Qatar’s Baladna and Malaysia’s FGV Holdings have officially terminated their plans for a dairy-farming enterprise in Southeast Asia. This decision follows a recent stock exchange filing by FGV, which indicated that the move occurred after the “expiration of the period to satisfy the conditions precedent stipulated” in their agreement.
The joint venture, signed in August 2022, was intended to be developed by FGV’s wholly-owned subsidiary, FGV Integrated Farming Holdings, in collaboration with Baladna. Unfortunately, FGV did not specify the exact conditions that went unmet in their bourse filing. However, they noted that this termination would not have a significant impact on FGV Integrated Farming’s operations.
The proposed joint venture also required approval from FGV’s shareholders and relevant authorities, which underscores the complexities often involved in the food and beverage industry trends. Under the initial agreement, both FGV and Baladna were expected to hold a 40% stake each, while a third entity, Touch Group, would retain a 20% stake.
The project was anticipated to be set on a substantial 3,259-hectare site within the FGV Chuping Agro Valley, with an expected investment of up to RM4.5 billion (approximately $1.01 billion), scheduled to commence in 2025. The ambitious goal aimed to produce 100 million liters of fresh milk annually within the first three years and potentially escalate production to 300 million liters within a decade.
When the agreement was first announced, FGV group CEO Dato’ Mohd Nazrul Izam Mansor stated that the joint venture would serve as a “springboard” for the company, aiming to enhance its status as “one of the world’s leading integrated and sustainable agribusinesses,” and position itself strongly within a growing milk and dairy industry.
It’s worth noting that FGV initially sought to partner with FELCRA Berhad and Baladna in August 2021 to conduct a feasibility and technical study for this integrated dairy farming project. However, FELCRA withdrew its participation in April 2022, citing the necessity to focus on group-wide transformation initiatives.
In an industry driven by evolving food and drink consumer trends, such developments underscore the challenges stakeholders face as they seek sustainable growth in the food and drink business sector.
