-  Felda Global Ventures Holdings Bhd (FGV) plans to build a rubber processing plant worth RM30mil-RM45mil in Myanmar this year.

-  FGV signed a joint venture agreement with local partner Pho La Min Trading Ltd to set up rubber processing plants and to look for rubber upstream opportunities in the country. FGV is expected to hold a 51% equity interest in the joint venture (JV).

-  The rubber processing plant, which would be completed by 1QFY15, will have a capacity of 24,000 tonnes per year.

-  In addition, the JV plans to look for 10,000ha of brownfield rubber plantation and plant 30,000ha of rubber separately.

-  This JV is not expected to contribute significantly to FGV’s bottom line due to its small capacity of 24,000 tonnes per year. Also, it will only be completed in 1QFY15.

-  FGV is envisaged to be active in acquisitions this year. Recall that recently, FGV was said to be eyeing Asian Plantations Ltd, which is listed on the London Stock Exchange. APL has 20,770ha of oil palm estates in Bintulu and Miri.

-  FGV has the balance sheet for its acquisitions. As at end-December 2013, FGV had gross cash of RM5bil.

-  In the short-term, we reckon that FGV’s bottom line would be boosted by the consolidation of Felda Holdings Bhd. If FHB were consolidated last year, FGV’s earnings would have increased by almost 30%.

-  Maintain HOLD on FGV.

Source: AmeSecurities