20/09/2011 (The Star) -  Felda Global Ventures' Holdings Sdn Bhd's (FGV) plans to penetrate the European Union with its palm oil products now that it has established a gateway into Europe via Turkey.

It has set up a company called Felda-Iffco Gida Sanayi ve Ticaret with Dubai-based Iffco Holdings Ltd to expand its palm oil products.

The company has invested RM60mil to develop its margarine and fats business by early next year using Malaysian crude palm oil.

When the joint venture was first initiated in 2009, the investment by FGV was RM66mil with RM21mil accounting for share sales and RM45mil for initial capital expenditure.

“I have seen the American Soybean Association investing in Turkey in the past and I think it is a strategic move,” Felda-Iffco chief operating officer Mehmet Sahin told StarBiz.

“Turkish people do not know much about palm oil yet. The oils market is protected and the food industry is strictly regulated here,” he added.

On product development, he said 80% to 90% would be fats or palm-related consumables. The products would be mainly for domestic use, with 10% targeted for exports.

The Felda-Iffco refinery in Turkey has a 3.2% share of the palm oil market in the country and it plans to increase it to 8.4% next year. The company also plans to expand the refinery from 4.3 sq m to 5.95 sq m with new machinery and facilities. It will also triple its manpower to accommodate growth.

The current plant, previously owned by an olive oil company, has a capacity of 150 tonnes per day and it would be increased to 450 tonnes per day next year.

Felda-Iffco had previously focused on soft oil products like sunflower oil and canola oil.

FGV is the commercial arm of the Federal Land Development Authority (Felda) .

Felda Global group president Datuk Sabri Ahmad said the Turkey project showed that the group's downstream ventures overseas could also become successful.

“By 2012, when our state-of-the-art fats plant in Turkey is operational, we will be able to enter the industrial and bakery fats market in Turkey in a big way,” he told StarBiz.

Meanwhile, Malaysian consul general in Izmir, Datuk Husamettin Sinlak, said Malaysian companies had yet to unlock the full trade potential in Turkey as it was still a fairly new market. “We have an international trade fair here in Izmir every year and it would be great if Malaysian companies participated in it,” he said.