Fraser & Neave Holdings Bhd (F&N) faces a faltering land deal in Malaysia’s Perlis state, which was earlier planned to facilitate its venture into the upstream fresh milk business.
F&N and its wholly-owned unit, F&N AgriValley Sdn Bhd have decided to pursue and evaluate other opportunities for its proposed integrated crop and dairy farming project in Chuping, Perlis, after MSM Malaysia Holdings Bhd terminated the land sale agreement on 9 April 2020.
F&N AgriValley had received the refund of deposit under the conditional sale and purchase agreement (SPA) with MSM Malaysia’s wholly-owned unit, MSM Perlis Sdn Bhd.
In the agreement, F&N had earlier proposed the acquisition of 4,454 hectares of leasehold land in Chuping for RM156 million (US$35.9 million). According to MSM, F&N Agrivalley has failed to obtain the approval of the then Economic Planning Unit (EPU) of the Prime Minister’s Department of Malaysia on or before the expiry of the Extended Conditional Period on April 8, 2020. F&N said it had not met the acquisition conditions in time due to the implementation of movement restrictions in the country in response to the coronavirus, and the landowner had declined to extend the deadline.
In light of these developments, F&N and F&N AgriValley are considering their options. The Board will make further announcement at a later stage.
FGV and subsidiary MSM to expedite Agro-Food Valley development
As the F&N land deal had been cancelled, FGV Holdings Bhd (FGV) and its subsidiary MSM Malaysia Holdings Bhd (MSM) are now expediting their plan to develop the land into a new agriculture growth area called FGV Agro Food-Valley in Chuping, Perlis in Malaysia with a combined investment of RM100 million (US$23 million) to be spread over 2 years.
FGV’s group CEO, Datuk Haris Fadzilah Hassan said the project is expected to redefine the agricultural industry landscape in Perlis as it will adopt Industry 4.0 approaches that incorporate modern technologies and mechanisms, sustainable development, and value-added activities. This project will fortify Malaysia’s national agro sector whilst assuring food security for the country. The integrated development of the 4,400-hectare land aims to cultivate high-quality alternative crops in the 4 main agro-food sectors including cassava for starch production, MD2 premium pineapple, harum manis mangoes and animal feed production based on the cassava by-products of starch and biomass. For the production of cassava starch and maltodextrin, FGV plans to build a factory with a capacity of 50,000 tonnes per year.
“Apart from that, cassava could also be potentially produced as a substance for industrial production of bioethanol, biofuel, bioplastic, amino acid, polyols, pharmaceutical and animal feed. The production of animal feed from the by-products of starch and biomass can reach up to 22,000 tonnes per year. FGV will maintain its focus on the production of high-quality animal feed to cater to the demand from local dairy farmers including FGV Dairy Farm Sdn Bhd that produced dairy products under the brand ‘Bright Cow’,” according to FGV statement.
Datuk Haris said the establishment of the cassava-based industry will diversify the prospects and investment opportunities for Perlis in view of the development of Chuping Valley Industrial Area which is currently being managed by Northern Corridor Implementation Authority. The global cassava market is projected to register a growth rate of 3.2% from 2019 to 2024 to reach a market value of US$4.5 billion by the end of 2024. Currently, Malaysia is a major importer of cassavo and it imports up to 600,000 tonnes of cassava starch. With the new project, FGV hopes to substitute 8% of Malaysia’s imports of cassava starch.
