FGV buys Sarawak estates, upgrades biodiesel business

KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV) is buying London-listed Asian Plantations Limited (APL) for RM628 million.

In a statement, FGV said it intends to make a voluntary conditional cash offer for all of APL ordinary shares (excluding treasury shares) at £2.20 per share. The Singapore-incorporated APL is listed on the London Stock Exchange's Alternative Investment Market. 

APL owns 24,622ha of oil palm plantations in Miri and Bintulu, Sarawak. Its 29.4% major shareholder, Keresa Plantations Sdn Bhd, is owned by Tan Sri Leonard Linggi Jugah. One of APL’s directors is Tan Sri Amar Leo Moggie, who is more well-known as chairman of Tenaga Nasional Bhd.

“FGV continues to seek opportunities to strengthen our leading position in the oil palm plantation business, through organic and inorganic growth. 

"We are attracted to APL’s high-quality estates and are confident it will bolster FGV’s lead in sustainable palm oil production,” said FGV group president and chief executive officer Mohd Emir Mavani Abdullah.

He said the acquisition complements FGV’s long-term expansion strategy to be in the world’s top 10 agribusiness players and a leader in the sectors of palm oil, rubber and sugar by 2020.

These estates are serviced by a 60 tonne-per hour palm oil mill. Incidentally the estates are near Bintulu's deepwater port, where four of the big palm oil refineries in Sarawak are located. “FGV intends to double the productivity of the mill once it completes the purchase,” Emir said.

In October 2013, FGV bought Pontian United Plantations, which has oil palm estates in Sabah and Johor, for RM1.2 billion.

With all these acquisitions, FGV becomes the world’s third-largest plantation owner of more than 450,000ha in Malaysia and Indonesia.

The group is now the largest crude palm oil producer in the world with about 18 per cent of Malaysia’s production and 7 per cent of the world’s production.

Moving up the value chain, FGV via its unit Felda Global Ventures Downstream Sdn Bhd is upgrading its biodiesel plant at Pahang with the latest technology in renewable fuel.

The joint-venture parties consist of FGV Downstream (60 per cent), M2 Capital Sdn Bhd (20 per cent), a subsidiary of Australia stock exchange-listed Mission New Energy Ltd and Benefuel International Holdings S.A.R.L (20 per cent).

The joint-venture will acquire a biodiesel plant in Kuantan Port from Mission Biofuels Sdn Bhd and carry out retrofitting on the plant so that it can operate on the Benefuel ENSEL technology with capacity of 250,000 tonnes per annum.

“Through this synergistic collaboration with our partners, there are ready market players throughout their networks in North America and Europe," Emir said. “With the new plant, our biodiesel capabilities will increase threefold, resulting in FGV becoming one of the largest exporters of biodiesel in Southeast Asia.” 

He estimated cost for the proposed joint venture, including the plant acquisition, licensing costs, purchase of catalyst, refurbishment and retrofit to amount to US$47.5 million.