U.S. agribusiness giant Cargill Inc said it is building a 200 million palm oil refinery in the Indonesian province of Lampung, which the company expects to be completed late next year.
The new refinery is part of a push by Cargill to fully oversee its palm oil supply chain from plantation to customer in order to meet North American and European demand for more sustainable palm oil, the company said.
This project is a key step for Cargill to increase the availability of sustainably sourced and produced edible oil ingredients for our customers, Robert Aspell, president of Cargill Asia Pacific, said in the statement issued on Thursday.
This fully integrated supply chain offers our customers assurance that stringent production requirements and the highest product quality are achieved, he said.
The construction of the refinery has started and is slated to be completed late 2022, the statement said.
Indonesia is the worlds top producer of palm oil, which is used in a wide range of consumer products from food to cosmetics, but the versatile edible oil has faced a backlash particularly in some western markets over issues ranging from labour rights to forest clearance.
The palm oil industry has also been linked to forest fires in Indonesia, where in 2019 at least 1.6 million hectares of forest and other land were burned and losses were estimated at 5.2 billion as a choking haze blanketed the region.
Reporting by Fathin Ungku; Editing by Ed Davies