KUALA LUMPUR, May 22 — FGV Holdings Bhd and its public listed subsidiary, MSM Malaysia Holdings Bhd, are expediting the plan to develop a new agriculture growth area called FGV Agro Food-Valley in Chuping, Perlis.

This announcement followed the rescission of the sale and purchase agreement (SPA) between MSM’s wholly-owned subsidiary, MSM Perlis Sdn Bhd, and F&N Agrivalley Sdn Bhd on April 9, 2020, the companies said in a joint statement.

FGV group chief executive officer (CEO) Datuk Haris Fadzilah Hassan said the FGV Agro Food-Valley project is expected to redefine the agricultural industry landscape in Perlis as it will adapt Industrial Revolution 4.0 approaches, incorporating modern technologies and mechanisms, sustainable development and value-added activities.

"The entire development of the project, involving an investment of RM100 million within two years, will continue to fortify the national agro-food sector whilst assuring food security for the country,” he said in the statement.

FGV and several of its subsidiary companies are in final stages of discussions to develop various food-based production areas in Chuping as part of a comprehensive effort to enhance the plantation sector in Perlis while benefitting the national agro-food sector.

The integrated development of the 4,400-hectare land aims to cultivate high-quality alternative crops in the four main agro-food sectors including cassava for starch production, MD2 premium pineapple, harum manis mangoes and animal feed production based on cassava by-product of starch and biomass.

"FGV plans to build a factory with a capacity of 50,000 tonnes per year for the production of cassava starch and maltodextrin,” he said.

Apart from that, cassava could also be potentially produced as a substance for industrial production of bio-ethanol, biofuel, bio-plastic, amino acid, polyols, pharmaceutical and animal feed. The production of animal feed from the by-product of starch and biomass can achieve up to 22,000 tonnes per year.

Haris Fadzilah said 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 produces dairy products under the Bright Cow brand.

Each acre of cultivation could potentially reach up to 30 tonnes and FGV is willing to offer buy back guarantee which could help farmers to expand their revenue stream, he said.

"Positively, the establishment of the cassava-based industry will diversify the prospects and investment opportunities for Perlis in view of the development of the Chuping Valley Industrial Area (CVIA) which is currently being managed by the Northern Corridor Implementation Authority (NCIA),” he said.

The global cassava market is projected to register a growth rate of 3.2 per cent from 2019 to 2024 to reach a market value of US$4.5 billion (RM19.6 billion) by end-2024.

Malaysia currently imports 600,000 tonnes of cassava starch and FGV Agro Food-Valley may substitute eight per cent of Malaysia’s imports of cassava starch, he said.

Haris Fadzilah said FGV is looking forward to realise the strategic initiatives in line with the government’s proposition to bolster the domestic economic sector in reducing the impact from Covid-19.

The development of FGV Agro Food-Valley will offer more than 300 employment opportunities to the local community and provide business prospect for the local and agro youth farmers especially among the B40 group through the farming contract, as well as secondary industries such as logistics and supplies, he said.

The FGV Agro Food-Valley has been carefully designed since early this year in view of MSM’s rationalisation plan to dispose of the plantation land.

The synergistic development plan reflects FGV and MSM’s deliberative assessment in monetising the non-core assets by prioritising commercial and social interest that provides values to all stakeholders.

The proceeds from the disposal will strengthen both group’s financial commitment and resources to pave the way for more potential and profitable business diversification.

Meanwhile, MSM Group CEO Datuk Khairil Anuar Aziz said the company will continue to focus on rationalising the group-wide capacity through consolidation of production to enhance operational capabilities.

"The strategic consolidation will also reduce financial impact with regards to optimum capacity utilisation and prudent cost management across the supply chain, and MSM remains committed to transforming challenges into opportunities and returning the best value to our shareholders,” he said. — Bernama