IPOH, May 29 (Bernama) -- Felcra Bhd plans to invest between RM40 millionand RM60 million to build a plant and to bring in technology to producebiodiesel.

Its Chairman Datuk Hamzah Zainuddin said the company was now looking atthe technology developed locally as well as overseas.

"We are in discussions with a German company. If its technology issuitable, we may start the project this year," he told reporters after theopening of Ipoh Barat Umno division delegates conference by Domestic Tradeand Consumer Affairs Minister Datuk Mohamed Shafie Apdal.

After finding a suitable technology, he said, Felcra would submit the planto the Rural and Regional Development and Finance ministries for approval.

He said Felcra wanted to venture into biodiesel production due to risingdomestic and foreign demand prompted by oil price increases.

Furthermore, he said, biodiesel was environment-friendly.

Hamzah said the proposed investment in the new business would depend onthe type of technology to be acquired.

The technology must be usable throughout the year and not restricted tocertain period like in Europe, he said.

The company had received offers to build the plant in Perak and Pahang andhad identified the locations, he said. He did not name the places.

Felcra has a land bank of over 230,000ha nationwide.

The Plantation Industries and Commodities Ministry announced recently thatMalaysia's first plant producing biodiesel using palm oil would be builtin Labu, Negeri Sembilan.

The RM40 million project is carried out through a joint venture betweenthe Malaysian Palm Oil Board and Golden Hope Plantations Bhd.

The plant is expected to be operational in three years, with the initialproduction of 5,000 tonnes per month.

-- BERNAMA