PETALING JAYA: FGV Holdings Bhd is establishing a joint venture operation in India as a springboard for the group to penetrate into the market there.
FGV’s sub-subsidiary FGV Trading Sdn Bhd (FGVT) today entered into a joint venture agreement with India-based Pre-Unique India Pvt Ltd (PREU) for the exercise.
A joint venture company will be incorporated in India to carry out intelligence work including market study, business development, and build rapport with potential customers in India as well as trading and marketing activities of food and non-food products.
The company will also conduct advisory work and services for agricultural, plantation, and downstream related activities along with business of agriculture, plantation, food and non-food processing facilities, and consumer goods end-products.
FGV group CEO Datuk Haris Fadzilah Hassan said the growth prospects of India’s market is huge given its more than 1.3 billion population and the venture will serve as a vehicle for FGV to directly participate in the food products market in India, particularly in the South India region.
“It is also a great opportunity for FGV to create a presence along the palm oil value chain in the Indian consumer market with a special focus on fast moving consumer goods (FMCG) food products,” he said in a statement.
Previously, the group exports crude palm oil and refined products into the Indian market.
FGVT will hold a 70% stake in the joint venture, while PREU will hold the remaining 30%.
FGVT is the group’s one-stop entity focusing on the bulk sale of vegetable oils, processed palm and lauric oils to local markets and export destinations such as China, India and Pakistan. It manages the entire end-to-end supply chain spectrum, with a team of traders handling edible and non-edible products.
PREU is engaged in, inter alia, the business of engineering solutions for palm oil mills, biomass & gasification power plants, methane compost plants, civil constructions and all related works.
Among the salient terms for the joint venture includes agreement between both parties for a one-year cash flow projection, business plan and obtaining the required government approvals within 180 days of the joint venture agreement.
FGV expects the proposed venture to be completed within six months, barring any unforeseen circumstances and subject to all relevant approvals being obtained.
