Eng - IOI Group

Management’s Discussion and Analysis cont’dGROUP BUSINESS REVIEWINTRODUCTIONThe Group’s resource-based manufacturing business is essentially the other segment of our palm oil business that follows afterplantation segment and comprises mainly manufacturing and related activities ranging from basic processing such as refining, todownstream processing of palm oil into oleochemicals and specialty oils and fats. Crude palm oil and palm kernel oil are processedinto products or fractions that are used in various industries including personal care, households, food, pharmaceutical, cosmeticsand chemical industries.REFININGAs at 30 June 2007, the Group has four refineries with total refining capacity of 3,200,000 MT, i.e. one in Sabah with a refiningcapacity of 1,200,000 MT and kernel crushing capacity of 300,000 MT per annum, the second refinery in Johor, with an annualrefining capacity of 300,000 MT and the third refinery is a newly constructed refinery located in Rotterdam, Netherlands, with arefining capacity of approximately 700,000 MT per annum. The fourth refinery is through the acquisition of Pan-Century Groupduring the financial year, with a refining capacity of approximately 1 million MT per annum situated in Johor.The Rotterdam refinery, which started in Oct 2005 provides Loders Croklaan Europe with fresh palm oil for its downstreamoperations, and also enables the Group to channel its crude palm oil to the European market, for value added sales, utilising LodersCroklaan’s established distribution network and market standing.As for the three Malaysian based refineries, they cover the rapidly growing Asian market as well as occasional shipments tosupport the needs of Loders Coklaan, USA.45ANNUAL REPORT 2007IOI Corporation Berhad