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High palm oil prices would benefit the settlers: FELDA

High palm oil prices would benefit the settlers: FELDA

KUALA LUMPUR: Chairman Federal Land Development Authority (Felda) Tan Sri Shahrir Abdul Samad said that high palm oil price of above RM3,000 per ton would benefit the settlers.

He said the current price was better than before and Felda hoped for a higher price as settlers would receive reasonable returns which would be good for them.

“This is our business model where settlers are able to enjoy maximum returns while Felda’s function is to guarantee plantations are well-managed and ensure that payment for fruit bunches are reasonable,” he said.

A higher commodity price would contribute to the country’s economy which would boost entrepreneurship and socio-economic activities, he said adding that Felda and Felda Techno Plant (FTP) managed almost 72 per cent of the settlers in the Felda Plan while 14 per cent are self-managed.

Felda, for its various activities, needed some RM1.7 billion to RM1.8 billion yearly, with 30 per cent of it used for workers’ emolument and administration while the balance used for infrastructure, re-plantation, managing gardens, fertilising and providing loans for the settlers, he said.

Since its commencement in 1956, Felda has been receiving contributions from the government to pay wages, investment purposes and others. From 1996 onwards, Felda has been independently accounting for its expenses and activities from its income.

For its income, Felda depended on its investments in local companies, properties, shares and other investment, with the largest being a land lease to Felda Global Ventures Holdings Bhd (FGV), amounting to RM300 million a year.

“We are looking into all components such as bank loans, government allocations, asset returns and others to collect enough fund for expenses,” he said.

“This is the first thing that we would do. We decided to sell some of our stakes from our shares and portfolios. For example, we sold our stake in Malayan Banking Bhd (Maybank). “For this year, I’m looking forward to getting some financial assistance, interim and to sell our hotel assets,” he said.

It was reported that Felda aimed to sell RM280 million of its shares in Maybank to pare down its stake in the nation’s biggest bank. Next, Felda will also look into its 71 per cent stake in Encorp Bhd and 21 per cent stakes in Iris Corp Bhd.

Felda is currently in the process of selling its hotel in London, which it bought for £98 million (RM543 million) in 2014.

“Felda has to improve its financial situation and getting the settler farms back on track.