11/6/07 (Business Times)  -  BATAM (Indonesia): Lembaga Tabung Haji Malaysia will commission its first ever US$15.6 million (RM54.29 million) palm oil-based refinery today in Batam, Indonesia.

The commissioning of the refinery will also enable the pilgrims management body to make its first foray into China, Malaysia's top palm oil buyer for the past several years at over two million tonnes annually.

Lembaga Tabung Haji own oil palm estates in Malaysia and Indonesia as well as teak plantations in Sabah and Sarawak totalling about 129,663ha.

This includes a plantation project on peat soil measuring 82,000ha in Riau, Indonesia.

Lembaga Tabung Haji's estates are managed by its wholly-owned plantation arm TH Plantations Bhd.

Tabung Haji and Hong Kong-based Twin Wealth Holdings Ltd will form a joint venture company PT Synergy Oil Nusantara with a 51 per cent and 49 per cent stake respectively.

TH Plantations deputy managing director Zainal Azwar Zainal Aminuddin said the joint venture will enable Tabung Haji to tap Twin Wealth's market dominance in China.

Twin Wealth is China's third largest edible oil refinery owning two other refineries of its own.

"Twin Wealth has guaranteed that it will buy our products and we are set to sell our products into the huge China market.

"With the setting up of the refinery, Tabung Haji is now a fully integrated plantations company with operations upstream and downstream," Zainal told Business Times.

The refinery will have a capacity of 1,500 tonnes per day and source raw materials from Tabung Haji's 82,000ha oil palm plantations in nearby Riau Islands.

The refinery produces refined product processed from crude palm oil such as refined, bleached and deodorised or RBD palm olein (cooking oil), RBD palm stearing (noodles, margarine), palm fatty distillates (low grade detergent) and others.

The refinery will be jointly launched by PY Synergy chairman Datuk Muda Mamat and Minister in Prime Minister's Department Datuk Dr Abdullah Md Zin.