KUALA LUMPUR (Sept 25): Kuala Lumpur Kepong Bhd (KL:KLK) has formalised a memorandum of understanding (MOU) with Alami Commodities Sdn Bhd for their joint venture (JV) — KLK Alami Edible Oils Sdn Bhd (KAEO) — to manufacture, sell and market palm oil and specialty fats.
Formalising an MOU means turning the non-binding document into a legally binding agreement.
Under the terms of the JV, KLK will own 65% of KAEO, which will operate a refinery and packaging plant located in Teluk Panglima Garang, Selangor that will be fully commissioned in 2025, while Alami will hold the remaining 35%.
KLK will oversee all technical operations, including the procurement of raw materials, while Alami will manage global sales and marketing efforts, "with a focus on the Middle East market", according to a joint statement from the partners on Wednesday.
“This collaboration is aligned with KLK’s ongoing strategy to expand our midstream operations by enhancing refining capabilities, increasing capacity and integrating sustainability standards. The joint venture also reflects KLK’s commitment to optimising the value chain in the oil palm industry, ensuring both competitiveness and sustainability on a global scale,” said KLK chief operating officer Lee Jia Zhang.
Alami, which has over 28 years of experience in the vegetable oil sector, expects the JV to enhance its capacity in both upstream and downstream production, expand its product portfolio and improve the quality of its finished products through the use of high-quality, sustainable raw materials, said the company's managing director Ahmed Alami.
"This partnership brings together KLK’s expertise and Alami’s global marketing strengths, providing a foundation for delivering quality palm oil and specialty fats to international markets," the statement further read.
The ceremony to formalise the MOU was witnessed by Ministry of Investment Trade and Industry's secretary general Datuk Hairil Yahri Yaakob during the Arab Malaysian Chamber of Commerce's 14th annual general meeting on Tuesday.
At the time of writing on Wednesday, KLK’s shares were trading 10 sen or 0.48% lower at RM20.62, with a market capitalisation of RM22.66 billion.