16.01.2012 (New Straits Times) - Halim Abas has been a settler for more than 25 years of his life,  toiling the land in Felda Mempaga, Bentong, Pahang.

Although it is a hard and a backbreaking life,  oil palm has been good to him, enabling him to earn a living.

Now Halim can sense that things are going to get better for him and the other 110,000 Felda settlers.

This is because an important development is  unfolding in Jalan Gurney, Kuala Lumpur,  the headquarters of Felda or Federal Land Development Authority.

Felda’s wholly owned unit, Felda Global Ventures Sdn Bhd (FGV) is set to be listed  this year and Halim knows he will be part of a global company.

FGV president and chief executive officer Datuk Sabri Ahmad said, for settlers like Halim: “It’s a chance to own a slice of the more than RM70 billion a year oil palm  pie.”

This is because  profitable business activities carried out by FGV would trickle down to the 224,000 members of Koperasi Permodalan Felda.

Koperasi Felda owns a 51 per cent stake in Felda Holdings Bhd.

The other 49 per cent stake is owned by FGV.

Sabri had said  that Felda settlers, via the Koperasi, could be a force to be reckoned with in the future, just like Rabobank, which is owned by a cooperative of farmers.

Netherland’s Rabobank is the world’s largest agriculture bank, owned by 141 independent local cooperatives.

According to London-based Godrej International Ltd director Dorab E. Mistry, the listing of FGV would be in the right direction as  global investors were seeking to invest in agricultural companies  based in stable jurisdictions.

“Above all, it will be an incentive to every stake holder, particularly the employees of Felda,” Mistry said.

Despite the anticipated positive spin-off from the FGV listing, there are detractors who are scaring settlers away with their  tales of  land being seized after the listing.

National Association of Smallholders Malaysia president Datuk Aliasak Ambia said, generally, settlers were all for the listing as they were aware that there had to be a more effective and innovative way to sell rubber and palm oil.

He said the settlers understood the need to raise capital and that things had to change to sell palm oil in a more innovative manner.

However, Aliasak said they also needed to know where they were within the listing structure and how they would benefit.

“Assure them that their land will not be taken away and tell them what’s in it for them.

“It is also good to note that the listing will allow Felda to monetise their assets and create value which in turn will go back to the settlers.”

It would  be useful for those at the top of Felda  to drop complicated business jargon during their road shows.

“Please use simple language,” said Aliasak.

Another point to note is that the listing is not just about the plantations. FGV has other assets, as well, such as property, logistics, shipping, bulking and others.

A Kuwait Finance House investment executive said the initial public offering (IPO) would compel Felda to improve efficiency.

“The IPO can transform Felda into a more efficient plantation company to compete with the best because everybody knows that Felda’s oil palm yield is poorer than its peers, such as Sime Darby, IOI Corp and Wilmar.”

A cause of concern about the listing is how  Bumiputera ownership will be preserved.

With the IPO, anybody can buy a stake in the government-owned plantation company.

Academy of Sciences Malaysia fellow Dr Ahmad Ibrahim said foreigners would be able to have a stake in the world’s largest plantation entity and, without  controls, Malaysia’s plantation assets could flow out.

“Felda must have a strong structure in place before it  floats its shares.

“Bumiputera ownership issues must be liberalised and handled in a sensitive way.”

Felda has operations in seven countries, selling and processing crude or processed palm oil and its related products.

It has an annual revenue of RM15 billion.

The Felda Group, which has 40 wholly- or partly-owned subsidiaries as well as joint-venture firms, produces a fifth of the world’s crude palm oil output.

Set up in July 1956, Felda has a total landbank of 853,313ha, of which 90 per cent are planted with oil palm.

Felda manages 317 land schemes nationwide and owns 72 oil palm mills and seven refineries.