15th Jan 2015 09:33
LONDON (Alliance News) - DekelOil Public Ltd Thursday said it has awarded a turnkey contract for the construction of a kernel crushing plant at the Ayenouan palm oil project in the Ivory Coast to Modipalm Engineering Sdn Bhd.
Modipalm will be responsible for the manufacture, transportation, installation and commissioning of the kernel crushing plant, which is expected to be operational in the fourth quarter of 2015. The plant will run at 60 tonnes per day, but will have the capacity to run at 80 tonnes per day.
Modipalm constructed DekelOil's crude palm oil mill at the project in 2014.
The palm oil producer will pay Modipalm a total of EUR800,700 under the contract, 20% of which has already been paid. DekelOil will then pay around EUR400,350 on shipment of the plant, EUR200,175 when it is handed over and the remaining balance is due on the expiry of a one-year warranty.
DekelOil says it is continuing talks with Modipalm about the supply of spare parts for the plant and about additional fees for the installation of the plant, which should be finalised by the end of January, said the company.
The total capital expenditure on the plant, including any additional costs, is not expected to exceed EUR1.1 million, which is lower than previous estimates, said DekelOil.
"The kernel crushing plant has an attractive investment return profile and will materially increase profitability at the Ayenouan project by allowing both palm kernel oil and animal feed to be sold in the local market at the factory gate," it said in a statement.
DekelOil holds a 51% stake in the Ayenouan project whilst its partner, Biopalm Energy Ltd, holds the remaining 49%. DekelOil raised GBP1.5 million to fund construction of the plant in October 2014, and Biopalm has the option to match DekelOil's investment in the plant, with a final decision due shortly.
"This update is in line with DekelOil's strategy to maximise profitability at the producing Ayenouan project, the strategy for which includes the kernel crushing plant, further planting of company-owned estates, and the roll-out of a logistics hub network," said the company.
DekelOil shares were untraded at 1.02 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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