28/09/2012 (The Star) - Felda Global Ventures Holdings Bhd (FGVH) is targeting more mergers and acquisitions (M&As) in the Asean region, especially in the upstream operations, partly to counter i ts old age oil palm profile in Malaysia.

Group president and chief executive officer Datuk Sabri Ahmad said the group's upstream expansion would involve acquisitions of prospective small and mid-tiered plantation companies in Malaysia as well as green and brown fields for oil palm in Indonesia and sugar plantations in Myanmar.

“Of its total initial public offering proceeds of RM4.5bil, about 50% would go into the expansion of the group's upstream operation,” Sabri told StarBiz yesterday.

The upstream sector, namely oil palm, rubber and sugar, would remain the group's core business going forward, he said adding that it contributed about 70% to the group's revenue last year.

Sabri: ‘We are targeting 30,000ha of sugar plantation and also a cooking oil packaging plant there.’

Sabri, who is heading to My anmar today, said FGVH would be exploring opportunities in sugar-related operations both upstream and downstream.

“We are targeting 30,000ha of sugar plantation and also a cooking oil packaging plant there.

“Hopefully, these ventures will materialise by next year,” he added.

The group, via its listed unit MSM Holdings Bhd, is the country's largest sugar refiner with one million tonnes of production per year.

However, the group also imported about one million tonnes of crude sugar (raw material) to refine.

“This is quite risky in terms of value chain as we are too highly dependent on imports,” explained Sabri.

“Therefore, we need to explore or secure our own crude sugar supply of ab out 20% to 30% by acquiring sugar plantations,” he added.

In Indonesia, he sa id the group was pla nting oil palm on 15,000ha greenfield in Pontianak, West Kalimantan.

“We are also in the midst of acquiring brownfield oil palm plantations in Ind onesi a,” Sabri said.

The group aims to own about 150,000ha in the republic within the next five years.

According to Sabri, it is part of the group's vision to emerge as the leader in the global oil palm industry with a total landbank of one million ha by 2020.

Sabri said FGVH was addressing its old age tree profile via aggressive replanting activities in Malaysia.

“We are targeting 15,000ha per year for replanting and this will provide us the opportunity to plant better quality materials from our research and development division to boost yields,” he added.