JEDDAH: The Islamic Corporation for the Development of the Private Sector (ICD) has recently signed $12.5 million Ijara (lease) agreement with Arab Malaysian Vegetable Oil Products Company Limited (AMVO). Alami Group, a reputed name in Malaysia's palm oil industry, is the main sponsor of the project. The deal was made possible after the Board of Directors of the ICD, a unit of the Islamic Development Bank, approved the project.
Khaled Al-Aboodi, CEO and general manager of ICD, and Mohammad Radwan Al-Alami, managing director of AMVO, formally signed the agreement in Jeddah which was witnessed by the Trade Commissioner of Malaysia in Jeddah, Amran Bin Yem, and ICD's senior staff members.
Al-Aboodi said that the project aims to set up the first ever palm oil-based vegetable oil refining and downstream processing plant in Yanbu, Saudi Arabia. Yanbu is a strategic location with regard to import of raw materials and export of final products to regional ports. Besides, various favorable trade agreements between Saudi Arabia and other neighboring countries would give privileged tariff benefits to the exports, Al-Aboodi added.
The project will produce cooking oil with an annual production capacity of 90,000 MT. It will also produce non-hydrogenated downstream products like vegetable ghee, fats, shortening and margarine. The project plans to export up to 90 percent of its production while the rest will be sold to the Saudi market.
Radwan Alami of the Alami Group will be involved full time in the first three years of the project's operations. Besides, other top management personnel from existing operations in Malaysia would be deployed in Saudi operations. The project is expected to be operational by December.
© Arab News 2008
