Felda confident of returning to the black by 2022 with new business model

KUALA LUMPUR: The beleaguered Federal Land Development Authority (Felda), which has been hit by massive losses in billions and liquidation of several subsidiary companies, is confident of returning to the black by the financial year 2022 through the implementation of a new business model.

Chairman Datuk Seri Idris Jusoh said following the presentation of a white paper on Felda in Parliament on April 10, 2019, a task force led by Tan Sri Abdul Wahid Omar was formed to look into ways to enhance its (the white paper) inadequacy to address various issues besetting the agency.

“We have now identified the way forward by understanding where we are now and the past, and had come up with a new business model to make the agency more sustainable, profitable and independent.

“The task force had also proposed financial restructuring, how management system can be improved, which include digitalisation of the financial system, changing the mindset of settlers, gearing them to achieve high income, as well as cost-cutting exercise,” he told Bernama.

On the new business model, Idris said Felda believed the right business model for the agency moving forward is to have a complete supply chain from farms, mills to downstream.

“Before FGV Holdings Bhd was listed on Bursa Malaysia, we already have our own mills, whereby Felda during that time registered profit amounting over RM1 billion, of which in 2011 it posted about RM1.85 billion in profit.

“However, after the listing of FGV Holdings Bhd in June 2012, Felda’s earnings obviously declined as the returns from FGV investment did not commensurate with what was expected from them,” he said.