FGV denies Tradewinds links
However it is holding talks with China firms
KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV) has ended speculation linking it to a potential partnership with the Tradewinds Group and said it has no such knowledge of the matter.
“I do not know how the name came up as we have never had direct discussions with Tradewinds,” FGV group president and CEO Datuk Zakaria Arshad told reporters following the rebranding ceremony for FGV’s flagship Saji line of cooking oil and culinary products in Kuala Lumpur yesterday.
His reply was in relation to a recent report by a local English business weekly linking FGV with Tradewinds as one of a few possible strategic investors. Zakaria said the group was unaware as to whether Tradewinds had discussed the matter with FGV’s shareholders instead.
However, Zakaria confirmed that the group was holding talks with several Chinese parties, although the details had not been outlined yet.
“We are looking at strategic partnerships for certain business segments. We have to evaluate the options and get a mandate from the board first, so we cannot go into details on this (for now),” he said.
As an example, one potential avenue to be explored is on potential investments in infrastructure such as storage tanks, Zakaria pointed out.
A potential partner could jointly invest with FGV on the tanks for the storage of FGV’s oils in the destination market. An alternative scenario is for a partner with the existing infrastructure and capacity who can also help the group sell its products to consumers in that region, Zakaria explained.
FGV is said to be negotiating with at least three China-based companies over a potential partnership and a possible strategic investment stake. Among the parties said to be keen include China National Cereals, Oils and Foodstuffs Corp (COFCO).
FGV had intended to break into the highly competitive Chinese edible oils market in the past. In April last year, a proposed acquisition of China-based edible oils producer Zhong Ling Nutril-Oil Holdings Ltd fell through after both parties failed to agree on the terms.
“COFCO is one of the potential business partners out of many that we could work with. But we are not just looking at China. We are also looking into India and those in the MENA (Middle East and North Africa) region,” Zakaria said, adding that negotiations would be finalised by this year.
The launch for the rebranded Saji line was officiated by FGV chairman Tan Sri Isa Samad, Zakaria as well as Delima Oil Products Sdn Bhd (DOP) chief executive officer Datuk Wira Adam. DOP, which is a subsidiary of FGV, markets and distributes goods under the Saji brand.
In his keynote speech, Isa said that Saji has become a trusted brand in cooking oil which has a local market share of above 35%. Downstream operations, which include the consumer products sold under the brand, currently contribute around 30% of FGV’s current annual revenue base of RM17bil.