MARKET DEVELOPMENT
FGV Upbeat On Revenue Growth In Downstream Sector
FGV Upbeat On Revenue Growth In Downstream Sector
05/05/2015 (Bernama) - Felda Global Ventures Holdings Bhd (FGV) is confident of generating higher revenue from its palm oil and palm-related downstream activities in the next one to two years by exploring new product lines and expanding its production capacity.
Head of Palm Downstream cluster Datuk Zakaria Arshad said the world's largest crude palm oil (CPO) producer and third largest oil palm plantation company is looking at the lucrative ramen or Japanese noodle industry as well as the palm-based cosmetics industry.
"We have identified a South Korean company that we would like to work together with in the ramen industry and we are talking to them," Zakaria told Bernama at the two-day Malaysia-South Korea Palm Oil Trade Fair & Seminar 2015 (POTS) in Seoul recently.
FGV was an exhibitor at the event which began on April 27.
Zakaria said should the partnership materialise, it will be synergistic to FGV's overall business strategy to expand its product line through production facilities in Malaysia and China.
In its downstream business segment, FGV produces soybean and canola products as well as oleochemicals.
FGV has interests in palm oil refineries and downstream processing facilities in Malaysia, Indonesia, China, Turkey and South Africa as well as a facility for other oils and fats in the USA.
"We can leverage on the market for halal Ramen through production facilities in China and Malaysia," he said, adding the South Koreans are also looking at Malaysia as a quality supplier of palm oil.
He said there is a lot of potential in the South Korean market such as in the biodiesel industry and the booming beauty and personal care and dietary supplements sector.
"We have a few names in the beauty and cosmetics sector that we intend to form partnerships with, but we have not seriously talked to anyone yet. We believe the South Koreans have the technology and we can be a synergistic partner to them," he said.
According to Zakaria, FGV's intention to expand its downstream footprint is in line with its overall long-term strategy to generate short-term revenue besides its core business in the upstream oil palm plantation sector, which has a longer gestation period in terms of churning out revenue and profit.
"Currently, about 30 per cent of revenue comes from the downstream division, and we intend to increase the contribution from the downstream industry to 40 per cent of group revenue within the next one to two years," he said.
He said FGV is seriously ready to expand its production capacity especially in China should any proposal be finalised in line with increasing demand in the market for downstream products.
Zakaria said the downstream industry also looks vibrant in China, India and the Southeast Asia markets.
"We are looking at a few proposals in India where we can expand our market presence there," he said.
Head of Palm Downstream cluster Datuk Zakaria Arshad said the world's largest crude palm oil (CPO) producer and third largest oil palm plantation company is looking at the lucrative ramen or Japanese noodle industry as well as the palm-based cosmetics industry.
"We have identified a South Korean company that we would like to work together with in the ramen industry and we are talking to them," Zakaria told Bernama at the two-day Malaysia-South Korea Palm Oil Trade Fair & Seminar 2015 (POTS) in Seoul recently.
FGV was an exhibitor at the event which began on April 27.
Zakaria said should the partnership materialise, it will be synergistic to FGV's overall business strategy to expand its product line through production facilities in Malaysia and China.
In its downstream business segment, FGV produces soybean and canola products as well as oleochemicals.
FGV has interests in palm oil refineries and downstream processing facilities in Malaysia, Indonesia, China, Turkey and South Africa as well as a facility for other oils and fats in the USA.
"We can leverage on the market for halal Ramen through production facilities in China and Malaysia," he said, adding the South Koreans are also looking at Malaysia as a quality supplier of palm oil.
He said there is a lot of potential in the South Korean market such as in the biodiesel industry and the booming beauty and personal care and dietary supplements sector.
"We have a few names in the beauty and cosmetics sector that we intend to form partnerships with, but we have not seriously talked to anyone yet. We believe the South Koreans have the technology and we can be a synergistic partner to them," he said.
According to Zakaria, FGV's intention to expand its downstream footprint is in line with its overall long-term strategy to generate short-term revenue besides its core business in the upstream oil palm plantation sector, which has a longer gestation period in terms of churning out revenue and profit.
"Currently, about 30 per cent of revenue comes from the downstream division, and we intend to increase the contribution from the downstream industry to 40 per cent of group revenue within the next one to two years," he said.
He said FGV is seriously ready to expand its production capacity especially in China should any proposal be finalised in line with increasing demand in the market for downstream products.
Zakaria said the downstream industry also looks vibrant in China, India and the Southeast Asia markets.
"We are looking at a few proposals in India where we can expand our market presence there," he said.