28/7/06 (The Star) SHANGHAI: Golden Hope Plantations Bhd has formed a joint venture in China to set up a plant to produce a palm-oleochemical product used for making detergent.

Group chief executive Datuk Sabri Ahmad yesterday signed a memorandum of understanding (MoU) with Guangzhou-based detergent manufacturer Lonkey Industrial Co Ltd for the commercial production of methyl ester sulphate (MES).

The joint venture, in which Golden Hope and Cognis Oleochemical (M) Sdn Bhd hold a combined 51% stake, will build a plant with annual capacity of 36,000 tonnes in Nansha in south China’s Guangdong province.

Cognis Oleochemical is a 50:50 joint venture between Golden Hope and German specialty chemical firm Cognis, which has the technology to use palm oil to make MES.

Sabri said Golden Hope would invest US$13mil to US$15mil (RM48mil to RM56mil) in the plant and expected at least 20% return on equity in three to five years.

He said after the MoU signing that the production of palm-based MES was commercially viable now because spiralling petroleum prices had raised the cost of petrochemical products.

 
Datuk Sabri Ahmad (right) and Lonkey chairman Chen Xiang Zhi signing the MoU. The event is witnessed by Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui (standing right).

According to Sabri, the price of the petrochemical product used in making washing powder was now at US$1,200 to US$1,500 a tonne. “Our MES is only about US$700 to US$800 per tonne and it is more environment friendly,” he said.

He expects the lower price would spur detergent makers to switch to palm-based MES to save costs.

Lonkey would be the first main customer to source MES from the plant.

“We are also in talks with some major foreign detergent manufacturers like Procter & Gamble and Unilever to supply MES to them,” Sabri said.

He also said the group was exploring opportunities to partner South Korean and Japanese parties to expand its biodiesel business.

“We are in discussion with a local party to set up a biodiesel plant with a capacity of 100,000 tonnes in South Korea,” he said, adding that it was also working on a partnership with a Japanese company for a biodiesel plant in Bintulu, Sarawak.

Should the deal in South Korea materialise, it would be Golden Hope's fifth biodiesel plant and its second outside Malaysia after the Netherlands.

Of its four biodiesel plants, which have a combined capacity of 390,000 tonnes, only one has started operations. The rest are under construction.

Yesterday, Golden Hope also signed an MoU with Homey Group, a listed food processing and aquiculture company in northeast China’s Shangdong province, for research and development on Vitamin E extracted from palm oil for use in health supplements.