Post titleFelda takes bigger bite of Turkey mart

IZMIR (Turkey): Felda Iffco Gida Saneyi (FIGS), a unit of Felda Global, is banking on an indirect approach to help increase the usage of palm oil products in the European market.

Read more: Felda takes bigger bite of Turkey mart http://www.btimes.com.my/articles/FELXX/Article/#ixzz1YsQfoVFH

The Turkey-based FIGS is a test case in this new game plan, which has two giant entities backing and bankrolling its sucesss. FIGS is a unit of Felda Iffco Sdn Bhd, an equal venture between Felda Global Ventures Holdings Sdn Bhd and Iffco Group. Felda Global is the world's biggest plantation group by land, producing mainly palm oil, followed by rubber and cocoa, while Iffco is a food producer with operations in 84 countries spanning West Asia, Europe, and the United States. FIGS' chief operating officer Mehmet Sahin explains that in Turkey, FIGS is directly supplying to the consumer markets such as bakeries and food services. "Palm oil is healthy and easy to use, that is why we have targeted such sectors instead of going directly to the retail market," Sahin said at a media briefing. According to Sahin, in Turkey alone, sunflower, corn and olive oil currently control some 75 per cent of the soft oil market. FIGS, like other Malaysian controlled entities, has been targeting Europe as the next big market for palm oil. In May, Wilmar International Ltd, the world's biggest palm oil producer, said it will partner with a rival to refine and sell cooking oil in Europe, seeking to ease its reliance on China. Wilmar, controlled by Robert Kuok Hock Nien, will supply refined palm oil from New Britain Palm Oil Ltd (NBPO)'s farms in Papua New Guinea and the Solomon Islands. Wilmar also plans to build a natural alcohol plant in the Netherlands. Analysts, meanwhile, said that the route being taken by FIGS in targeting the fats market instead of merely selling cooking oil to the European market is a step in the right direction. They pointed out that this is the same route taken by IOI Corp Bhd nearly a decade ago when it bought Unilever group's specialty oils and fats division for RM814 million, a move which gave it an instant market presence and manufacturing facilities in Europe, North America and Latin America. "Targetting Turkey is a good move, as it is a growing economy, and there is also a possibility of the country being a member of the European Union," said Pong Teng Siew, the head of research of Jupiter Securities. For the first six months of this year, the Turkish economy has grown by as much as 10 per cent, making it the fastest growing economy in the world. With this in mind, Sahin outlined a plan to beef up the operations in Turkey. He said FIGS plans to invest as much as US$20 million (RM62.2 million) at its plant in Izmir, to strengthen its palm oil fats production capabilities. "We expect to recoup the investment in five years' time," said Sahin. He said the plant in Izmir has a soft oil production capacity of 150 tonnes a day, which should double with the investment. "By 2012, the facility for the palm oil fats will also be up and running."