FGV hopes to finalise Trurich sale by Q1 2020

File picture shows FGV Group Chief Executive Officer Haris Fadzilah Hassan holding a press conference at Wisma FGV, May 29, 2019. — Bernama pic
File picture shows FGV Group Chief Executive Officer Haris Fadzilah Hassan holding a press conference at Wisma FGV, May 29, 2019. — Bernama pic

KUALA LUMPUR, Nov 28 – FGV Holdings Bhd hopes to finalise the sale of Trurich Resources Sdn Bhd in the first quarter (Q1) of next year, said group chief executive officer Haris Fadzilah Hassan.

“The bidding process has been completed and it was managed by Maybank. The negotiation process between the bank and the highest bidder is ongoing right now.

“At the FGV board level, we have resolved that we want to proceed with it. So, it also has to happen at the Lembaga Tabung Haji (TH) board level. We are optimistic that this will go through,” he told a press conference on FGV’s financial performance in the third quarter ended Sept 30, 2019 (Q3 2019) here, today.

Trurich, a 50:50 joint-venture company (JV) between TH and FGV, owns and manages 42,000 hectares of oil palm plantations in north and central Kalimantan.

FGV, through its wholly-owned subsidiary, FGV Kalimantan Sdn Bhd, acquired a 50 per cent stake in Trurich from TH in 2010, and to date, FGV’s total cost of investment in the JV amounts to RM255 million and accumulated share of losses totalling RM234 million.

He said Trurich was valued at RM1 billion in 2018, but since then, the condition of the estate had deteriorated.

“When the bids came in, we see a gap between the valuation price and what people were willing to pay for it,” he said. He declined to disclose the value of the highest bidder.

On its sugar business, which is facing excess capacity at MSM Holdings Bhd’s new refinery in Johor, FGV said it is currently in the ‘advanced stage’ of talks with partners in China on the offtake of 700,000 tonnes of sugar.

Haris Fadzilah said that the new refinery would increase MSM’s capacity to 2.25 million tonnes per annum, exceeding Malaysia’s maximum demand level of 1.6 million tonnes per year.

“We need to export and so we are looking for a partner with the ability to export. Currently, only five countries in the world are open with regard to their sugar sector, namely, Australia, New Zealand, Hong Kong, Singapore, and the United Arab Emirates. Other countries have some form of regulation in place regarding their sugar industry.

“We are talking to parties in markets where there is a gap between supply and demand. We are talking to partners in China for 700,000 tonnes of our capacity and once this is concluded, we will keep 300,000 tonnes for the local market,” he added. — Bernama

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