FGV Holdings diversifies into dairy farming, fresh milk processing
FGV Holdings Bhd (FGV) is diversifying into the business of dairy farming and fresh milk processing with the subscription of new shares amounting to 60 per cent equity interest in the enlarged share capital of RedAgri Farm Sdn Bhd (RedAgri) for RM10 million.
It marks the first step for the group to become an integrated agrifood company.
The acquisition of RedAgri, which owns the Bright Cow brand of dairy products, enables FGV to create more value from its existing resources and to tap into synergies within the palmbased circular economy.
FGV Group chief executive officer Datuk Haris Fadzilah Hassan said dairy farming is one of the identified pillars of
FGV’s integrated farming business.
“The other key components are animal nutrition, paddy and rice, and cash crops, which include MD2 pineapples and Cavendish bananas,” he said in a statement yesterday.
Haris Fadzilah said FGV has already ramped up production of its palm-based animal feed operations, with 2019 sales showing a marked 113 per cent increase to 21,600 million tonnes (MT) from 10,200 MT in 2018.
“Once capacities are ramped up to 150,000 MT per annum over the next five years, we are looking at additional revenues of about RM120 million from this business,” he added.
In 2019, FGV announced that it would enter the palm-based circular economy to tap into lucrative synergies presented by the group’s extensive palm oil operations. RedAgri currently processes 4,000 litres of fresh milk a day, which will be increased to 20,000 litres a day by 2022.
With the support of contract farmers, FGV will be able to increase production to meet increased local demand.
Haris Fadzilah added that Malaysia imports about RM3.9 billion worth of dairy products a year, as local production amounts to only 67.1 million litres annually, or 61 per cent of current domestic demand, with the remaining 40.0 million litres imported.
The same scenario also applies to several other key food products, presenting opportunities for organisations such as FGV to benefit from import substitution, while supporting the government’s vision of shared prosperity. – Bernama