Mewah to invest in Indonesia refinery

Mewah International Inc, Malaysia’s biggest palm oil refiner after
Wilmar International Ltd, said its planned investment in Indonesia will
diversify operations and increase processing capacity by 23 percent.


“With the current volume which we are doing, we are too big to
depend only on one country,” Chief Financial Officer Rajesh Chopra said
by phone from Singapore today. “So the idea was to diversify where we
can source crude palm oil more reliably instead of sticking to one
country.”


Malaysian refiners are planning to add capacity in Indonesia, the
world’s largest producer of the edible oil, after the neighboring
country cut export duties on processed palm oil and increased taxes on
crude palm oil exports in October. Mewah’s shares in Singapore gained
the most in almost a month after the company said today the East Java
plant will boost its annual refining capacity by 630,000 metric tons.


“Inherently, it’s good news,” Ben Santoso, a plantation analyst at
DBS Vickers Securities, said by phone from Singapore. “Now that they’re
expanding into Indonesia, hopefully they would secure the raw material
at cheaper prices than Malaysian crude palm oil, but then again it would
only be completed in 2013. The impact is not going to be that
immediate.”






The March-delivery crude palm oil contract advanced 1.6 percent to 3,225
ringgit ($1,026) a ton on the Malaysia Derivatives Exchange today, the
highest since Nov. 18.


Mewah’s profit slumped 48 percent in the first nine months from a
year earlier to US$29.6 million as operating margin fell 28 percent.
Full-year net income may reach US$45.7 million, according to the mean
estimate of 10 analysts in a survey compiled by Bloomberg. The company
reported a US$92.4 million profit in 2010. -- Bloomberg