FGV inks MoU with China's Sinograin

Group president and chief executive officer Datuk Zakaria Arshad said the YangambiGT1 was the first palm oil seed in Malaysia with tolerant capabilities against Ganoderma fungal attacks.

KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV) has signed a memorandum of understanding (MoU) with Sinograin Oils Corp to explore the feasibility of supplying and distributing palm oil products to penetrate China's midstream and downstream markets.

FGV Group president and CEO Datuk Zakaria Arshad said FGV hoped to explore the opportunity to integrate the operations of its unit FGV China Oils Ltd in Dongguan, Guangdong, with Sinograin's domestic operations to bring value and cost savings to both parties.

In a statement on Monday, he said the collaboration would also allow FGV to explore its downstream expansion in the supply, processing, packaging and distribution of blended oils, shortenings and specialty fats.

Sinograin is a unit of China Grain Reserves Corp, which specialises in the operation and management of China's national grains and oil reserves, with integrated functions to purchase, store, transport, process and trade.

It produces edible oils from soy beans, palm oil and other oils, as well as, distributes and sells its own brand of consumer edible oils direct to the domestic market.

Sinograin also imports 700,000 tonnes of palm oil products annually.

Zakaria pointed out that China is FGV's second biggest crude palm oil (CPO) market with 308,040 tonnes exported to that country in 2016.

As the third largest palm oil consumer in the world, China consumed 5.05 million tonnes of palm oil in 2016 compared with 2.02 million tonnes in 2001, he said.  

China''s palm oil consumption is forecast to grow further, driven by the rise in the disposal income of its population and changes in income habits brought on by demand for healthier edible oils.

"We want to expand our business in China and we believe FGV and Sinograin Oils can complement each other," he added. - Bernama