KUALA LUMPUR, March 21 — Companies from China are now looking for strategic stake in plantation firm Felda Global Ventures Holdings Bhd (FGV) causing its share to close 9.42 per cent higher at RM2.09 yesterday, StarBiz reported today.
Among the three firms was China National Cereals, Oils and Foodstuffs Corp (Cofco), one of China’s state-owned food companies, and its largest food processing, manufacturer and trader.
“These Chinese companies are major global consumers of palm oil/palm products and are looking to raise stakes in FGV via the open market,” said an anonymous source as quoted in The Star’s business pullout.
“FGV is well aware of the interest by Cofco and two other Chinese parties which are keen to come on board as FGV strategic investors,” the source added.
FGV’s major stakeholders are currently the Felda Land Development Authority (Felda) at 32.4 per cent, pilgrims’ fund Lembaga Tabung Haji (7.9 per cent), and the Retirement Fund Inc (7.2 per cent).
PublicInvest Research’s latest report was quoted saying that Cofco’s entry would grant FGV access to China’s downstream market, with the former holding controlling interests in 11 Hong Kong listed companies and four public listed companies in mainland China.
Despite that, the research house warned that COFCO’s move may face difficulties from the tightening capital controls by China’s central bank.
FGV group president and chief executive officer Datuk Zakaria Arshad however declined to comment on the rumour when contacted by StarBiz.
However, he admitted that China was among the many markets it was looking into to market FGV’s downstream palm oil products.
“Towards this, China, India, Pakistan, Middle East and the North African countries have been earmarked as lucrative destination markets for our downstream palm oil products,” he was reported saying.
“China is an important destination markets for FGV’s downstream palm oil and palm olein products,” Zakaria added.
Earlier this year, Zakaria was reported saying that the firm is optimistic of emerging leaner and stronger in 2017 backed by improved plantation sector's performance and commodity prices after a challenging and tumultuous year that saw its share slipping.