Grand Holding to purchase FGV China Oils Ltd. to extend its palm oil business chain

FGV, a Malaysian company, is one of the world's largest palm oil producers and a leading supplier of palm oil to China. It has a wholly-owned subsidiary -FGV China Oils Ltd.(FGV China).
 
But in July FGV announced the sale of 100% of FGV China to Grand Holding for 165 million RMB, mainly because FGV China has been losing money since it was bought by FGV in 2015. The main business of FGV China is palm oil sales, storage and processing. In 2018, the revenue reached 578 million RMB and the loss was 21.02 million RMB. The loss for the first five months of 2019 was 2.84 million RMB.
 
As a listed company, Grand Holding is mainly engaged in trading of petrochemicals, energy chemicals, metals, agricultural products and other bulk commodities, among which palm oil is one of the main commodities. In 2018, the company's total revenue reached 66 billion RMB. The main reason for the acquisition of FGV China is to extend its industrial chain of palm oil business: 1) to expand palm oil refining and processing business, packaging oil and terminal distribution business; 2) to make use of its warehousing advantages to achieve a benign cooperation between trade and warehousing; 3) to better meet the requirements of downstream customers, especially food processing enterprises, for suppliers in processing capacity, which is conducive to expanding downstream customer group and improving the company reputation.