FGV To Make Strategic Shift To Become A Major Downstream Player

KUALA LUMPUR, June 21 (Bernama) -- FGV Holdings Bhd said although oil palm would continue to play an important role in the company’s future, it is now studying closely the tremendous potential of the downstream cluster, which has more room for growth. “I am of the view that with the current leadership in place, FGV will be able to make the strategic shift to become a major player in the sector,” chairman Azhar Abdul Hamid said in a letter to shareholders here, Friday. FGV, he said, would want to take a leaf from other, much bigger and more successful companies which have chosen to focus on downstream activities. Even in the area of oil palm cultivation, he said FGV is currently reviewing its position. “We cannot continue to be price takers, always at the mercy of international commodity pricing. Instead, we have to look at how we can create more value with the product we produce in such abundance,” he said. Additionally, the company cannot solely depend on earnings from crude palm oil (CPO) sales and remain helpless in the face of price fluctuations, he said. “FGV is fully aware of the plight of the smallholders and third parties who produce two-thirds of the fruits we process. In an environment of low CPO price, these small farmers suffer more than anyone else.” Hence, Azhar said by year-end, FGV would make key announcements on the way forward. “I am excited at the prospects and opportunities that lie ahead. We will, of course, tread cautiously, mindful of our mandate to create value for all our shareholders,” he said in the six-page letter. -- BERNAMA