InfoSAWIT, JAKARTA – Kuala Lumpur Kepong Berhad (KLK) has joined forces with Swedish specialty oils and fats company AAK AB to develop a new specialty oils and fats refinery in Pasir Gudang, Johor, Malaysia.
The partnership will be carried out through a newly established joint venture, Nura Speciality Oils and Fats Sdn Bhd, which will develop a processing facility aimed at producing higher-value palm-based products for the global food industry.
The project marks another step in KLK's strategy to strengthen its midstream business, expand its technical capabilities and reinforce its position as an integrated player in the global oils and fats industry.
Focus on Higher-Value Palm-Based Products
The new refinery will manufacture a range of specialty oils and fats derived from palm-based raw materials. These products are intended to serve global food manufacturers requiring ingredients with specific characteristics and customised formulations.
KLK brings to the partnership its integrated palm oil supply chain and experience in plantation and processing operations, while AAK will contribute its technical expertise in specialty fats and product formulation.
By combining their respective strengths, the two companies aim to enhance product value, strengthen supply reliability and develop innovative solutions for customers across international markets.
The investment also reflects the continuing shift within the palm oil industry towards downstream processing and higher-value products.
Rather than relying solely on crude palm oil production, companies are increasingly expanding into specialty ingredients and customised products to access new markets and improve the competitiveness of palm-based products globally.
Production Ramp-Up Expected from 2028
Construction of the specialty oils and fats refinery in Pasir Gudang is expected to support a gradual increase in production capacity beginning in 2028.
The facility is targeted to reach full utilisation in 2029.
The KLK-AAK partnership highlights the growing importance of collaboration between integrated palm oil producers and companies with advanced processing and formulation expertise.
As demand for specialised food ingredients continues to evolve, the new Johor refinery is expected to strengthen both companies' presence in higher-value segments of the global oils and fats market.
For the palm oil industry, the project also demonstrates how downstream development is becoming an increasingly important strategy for creating additional value beyond crude palm oil and expanding the sector's role in international food supply chains. (T2)
Source: InfoSAWIT
