Felda increases presence in North America

This is written by my colleague Kamarul Yunus.

KUALA LUMPUR: FELDA Global Venture Holdings Sdn Bhd (FGVH) has made another milestone in spreading its refining business in North America by forming a strategic partnership with Bunge Ltd, a leading global agribusiness and food company.

On December 12, 2011 New York-based Bunge, through its North American unit, announced that it has formed a joint venture with the Canadian arm of FGVH, Twin Rivers Technologies-Enterprises de Transformation Graines Oleagineuses du Qubec (TRT-ETGO), to combine commercial activities related to seed crushing and edible oil refining operations of their plants in Canada.

The joint venture, Bunge ETGO L.P, will handle the buying and selling of oilseeds for their crushers at Bunge’s Hamilton, Ontario plant and TRT-ETGO’s plant in Becancour, Quebec.

Bunge country manager in Canada, Rick Watson said the joint venture creates an organisation that can more effectively serve the growing demand for canola and soy bean meal and oil in the domestic and export markets. 

“Managing the commercial aspects of both facilities as a single company provides a number of efficiencies, reducing the overall cost of running both facilities,” he said in a statement made available to Business Times.

The combined crush capacity of Bunge ETGO is two million tonnes per year and both plants are able to crush either canola seed or soyabeans. While Bunge and TRT-ETGO will continue to own and operate their respective facilities, the joint venture will be responsible for all commercial aspects of the business including oil seed procurement, product sales and risk management.

TRT-ETGO acting chief executive officer Wira Adam said the company is excited about the prospect of working with Bunge. “Bunge will honour all open contracts and the new commercial team is looking forward to providing new marketing opportunities for customers. While the new commercial team include employees from both companies, TRT-ETGO will be closing its trading office in Montreal and relocating a few employees to Becancour or the joint venture's office in Oakville, Ontario," he said.

However, financial terms of the transaction were not disclosed.

A news wire recently reported Felda is discussing a strategic alliance with five global trading houses, including Bunge, Archer Daniels Midlands Co and Cargill Ltd. Quoting sources, the report said the strategic tie-up, likely to be in February 2012, is expected to shore up investor interest ahead of Felda's US$2 billion (RM6 billion) listing of agribusiness arm Felda Global by mid-2012, turning it into a palm oil and rubber trading powerhouse.

Felda, which accounts for 8 per cent of global palm oil output, is keen to tap that growing interest as it seeks to widen market access and monetise its assets. 

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