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FGV signs dairy farming deal with Touch Group and Qatar's Baladna

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KUALA LUMPUR: FGV Holdings Bhd via its wholly owned subsidiary FGV Integrated Farming Sdn Bhd has signed a conditional shareholders’ agreement (conditional SHA) with Baladna Food Industries W.L.L and Touch Group Holdings Sdn Bhd for the development of an integrated dairy farming business in Chuping, Perlis.

Baladna Food Industries W.L.L is a subsidiary of Baladna Q.P.S.C. (Baladna).

The parties’ corresponding shareholding will be FGVIF (40 per cent), Baladna (40 per cent) and Touch Group (20 per cent), while the project, which is to be developed within an area comprising 3,259 hectares in FGV Chuping Agro Valley, is expected to involve an investment of up to RM4.5 billion.

The signing ceremony was held last Saturday at the Malaysia Agriculture, Horticulture and Agrotourism 2022 Exhibition (MAHA 2022) in Serdang, witnessed by Prime Minister Datuk Seri Ismail Sabri Yaakob, together with Minister of Agriculture and Food Industries (MAFI) Datuk Seri Dr Ronald Kiandee and Perlis Menteri Besar Datuk Seri Azlan Man.

The conditional SHA was signed between FGV group chief executive officer (CEO) Datuk Mohd Nazrul Izam Mansor, BALADNA CEO Piet Hilarides and Touch Group CEO Raja Datuk Idris Raja Halid.

"This joint venture will be a springboard for FGV to become one of the world’s leading integrated and sustainable agribusinesses,” Mohd Nazrul said in a statement today.

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As an organisation which is already involved in the food industry, the company’s latest venture into this integrated dairy farming business strongly positions the plantation giant in a growing milk and dairy industry, thus strengthening its presence in the food industry, he said.

With an aim to strengthen the National Food Security Agenda, this project is also aligned with FGV’s long-term plan to position FGV Chuping Agro Valley (FCAV) as one of the leading agro-valley hubs in Malaysia, delivering sustainable value for its stakeholder and better living conditions to the local community as well as addressing food security concerns of the country, under the supervision of the Northern Corridor Implementation Authority.

The establishment of the integrated dairy farming business is expected to create more than 2,000 job opportunities.

Expected to be commercially operational by 2025, the project aims to produce 100 million litres of fresh milk per annum within the first three years and is expected to reach 300 million litres of fresh milk in 10 years.

"Malaysia’s dairy market grew at a compounded annual growth rate (CAGR) of 4.5 per cent from 2015 to 2020.

"The outlook for the dairy sector is positive, and FGV is optimistic that this strategic direction will support the national goals to gain 50 per cent self-sufficiency levels for liquid milk and 100 per cent for fresh milk by 2028, doubling the production of fresh milk in Malaysia, reducing imports and providing fresh milk to consumers,” he added.

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