SETELAH SETAHUN PEMERINTAHAN PH, JIKA PARLIMEN DIBUBARKAN SEKARANG, PARTI MANA PILIHAN SAYA?

Mohammad Agus Yusoff - 05 Mei, 2019

1. Setahun yang lalu, rakyat meletakkan harapan tinggi kepada kerajaan PH untuk membawa pembaharuan kepada negara. Rakyat mahu isu 1MDB diselesaikan, rasuah dihapuskan, urus tadbir negara diluruskan, reformasi institusi dilaksanakan, hak politik mereka dihormati, dan paling utama bebanan kos hidup menurun.

2. Namun, menghampiri setahun rakyat kecewa. Kekalahan PH di tiga PRK adalah bukti kekecewaan tersebut. Rakyat menghantar mesej kepada kerajaan PH.

Mengapa rakyat kecewa?

3. Rakyat kecewa kerana perlahannya tindakan reformasi kerajaan, lambatnya tindakan kerajaan menyelesaikan skandal 1MDB, kecewa kerana harga komoditi sawit dan getah jatuh teruk, kecewa kerana menteri PH kerap mengeluarkan kenyataan yang bercanggah sesama mereka, kecewa pemansuhan GST tidak menurunkan kos hidup dan harga barang, kecewa kerana kerajaan PH mengubah kaedah bayaran PTPTN dari janji asal manifesto mereka, dan kecewa kerana kurangnya peluang pekerjaan.

4. Selain itu, rakyat juga kecewa kerana kerajaan PH meneruskan dasar kerajaan dahulu yang tidak sesuai seperti meneruskan harga mingguan minyak dan AES, kecewa dengan keadaan ekonomi negara yang tidak menentu, dan paling utama kecewa dengan iltizam politik PH dalam melaksanakan janji manifesto PRU-14nya.

Bagaimana reaksi PH apabila dikritik?

5. Reaksi PH mudah. Mereka meminta rakyat bersabar dan memberi peluang kepada kerajaan PH. Kata mereka, kerajaan PH ini ibarat bayi yang baru setahun, takkanlah hendak mengharapkan bayi ini terus berlari. Kata mereka lagi, banyak hal perlu diselesaikan oleh kerajaan untuk memastikan segala janji dapat ditunaikan. Ini kerana PH mengambil alih pentadbiran yang sudah rosak. Bila sudah rosak, maka ini memakan masa untuk memperbetulkan semuanya.

6. Tidak hanya itu, PH juga menyatakan faktor utama manifesto tidak dapat dilaksanakan adalah disebabkan negara ketiadaan wang. Ini kerana wang negara telah banyak dirembat oleh kerajaan kleptokrat terdahulu. Atas hujah ini, kerajaan PH meminta rakyat faham dan bertimbang rasa.

Setelah meneliti hujah kedua-dua pihak, parti mana pilihan saya?

7. Saya melihat kedua-dua parti PH dan parti oposisi mempunyai hujah masing-masing. Tetapi jika dikehendaki memilih parti mana pilihan saya, sekiranya pilihan raya diadakan (dalam tempoh terdekat ini), saya memilih untuk mengundi PH.

8. Pertama, jikapun PH ada kelemahan, saya dapati pemimpin PH belum lagi terlibat dalam gejala rasuah atau penyelewengan kuasa yang besar. Bagi parti oposisi PAS dan BN pula, jikapun mereka telah menunjukkan penyatuan yang tentunya baik untuk Melayu dan Islam, saya hairan apabila masih ada lagi dalam kalangan pemimpin mereka yang mempertahankan 1MDB dan salah laku kerajaan dahulu.

9. Kedua, walaupun kerajaan PH masih lagi mempunyai hala tuju yang kurang jelas dan ada dalam kalangan menterinya kurang kompeten, saya setuju dengan pandangan supaya kerajaan ini perlu diberikan peluang untuk memperbaiki kelemahan yang ada. Saya percaya hatta jika mempunyai lampu Aladdin sekali pun, kerajaan PH tidak boleh merubah Malaysia dalam masa setahun. Ini kerana saya melihat besarnya kerosakan Malaysia sebelum PRU-14 yang lalu.

10. Ketiga, saya melihat kerajaan PH berwajah Malaysia, manakala PAS dan UMNO masih lagi terikat rapat dengan politik perkauman. Dalam dunia tanpa sempadan, saya percaya politik Malaysia perlu keluar dari politik sempit sebegini untuk maju ke depan.

11. Keempat, biarpun PH masih perlahan dalam tindakannya untuk membawa perubahan institusi seperti yang dijanjikan, saya nampak kesungguhan kerajaan PH untuk membawa perubahan tersebut. Ini dapat dilihat dalam kes pelantikan Pengerusi SPR, SPRM, Ketua Hakim Negara, Ketua Polis Negara—yang saya yakin dapat membawa negara ke depan. Saya juga dapati kesungguhan kerajaan untuk memerangi rasuah, meningkatkan kebebasan media, dan menghormati hak-hak politik rakyat.

12. Kelima, saya melihat kerajaan PH masih tidak tergelincir dari landasan objektif dan misi mereka untuk menambahbaik urus tadbir dan pengurusan pembangunan ekonomi negara. Pada hemat saya, setakat waktu ini, perlahan pun tidak mengapa asalkan manifesto yang dijanjikan dapat ditunaikan sebelum PRU ke-15.

Penutup

13. Kita masih ada empat tahun lagi sebelum tempoh kerajaan PH berakhir. Dalam tempoh tersebut, masih banyak lagi perkembangan yang akan berlaku. Untuk mengekalkan pemerintahannya, kerajaan PH perlulah bertindak ke hadapan sesuai dengan aspirasi rakyat dan bukan lagi mencari alasan. Selesaikan tiga perkara: tunaikan manifesto PRU-14, selesaikan isu anak muda berkaitan dengan PTPTN dan peluang pekerjaan, dan turunkan kos hidup rakyat.

14. Bagi parti oposisi pula, mereka juga mempunyai peluang untuk menang dalam PRU akan datang. Kekalkan perpaduan dalam pakatan oposisi, mantapkan kerjasama bersama dengan parti-parti bukan Melayu, dan tidak lagi mempertahankan perkara yang salah di mata rakyat.

15. Semoganya, politik Malaysia ke depan adalah politik demokratik yang menjunjung hak-hak rakyat dan negara.

FGV CEO sees three options for Felda land lease agreement

Jose Barrock and Jenny Ng  /  The Edge Malaysia - May 02, 2019

FOR the past two or three years, there have been reports on the Federal Land Development Authority (FELDA) reviewing its land lease agreement (LLA) with FGV Holdings Bhd (formerly known as Felda Global Ventures Holdings Bhd), which has sent shivers down the spine of anyone involved in FGV.

Worse still, there is talk of FELDA taking back its plantations, which would seem like a nightmare for FGV and its shareholders.

But the question is, will FELDA pull such a stunt, and can it pull it off?

In a nutshell, as part of FGV’s flotation exercise in 2012, FELDA handed over the management of some 355,000ha of its plantations via a 99-year LLA. In return, FELDA was to receive payments of RM248 million a year for leasing its land, as well as a share of the profits at a quantum of 15% per annum.

So, basically, if FGV does well, so will FELDA as it is FGV’s single largest shareholder and benefits from the dividend payments.

FELDA’s grouse is that its 33.67%-unit FGV has only forked out an average of RM400 million a year, in contrast to FELDA’s minimum requirement of RM800 million per annum, which is largely used to manage and ensure the wellbeing of the settlers.

In an exclusive interview, FGV’s recently appointed CEO, Datuk Haris Fadzilah Hassan, says, “We have explained it a few times. In the LLA commitment, there is a formula there. There is a payment for a fixed portion of it, RM248 million. Regardless of the CPO (crude palm oil) price, we have to pay RM248 million, plus a 15% share of profits from the plantations.

“So, this formula was agreed on when they (FELDA) signed the LLA in 2012. But the CPO prices then were at RM2,800 per metric ton. Maybe due to the euphoria at that time, they believed the price would not go below RM2,800 … but today, it is below RM2,000, at about RM1,948.”

FELDA’s requirement of RM800 million would indicate that it had assumed CPO prices would remain at the RM2,800 per metric ton level for the long term.

Haris says, “The last time CPO was above RM3,000 was in 1Q2017 … it was RM3,061 … after that, it’s been sliding all the way to this point.”

At present, CPO is trading at just above the RM2,200 per metric ton level and has traded at between RM2,100 and RM2,499 over the past year.

Three possible outcomes

Haris sees three options in the situation: First, for things to remain status quo; second, for the terms to be renegotiated; and third, for FELDA to terminate the LLA.

While the first and second scenarios are both palatable, the possible termination of the LLA makes analysts and fund managers jittery.

On FELDA terminating the LLA, Haris says, “It’s all within their rights, but there are certain steps or procedures that have been agreed upon in the agreement. For example, they (FELDA) will have to give 18 months’ notice. Once they have given the notice, there is a calculation of compensation, which they need to pay.”

This compensation could go into several billion ringgit, considering FGV has forked out RM300 million per annum for the replanting of 15,000ha for the past seven years. FGV is also slated to undertake replanting exercises until 2026, which will bring down the average age of its trees to 12 years from the current 14.3 years.

At the point of its initial public offering, 53% of FGV’s trees were considered old — more than 23 years old. Now, 28% of the company’s trees are considered old.

“So, if anyone takes away this land, they need to replant as well, so that will cost RM300 million a year. Then they (FELDA) will have to spend on fertilising, which is between RM250 million and RM300 million [annually]. Then, they will also have to look at housing [for plantation workers], which is another RM300 million. Our manpower costs a year are about RM1 billion … So, if they (FELDA) take away the LLA, they have many commitments as well,” Haris points out.

Note that the government is injecting RM6.23 billion into FELDA for various initiatives, as stated in the recently released FELDA White Paper. This is largely because FELDA’s cash balances as at May 9 last year was only RM35 million.

FELDA suffered losses and bled the most, to the tune of RM4.9 billion, in 2017. Much of these woes have been blamed on FGV not contributing to FELDA’s earnings.

Perhaps the best-case scenario from FGV’s perspective would be a renegotiation of the LLA with a variable payment, depending on the price of CPO.

Impact of a termination on FGV

Haris says FGV’s 355,000ha of plantation land under the LLA only contributes 30% to the company’s fresh fruit bunches (FFB) processed.

“We get 30% of our FFB from this LLA land, 47% from FELDA-managed smallholders and 23% from third parties,” he elaborates.

It is also worth noting that the LLA only covers the estates, but the mills are owned by FGV. Thus, with the mills located where the plantations are, FGV could still end up buying FELDA’s FFB.

“So net net, I’m thinking I will still get their (FELDA’s) FFB as our mills are located near the plantations, and I can reduce billions [of ringgit] from my cost structure … Realistically, they will have to fork out a lot of money to compensate,” says Haris.

“Maybe with the compensation [from FELDA], we can get plantations with a better age profile … They (FELDA) need to look more into it as the LLA is very specific in terms of the arrangement. There is a notice period, there is a compensation formula, there are some responsibilities for the employees that need to be taken back, and from the operations side, you need to be managing 355,000ha — you have to fertilise, you have to have workers, housing, or maybe they may reappoint FGV as the management company or something, which was the model before,” he adds.

For FGV, if the LLA with FELDA is indeed terminated, it would still have its sugar business under 51%-controlled MSM Malaysia Holdings Bhd, and could venture into renewable energy or a business that generates recurring income.

“Sugar’s cycle is similar as well [to that of CPO], so we will find something that is more stable,” says Haris.

FGV is one of the biggest players in the biomass business. The empty fruit bunches (after the oil is extracted), tree trunks (after replanting) and palm kernel shell can all be used to generate electricity.

Also, FGV has 68 mills, with many of them having the potential for methane capture as well as biogas and biomass production.

“In the long run, the only two things with demand that will still grow are demand for food and demand for energy,” Haris concludes.

Cover Story: Will ‘outsider’ Haris succeed in reviving FGV?

Jose Barrock and Jenny Ng  /  The Edge Malaysia  - May 02, 2019

IN his modest office in downtown Kuala Lumpur, Datuk Haris Fadzilah Hassan, the recently appointed CEO of FGV Holdings Bhd (formerly known as Felda Global Ventures Holdings Bhd), removes his lanyard, showing it to The Edge in an exclusive interview.

On it are five words — partnership, respect, integrity, dynamism and enthusiasm. When worn, integrity falls on the nape of one’s neck and the first letter of each word spells “pride”. But none of these values is currently associated with FGV.

“I tell them (the employees of FGV) these are good values. We have been pummelled so badly, so we need to get our mojo back,” says Haris.

“Why are we in this position? Because of the integrity issues before. If people were taking integrity seriously in terms of investments, for example, there would have been better due diligence done.”

For its financial year ended December 2018, FGV suffered a net loss of RM1.08 billion on revenue of RM13.47 billion. A year before, in FY2017, it chalked up a net profit of RM130.93 million on sales of RM16.92 billion.

Much of the losses in FY2018 were the result of impairments and provisions, which totalled RM1.04 billion. A significant amount of the impairments came from the acquisition of Asian Plantations Ltd for about RM1 billion — RM628 million in cash and the assumption of RM388 million in liabilities — back in 2014. (See accompanying story, “FGV better off listed”.)

As at end-December last year, FGV had deposits, cash and bank balances of RM1.22 billion, and short and long-term debt commitments of RM3.3 billion and RM991.51 million respectively. For the year in review, FGV forked out RM187.38 million in finance costs.

Haris, who was appointed less than 100 days ago — in late January this year — has the unenviable task of making things right at FGV.

The key performance indicators he willingly shares include strengthening FGV’s share price, thus improving its market capitalisation, and reducing the plantation giant’s gearing ratio, while the rest are regular yardsticks such as cost reduction, watching manpower costs, the divestment of non-core assets and putting in place an anti-bribery management system.

“It’s one of the images of us outside [that there are a lot of bribery and corruption]. Before the end of the year, we will be certified as having an anti-bribery management system,” says Haris.

“The [company’s] fundamentals are strong,” he continues. While he cannot share the profit forecasts, he says FGV’s gearing ratio of 0.75 times in FY2018 is slated to be reduced to 0.68 times by the end of the current financial year.

But the question is, how will Haris — FGV’s fifth CEO since its flotation exercise less than seven years ago — turn around the lumbering giant and get it back on the right track?

What the plan entails

Haris has a three-year contract in which time he has to put in place strategies to get FGV out of the rut it is in.

“I was in Sime Darby [Bhd] before, so I’m not afraid of the scale. Immediately before this, I was working on the MRT1 (Mass Rapid Transit Line 1), handling RM31 billion worth of projects, so scale-wise, it (FGV) is not something that I’m afraid of. Look at their fundamentals: they have land, they have plantations — it’s not really rocket science, but you need to get the basics correct. Demand for food will always be there, so in the long term, it’s a positive play,” he explains.

Haris says at present, FGV’s focus is on the upstream business and in fact, 60% of FGV’s crude palm oil (CPO) are sold as CPO while only 40% are processed into other products. This means that the company may have to give out discounts, such as when the tanks at the mill are full and more fruits are coming from the field.

Palm oil keeps for only three to four months before the free fatty acid content starts to increase, so buyers know that they can squeeze companies such as FGV for higher discounts as they would want to make a quick sale.

In contrast, if FGV converts the CPO into cooking oil, its shelf life would increase to more than a year, or possibly even two.

“So, if you convert it (CPO) into another product, you would not be in a hurry, and the value is retained in the product … So, FGV needs to move forward in terms of the downstream business,” Haris explains.

By moving downstream, he is referring to plans to venture deeper into oleochemicals and quality oils through the joint ventures that the company is already in.

It is worth noting that of his nearly six years at Sime Darby, Haris spent the last three years and nine months, from 2008 to 2012, as its head of downstream business.

At FGV, he is also looking at improving efficiency or the utilisation factor at the mills. Costs are higher where the utilisation rates are low. FGV is considering closing down some of its mills and using them as fruit collection centres to bring down costs.

Meanwhile, one of the company’s worries is the oil extraction rate (OER), which is a function of the oil-to-bunch ratio. Its OER is hampered by the fact that only 30% of its fresh fruit bunches (FFB) come from its own plantations, which means it has little control over the 70% of FFB going into its mills. (See accompanying story, “Three options for FGV and FELDA’s LLA”.)

“We can’t control CPO prices, so in the last 100 days, we have been controlling the things we can, which is our costs. If we get our costs to the level that is competitive, when the good times return, we will be in a good position. So, we have been focusing our efforts on driving our costs down,” Haris explains.

His efforts have already started to bear fruit.

Early this year, FGV’s costs were RM1,800 per metric ton of CPO. With the land lease agreement (LLA) charges added — between RM350 and RM400 — the costs were nudged up to about RM2,200 per metric ton.

In a nutshell, this means that if CPO prices were below RM2,200 per metric ton, FGV would likely be in the red.

Now, Haris has managed to bring down the costs from RM1,800 to below RM1,500 for the first quarter of this year. This is actually a big deal, considering FGV produces three million metric tons of CPO a year. Savings of RM100 per metric ton on costs translates into RM300 million in savings, which goes straight into FGV’s coffers.

“It’s all about costs per metric ton … We have reduced our processing costs, we have reduced our costs at the mill, we are making sure we have enough workers, so we can harvest all the fruits, evacuate the fruits as fast as we can, and make sure the OER is good, then we will be as good as the rest (its competitors),” he says.

The people factor

However, Haris’ biggest task lies in the handling of the people at FGV. Many of them have heard the same rhetoric of transformation and have seen the last three CEOs all leave abruptly, while they have stayed put.

Then again, FGV until recently had a workforce of 19,000, which was far too large by most standards. In addition, it has 32,000 foreign workers at the plantations. Haris admits that on a cost per hectare basis, the company has too big a workforce.

The recently concluded mandatory separation scheme targeted at staff with medical issues brought down FGV’s staff count to 18,018, and Haris hopes to push the number down to about 17,500 by June. And the big picture involves a reduction in manpower costs by 30% over the next three years.

It is also noteworthy that out of the 19,000 employees, about 10,000 or 53% are in non-executive or junior executive levels.

“It is high — 19,000 [people] for 355,000ha is a bit too much. On a cost per hectare basis, it is high,” Haris comments.

According to FGV’s financials, as at end-December, the company’s administrative expenses amounted to RM925.67 million, down from RM982.3 million a year earlier.

But his biggest challenge with manpower lies not in the numbers but their motivation levels. FGV started from the Federal Land Development Authority (FELDA), and the whole reason for its being was a social agenda. So, while other companies are set up for the purpose of making money, FELDA does not have the same DNA.

It also does not help that the last few CEOs were also looking at transformation, which could lead to what Haris calls “transformation fatigue”.

“To these 19,000 people, you can keep shouting about transformation day in, day out but they know … the people at the top, they come and go. They (the employees) are the only constants.

“So, my biggest challenge is how do I mobilise these 19,000 people to change? Because they have heard all this before, and I am an outsider. For me, coming from the outside, I have to gain their trust. This is the greatest challenge for me,” Haris explains.

Some of the employees, he concedes, have worked in the FELDA environment for many, many years and in 2012, started work at FGV, a public-listed entity, but they have not had a change in mindset.

Haris and those at the helm of FGV are trying to inject a sense of urgency, that FGV is competing commercially and that the company is in competition with other players.

“I’m spending a lot of time on the people side. This coming 23rd [of April marks] my third month here, but I’ve already had 13 town hall meetings. I’m going to meet people on a smaller scale. This needs to be addressed,” he says.

While Haris grapples with the many issues at FGV, the plantation company’s share price hit 63.5 sen in mid-December last year, its lowest since its flotation exercise. Since then, it has risen, closing at RM1.23 last Friday to give the company a market capitalisation of RM4.49 billion.

What happened at FGV?

While things may have picked up for FGV, its share price is still much lower than its initial public offering (IPO) price of RM4.45 in mid-2012. At its peak, FGV boasted a market capitalisation of above RM17 billion.

The key problem with FGV was its ageing plantations. FGV’s prospectus in 2012 indicated that 36% of its plantations were between 21 and 25 years and 16.9% were over 25 years, or put another way, almost 53% of FGV’s plantations were regarded as old even seven years ago.

Nevertheless, FGV raised RM4.5 billion from its IPO, selling shares to investors.

Much of this cash has been used up, mainly for acquisitions. In July 2013, FGV acquired Sabah-based Pontian United Plantations Bhd for RM1.2 billion in a deal many thought expensive, with FGV paying RM74,800 per hectare.

In October 2014, FGV acquired Asian Plantations for about RM1 billion, and the acquisition has since been fraught with legal issues. FGV is seeking legal recourse against former directors and the senior management of Asian Plantations for losses suffered due to their failure to discharge their respective fiduciary duties.

Then, in June 2015, FGV acquired four plantation companies and an 836.1ha oil palm plantation in Sabah from Golden Land Bhd for RM655 million cash.

Other than plantations, FGV also invested in Cambridge Nanosytems Ltd, which was supposed to get involved in the production of high-grade carbon nanotubes and graphene from the by-products of CPO.

Many of the acquisitions were frowned upon. The question now is, will Haris be able to change the tide of negative news at FGV and turn things around, or will he be another CEO to leave abruptly from the hot seat?

Cover Story: ‘FGV better off listed’

Jose Barrock and Jenny Ng / The Edge Malaysia -  2 Mei, 2019

FGV Holdings Bhd’s current office, Wisma FGV, in Jalan Raja Laut is a far cry from its old posh set-up at Menara FELDA in Platinum Park, Kuala Lumpur. “The decision to move here was purely commercial. Rental here is RM3.50 psf, the old one (Platinum Park) was RM7.70,” says recently appointed FGV Holdings CEO Datuk Haris Fadzilah Hassan matter-of-factly.

In an exclusive interview with The Edge, Haris shares his thoughts on the way forward for FGV and the gargantuan tasks ahead for him. Here are excerpts from the interview.

Your office … it’s very different from the old set-up.

It’s nothing to be shy about. It was an opportunity for us to be ourselves. At the old building, we couldn’t even put the FGV logo outside. There was no opportunity for us to exert our identity, although we are a public-listed organisation.

The perception is that you are trying to distance yourself from your parent (FELDA).

I won’t say distance. There is a confusion, even in the way you are saying it — after June 2012’s public listing, FELDA is only the single largest shareholder. They (FELDA) own 33.67% of FGV, but there are other shareholders with about 67% (in FGV). Even in accounting treatment they equity account based on the shareholding, if they were our parent they would take the whole profit … so they are our single largest shareholder.

What were your fears, your thoughts before you joined FGV?

Basically, FELDA was established to give land to the landless, so when you have an organisation that until recently had a social agenda, it is different. My (other) concern then, looking at this company, it has been listed for say seven years, if I were to join, I would be the fifth CEO.

There is a perception that people in FGV are more loyal to FELDA than to FGV.

I would not say it is untrue. It’s because of the long association. They have only been in FGV for seven years, and over the last few years there’s not much to be proud of, being with FGV.

How does it work for you, being a unit of FELDA, they talk about privatising FGV on and off.

If you ask me, personally, I prefer FGV being a public-listed entity because when you are publicly listed, then you are transparent, you are accountable. So, for me, there are advantages of being listed. Many of these stories, these discoveries in FGV are because we are a public-listed organisation. So, if we are taken private, whether it’s good in the long run is a question mark.

Is there any strain between FGV and FELDA?

On the outside, people say things like that, but internally, I do not feel there is a strain between FGV and FELDA. I think the relationship is fine.

Your first 100 days seems very eventful. The FELDA White Paper came out. So how has it been?

It was hectic. To be candid about it, it has also been very hard. It’s easy to lose focus when you have so many things to do at any one time.

We have to look at the upstream segment, as this is where the real money-making areas are. So for the last 100 days, we have been focusing more on the upstream, getting our basic practices right.

That is the other area I’ve been looking at in the first 100 days, sweating the assets. We have 68 mills but utilisation is about 65% to 67%, so we want to increase this. We have assets but we are not sweating them enough. Also, we are looking at opportunities to rationalise. Do we really need all these 68 mills because some of them are within the vicinity of others, which could be one of the reasons why the utilisation rate is low.

So we are looking at rationalising two mills a year, [and] we want to take out about six mills from the system. We are looking to close them and make them collection centres for FFB (fresh fruit bunches). Then we will be able to raise utilisation to 75%.

Some of the acquisitions that were made prior to your entry, for instance, Asian Plantations had issues. How are you dealing with them?

In fact, my first week in FGV, the first place I visited was Asian Plantations. I went there because of the big impairment. This investment was made in 2014. Last year’s impairment, (a little more than RM1 billion) was mostly because of Asian Plantations. It’s about 26,000ha, the total area if I’m not mistaken, but only 8,000ha are planted, and out of that 8,000ha only 5,000ha are productive. There are terrain difficulties and all those things.

Do you have a problem with — integrity in FGV?

Why we’re in this position is because of integrity issues before. For the first quarter of 2019, we have to return to the black, to the positive. That has been our battle cry. That is why this first quarter is very important. There is nothing more morale-boosting than to be in a company that performs.

Datuk, are there issues with integrity in the estates, as in the past, we heard of pilferage, or managers not meeting KPIs or standards, is that true, and if it is, how do you change that?

We are talking about such a huge area, so to be there all the time is a bit difficult, which is why we are looking at processes. How do we put processes in place to manage some of these things? In the past, we heard the same thing.

They have just been put into place?

They have been further strengthened in the last two to three years. So back to your question, we heard about them, but now we have a different process, we are of the view that you cannot have the same process and expect different results. So we are changing the processes.

From procurement, we are expecting RM150 million savings by tightening some of these processes. Also, by combining, rather than having each estate going and buying their own needs, we can do more volume purchases to get better deals.

We are also targeting RM350 million from the sale of non-core businesses, which is happening ... for example, Cambridge Nanotech. We also have the property business, the engineering business, so RM350 million within three years, we are expected to get.

Where do you hope to see FGV in five years?

My hope is that, and I’m quite confident of this, FGV will be one of the leading plantation companies or agribusiness companies in Malaysia.

Sorry for saying this, but every new CEO says the same thing … at every interview, we hear the same thing.

This is why I say I don’t only have you guys being cynical about it. The 19,000 people (staff of FGV) also have the same feeling.

It’s a natural reaction, but as a leader I have to believe tomorrow will be better than today, and I have to work towards it. But what I say is from a point of facts. I look at the amount of land that we have, looking at the people, mathematically we can be there, it is possible. It’s whether I can harness the power of these 19,000 people, to come along with me on this transformational journey, whether they are willing to give me a chance, to work with me, to trust me, to lead them to this path. Whether we fail or succeed depends on these 19,000 people.

You said you want to balance the downstream, what do you mean by that? FGV already has some downstream products right? Saji oil and all that, so what more are you doing?

There are two areas, one is where we are targeting the B2C (business to consumer). Saji is more of a FMCG (fast moving consumer goods). There is a big market supplying to businesses — supplying ingredients, supplying to Unilever, supplying to Nestle, to QSR — so that part of the business, we need to beef up.

We can also go further downstream in terms of oleo chemicals or go into areas such as quality oils. These are things that we don’t have because our focus has always been on commodities.

The other thing we are doing is looking at some of the joint ventures that we have. In some, FGV has taken a role of just supplying raw materials, so I’m thinking why just raw materials? Why not product development? Why not branding?

Are you still on track for Roundtable on Sustainable Palm Oil (RSPO) certification?

Yes, we are still on track. Our commitment is still there [and] according to our timeline, we are on track. We have 33 RSPO-certified mills, out of our 68. We are still proceeding with the programme to certify … no issue there.

Is there still an expectation to provide for the FELDA settlers ... the socioeconomic aspect — how do you address that?

We maintain very clear lines, and as a public-listed entity, we have our corporate social responsibility (CSR) activities. So we will occasionally get requests for CSR, for some donations, so we look on the basis of whether we can afford it.

Our priority for CSR has always been to places near where we operate. We give priority to communities within our work ecosystem, but the amount is not mandated or regulated by a certain percentage. It depends. Like this year, I can always say we are not making money yet. Those that we can, we do.

Your share price, what do you think is a fair value for FGV?

The fair value should be at least NTA (net tangible asset) per share. NTA per share assumes that if this company closes down, if you strip it, that’s what you will get. Our NTA does not vary much from other companies, but they are trading in multiples of their NTA. The minimum should be the NTA level.