KUALA LUMPUR, March 2 (Reuters) - Malaysia's No.3 palm oil firm, KL Kepong , will build three refineries in Indonesia to tap higher margins after Jakarta lowered its processed edible oil export taxes, a senior company official said on Friday.
With 56 percent of KL Kepong's 248,498 hectares of total landbank in Indonesia, the firm has "little choice" but to build refineries there to enhance the value of its crude palm oil from these estates, the firm's plantations director, Roy Lim, said.
"Indonesian refined materials are available at sometimes a $15-$25 a tonne discount to what is being offered by Malaysian refineries in their endeavour to take advantage of the margins and to capture markets," Lim told Reuters in an interview ahead of the Bursa Malaysia Palm Oil Conference.
Planters, refiners and bankers gather for the palm oil conference from Monday to Wednesday as the market for the tropical oil grows this year at the expense of soyoil, with the South American soy crop damaged by drought.
Indonesian refiners have been offering discounts and taking business away from Malaysian competitors, with last year's cut in processed palm oil export taxes and high supply boosting margins.
Top producer Indonesia's moves turned margins negative for Malaysia where KL Kepong has two palm oil refineries.
With 56 percent of KL Kepong's 248,498 hectares of total landbank in Indonesia, the firm has "little choice" but to build refineries there to enhance the value of its crude palm oil from these estates, the firm's plantations director, Roy Lim, said.
"Indonesian refined materials are available at sometimes a $15-$25 a tonne discount to what is being offered by Malaysian refineries in their endeavour to take advantage of the margins and to capture markets," Lim told Reuters in an interview ahead of the Bursa Malaysia Palm Oil Conference.
Planters, refiners and bankers gather for the palm oil conference from Monday to Wednesday as the market for the tropical oil grows this year at the expense of soyoil, with the South American soy crop damaged by drought.
Indonesian refiners have been offering discounts and taking business away from Malaysian competitors, with last year's cut in processed palm oil export taxes and high supply boosting margins.
Top producer Indonesia's moves turned margins negative for Malaysia where KL Kepong has two palm oil refineries.
