30/6/04 - SAWIT Kinabalu Bhd will spend some RM500 million in 10 years todevelop a 50,000ha oil palm plantation under a proposed joint-ventureproject with Yayasan Sabah.

Under the proposed joint venture, Yayasan Sabah will provide the land andSawit Kinabalu will come up with the funds and expertise.

The two parties signed a memorandum of understanding for the joint venturein Kota Kinabalu yesterday witnessed by Chief Minister Datuk Seri MusaAman.

Signing for Sawit Kinabalu was its acting group managing director, SalimMohamad, while Yayasan Sabah was represented by group director Tan SriKhalil Datu Jamalul.

The 50,000ha area is a logged-over site in Kalabakan in Tawau which wassupposed to be used for a proposed pulp and paper mill joint-ventureproject between Yayasan Sabah and a Chinese company, which has now beencalled off.

Musa, who is the chairman of both Sawit Kinabalu and Yayasan Sabah, saidthe oil palm plantation should be ready for harvesting in four years.

He said the MOU was timely to ensure a consistent supply of crude palm oil(CPO) for processing at a Sawit Kinabalu refinery mill currently underconstruction in Kunak.

Scheduled to be completed in July 2006, the mill will have the capacity toprocess 450,000 tonnes of CPO annually.

Sawit Kinabalu has thus far opened up 75,000ha for oil palm plantation,including 17,000ha developed on a joint-venture basis.

Last year, Sawit Kinabalu posted a RM150 million net profit. This year, ithas forecast a profit of RM200 million.

Yayasan Sabah is mainly involved in logging activities, but with itstimber resources fast depleting, it has decided to diversify its businessoperations.