History of Felda

Felda

THE Federal Land and Development Authority (Felda) journey started back in the 1950s with a dream by Tun Abdul Razak, Malaysia’s first deputy prime minister and second prime minister.

His dream was for the poor to have land and productively develop them to get a decent source of income. In July 1956. the Land Development Act 1956 come into force giving birth to the statuatory body, Felda.

Prior to the setting up of Felda, land development was a commercial operation undertaken by mostly foreign private companies: i.e. plantation companies owned by Harrison and Crosfield, Guthrie, Sime Darby and Highlands and Lowlands.

In the early days, Felda’s objectives were clear and simple – to help settlers develop land that will set the foundation to eradicate poverty in the rural area especially after Malaysia attained its independence.

Despite the straight forward task, Felda was deeply challenged as there were no pre-set model for it to emulate.

The challenges faced by Felda during post-Merdeka include approvals for land and land allocations by the state governments, tight financing over government funded projects, short supply of resource capabilities and scarcity of qualified personnel in agriculture-related development.

Felda had the daunting task of developing a viable model to ensure continuous land development and efficient settlement placement for settlers nationwide.

In a nutshell, Felda had to undergo various phases of experimentation and models, starting from 1955 to 1961 as a financier to channel funds into state government land development projects for settlement.

However, the pioneering concept where settlers had to carry out the land clearing and build their own houses was slow and not feasible.

This resulted in the amendment of the Land Development Act in 1961, which ultimately positioned Felda as the developer of land for eventual settlement by settlers, thus allowing Felda to directly manage all the land schemes initially managed by the state boards as commercially viable estates, and takeover land development work in the country.

This new role of Felda – clearing land and setting up housing amenities prior to settlers coming in – has proven to be a success, with the Government approving the model by allocating more acreage for Felda to develop in the First Malaysia Plan to the Fourth Malaysia Plan.

By the early 1990s, rural poverty had somewhat been contained which saw decreasing interest in new settlements. The Government then decided to stop new intakes of settlers.

Of the 350,000 ha land developed then, Peninsular Malaysia had 225,000 ha and 125,000 ha in Sabah and Sarawak managed by Felda as commerical estates.

At the same time, existing settler estates matured and the prices of crude palm oil (CPO) and rubber climbed higher, their contributions to Felda’s coffer increased.




Felda Holdings Bhd

The more matured and “richer” Felda then saw the opportunity to broaden its plantation operation into other agro-based related sectors via the creation of a commercial arm, Felda Holdings Bhd, in 1996.

It set up some 26 subsidiaries and five joint-ventures covering every aspect of the oil palm supply chain back then. Now there are about 52 subsidiaries and three joint ventures, according to Felda group website.

The subsidiaries are involved in the downstream, manufacturing, services, engineering, transportation and agro-based related joint-ventures overseas to ensure that the rubber and oil palm fruits belonging to Felda and its settlers are processed and marketed to the right markets at the right price.

Interestingly, all the profits earned from the businesses are in turn declared as dividends to the major shareholders of Felda Holdings namely Felda and Koperasi Permodalan Felda (Felda Investment Cooperative (FIC)).

Through this business model, all Felda settlers and staff who are members of FIC enjoy a yearly dividend – so far ranging from 10% to 15% – for the past five years from Felda Holdings and its subsidiaries.

Global Ventures Holdings Sdn Bhd

This new unit was officially launched last July and is essentially an extension of Felda group’s journey towards becoming a global agro-based multinational corporation. Felda owns 100% stake in Felda Global, which in turn has a 49% stake in Felda Holdings.

Prime Minister Datuk Seri Najib Razak, during the official launch of Felda Global, expressed his hope that with the new structure, Felda will have the clarity of direction and responsibility to implement the Government’s vision for Felda for the next 50 years.

Najib is the eldest son of Tun Razak. His first official involvement with Felda started in 2004 when he was the deputy prime minister.

Felda Global is the vehicle to develop Felda group’s four global business lines in multicrop, oils and fats, oleochemicals and logistics. The group is in the midst of restructuring Felda Holdings’ international businesses into Felda Global.

Felda Group has enjoyed long standing tie ups with large multinationals like Proctor & Gamble and IFFCO. It has been steadily growing its business interests in over 20 countries including the United States, Canada, Australia, China, Pakistan, Sri Lanka and South Africa.

Felda Global has acquired an 85% stake in US-based Twin Rivers Technologies with an oleochemicals plant in Quincy and a food-based facility in Cincinatti.

In Quebec, Canada, the group is building a multi-seed crushing facility with an annual capacity of 1.06 million tonnes and a cooking refining capacity of 328,000 tonnes.

It also has a joint venture with Dubai-based Iffco Sharjan to start refining operations in south China. A trading office called Felda Iffco France SAS has been established in Paris, France. In addition, plans are afoot to acquire a refinery in Batam, Indonesia.

Source: The Star Online