KUALA LUMPUR, Sept 28: A consortium of Malaysian plantation firms is mulling construction of palm oil storage tanks in several African nations to tap a one billion ringgit ($263 million) a year market, a newspaper reported on Saturday.

Several locations are being looked into, including in West Africa and the sub-Saharan area, the Business Times said.

The paper quoted Malaysian Palm Oil Promotion Council member, Victor Ngo, as saying that the council was leading a feasibility study, which was still at a preliminary stage.

Each tank would be capable of storing between 500 and 1,000 tons of palm oil. However, the report did not say how many tanks were planned in Africa.

Should the results of the study be positive, then we can push for the consortium to set up such a facility, Ngo told the Business Times.

He did not name the members of the consortium. Golden Hope Plantations and Kumpulan Guthrie are among Malaysia’s biggest plantation companies.

Malaysia, the world biggest palm oil producer, exported 520,015 tons of palm oil to Africa last year, accounting for 4.9 per cent of the country’s total exports of 10.6 million tons. South Africa was the continent’s biggest buyer with 163,607 tons.

What is important is that the consumers there are assured of a steady supply of palm oil rather than having to depend on shipments which can be irregular, Ngo said.

He also said that findings of the study can be used to set up a similar facility in eastern Europe.

The region has the combined potential of buying up to 200,000 tons annually and two tanks with a capacity 5,000 tons each can be made available to cater for monthly shipments, Ngo added.—Reuters