7/2/06 (Business Times)  -  BIOTECHNOLOGY and biodiesel firm Carotech Bhd will buy 13ha in Lumut, Perak, for RM9.7 million to boost its crude palm oil (CPO) production facility.

The company said it has signed an agreement with Lumut Maritime Terminal Sdn Bhd to build a new plant on the land.

“The board, having considered all aspects of the proposed acquisition, is of the opinion that it is in the best interest of the company and the group,” it said its filing to Bursa Malaysia.

The Perak-based firm said the new plant will help increase its CPO processing capacity to 345 tonnes a day, from 45 tonnes, and enable it to meet increasing demand for its products.

The land is located close to the Lumut port as well as CPO suppliers.

“This will facilitate transportation of CPO and bulk finished goods such as biodiesel and ensure a continuous supply of raw materials,” the company said.

Coupled with the close proximity of the land to Ipoh, it will enable easier monitoring of the plant by the company’s management, Carotech added.

The purchase consideration will be funded by internally generated funds and bank borrowings. It will be paid in instalments and is expected to be completed in 18 months.

The acquisition is not expected to have any material effect on the consolidated earnings of Carotech for the financial year ending June 2006.