28/05/2012 (Business Times) - Felda Global Ventures Holdings Bhd aims to be among the world’s top five giants in upstream and downstream commodity businesses by 2020, doubling its revenue and profit in the next eight years.

Some of the world’s top commodity groups are Cargill, Louis Dreyfus, ADM and Bunge Ltd. Felda Global, the business arm of government-owned Federal Land Development Authority (Felda), is expected to list its shares on Bursa Malaysia by end-June.

Felda Global’s president and group chief executive officer Datuk Sabri Ahmad said Felda wants to be a world player in the field of oil palm, rubber and sugar, in both downstream and upstream.

“We have a blueprint and are already charting our strategic direction to double revenue and profit over the next eight years.

“Felda is already working hard to achieve its vision and aspiration. We are on a growth transformation,” Sabri told Business Times in an interview recently.

Sabri said after listing, Felda Global will use part of the proceeds to expand in Malaysia, Asean, Africa and IndoChina.

Felda Global is expected to garner a market cap of some RM17 billion, which is among Bursa Malaysia’s top 20 firms.

Prime Minister Datuk Seri Najib Razak is due to launch Felda Global’s prospectus on Thursday at Felda’s Dewan Perdana here.

Sabri said in Malaysia, Felda will embark on aggressive replanting of 15,000ha of its estates a year and identify new areas such as in Perlis to grow sugarcane as well as plant oil palm on hilly areas.

In Africa, Felda will use its existing model, which is to start with 5,000ha first, of which 1,000ha will be the nucleus estate while the rest will be owned by local farmers.

Sabri said the venture could be in the form of an acquisition, joint ventures, collaboration without having a stake or a government-to-government deal.

Money from the initial public offering (IPO) will also be partly used to strengthen its downstream sector such as making specialty products and oleochemicals to support existing customers, such as Unilever and Procter & Gamble.

"Our future expansion and strategic collaboration post- IPO either in upstream or downstream must be on a win-win formula.

"The downstream sector must support and protect the upstream sector because even though the downstream profit margin is less, the upstream sector is more volatile (and) exposed to price fluctuations," said Sabri.

He said for example, crude palm oil (CPO) prices reached as high as RM4,200 in March 2008, but crashed to RM1,600 in September of the same year.

"Huge price fluctuations are not good for the plantation industry. What we need is sustainable prices so that we can have good profit and dividends for all."

He added that it is important that Felda Global be able to sell commodities to all and not only to limited buyers as it is not healthy to do so.

Felda, arguably the world's largest plantations scheme, owns over 850,000ha of estates growing oil palm, rubber and other crops, of which 500,000ha are owned by its 112,635 settler families.