FGV wants to remain in the sugar business

Haris was speaking to reporters yesterday after the signing of an MoU among FGV Plam Industries Sdn Bhd (FGVPI), Sime Darby Energy Solutions Sdn Bhd (SDES) and Biotek Dinamik Sdn Bhd (BDSB).. (Picture shows from left: FGV chief operating officer (plantation) Syed Mahdhar Syed Hussain, Sime Darby Energy Solutions Sdn Bhd GM, Habibullah Nordin, and Biotek Dinamik Sdn Bhd MD and CEO, Eddy Yap Wai Hong at the signing.)

PETALING JAYA: While it wants to remain in the sugar business, FGV Holdings Bhd does not rule out the possibility of reducing its stake in its 51%-owned MSM Malaysia Holdings Bhd.

Its CEO Datuk Haris Fadzilah Hassan said the group was open to various forms of collaboration, including one that involves a stake disposal, “as long as it is good for MSM.”

“We are open to any discussion to strengthen and add value to MSM - we are always on the lookout for opportunities, ” he said.

He said MSM, with its refining capacity of 2.2 million tonnes, could afford to not only serve the domestic market, but also expand to overseas markets.

MSM is the country’s biggest sugar refiner and holds a 60% market share.

The sugar company, however, has been making losses for the past two consecutive quarters on the back of depressed average selling prices (ASPs) due to the glut in sugar supply.

Asked if FGV was looking to dispose of its stake, Haris said the potential collaborations could be in any form.

He said they did not discount any form of collaboration, as long as it was good for MSM and brought value to its shareholders.

“As an agriculture player, we believe that demand for food and energy will always be there, so we want to stay in this business.

“We believe there is potential (in MSM), but we need to see how we can make it stronger, ” he said.

Last Friday, FGV told the stock exchange that the group was exploring potential collaborations in the palm and sugar industries, both in the upstream and downstream sector, including strategic alliances.

It reiterated its statement that it was working on its transformation plan, which included reviewing all under-performing and non-performing businesses, especially the group’s legacy investments.

On the issue of FGV’s shareholder remuneration, Haris said talks were ongoing, and a statement would be issued once there was a decision on the matter.

“All I can say is that our directors are very determined to stay on with the group.

“Yes, they are still working, without fees at the moment, and this shows their commitment to turnaround the company, ” he said.

During FGV’s AGM in June, the major shareholders of FGV – the Federal Land Development Authority (Felda), the Armed Forces Fund Board (LTAT) and Koperasi Permodalan Felda Malaysia Bhd (KPF) – voted against three resolutions pertaining to the remuneration of FGV’s directors.

LTAT later issued a statement saying it was of the view that FGV’s director’s remuneration should commensurate with the current state of affairs and its prospects ahead, given the prevailing economic conditions and FGV’s financial standing.

Haris was speaking to reporters yesterday after the signing of an MoU between FGV Plam Industries Sdn Bhd (FGVPI), Sime Darby Energy Solutions Sdn Bhd (SDES) and Biotek Dinamik Sdn Bhd (BDSB).

The three parties are teaming up to produce bio-compressed natural gas (BioCNG) from waste biogas generated at 35 of FGV’s palm oil mills.

Haris said each mill had the capability to produce between one million and 1.5 million of diesel equivalent from the BioCNG.

“Material that was once deemed as waste will not be used to create value.

“This is an opportunity to add value to our by-products and to also support the Malaysian government’s renewable energy targets, ” he said.

FGV, he said, would not be incurring any costs for the project, as its role was merely to provide the site and waste material.

SDES will be the engineering, procurement, construction and commissioning (EPCC) and technology provider, while DBSB is the project owner and operator, which will be investing about RM350mil into the initiative.

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