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Mewah International Inc. (MII), an edible oils and fats processor, will complete a refinery in Malaysia after the country cut export taxes on crude palm oil, potentially boosting margins.
The plant in the eastern state of Sabah with an annual capacity of 700,000 metric tons will probably be finished by the year-end, boosting the company’s capacity to 3.5 million tons, a stock exchange filing said today. A refinery in Indonesia was put on hold and may be revisited by end-2014, Chief Financial Officer Rajesh Chopra said in an interview.
Malaysia, the world’s second-largest producer, lowered the export tax on the crude variety and abolished a duty-free shipment quota from Jan. 1. Indonesia, the biggest, cut taxes in 2011. Shipments from Malaysia are tax-free in January and February because of a decline in global prices.
The decision to resume construction in Sabah was made after “looking at the viability in Indonesia, refining margins in Malaysia, the supply, customer base, and how much time it’ll take to complete,” said Chopra.
In January last year, Mewah said the plant was being delayed as the company moved investments to Indonesia. The Sabah facility may cost about $73 million and will be funded from Mewah’s initial public offering, internal accruals and external borrowings, the company said.
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