FGVH Identifies Partners To Emerge World’s Biggest, Respected Commodity Company

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LONDON, May 15 (Bernama) — Felda Global Ventures Holdings Bhd (FGVH) has signed two agreements with two renowned companies, which Prime Minister Datuk Seri Najib Tun Razak, said would allow the soon-to-be-listed entity to emerge as one of the world’s biggest and respected commodity company.

The first agreement was on Strategic Joint Venture with Louis Dreyfus Commodities Asia Pte Ltd (LDCA) while the second was a memorandum of understanding (MoU) with Vitol S.A. to collaborate on the supply, international trading, marketing, logistics operations and risk management on various commodities, excluding oil and fats.

The strategic joint-venture agreement the two parties are negotiating covers a broad collaborative strategy for:

  • DCA’s proposed strategic cornerstone investment in FGVH upon its IPO; and
  • trading and marketing and downstream assets joint venture to be implemented.

The agreement is to combine the respective strengths of both companies — FGVH in the production and processing of crude palm oil (CPO), LDCA in the merchandising of CPO and refined products, and risk management of those activities to maximise the value creation throughout the supply chain to become one of the world’s largest integrated palm oil players.

The signatories were Felda Chairman Tan Sri Mohd Isa Abdul Samad and Felda Global Ventures Holdings Bhd President and Chief Executive Officer Datuk Sabri Ahmad and Louis Dreyfus Commodities was represented by its chief executive officer Serge Schoen.

Under the MoU between FGVH and Vitol Group, the two parties planned to incorporate a joint-venture company in Kuala Lumpur in the next six months with the FGVH, Felda’s commercial arm, holding the majority shareholding.

This collaboration enhances Vitol’s already significant presence in Malaysia, which is currently focusing on its existing energy trading business and terminal operations.

The signatories were Sabri while the Vitol Group was represented by its Chief Financial Officer Jeff Delapina.

Najib witnessed both signings which took place at the Malaysian High Commission here late yesterday evening.

At a press conference after the signings, Najib said part of Felda’s new strategies after the listing of the Felda Global Ventures was to emerge as among the world’s biggest commodity company from plantation level to the marketing stage.

“As we all know, the foreign market, including Europe, the Middle East and also Russia, need us to network with Felda and Global Ventures just like commodity-based companies which have networking and know the mechanism of commodities’ listing.

“I’m confident with this strategic partnership, Felda Global Venutures can emerge as a formidable company and among the world’s biggest,” he said.

Felda Global Ventures is incorporated in Malaysia and is directly owned by the Federal Land Development Authority (Felda). It is a global agricultural and agri-commodities company, with operations in 10 countries.

Currently, it is the third largest oil palm plantations operator in the world.

The company currently operates 343,521 hectares of oil palm estates in Malaysia which produced 5.2 million metric tonnes of fresh fruit bunches last year.

Felda Holdings Berhad (FHB), a 49 per cent-owned associate of Felda Global ventures is the world’s largest producer of crude palm oil, with 3.3 million metric tonnes produced in 2011 and Felda Global Ventures subsidiary, MSM Holdings, which is listed on the Bursa Malaysia Main Board, is the leading refined sugar producer in Malaysia, with an annual production capacity of over 1.1 million metric tonnes of sugar products.

FHB also owns and operates crude palm oil and vegetable oil terminals in Malaysia and Indonesia, with a current capacity of about 772,050 metric tonnes.

The Vitol Group was founded in 1966 in Rotterdam, the Netherlands. The company has grown significantly to become a major participant in the world energy market and is now the world’s largest independent energy and commodity trader.

Its trading portfolio includes crude oil, petroleum products, bunker fuel, liquefied petroleum gas, liquefied natural gas, natural gas, coal, power, metals, carbon emissions and sugar.

Through its trading business, Vitol has established itself in shipping as one of the world’s largest charterers of crude oil and oil product tankers. Vitol trades over 400 million metric tonnes of crude oil, petroleum products and commodities annually. Its 2011 revenue was US$297 billion.

Vitol has a 50 per cent share in VTTI, a storage and terminals business, which operates 11 terminals on five continents, with an existing capacity of about 6.5 million cubic metres which includes its recently completed 841,000 cubic metre world-class oil products terminal in Tanjung Bin, Johor.

VTTI expects to increase its capacity to over eight million cubic metres by next year.

Source : Bernama

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