M’sia signs a memorandum of understanding with the Saudi group Savola to increase palm oil exports

PUTRAJAYA: Malaysia will sign a Memorandum of Understanding (MoU) with Saudi-based Savola Group on three areas of cooperation to further enhance Malaysian palm oil exports to the region, the Ministry of Plantation Industries and Commodities (MPIC) has announced. ).

In a statement released today, the ministry said that among the cooperation are the construction of a tank storage terminal in Jeddah, using Saudi Arabia as a re-export hub for Malaysian palm oil and a campaign to promote the benefits of Malaysian palm oil.

He said this followed a meeting in Jeddah between Minister of Industries and Plantation Products Datuk Zuraida Kamaruddin and Savola Foods Board Member Abdullah Rehaimi and Director of Sourcing, Strategic Sourcing and supply, Dr. Ghazi J Al-Sulaimani.

Zuraida told the meeting that the three areas of cooperation have been identified to further boost exports of Malaysian palm oil and its derivatives not only to Saudi Arabia but also globally.

She said building a tank storage terminal in Jeddah would help overcome logistical problems, demurrage and long waits for shipments.

“Dr Ghazi suggested that Malaysian exporters could keep their stocks at destination ports instead of Malaysian ports, as this would also allow them to make off-tank sales and meet the needs of smaller market players.

“We supported the idea but stressed that Savola should create a joint venture with Malaysian suppliers as our Malaysian companies have similar projects underway in Pakistan and they are doing very well,” she said.

She said Savola management was fine with the suggestion provided the terms and conditions of the joint venture were fair and created a win-win situation for all parties involved.

On the cooperation of using Saudi Arabia as a hub for re-exporting Malaysian palm oil, Zuraida said it was because Saudi Arabia was ideally placed to serve regional markets in the Gulf Cooperation Council. (CCG) as well as the North Africa region.

“It was agreed that having a palm oil center in Saudi Arabia will not only significantly increase the volume of use of Malaysian palm oil in the Saudi market, but also allow Malaysian exporters meet the needs of smaller markets in the region.

“Abdullah (of Savola Foods) added that the development of a ‘Food Hub’ is also in line with Saudi Vision 2030 which aims to ensure food security across the region,” she said.

She said if the idea comes to fruition, the export potential of Malaysian palm oil to this region could be tripled.

Regarding the joint campaign to promote the benefits of Malaysian palm oil, Zuraida said that she gave Savola management insight into the baseless anti-palm oil campaigns carried out by Western non-governmental organizations (NGOs). , which are purely triggered by protectionist policies.

“Savola management fully agreed and added that the influence of these anti-palm oil campaigns will reach this region sooner or later and that we should develop a strong positive image of palm oil and educate our consumers about its various health benefits.

“These collaborations will not only strengthen our position in the market, but will also remove negative assumptions against the industry and help Malaysia maintain its position as the global market leader in palm oil,” she said. declared.

Regarding the Malaysian Rubber Council’s (MRC) participation in the Arab Health Exhibition in Dubai, Zuraida said participating Malaysian manufacturers expect total sales to reach US$110.46 million (RM464 million). .

She added that a total of eight Malaysian companies will be part of the exhibition where attendees can discover and source new products and connect with suppliers.

In 2021, Malaysia’s palm oil and palm oil products exports to Saudi Arabia amounted to RM1.71 billion, 30.7% more than in 2020 .-Bernama

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