Malaysian palm oil refineries should venture into more downstream value-added products to remain profitable, said Felda Vegetable Oil Products Sdn Bhd Chief Executive Officer Ismail Hasan.
“It is important to produce and export more value-added products as it would help increase margins for refineries.
“The price of refined products do not move in tandem with the commodity’s high price.
“Therefore, with more value-added products produced such as margerine, soaps and cosmetics, refiners would be able to survive comfortably,” he told a Bernama roundtable discussion on palm oil on Thursday.
The roundtable was moderated by Bernama Editor-in-Chief Datuk Yong Soo Heong as well as Deputy Editor-in Chief, Puan Salbiah Said and Assistant Editor, Cik Siti Hawa Othman.
He pointed out that spiralling crude palm oil prices was good for the industry but not necessarily so for refiners as it usually resulted in higher cost for them.
Ismail also said Malaysia’s current refining capacity was about 22 million tonnes while the country’s output last year stood at 17.6 million tonnes.
Refineries were currently operating at 70 per cent capacity.