14/10/05 (Malay Mail) - SEJATI Oil Palm Feed Sdn Bhd is in talks withtwo plantation groups to form joint ventures to build as many as threefactories processing oil palm fronds, said its managing director ZainalAhmad.

"The factories will be able to process 5,000 tonnes of oil palm fronds permonth. The cost will be about RM18 million altogether," Zainal told MailMoney.

He said both the plantation groups are based in Pahang and are privatelyheld.

"They are mainly involved in the plantation sector but are keen todiversify their business and move upstream," said Zainal, adding thatnegotiations with both parties has been ongoing since April.

"The two companies are holding their board meeting in November. We hope tohave something firm signed by the end of the year," Zainal said.

He said, they are at an MoU (memorandum of understanding) stage, but wantto expand it into something more concrete and lasting.

"This may include taking some form of equity in the ventures," saidZainal.

He added if everything goes as planned, the construction of the factoriescould start as soon as early next year.

According to Zainal, the factory will likely be located next to an oilmill, to enable the usage of excess power to power the plant.

"We are getting some support from the Malaysian Palm Oil Board (MPOB)," hesaid, adding that the whole project has not received any financialassistance from local banks or the Government despite proposals being sentto Bank Industri dan Teknologi Malaysia Bhd and Bank Pertanian Malaysia.