03/09/05 BEIJING (Bernama) -- Felda, through its subsidiary company, VorayHoldings Limited, would be investing RM50 million to increase its palm oilexports to China in the near future.

Chairman of Felda Tan Sri Yusof Noor said the investment would involve theopening of a palm oil processing mill and a packaging plant in China.

Currently, Felda ships about 500,000 tonnes of palm oil to China annuallyand this is expected to be increased to one million tonnes with the latestinitiative.

The move was taken following the Chinese government decision to do awaywith the quota limit on the entry of palm oil into the country beginningnext year, he told Malaysian reporters after signing a Memorandum ofUnderstanding with three Chinese companies for the purpose.

He said that although there would be no quota imposed, the Chinesegovernment was encouraging value added products to be produced in thecountry.

With the establishment of the plants, Felda would be able to market itsproducts directly to its consumers, he said.

Currently, Felda produces 2.5 million tonnes of palm oil annually inMalaysia.

Yusof said the opening of the plants would be decided soon, adding thatthe potential returns would depend on the market price of palm oil butthey were expected to be multifold.

He represented Voral in the signing of the MoU with three Chinesecompanies, namely First Engineering Co (FEC), East China Oils & FatsIndsutries (Taixing) Co Ltd (ECOFIC) and Hubei Provincial Oil Corporation(HPOC) which covered the plans to build the oil palm mill in Hubeiprovince and Wuhan as well as for the marketing of palm oil.

The signing took place here Friday, and was witnessed by Deputy PrimeMinister Datuk Seri Najib Razak, currently on a week-long visit to China.

Other Malaysian companies that have inked agreements included IntegratedEsquire (M) Sdn Bhd which inked a deal with Shanghai Zong Yi Industrial CoLtd to set up a mill for the production of oil-palm based paper pulp forthe export market.

Essem Holdings (M) Sdn Bhd also signed a deal with China ShipbuildingIndustry Corporation for the purchase of training ships for the MalaysianRoyal Navy.

Kinsteel Bhd signed an agreement with Beijing Tierforce Drive Machine CoLtd for the purchase of electrical arc furnace, LM Star Autoworld Sdn Bhdwith BYD Auto Co Ltd for the exclusive rights to import, assemble anddistribute BYD cars in Malaysia.

Gamma Technics Sdn Bhd and Nuctech Co Ltd signed a bilateral arrangementfor technology transfer in the security industry.

Integrated Esquire, a Selangor based company, would meanwhile invest RM250million for the production of oil palm based pulp paper together withShanghai Zong Yi in Lepa, Pekan.

Its chairman, Datuk Hasan Arifin, said the investment would cover the setup of a production plant in Lepa, Pekan with the capacity to produce50,000 metric tonnes of pulp a year.

Shanghai Zong Yi is involved in the production of non-wood based paper andhas the technological expertise to process paper from other sources suchas jute, grass, sugar cane pulp and rattan.

He said that the plant was expected to start in two years time once allapprovals come in, including the approval for land.

-- BERNAMA