10/11/05 KUALA LUMPUR (Dow Jones)--Plantation and property firm IOI Corp. Bhd. (1961.KU) will build its first biodiesel plant on its own, either in the Netherlands or in Pasir Gudang, in southern Johor state, to capitalize on the green fuel's growing global potential, the daily New Straits Times reports.

Citing an unnamed industry source, the daily said the plant, which will use palm oil and diesel, could be located either near the company's existing refinery Soctek Edible Oils Sdn. Bhd. in Pasir Gudang or in Rotterdam in the Netherlands.

The daily, however didn't divulge the plant's capacity and cost but said a biodiesel plant which produces 60,000 tons of fuel per year costs about MYR40 million in Malaysia.

IOI could also export the biofuel to Japan or South Korea, the daily added.

IOI officials weren't immediately available for comment on the report.

Plantation Industries and Commodities Minister Peter Chin Fah Kui said last September the government plans to build three biodiesel plants in Malaysia

So far, only Golden Hope Plantations Bhd. has been awarded a contract by the government to produce biodiesel.

Malaysia produced 15 million tons of crude palm oil last year.

Other companies that could be given contracts to produce biodiesel include Fima Bulkers Sdn. Bhd., a unit of Kumpulan Fima Bhd. and privately held Carotino Sdn Bhd., the daily added, citing unnamed industry sources.

Officials of both companies weren't immediately available for comment