Malaysia’s Felda Global eyeing plantation land in Indonesia
RHB Research Institute says Malaysian company Felda Global Ventures (FGV) is close to securing some acquisitions, likely to be upstream plantation land in Indonesia.
“We believe FGV would prefer to buy a combination of greenfield and brownfield land, which would add to earnings immediately and generate positive cashflows,” it said today.
RHB Research said on the downstream front, FGV could be eyeing to expand via collaboration or strategic alliances with partners, and possibly exploring the setting up of downstream plants in China and India.
“Besides this, we believe FGV continues to identify non-core assets (held at FHB level) to divest, which could include its travel, IT, livestock and cocoa businesses, amongst others,” it said.
Following its company visit, RHB Research said FGV's fresh fruit bunches (FFB) production was better than expected for FY12 and estimates were lowered for FY13.
The research house said FGV was also expecting better crude palm oil (CPO) prices in the second half of 2013.
It added that unit production costs were expected to be flattish in FY13. Meanwhile, FGV replanted more than original target in FY12.
As for the downstream refineries, they had started to turn around operationally in Q4, 2012.
“Upstream plantation acquisitions are most likely, while non-core asset divestment and downstream collaborations are being considered,” it said.