Home > Uncategorized > Challenging year ahead for FGV

Challenging year ahead for FGV

This is written by my colleague Zaidi Isham Ismail.

KUALA LUMPUR: FELDA Global Ventures Holdings Bhd (FGV), the world’s largest crude palm oil producer, expects a challenging 2013 due to lower CPO prices and soft demand from top buyers China and India.

FGV president and chief executive officer Tan Sri Sabri Ahmad said CPO prices averaged above RM3,000 a tonne in 2011 before settling to around RM2,400 a tonne presently.

“So it will be a challenging year for FGV and the industry this year due to slower economic growth in China and India,” Sabri told Business Times and Berita Harian at the company’s headquarters here recently.

He reminded the industry to be careful not to allow CPO prices to dip below the RM2,000-a-tonne level. “Everybody wants to see the CPO price rise above RM3,000… we must also make sure it does not go below RM2,000,” said the outgoing president and CEO, whose contract expires on July 15.

“For the past few months, some 100,000 tonnes of CPO were taken from the market through the local biodiesel programme, which helped to support prices as well as trim the stockpile level to 1.8 million tonnes.

Sabri did not disclose where he will be heading next, only saying that he will devote his time for the betterment of the palm oil industry.

He declined to comment on whether he will be leading Biodiesel Malaysia Sdn Bhd, a consortium called that was formed to give the lacklustre biodiesel sector a new lease of life. The consortium is 32 per cent-owned by FGV while Sime Darby Bhd holds 23 per cent. The remaining 50 per cent is reserved for industry stakeholders, including plantation companies and biodiesel players.

Before leaving FGV, Sabri said he will helm the company’s annual general meeting on June 26, its first since being listed last June. The AGM will be the country’s largest shareholders meeting as FGV has more than 180,000 shareholders, including the 112,000 settlers nationwide.

FGV, which contributes to some 10 per cent of the world’s CPO output, posted a 55.9 per cent increase in revenue to RM2.68 billion for its first quarter ended March 2013. Its pre-tax profit for the quarter, however, declined 22.2 per cent to RM218.51 million from RM280.81 million. a year ago.

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