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Publish Date : 14-Mar-2014

Felda Global Ventures Holdings Bhd (FGV) has announced strategy to set up a rubber processing facility in Myanmar in the current year.

The Malaysian group has revealed that it is ready to spend RM30 million to RM45 million to build the plant in line with efforts to make an entry into the country's rubber industry.

It has inked a joint-venture (JV) agreement with Pho La Min Trading Ltd (PLM) of Myanmar on Saturday to establish a new JV company, dubbed as FGV Pho La Min Co Ltd. The group has signed the deal with the local partner through its subsidiary FGV Myanmar (L) Pte Pld.

FGV and PLM will hold 51% and 49% stake in the new JV respectively.

The FGV Group President and CEO - Mohd Emir Mavani Abdullah has expressed his hope to finish the maiden facility of the JV unit by the first quarter of next year. He has further said that the entity will try to have 10,000ha brownfield rubber plantation and will plant rubber trees on 30,000ha.

Emir has revealed that some of the greenfield rubber plantation will be done progressively and added that the Government of Myanmar will provide land to overseas investors for a maximum lease period of 70 years.

The rubber plant, with an annual capacity of 24,000 tonnes, will be set up in Myeik. Afterward, the company hopes to construct another facility in Mon State.

During the pact signing event, Emir stated, "The JV company that we are setting up may be a humble start for FGV. We have high ambitions for this company to excel as a big player in Myanmar in the rubber-related industry."

He added, "We have identified the area for rubber planting, which would be at the central region."

He has further said that FGV will also search for opportunities to plant sugar cane in Myanmar.

He added, "The country has a shortage of sugar, hence there is a lot of growth potential here."

Interacting with media following the signing ceremony, Emir has stated that it may be in refine or raw sugar and the group can reflect on creating a new JV with a Myanmar-based partner for this project.

Since 2011, FGV is doing aggressive search in Myanmar for openings and it has inked a memorandum of understanding (MoU) with PLM in 2012 to set up a comprehensive supply chain in palm oil, rubber and sugar in Myanmar.

It has already started exports of palm oil-based products like SAJI cooking oil, Adela industrial margarine, Mariana shortening and SunBear bread spread range to Yangon.

In addition to the upstream prospects, the group is eyeing the downstream sector as well, according to Emir.

He has disclosed that FGV has also decided to enter into the Cambodian market, with rubber plantation and processing business.

Brownfield operations in Cambodia, Indonesia and Africa are also being considered by the group, revealed Emir.

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