04/10/2007 (The Edge Daily), Kuala Lumpur - MWE Holdings Bhd is diversifying into palm oil activities via the acquisition of Fauzi Lim Plantation Sdn Bhd (FLP), which manages and operates a 2,023.4 hectare oil palm plantation in Gua Musang, Kelantan, for RM34.2 million cash.

The company said yesterday the acquisition would be financed through its internally-generated funds and/or bank borrowings.

MWE said the acquisition would provide it with an opportunity to diversify into palm oil related activities, which were expected to have good upside potential as global demand for crude palm oil (CPO)was anticipated to be very strong.

On prospects of the oil palm industry, it said CPO production this year was projected at 16.5 million tonnes, a small growth considering the impact of the recent floods in the affected oil palm areas and a possible El-Nino weather phenomenon.

“Coupled with this and the projected higher growth in the global oils and fats demand against production, the outlook for palm oil prices in 2007 is projected to be good,” it said.