29/3/06 KUALA LUMPUR(The Star) - Felcra Bhd hopes to secure RM1bil under the Ninth Malaysia Plan to fund its capital expenditure for special projects, said chairman Datuk Hamzah Zainudin.

“From the RM1bil which we hope to receive, 60% will be allocated for replanting and 40% for infrastructure and downstream activities,” he said after the signing of a memorandum of understanding (MoU) with Bank Islam Malaysia Bhd for a RM100mil Bai Bithaman Ajil (BBA) corporate financing facility.

Bank Islam managing director Datuk Noorazman Abdul Aziz signed on behalf of the bank. 

Hamzah said Felcra recorded turnover of RM1.5bil last year and was upbeat about achieving 10% growth this year.

On its downstream activities, Hamzah said Felcra was aiming to boost its downstream activities to 50% of its operations within the next three years from the current 30%.

Last year, the bulk of the contribution came from upstream activities, which included replanting and managing the 250,000 ha of palm oil and rubber plantations.

He said Felcra was currently in the process of drafting several proposals to the government and related parties to get directly involved in the palm oil-based industry. 

“Our major effort is now concentrated on the setting up of a few refineries and biodiesel plants,” he said. 

The first refinery will be set up in Lumut, Perak. 

On the company's expansion plans, Hamzah said Felcra was also in talks with several interested parties in Riau, Indonesia, on the possibility of setting up a palm oil mill on a joint venture basis.

Under the MoU signed yesterday, Bank Islam will provide bilateral financing to Felcra Bhd for a period of up to 10 years.

The scheme offers deferred payment whereby the bank will finance Felcra customers who wish to acquire an asset but wish to defer the payment for the asset for a specific period or to pay by instalments.

Under this facility, the bank would first purchase the asset concerned and subsequently sell the relevant asset to the customer at a selling price, which comprises the actual cost of the asset to the bank plus the bank's margin.