Monday, April 29, 2013

FGV mulls Papua New Guinea foray

New Straits Times

FELDA Global Ventures Holdings Bhd (FGV), the world's largest crude palm oil producer, may venture into Papua New Guinea to increase its plantation land.

President and group chief executive officer Datuk Sabri Ahmad said Papua New Guinea's government officials were impressed with FGV's businesses and operations during their visit here recently.

"They were impressed with the FGV model and have asked for our help to start oil palm plantations in Papua New Guinea. If all goes well, we will go there on a government-to-government level of cooperation.

"We are conducting feasibility studies and technical due dilligence and if we decide to go there, we can easily start with an initial 10,000ha. The land is suitable for oil palm and can either be greenfields or brownfields," Sabri told Business Times in an interview.

FGV currently has a RM4.4 billion war chest following its listing on Bursa Malaysia last June.

Sabri had said previously it would use part of the proceeds to buy more plantation land as oil palm land in Malaysia is limited, and also with many plantation companies having expanded resinto Indonesia.

He had said FGV was looking for land in Myanmar, Cambodia and more recently in Mindanao in the Philippines.

The latter plan, however, was put on hold following the Lahad Datu intrusion recently.

FGV currently owns a total of 350,000ha and manages another 500,000ha for the country's 112,635 settlers grouped under the Federal Land Development Authority (Felda).

FGV has businesses in cooking oil, oleochemicals and refinery operations in 12 countries.

If FGV's plan materialises, Papua New Guinea will be its second overseas plantation land venture after Indonesia.

On its Myanmar venture, Sabri said the company is in the final stage of due dilligence with a local partner to start rubber processing activities in the country's south.

"We will buy natural rubber from local farmers and turn them into processed rubber. If it is successful, we may go further into rubber plantations by buying an initial 12,000ha," he added.

In December, FGV signed a memorandum of understanding with Myanmar's Pho La Min Trading Ltd.

Under the deal, a joint venture company will be set up to develop rubber business in three phases, starting with a processing plant.

On West Kalimantan, Sabri said FGV, which owns 14,700ha there, is in the final stage of a due dilligence to plant another 10,000ha at Kebun Patin Landak.

Kulim (Malaysia) Bhd is another Malaysian planter in Papua New Guinea through its 48.7 per cent-owned New Britain Palm Oil Ltd.

Kulim, in turn, is 59.6 per cent-owned by state government investment agency Johor Corp.

Read more: FGV mulls Papua New Guinea foray

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