JAKARTA, March 7 (Xinhuanet) -- A U.S.-Malaysian joint venture is to construct a plant to process crude palm oil (CPO) into biodiesel fuel on Indonesia's Batam island, a local newspaper reported Tuesday.

    The joint company had signed a Memorandum of Understanding (MoU) with the Batam Industrial Development Authority (BIDA) on its investment plan, said The Jakarta Post.

    The joint venture company had selected Batam, about 30 km southeast of Singapore, because of its strategic location and proximity to Indonesia's Riau province, a major supplier of CPO, reported the newspaper, quoting an official as saying.

    "They carried out feasibility studies in Malaysia and China, but eventually chose Batam for various reasons," said BIDA spokesman Tri Novianta Putra. He declined to disclose the name of the company. Enditem