Malaysian biodiesel producer, AJ Oleo Industries, has restarted its 100,000 mt/year plant at Segamat in Johor state, CEO Kasim Nani said Monday.
Recommissioned early last month, the plant will supply 3,000-4,000 mt/month of palm methyl ester to a Malaysian company for the next six months, he said, though he did not name the buyer. Market sources said that the buyer was a listed company.
"If AJ Oleo performs satisfactorily in accordance with the stringent specifications set by our buyer, the company may extend the tolling agreement," he said. "We might consider exporting PME as we scale up production in the coming months, but first we need to have this baseload of 3,000 mt/month to start with."
AJ Oleo resumed production after a hiatus of three years as cheaper Indonesian biodiesel and poor domestic demand had made it difficult for Malaysian biodiesel producers to compete in the export market.
Malaysia's mandatory B5 mandate requiring diesel blended with 5% PME to be rolled out nationwide in July this year, and new commercial opportunities led the producer restart operations, Kasim said.
AJ Oleo is a subsidiary of Achi Jaya Plantations.
