20/02/2012 (Business Times) - Sime Darby Bhd is close to signing a distribution agreement with CJ Cheilingjedang Corp, South Korea’s largest food maker by market value.

Business Times understands that talks between both parties are at a very advance stage, and if fruitful, a concrete agreement could be signed by the first week of March.

The agreement is to supply Novelin cooking oil to the South Korean market. The Novelin cooking oil is a palm oil-based cooking oil and the technology for it was developed by the Malaysian Palm Oil Board (MPOB).

However, Green Ocean Corp Bhd has the sole rights to use the MPOB technology for a 20-year period, and in return, it will pay MPOB a royalty.

The technology known as Novelin allows Green Ocean to produce cooking oil which has cold stability at zero celcius, which means it can be used during the winter period.

Palm-based products tend to solidify at about 24.1 degree celcius, which means palm oil-based cooking oil can’t be used during winter.

The Novelin technology, which has been trademarked by the MPOB, is a game-changer in the global cooking equation as it removes palm oil’s Achilles’ heel in cold weather. Early this month, Green Ocean told the local stock exchange that is in the advance stage of negotiation to supply the entire premium cooking oil production to a conglomerate.

“The agreement also provides for the planned expansion of the production capacity,” it said in the statement. The company informed Bursa Malaysia that its RM15 million to RM20 million profit is a target set by the management for the financial year ending March 31 2014.

The internal target can be achieved, provided the signing of the agreement with the conglomerates materialised by the fourth quarter of financial year ending March 31 2012 and the expansion proceeds as planned.