01/09/ 2005 (The Star) - WHILE plans for its proposed listing is still upin the air, Felda Holdings Bhd is set to drive the Felda group's five-yeargrand plan into motion that aims to transform the plantation giant into aformidable champion in the global oil palm sector.

Felda Holdings group managing director Raja Datuk Sharifuddin Abidin saidthe transformation was achievable through three focus areas - acquisitionof plantation land abroad, increasing efficiency to be at par with thebest private plantation players in the industry and aggressive expansionof downstream activities.

To date, Felda Holdings manages the Felda group of companies comprising 27subsidiaries, 12 joint-venture companies and 10 associate companies, bothlocally and abroad.

Felda Holdings is 51%-owned by Felda Investment Co-operative (FIC) and theremaining 49% by the Federal Land and Development Authority (Felda).

In outlining the transformation roadmap, Sharifuddin told StarBiz inPutrajaya recently that the Felda group needed to seriously re-assess itscurrent position by benchmarking against the best private plantationplayers in Malaysia.

Raja Datuk Sharifuddin Abidin"In the local palm industry, the Felda group is slowly losing market shareand competitiveness with negative remarks that we are bringing down theindustry average," he added.

However, Sharifuddin said there were two options for the Felda group goingforward - either maintain its status quo or adopt a growth strategy.

He said: "By adopting the growth strategy - which is the preferred option- this can result in group pre-tax profit growing beyond RM1bil and asignificant jump in dividend payout to RM120mil by end-2009."

By retaining its status quo, the Felda Holdings group would continue togenerate pre-tax profit of between RM350mil and RM400mil per year and paydividend of RM60mil to RM70mil annually, he added.

According to Sharifuddin, the key growth and competitive strategiesinclude the acquisition of plantation land overseas.

"For economies of scale, the Felda group believes the suitable size ofplantation land must be over 10,000ha to allow us to build one or two palmoil mills within the vicinity," he said.

In Malaysia, Felda is the biggest plantation-land owner with over853,000ha nationwide but to date, it does not own any plantation landoverseas.

Sharifuddin said the Felda group was currently looking at the possibilityof acquiring plantation land in Indonesia, Colombia and in Africancountries like Ghana, Nigeria and Sierra Leone.

Apart from the Government advising the group to look for more landoverseas, Felda also gets invitations from foreign governments to considerdeveloping oil palm plantations in their respective countries.

"This reflects the strong confidence in Felda based on its 50 years ofsuccess in making palm oil a significant contributor to Malaysia's economyand also, the social contribution to the settlers' community," he added.

Sharifuddin said: "We have sent out a fact-finding and research team toIndonesia to look at the prospective plantation land and more recently, toSierra Leone, but to date no final decision has been made."

Any proposal would need to be submitted to the Prime Minister's Departmentfor approval, he said, adding that the Felda group was targeting toincrease its plantation land by 100,000ha over the next five years.

As for downstream activities - another priority area for the group hesaid: "So far, we have invested about RM800mil in downstream activities,mainly in oil palm-related businesses."

"We want to be a global palm oil downstream player by participating invalue-added downstream activities with strong focus on our end users," headded.

Sharifuddin said the Felda group planned to work with its existing jointventure partners abroad to further explore downstream activities in newgrowth markets.

"We also hope to add value to our existing businesses like setting up acooking oil refinery and packaging plant in Sri Lanka," he added