Felda Global buys Mission's Kuantan Port plant for $11.5 million
Felda Global Ventures Holdings Berhad, through its subsidiary, Felda Global Ventures Downstream Sdn Bhd, signed on April 17 an asset purchase agreement with Mission Biotechnologies Sdn Bhd to acquire its assets including a biodiesel refinery at Kuantan Port for $11.5 million.
Apart from the 100,000 ton per year (approximately 30 MMgy) biodiesel refinery sited on 6 acres of prime land, the assets include a 16,000-ton tank storage connected with import and export pipelines to a deep water jetty. The plant is expected to be fully operational by July 1.
In a statement released April 18, FGV Group President Dato’ Sabri Ahmad said that the acquisition of the plant is in line with FGV’s strategy to move further downstream in a bid to protect its upstream business.
“The biodiesel refinery will result in higher offtake of FGV’s palm oil, especially high FFA palm oil,” Sabri said. “In addition, it has the potential to produce raw materials for palm methyl ester suffonate, crude or refined glycerin and palm fatty acid distillate apart from biodiesel. This will enable us to meet the increasing demand by detergent companies for these essential products.”
Sabri added that the refinery’s location is ideal as it is near to a refinery and oleochemical plant owned by Felda Vegetable Oil products Sdn Bhd and Felda Procter Gamble respectively—both companies within the FGV Group.
It is also close to FGV’s plantations in Pahang, which produces plentiful palm oil supply. Both FGV’s palm oil and the biodiesel refinery are ISCC (International Sustainability & Carbon Certification) compliant, a prerequisite for biodiesel usage in Europe.
The signing is a forward effort by FGV towards supporting the [Malaysian] government’s B5 and B10 biodiesel initiative to make biodiesel viable in view of growing demand in Europe for compliance with greenhouse gas emission targets. As such, global demand for biodiesel is estimated to reach up to 15 million tons (4.5 billion gallons) by 2020.
"Being the largest CPO producer in the world, FGV can implement the use of B10 biofuel now to help lift CPO prices as well as reduce national stockpile,” Sabri said. “Once B10 is implemented, it can take out 1 million tons out of the 2.1 million stockpile and help stabilize CPO price. This refinery in particular, is the only running East Coast [Malaysian] plant and therefore strategically positioned to serve the East Coast [Malaysian] domestic market for biodiesel.”
Related to the refinery acquisition, FGV also made a separate announcement to Bursa Malaysia April 17 that FGV Downstream had incorporated a wholly owned subsidiary known as FGV Biotechnologies Sdn Bhd in Malaysia. The new company will focus on biodiesel business including production of various biodiesel products.
At the same ceremony, FGV also signed a management and technical services agreement with MBSB related to the acquisition. Mission Biotechnologies Sdn. Bhd is a wholly owned subsidiary of Mission NewEnergy Ltd.