FGV not affected by EU ban on palm oil

KUALA LUMPUR, Feb 23 — The European Union’s (EU) plan to phase out palm-oil based biofuel from its energy mix from 2021 will not affect Felda Global Ventures Holdings Bhd (FGV) as its export to the EU is minimal, said its Group President and Chief Executive Officer, Datuk Zakaria Arshad.

“Our production or sales to the EU is only about two per cent of our business and (even) without the ban we (still) could not sell because of the price wise. Therefore we only concentrate on the local market.

“However, I am worried about the perception of palm oil by the other consuming countries as they might think the EU’s ban is in totality, which is wrong,” he told reporters after announcing FGV’s 2017 results here today.

The EU Parliament voted on Jan 17, 2018 to ban palm oil-based biofuels by 2021, while other vegetable oil-based biofuels such as those from soya oil and rapeseed oil can continue to be used until 2030.

FGV’s net profit rose to RM208.04 million in the financial year ended Dec 31, 2017 from RM66.45 million a year ago.

Revenue, however, declined two per cent to RM16.97 billion from RM17.24 billion previously, as a result of lower profits accrued from the sugar sector which suffered from higher raw sugar costs, the world largest palm oil producer’s said in a filing with Bursa Malaysia today.

Asked whether FGV is also eyeing India’s ailing vegetable oil producer Ruchi Soya Industries Ltd, Zakaria replied, “As for now, Ruchi Soya not in our target.”

Yesterday, Sime Darby Plantation was reported to have expressed interest in the company, which has 25 per cent market share and a number of brands.

Zakaria revealed that FGV planned to divest two to three non-core businesses that would bring an additional income to the company this year.

“One of two have already been concluded and these will give impact on this year’s financial results,” he said. — Bernama