KUALA LUMPUR (Sept 18): Sime Darby Plantation Bhd’s downstream arm Sime Darby Oils International Ltd (SDO) has inked a memorandum of understanding (MOU) with Guangxi Beibu Gulf International Port Group Ltd (BGP) to expand its presence in China. 

In a statement to the local bourse on Monday, the plantation group said the one-year MOU is to leverage BGP's port, logistics, as well as trade in the Beibu Gulf economic region to explore the possibility of establishing a refined palm oil trading and distribution centre in the Qinzhou Free Trade Zone. In addition, SDO and BGP also plan to market health products, such as tocotrienols and palm oil-derived red oil, in the Chinese domestic market.

SDO managing director Mohd Haris Mohd Arshad said the collaboration offers an exciting opportunity to sell and distribute the company's palm oil products through the port of Qinzhou to key consumer regions in mainland China. The MOU targets a combined target trading volume for shortening and refined palm oil of about 500,000 tons per year.

“With growing demand for palm oil products and increasing trade volumes between China and Malaysia, we anticipate that this partnership will promote growth of a sustainable supply chain and spur greater demand for palm oil in China,” he said. 

Mohd Haris added that a successful collaboration with BGP would be another milestone for SDO, as it builds its position as the preferred supplier of certified-sustainable, high-value palm oil products for the global market. 

At Monday’s noon break, shares in SDP finished down 15 sen or 3.28% at RM4.43 each, valuing the plantation group at RM30.64 billion.