The announcement came following the rescission of a deal by MSM to sell its sugar plantation in Chuping for RM156 million to a unit of Fraser & Neave Holdings Bhd last month.
FGV’s group chief executive officer, Datuk Haris Fadzilah Hassan, said the project is expected to redefine the agricultural industry landscape in Perlis as it will adopt Industrial Revolution 4.0 approaches that incorporate modern technologies and mechanisms, sustainable development, and value-added activities.
"The entire development of the project involving investment of RM100 million within two years will continue to fortify the national agro-food sector whilst assuring food security for the country,” Haris said in a statement today.
FGV and several of its subsidiaries are now in the final stage of discussion to develop various food-based production areas in Chuping.
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 the cassava by-products of starch and biomass, FGV said.
For the production of cassava starch and maltodextrin, FGV plans to build a factory with a capacity of 50,000 tonnes per year.
"Apart from that, cassava could also be potentially produced as a substance for industrial production of bioethanol, biofuel, bioplastic, amino acid, polyols, pharmaceutical and animal feed. The production of animal feed from the by-products of starch and biomass can be achieved up to 22,000 tonnes per year. 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 produced dairy products under the brand 'Bright Cow'," the statement read.
Each acre of cultivation, said Haris, could potentially reach up to 30 tonnes and FGV is willing to offer buy-back guarantees to help farmers further expand their revenue stream.
"Positively, the establishment of the cassava-based industry will diversify the prospects and investment opportunities for Perlis in view of the development of Chuping Valley Industrial Area which is currently being managed by Northern Corridor Implementation Authority. The global cassava market is projected to register a growth rate of 3.2% from 2019 to 2024 to reach a market value of US$4.5 billion by the end of 2024. Currently, Malaysia imports 600,000MT of cassava starch, and FGV Agro Food-Valley may substitute 8% of Malaysia’s imports of cassava starch,” he said.
The project, it added, will offer more than 300 employment opportunities to the local community and provide business prospects for local and agro youth farmers through farming contracts, as well as secondary industries such as logistics and supplies, especially among the B40 group.
FGV said the food valley project has been carefully designed since early 2020 in view of MSM’s rationalisation plan to dispose of the plantation land. The proceeds from the disposal will strengthen both groups’ financial commitment and resources to pave the way for more potential and profitable business diversification, the statement added.
“Moving forward, MSM will continue its focus on rationalising group-wide capacity through the consolidation of production to enhance operational capabilities. The strategic consolidation will also reduce financial impact with regard to optimum capacity utilisation and prudent cost management across the supply chain. We remain committed to transforming challenges into opportunities and returning the best value to our shareholders,” said MSM group chief executive Datuk Khairil Anuar Aziz.
Source: The Edge Markets