FGVH has been invited to adopt its model on oil palm cultivation in PNG

30/04/2013 (The Star) - Providing “land for the landless” and “jobs for the jobless” were the two famous phrases coined by the mastermind of the Federal Land Development Authority (Felda) scheme the late Tun Abdul Razak, Malaysia's second prime minister, back in the 1950s.

Fast track to 2013 and the Felda scheme model has become one of the most successful land development schemes in the world, widely admired by many newly developing nations given its strategic role in addressing Malaysia's poverty alleviation measures in the rural economy.

Beginning with just managing the settlers' resettlement scheme, Felda has expanded dynamically via the ownership of profitable agriculture-related businesses in upstream oil palm plantations and downstream activities worth billions of ringgit, spearheaded by its business entity Felda Global Ventures Holdings Bhd (FGVH).

FGVH has, to date, business interests in 12 countries sprawling across four continents, overseeing over 800,000ha of landbank and employing 19,000 people.

More importantly, FGVH has become a source of subsistence for 112,600 settlers and their families, with an estimated population of 1.6 million.

The unique business model of the Felda group has managed to incorporate all the tenets of corporate social responsibility into a symbiotic structure that links Felda, its settlers and the growing business entities of FGVH.

In fact, Felda, given its lucrative business ventures, has been independent of funding from the Federal Government since 1996, thanks to the good palm oil prices,

As a result, the proven success of the Felda scheme model has now generated a strong following among some developing nations keen on emulating a similar approach.

In recent years, both the Government and Felda have been invited by several Asian, Latin American and African countries to assist them in developing similar settler schemes starting with the opening up of oil palm plantations, the key commodity crop that will help smallholders and farmers improve their income levels.

FGVH group president Datuk Sabri Ahmad who successfully led the listing of FGVH, the world's second-largest initial public offering on Bursa Malaysia last year, also holds similar aspirations for FGVH to help implement and replicate the successful Felda scheme model in Myanmar, Cambodia and Africa.

Sabri said the agenda was mainly to share Felda's experience in creating land for the landless and eradicate poverty so that people who are poor have a steady income from cultivating lucrative crops such as oil palm and rubber.

FGVH is currently in the first phase of its upstream expansion into the Asean region, and upon completion, will be looking at Africa mainly for oil palm cultivation.

The latest report is that FGVH is mulling over an oil palm venture in Papua New Guinea (PNG). This comes as no big surprise as Kuala Lumpur Kepong Bhd and Kulim Bhd are already ahead with a strong presence in PNG.

On the other hand, industry observers opine that the Felda scheme model is best replicated in the African countries because it is predicted that the future production of palm oil could shift to this continent where land and labour are aplenty.

Furthermore, the governments of some African countries such as Liberia, Nigeria, Ghana, Congo, Ivory Coast, Cameroon and Gabon have been the most pro-active in supporting the plantation sector and are also believed to be the most keen on adopting the Felda model.

It has also been reported that Brazil and Colombia in Latin America are interested in oil palm cultivation. However, given the unfavourable logistics and infrastructure issues, many local plantation investors are reluctant to invest in these countries.