MALAYSIA – Qatar’s Baladna and Malaysia’s FGV Holdings have terminated their joint plans for a large-scale dairy farming project, as reported by FGV in a stock exchange filing.
The company cited the “expiration of the period to satisfy the conditions precedent stipulated” in the conditional agreement signed in August 2022.
The ambitious project, valued at RM4.5bn (US$1.01bn), aimed to produce 100 million litres of fresh milk annually within its first three years of operation.
Located on a 3,259-hectare site in FGV Chuping Agro Valley, the initiative was set to position Malaysia as a significant dairy producer while strengthening FGV’s footprint in the global agribusiness sector.
FGV Holdings, through its wholly-owned subsidiary, FGV Integrated Farming Holdings, had initially collaborated with Baladna to form a joint venture.
The agreement also included Touch Group, which would hold a 20% stake, while FGV Integrated Farming and Baladna were each set to control 40%. However, with conditions under the agreement unmet, the collaboration was discontinued.
While FGV did not specify the exact conditions that failed to materialize, the company reassured stakeholders that the termination will not have a material impact on its operations.
According to the company’s statement, the joint venture had been subject to approvals from FGV shareholders and other relevant authorities, which may have influenced the decision to call off the deal.
The dairy project had been regarded as a strategic move for FGV Holdings to diversify its business and capitalize on the increasing demand for dairy products across the Southeast Asian market.
FGV Group CEO Dato’ Mohd Nazrul Izam Mansor previously described the venture as a “springboard” to solidify the company’s position as a leading integrated and sustainable agribusiness player.
The fresh milk production targets, which were to potentially reach 300 million litres annually within a decade, highlighted the project’s scale and its role in addressing Malaysia’s reliance on dairy imports.
The partnership initially stemmed from a feasibility and technical study announced in August 2021, involving FGV, Baladna, and FELCRA Berhad.
However, FELCRA withdrew from the initiative in April 2022, citing its decision to focus on group-wide transformation strategies. Despite this, FGV and Baladna remained committed to the joint venture until the conditions precedent expired.
The project’s termination marks a setback for Malaysia’s efforts to scale up local milk production and achieve dairy self-sufficiency.
However, FGV Holdings’ assurance of minimal operational impact signals the company’s intent to continue exploring opportunities within its integrated farming business.
Baladna, a major Qatari dairy company, remains an influential player in global dairy markets. Its previous success in expanding dairy production in Qatar had set high expectations for its potential collaboration with FGV.
Nonetheless, the expiration of this agreement underlines the complexities of cross-border agricultural investments and regulatory approvals.
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