PETALING JAYA: Sime Darby Plantation Bhd’s downstream arm Sime Darby Oils (SDO) is investing US$150 million (RM711.38 million) for the construction of its specialty oils and fats refinery in Indonesia, which is expected to begin production in 2024.
The refinery, on a 16ha site, will have an annual production capacity of more than 450,000 tonnes of palm and lauric-based products. It is located in the Sei Mangkei Special Economic Zone in North Sumatra’s Simalungun region.
Managing director Mohd Haris Mohd Arshad said the company’s latest investment reflects SDO’s long-term commitment to Indonesia and in contributing to the development of the North Sumatra region.
“The Sei Mangkei refinery is Sime Darby Oils’ biggest investment in Indonesia to date and will be our second refinery investment in this country after our Pulau Laut refinery in Kalimantan. It will employ world-class technologies to produce our specialty oils and fats as well as more value-added products for export markets,” he said in a statement yesterday.
SDO’s latest refinery is the company’s fourth downstream asset in Indonesia. Besides its premier refinery in Pulau Laut, which began operations in 2014, the company also operates two Kernel Crushing Plants in Rantau, South Kalimantan and in Pemantang, Central Kalimantan. The Sei Mangkei refinery, SDO’s first facility in the Sumatra region, is expected to leverage on existing crude palm oil production within the region through Minamas Plantation, SDP’s Indonesian subsidiary.
“With the complexity of our specialty oils production, coupled with automation and digitisation installed within the refinery, we are opening our doors to Indonesia’s young and upcoming, skilled workforce including engineers, technicians, logistic planners, financial executives, and other high value adding workers, especially in the northern Sumatra region.
“Our Sei Mangkei refinery will also offer opportunities for existing and new businesses in the region and we hope to be the catalyst in spurring local and sustainable economic growth,” Mohd Haris said.
At full capacity, the refining operations will create more than 200 jobs locally and other positive spillover effects.
The launch of the Sei Mangkei refinery is in line with SDO’s priority to grow its existing downstream business, particularly in the production of sustainable and traceable specialty oils and fats where it is expected to meet demand growth from existing and new customers globally.
