Palm oil producer Felda looks to sell non-core assets in North America

Felda Global Ventures is the world's largest crude palm oil producer.

Felda Global Ventures Holdings Bhd (FGV), the world’s largest producer of crude palm oil, is seeking a buyer for peripheral assets in North America, according to people.

Bloomberg reported that the Malaysian conglomerate has invited offers for its crushing and refining businesses in the US and Canada, quoting people with knowledge of the matter said.

“Suitors have submitted first-round bids for the operations, which could fetch about $150 million,” the sources said.

FGV had said earlier this year it will sell some assets as it seeks to increase its core palm oil plantation business, expand trading operations and develop new markets.

Recently, research houses had said that analysts are speculating that FGV will likely dispose of its non-profitable Canada-based canola and soybean crushing plant, which was badly hit by lower crushing margins in North America.

The firm has a Canada-based subsidiary which does soybean and canola crushing. The subsidiary, recorded a pretax loss of MYR81.8 million ($21.9 million) last year, according to its 2014 annual report, affecting FGV’s downstream oleochemicals operations.

Its US oleochemical business recorded a profit of MYR36.5 million for the period.

The company said its downstream operations were affected by losses at the oleochemicals segment, as production was affected by blizzards that hit in January this year, and by lower soybean crush margins at its Canadian businesses.

FGV was the largest initial public offering in 2012, having raised $3.3 billion. The stock share price has not trended upwards. To-date, the share price has dropped 12 per cent this year compared to the 1.5 per cent decline in the benchmark FTSE Bursa Malaysia KLCI Index.

While FGV is expected to post sequentially stronger earnings in the coming quarters, lower oil palm fresh fruit bunch (FFB) output and downstream losses will persist, Malaysia-based Maybank Research had said in a note.

Felda has operations in more than 10 countries across Asia, North America and Europe including upstream and downstream palm oil, rubber, sugar and logistics. Last month, it announced a 98 per cent drop in first quarter net income on lower palm oil prices.

The company responded to Bloomberg in an emailed statement it doesn’t comment on planned acquisitions or divestitures.

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.