FGV: Disposals to be completed by end-June

KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV) expects to complete divesting its non-core businesses, which it has been trying to do, by the end of next month via open tender, said its group president and CEO Datuk Emir Mavani Abdullah, whose contract ends in June.
Emir declined to comment on discussions on his contract, saying only that “it is in the process” and the result will be known “very soon”providing no hint as to whether he would be staying or going.
“We hope to complete the disposal of the non-core business most likely by end of June. We have non-core assets like our travel agencies (Felda Travel) and property arm, which we want to dispose of. We are in the process of divestment now,” he told reporters at a signing ceremony yesterday.
On the outlook for plantation and crude palm oil (CPO) prices, Emir said 2015 will be a bearish year.
“CPO price as you can see, it is still hovering around the same region of RM2,100 to RM2,200. I think this year, most of you also heard...it’s going to be quite a bearish year. Also, the issue of the floods and before that was the hot summer, have created a bit of a reduction in production of our fruits. Not only us in FGV but generally in all the plantations within Malaysia.
“Like any other plantation companies we are also affected by the low CPO prices and also the concern of the low production that happened at the beginning of this year,” he said.
Commenting on its replanting efforts, Emir said FGV will maintain its target of replanting 15,000 ha per year but will stagger the replanting process to focus on areas with old trees.
“Our replanting effort is following the track actually. What we’re doing now is optimising the replanting. Knowing the CPO price is at a bearish mode, we’re going to focus on areas that require more replanting. We are going to stagger it now...now already about 44,000 ha being replanted. We maintain target but we are going to focus on the areas where the trees are very, very old,” he said.
He added that its efforts in increasing brownfield landbank will also ensure FGV sustains its earnings at current levels or more, as all its new brownfield landbank are not affected by land lease agreements (LLAs).
“We are looking at stabilising the LLAs, a team is looking at it now. We are talking to Felda and to have more predictability in our LLAs,” he said.
Yesterday, FGV signed two memorandum of collaborations (MOC) with the Forest Research Institute Malaysia (FRIM) and Department of Wildlife and National Parks (Perhilitan) to begin conservation efforts for the world’s largest flower Rafflesia and the sun bear.
The MOC with FRIM is to set up a Rafflesia Conservation and Interpretive Centre while the MOC with Perhilitan is to set up the Sun Bear Conservation Programme. FGV pledged to invest a total of RM7.5 million over five to six years for both programmes.