Felda: change to survive
RECENT news reports highlighted that the Felda community has rejected moves for FGV Holdings Bhd to be taken over by a third party. According to one newspaper report, the Felda Settlers Consultative Committee, which represents more than two million Felda community members nationwide, protested against a third party that is allegedly trying to take over majority shares in FGV.
I feel compelled to point out that for the last three years Felda has been faced with a number of issues that has tainted its name, ranging from massive losses in the billions and liquidation of several subsidiary companies to the termination of employees. It has also been burdened with a ballooning debt and an almost empty cash-flow position due to years of mismanagement and abuse.
The troubled plantation giant has also appealed for the government to step in with financial assistance time and again, giving rise to even more issues. In fact, I believe that Felda’s state of affairs may have even had an impact on the 2018 General Election.
On April 10 this year, the much anticipated Felda White Paper was tabled in Parliament. With this, the Malaysian government allocated financial aid of RM6.23bil as part of its turnaround plan for the ailing giant.
However, I believe that this allocation will soon be exhausted as Felda’s current business model may not be able to generate income sustainably.
To date, and prior to the recent tabling of the Malaysian Budget, we have not heard of any plan to revive Felda or FGV coming from the horses’ mouth.
Budget 2020, which was tabled in October, made a further allocation of RM810mil to help turn around the world’s largest crude palm oil producer. Around this time, news reports emerged of the possibility of a well-known and successful bumiputra tycoon taking over FGV by buying 20% of its shares. His plan? To revive the company!
As a concerned citizen, I would like to ask the protesting Felda community: What do you really want?
Firstly, as can be seen from past experience, the Felda community’s demands for funding from the government is definitely not the solution. Injecting funds without a solid turnaround plan will not go far.
Secondly, while Felda itself is not agreeable to the involvement of a private sector party, for the past one year we have not seen any proper recovery plans for Felda and FGV coming from either organisation.
Thirdly, from what I know , the business tycoon concerned has an impressive track record of turning around companies and, in fact, has created sound and thriving businesses across diverse industries.
Bearing all this in mind, I would like to call upon Felda and its community to take a step back and relook at the entire scenario. They should consider the potential involvement of the tycoon and look at it rationally and objectively rather than from an emotional or sentimental perspective.
With its very survival at stake, Felda and its community can no longer afford to hold on to an entity that is becoming less and less viable – sentimental legacies do not put food on the table.
It’s time for change in order to survive.