June 20 - SEJATI Oil Palm Feed Sdn Bhd plans to upgrade its plant inCarey Island by as early as next month to help reduce its reliance ondiesel, said its managing director, Zainal Ahmad."We plan to spend as much as RM3 million to upgrade the plant inSelangor," said Zainal in a telephone interview with Mail Money.

Sejati Oil is raising the funds, for the capital expenditure on the plantvia internally sourced financial mechanism. It seeks to use alternativefuel sources, to help crimp its dependence on diesel.

"We have to look at more cost effective methods," said Zainal, who expectscost savings from the exercise to be as high as 40 per cent of its currentoperating cost.

The plan involves changing alternative energy source such as solar energyand bunker fuel, to help operate the machinery currently powered bydiesel.

The Government had announced a 20-sen increase in the price of diesel toRM1.08 per litre, effective May, thus pushing up the operating cost ofcompanies such as Sejati Oil.

Based on the current price structure of diesel, it will cost about RM380to process a tonne of oil palm fronds (OPF).

"With solar energy and bunker fuel, it will only cost about RM200 to RM250to process a tonne of OPF," said Zainal.

He expects the upgrading to be completed by as early as October, and uponcompletion, Sejati Oil expects to process about 50 tonnes OPF daily, usingthe new source of energy as its mainstay.