Baladna, FGV Call Off Malaysian Dairy Venture Over Unmet Conditions
Source: DairyNews.today
Qatar’s Baladna and Malaysia’s FGV Holdings have terminated plans to establish a large-scale dairy farming joint venture in Malaysia, citing an inability to fulfill conditions set out in their initial agreement.
In a filing with the stock exchange, FGV said the decision followed the “expiration of the period to satisfy the conditions precedent stipulated” in the conditional agreement signed in August 2022. The specific unmet conditions were not disclosed.
The proposed venture, involving FGV’s wholly owned subsidiary FGV Integrated Farming Holdings and Baladna, aimed to establish a dairy farming operation on a 3,259-hectare site in FGV Chuping Agro Valley. The project, which included Touch Group as a 20% shareholder alongside 40% stakes for FGV and Baladna, envisioned an investment of up to RM4.5 billion ($1.01 billion).
The dairy farm was designed to produce 100 million liters of fresh milk annually within the first three years, potentially scaling up to 300 million liters within a decade. Operations were slated to begin in 2025, pending shareholder and regulatory approvals.
FGV emphasized in its filing that the termination of the agreement would not materially impact its subsidiary FGV Integrated Farming.
When the deal was announced, FGV Group CEO Dato’ Mohd Nazrul Izam Mansor described the partnership as a “springboard” to position the company as a global leader in integrated and sustainable agribusiness and to capitalize on a growing dairy market.
The venture stemmed from an earlier collaboration announced in August 2021, when FGV, Baladna, and Malaysia’s FELCRA Berhad agreed to conduct feasibility and technical studies for the project. However, FELCRA withdrew in April 2022, citing the need to prioritize internal transformation initiatives.
The termination highlights challenges in executing complex joint ventures in the agribusiness sector, particularly in regions with evolving regulatory and operational landscapes.
The proposed venture, involving FGV’s wholly owned subsidiary FGV Integrated Farming Holdings and Baladna, aimed to establish a dairy farming operation on a 3,259-hectare site in FGV Chuping Agro Valley. The project, which included Touch Group as a 20% shareholder alongside 40% stakes for FGV and Baladna, envisioned an investment of up to RM4.5 billion ($1.01 billion).
The dairy farm was designed to produce 100 million liters of fresh milk annually within the first three years, potentially scaling up to 300 million liters within a decade. Operations were slated to begin in 2025, pending shareholder and regulatory approvals.
FGV emphasized in its filing that the termination of the agreement would not materially impact its subsidiary FGV Integrated Farming.
When the deal was announced, FGV Group CEO Dato’ Mohd Nazrul Izam Mansor described the partnership as a “springboard” to position the company as a global leader in integrated and sustainable agribusiness and to capitalize on a growing dairy market.
The venture stemmed from an earlier collaboration announced in August 2021, when FGV, Baladna, and Malaysia’s FELCRA Berhad agreed to conduct feasibility and technical studies for the project. However, FELCRA withdrew in April 2022, citing the need to prioritize internal transformation initiatives.
The termination highlights challenges in executing complex joint ventures in the agribusiness sector, particularly in regions with evolving regulatory and operational landscapes.
