Felcra to list non-plantation unit next year

PETALING JAYA: Felcra Bhd in cooperation, which is buying a cattle farm in Western Australia for AU$22 million (RM65 million) with another private party, plans to list one of its non-plantation subsidiaries on the local stock market next year.
"We're planning it right now. I believe one of our subsidiaries (will) be listed next year," said its chairman Datuk Bung Mokhtar Radin after the signing of memorandum of understanding ceremony with Australia incorporated Grain Synergy Global Pty Ltd to form a consortium for the takeover of the Yakka Munga cattle station in Kimberley District, Western Australia.
He did not say which unit it plans to list and would not confirm if was it property business.
"My business team is working out the plan right now, it's not really property business, they (business team) will come back to me," he quipped.
Bung Mokhtar had previously mentioned that the group intends to diversify from its plantation business into property development given its prime land bank in Kuala Lumpur and Langkawi.
It kicked of its venture into the property market last September with the launch of a mix development project at Jalan Semarak, Kuala Lumpur with a gross development value about RM1 billion.
Felcra, which mainly focuses on the planting of oil palm, rubber and paddy, was widely expected to follow Federal Land Development Authority's (Felda) foot step and list its unit to unlock its value.
However, for Felcra, listing its plantation unit would not be an easy task since the oil palm and rubber plots it manages, belong to smallholders.
Meanwhile Bung Mokhtar added that the company is looking to diversify its business away from oil palm and rubber segment with plans to invest in paddy business in Cambodia and Indonesia.
"We have to look for more opportunities apart from oil palm and rubber business. It's good for us," he said to balance out the volatility that is inherent in the oil palm and rubber business.
Bung Mokhtar also said that the company needs to be more aggressive in its business plan this year in order to mitigate potential losses due to replanting activities.
As for the MOU, Felcra expects the acquisition of Yakka Munga cattle station from Alchemy Agriculture Pte Ltd to be completed by this August, after a study by an independent adviser and a due diligence process is done.
Felcra and its partners are looking to develop Yakka Munga, which has a land size of 189,700 hectare, into the world's first halal livestock valley.
The equity structure is still unknown as the terms and conditions of the partnership will only be discussed after obtaining approval from the board of directors of Felcra.It is understood however, that Felcra will hold a substantial stake.
Felcra will seek expertise from a well-known farming company in Japan for cattle rearing. Besides that, two government-linked companies from Indonesia, namely PD Dharmajaya and PT Agro Jabar have also expressed their interest in cattle breeding and fattening activities, which will be done in Indonesia and Malaysia.
Asked on the profit contribution from this partnership, Felcra is confident that the cattle business would contribute significantly in future.
Meanwhile, chairman of Grain Synergy Global Datuk Hashim Suboh said that maize planting could easily achieve 40% profit margin, while cattle trading between 25% and 30%.