Felda Global Ventures eyes brownfield plantations to maintain cash

Executive vice-president and head of plantation cluster Abdul Halim Ahmad said the company is looking to acquire an estimated 15,000 ha. of brownfields a year, the same hectarage in its replanting programme.
Executive vice-president and head of plantation cluster Abdul Halim Ahmad said the company is looking to acquire an estimated 15,000 ha. of brownfields a year, the same hectarage in its replanting programme.

BAHAU, May 1 — Felda Global Ventures Plantations (M) Sdn Bhd (FGV) says it will continue to acquire old oil palm plantations at a time when the company is carrying out aggressive replanting activities to maintain financial flow and profit.
           
Executive vice-president and head of plantation cluster Abdul Halim Ahmad said the company is looking to acquire an estimated 15,000 ha. of brownfields a year, the same hectarage in its replanting programme.
           
"We already have between 25,000 to 30,000 ha. of brownfields, and we are also eyeing 20,000 ha. to ensure stable cash flow for the company," he told reporters on a media visit here today.
           
Abdul Halim said Felda Global's profit is expected to grow by up to 25 per cent in five years as its oil palm trees mature.
           
He said replanting 15,000 ha. would cost RM135 million in the first year, rising to RM172.5 million in the second year after adding RM37.5 million in farm maintenance costs.
           
FGV's planned acquisitions of brownfields in Malaysia, Indonesia and Papua New Guinea are expected to be finalised by year-end, he said, adding brownfield acquisitions normally exceed 10,000 ha.  
           
Funding for the acquisitions would come from its 2012 initial public offering proceeds, he said.
           
FGV has a landbank of 467,755 ha., including 56,422 ha. in Indonesia. Out of the total, 350,394 ha. are oil palm plantations.
           
The company aims to lead other market players over the next five years by ensuring mature oil palm plantations comprise 60 per cent of the total, with immature and old plantations making up 20 per cent each.          
           
It also aims to raise its annual fresh fruit bunch yield to 25 metric tonnes per ha. from 16 metric tonnes per ha. currently through replanting and the Big Bang programme introduced early this year, which it targets to generate RM320 million a year. — Bernama