KUALA LUMPUR, Feb 28 — FGV Holdings Bhd is looking to divest its non-core and non-performing businesses this year, with total identified assets worth about RM150 million.
Group chief executive officer Datuk Haris Fadzilah Hassan said some of the non-performing assets had been recognised since last year and the group hoped the divestment exercise could be finalised this year.
“For this year, I think we can conclude the (divestment of) Nilai Education Sdn Bhd and Malaysia Cocoa Sdn Bhd by the first quarter,” he told a media briefing on the group’s financial results for the year ended December 31, 2019 (FY19) here, today.
The group is also currently working towards completing its Roundtable on Sustainable Palm Oil (RSPO) certification by the second quarter of 2021 after achieving 100 per cent Malaysian Sustainable Palm Oil (MSPO) certification.
Haris Fadzilah said that for the renewable segment, FGV was targeting to reach an annual revenue of around RM200-RM300 million in the next five years from RM109 million recorded in FY19, through several strategies including focusing on zero-investment projects.
FGV’s plan to diversify its revenue streams was well underway, he added.
In FY20, the group expected additional revenues of RM45 million from its integrated farming, renewable energy and animal feed businesses.
“While palm oil will remain our mainstay, this is an exciting diversification that will bring us and our smallholder partners added revenue and opportunities for growth,” he added.
He also expects the crude palm oil (CPO) price to trade within the range of RM2,200-RM2,400 per tonne in FY20, while the price is expected to linger at around RM2,450-RM2,550 per tonne in the short term.
Meanwhile, Haris Fadzilah said there is no urgency for the group to find a business partner for its subsidiary, MSM Malaysia Holdings Bhd, at present as it has passed the major problems regarding additional supply and pricing, among others.
“There is no plan to divest MSM actually, but we are open to any proposal (at the moment). At that point (last year) we are looking for a partner that can help provide off-take (for the additional capacity) because MSM Johor came on stream last year
“The additional one million-tonne capacity (from MSM Johor) increases MSM’s total capacity to 2.25 million tonnes, while the total demand in Malaysia is only about 1.6 million tonnes, so there is excess capacity,” he said.
However, he said, based on the latest market situation, the sugar industry is getting better as the shortage of raw sugar supply had boosted the sugar price to US$0.14 (RM0.60) per pound to date.
“One of the (other) issues that has been a problem for MSM is that it is tied with long-term sugar supply and buying, but this had ended in December last year.
“Now, its sugar trading has returned to the normal pricing while the sugar price has been going up due to the shortage of supply. The company has also restructured its current financial commitments,” he added. — Bernama
