IOI Inks Partnership With Mega Star Holding To Establish RM100 Million Coconut Mill Complex

IOI Corporation Berhad ("IOI"), together with Mega Star Holding Pte Ltd ("Mega Star"), announced the signing of a joint venture to develop Malaysia's first state-of-the-art, integrated and sustainable coconut mill complex in Segamat, Johor. Mega Star, an investment company based in Singapore, is affiliated to Ting Hsin International Group, a China-based conglomerate which has an extensive food and beverage business across China and Taiwan.

This joint venture combines the core business strengths of both corporations, unlocking synergies that will drive growth and expand the coconut-based product portfolio. Under this strategic partnership, IOI, an international player in the edible oil market, will offtake and market the coconut oil to its associate companies and customers in the European Union and the United States. On the other hand, Mega Star will leverage its group network to offtake and market the concentrated coconut water to China and other Northeast Asian countries.

The integrated coconut mill complex, involving an estimated investment cost of RM100 million, will have a processing capacity of 100,000 coconuts per day upon its completion in the fourth quarter of 2027. It is located close to IOI's plantation landbank in Johor and next to the Inland Port of Segamat, which enables IOI to efficiently supply coconuts from its approximately 3,700 hectares of young coconut plantations while the port location facilitates cost effective movement of finished products. The complex is designed to progressively scale up production to 300,000 coconuts per day as the existing trees mature and IOI's coconut plantations is expanded to approximately 5,000 hectares within the next two years.

The complex will process matured coconuts into high-value downstream products, namely coconut oil and concentrated coconut water. It is the first coconut mill complex of its kind to utilise the latest robotic and IR 4.0 processing equipment, and incorporate a self-generating energy system by utilising its by-product coconut husks as biofuel in the production process. There is also a plan to convert another by-product, coconut shells, into high-value activated carbon in the near future in line with IOI's strategy to adopt the circular economy model.

IOI Group Managing Director and Chief Executive Dato' Lee Yeow Chor said: "This joint venture marks a significant milestone for IOI as we expand into the lucrative coconut segment. By combining IOI's operational excellence and access to the international edible oil market as well as Mega Star's strong market access to the food and beverage sector in China, we aim to deliver high quality and sustainable coconut products to meet the growing market demand."

Mega Star Executive Director Mr CM Wei said: "We are delighted to join hands with IOI to create new business opportunities. Through this collaboration, we demonstrate our shared commitment to driving innovation and building a green and sustainable value chain."