Archive for February, 2012

Three steps to Felda Global listing

February 25, 2012 Leave a comment
This is written by my colleague Maizatul Ranai stationed in Negeri Sembilan.

SEREMBAN: Three steps will be carried out to ensure the listing of Felda Global Ventures Holdings Bhd on Bursa Malaysia scheduled in May or June this year will proceed as planned.

Deputy Minister in the Prime Minister’s Department Datuk Ahmad Maslan said the first step is to persuade eight members of Koperasi Permodalan Felda (KPF) to withdraw their action. These eight settlers had, for the second time, obtained a temporary order at Kuantan High Court to prevent the cooperative from making any decision at its extraordinary general meeting (EGM) on February 22, 2012.

The court order had forced the cancellation of the EGM and hindered KPF from participating in the proposed listing of Felda Global.

Ahmad Maslan said efforts to persuade the Felda settlers involved to withdraw their action was tough. He said their action was unfair to about 240,000 KPF members who mostly supported the listing.

“(As a second step) we will try to set aside the application of the injunction. This will enable the EGM to be held and allowing about 1,300 KPF representatives to cast their votes regarding the listing exercise. I believe the majority will support the listing of Felda Global. So far, the explanation on the benefits of the listing was well received,” he said after launching SB Fight Back Academy at Karnival Seni Beladiri Kolej Negeri here yesterday.

Ahmad Maslan said the government is looking forward to implement the two steps, before going to the third step, which is the listing of Felda Global — without KPF’s participation.

Maslan, who is also Umno information chief, said the injunction is backed by the Opposition, who did not mind destroying the future of the settlers and Felda’s staff for the sake of their own political expedient. “We know the eight settlers support the Opposition. Even PKR director of strategy Mohd Rafizi Ramli admitted that the Opposition wants to prevent the listing of Felda Global,” he said.

Ahmad Maslan also responded to the opposition’s claims that KPF only owns 37 per cent shares in Felda Global, compared to 51 per cent in Felda Holdings Bhd. “The Opposition is willing to see KPF own 51 per cent in an entity which only has market value of RM3 billion compared to a 37 per cent stake in Felda Global which analysts had estimated to be valued at RM20 billion upon listing on the stock market,” he said.


Felda to go ahead with IPO

February 23, 2012 Leave a comment
KUALA LUMPUR: FELDA Global Ventures Holdings Bhd (FGVH) will go ahead with its proposed initial public offering without the direct involvement of the settlers’ cooperative, Koperasi Permodalan Felda (KPF), Felda chairman Tan Sri Isa Samad said.

However, Felda settlers will still enjoy any windfall from the proposed listing through a special purpose vehicle (SPV).

“I want to be clear that Felda wants KPF to participate in the IPO. However, it is unfortunate that a small group of eight Felda settlers, influenced by the National Felda Settlers’ Association (Anak), have chosen to block the participation of KPF in the IPO,” Isa said at a press conference held before a briefing session with Felda settlers here yesterday.

The Kuantan High Court last week allowed an interim injunction by eight Felda settlers barring KPF from transferring its shares in Felda Holdings Bhd and 10 of its subsidiaries to FGVH or any discussion to be held on behalf of KPF on the matter, resulting in the cooperative board cancelling its extraordinary general meeting yesterday.

While KPF owns a 51 per cent stake in Felda Holdings, it does not have a stake in FGVH, which is wholly owned by the government through Felda. As such, the decision to list FGVH lies wholly with the Felda board and the minister in charge of Felda.

Isa expressed disappointment with the action of the eight settlers, which he said was detrimental to the interest of 220,000 KPF members, of whom 112,635 are Felda settlers. “As a result of their action, other KPF members (non-settlers, such as Felda employees) will not be able to participate in the proposed listing of what would have been one of the largest producers of crude palm oil in the world.

“Although the action of the eight will not impact on FGVH’s proposed listing, we are disappointed at their opposition-influenced decision to deprive a majority of Felda employees an opportunity to participate in the growth of FGVH,” he said.

With KPF out of the picture, Felda now proposes to establish a SPV to protect settlers’ interest.

“As the proceeds from the proposed listing and potential profits from the listed business now cannot be channelled through KPF, the SPV will assume this role and ensure that Felda settlers benefit directly from the proposed listing and participate fully in all future profits,” said Isa. “We anticipated this. That’s why we were prepared to handle it in a different way.”

Isa said the listing of FGVH was going through the usual regulatory process and it had been finalised. “I urge all parties not to make any statements or speculations on the outcome. I am sure the FGVH management will provide the necessary information as to when approval from the authorities is granted.”

He reiterated that no Felda settler’s land would be touched. In addition, their holding in KPF remained as it was.

Garuda increases KL-Jakarta flights

February 20, 2012 Leave a comment
This is good news for oil palm investors who frequently shuttle between Kuala Lumpur and Jakarta.

SEPANG, Selangor: Garuda Indonesia will now fly three times a day between Kuala Lumpur and Jakarta from just twice daily, previously.

Travellers from Malaysia topped tourist arrivals to Indonesia last year. “As a regional hub for both business and leisure travellers, Malaysia is a very important destination for us,” said Garuda Indonesia president and chief executive officer Emirsyah Satar.

“Whether it is for business or pleasure, three daily Garuda flights will give passengers the convenience and flexibility when planning a trip to Jakarta,” he told reporters after greeting passengers on flight GA816 at Kuala Lumpur Interna-tional Airport (KLIA) yesterday evening.

Also present at the launching ceremony of Garuda’s additional daily flights was Malaysia Airports Holdings Bhd managing director Tan Sri Bashir Ahmad, Indonesia Youth & Sports Minister Andi Malarangeng, Indonesia’s Social and Culture Minister Suryana Sastra Diredja and Garuda executive vice-president of marketing and sales Arief Wibowo.

Andi noted that last year, only five million passengers travelled between Malaysia and Indonesia. “We see potential for growth as business ties, tourism and sporting activities expand in view of the formation of an Asean Community by 2015,” he added. 

As Indonesia’s national airline, Garuda offers full-service network with main hubs in Jakarta, Denpasar and Makassar. Its fleet of 87 aircraft serves 31 domestic and 19 international destinations.

“With Garuda’s additional daily flight, frequent flyers between Kuala Lumpur and Jakarta now have a wider choice in their flights. This additional flight will also further stimulate passenger movement between Indonesia and Malaysia,” said Bashir.

Currently, Malaysia Airlines flies six times daily between Jakarta and Kuala Lumpur.

Catering to a growing demand for bicycles

February 20, 2012 Leave a comment
Apart from meeting corporate leaders who are clever at making money, as a business journalist, I also deal with scientists collecting data at oil palm fields. Most scientists are in tune with the commercial world but there are also a handful who are penny wise pound foolish. On top of that, they also like to talk big but are not able to step up to the plate. Frustrating, huh?

At times like this, a leisurely ride in the estate under the cool canopy of oil palm leaves makes me feel there are brighter days ahead. As the gentle breeze blew past me, I remembered words of comfort from a friend — in times of crisis, there’re opportunities. That prompted a story idea in my head and led to this interview with bicycle retailer Edwin Ng.

As recreational cycling starts to regain its popularity in the Klang Valley, Joo Ngan Son Bicycle Specialist taps into the heightened demand with a third store. OOI TEE CHING speaks to former national cyclist Edwin Ng about the booming sector.

“WE will be opening our third outlet and it’ll be called Volt – Your Cycling Companion,” said managing director Edwin Ng, a former national cyclist.

In an interview with Business Times in Petaling Jaya, Ng said in today’s fast-paced world, parents are realising that they need to spend more time with their children. “One of the ways to tighten family ties is to engage in outdoors activities together, such as cycling.” 

Edwin recalls cutting his teeth in cycling in the 1980s by taking part in BMX competitions. It was also then that he started helping his father, Datuk Ng Joo Ngan, run the family’s bicycle shop. 

Back in the 1970s, the elder Ng was an Asian Games gold medallist and king of road cycling. Like his father, Edwin was also talented at competitive cycling. 

In 1994, he earned the Future Sportsman of The Year award. By 1998, he had bagged more than 20 gold medals from local and international races. At the 1995 World Championship in Bogota, Colombia, he smashed the national record in the 1000m individual time trial.

However, Edwin was forced into early retirement because of injuries to his wrist, shoulder, hips and left eye during high-altitude training at Genting Highlands.

Undaunted, he channelled his passion for bicycles into retail.

In 2007, Edwin opened his first outlet as Joo Ngan Son, an obvious reference to his father Datuk Ng Joo Ngan. He bought stocks worth RM760,000 in his father’s business. “I didn’t borrow any money but I paid my dad bit by bit, over the next three years,” he said.

Edwin is in a unique position as he has first-hand experience in competitive cycling, having been Malaysia’s top cyclist in 1995. At the same time, he also has first-hand knowledge in being at the sharp end of bike retail. “Customers are key to us and always will be. We cater to mountain bikers, roadies, spinners or even recreational bikes like tandems for the family. Ultimately, success in any market is down to how well we can offer what they need,” said Edwin. 

“The best part of being in the bicycle business are the friendships that I have made,” he added. True enough, as he pauses, his phone rang. He promptly excused himself to have a friendly chat with a client on a list of preparatory steps to undertake in a tournament.

Edwin notes that the appetite for cycling among urban Malaysians is growing. Nowadays, potential customers are being offered a wider spectrum of two-wheelers compared to 10 years ago. Bicycle shops need not be the old small mum-and-pop style shops, especially when the top range bicycles are costing tens of thousand of ringgit. Concept stores are opening to push cycling out to a wider audience.

Edwin positions his Volt – Your Cycling Companion concept store as a one-stop-shop for those who are passionate about cycling, including for commuting, mountain biking, racing, leisure touring and endurance training for triathlons. “The retail environment is becoming brand-orientated. More and more consumers want to frequent stores that offer quality products and friendly consultations on maintenance and repair,” he said.

In his four-year stint in bicycle retail, Edwin has had clients who wanted bicycles for everything, such as commuting, recreational and racing and even one for the maid to run errands. 

But a one-size-fits-all does not exist. So, how does one go about choosing a bicycle?

“First, you have to decide on your budget and then, the features you want. Do you like to race or do you want to have multiple gears and panniers to carry all your food and beverage rations?”

Since a cyclist typically pedals 90 per cent of the time, he says saddle choice, ride comfort and sitting posture are important. “The bike has to fit the rider ergonomically.”

Currently, anyone who buys a bicycle is able to deduct up to RM300 in their income tax filing. But Ng feels the government can do more to encourage healthy lifestyle among Malaysians. “It will be good if the government considers waiving the limit on income tax deduction for sporting equipment,” he said.

Bicycling is good for physical and mental health because, in the long run, one can save money on healthcare and medical insurance. “The bicycle is a simple solution to a whole host of problems,” he says. 

Last year, Youth and Sports Minister Datuk Seri Ahmad Shabery Cheek endorsed the World Car-Free Day on September 22 and urged the public to do their part. 

In promoting a healthy lifestyle among Malaysians, Shabery had said proper bicycle lanes should be incorporated into city planning. He also encouraged bicycle rental services where the public could rent a bicycle from one spot and return it at another. “This will help alleviate the parking problem.”

This was written by my colleague Chai Mei Ling. It was published on 2nd October 2011.

I remember when I was the King on two wheels

IT all started some 50 years ago at Jalan Kuchai, Kuala Lumpur with a simple dare. Datuk Ng Joo Ngan was then 15, scrawnier than most boys in the neighbourhood, was always a target when the rest wanted to show off their prowess in anything.

His brother’s friend, a cycling enthusiast, challenged Ng to a race. At stake were a bowl of noodles, RM10 and bragging rights. Ng lost to the other boy, who was a year older than him.

“My brother, Joo Pong, who is also a year older, is a very good cyclist. His friend naturally never challenged him, but always chose me as a target. I was annoyed to be taunted all the time. Plus, RM10 was a big sum then,” says Ng.

The teen then decided to equip his ordinary bicycle with a racing handlebar. He also woke up at 6am daily to train for a week, cycling some 3km a day.

His determination was worth it — he beat the friend in the next race, regained his pride, and learnt that almost anything was possible with perseverance and hard work.

“I thought to myself — I’ve never been interested in or picked up cycling, but if I could beat my brother’s friend, who had been cycling for two years, after having trained for just a week, I could probably beat my brother should I train harder.” 

He continued training on his own every day — sometimes joining his brother in races — and within a year, made it to the national cycling squad at the young age of 16. Three years later, the 19-year-old represented Malaysia in the 1966 Asian Games in Bangkok, coming up up fourth in the team time trial.

The following year, Ng hauled in three medals — two bronzes and one silver — in the Southeast Asian Peninsular Games, now known as the Southeast Asian Games. The cyclist continued to make his mark in subsequent tournaments but his biggest break came when he represented Malaysia in the 1970 Asian Games, also held in Bangkok.

He secured a gold medal in the 200km road race — a feat that has yet to be replicated by any Malaysian, even in later years when the event’s distance was reduced to 187km. In the same year, he became the overall team and individual champion of the Tour of Jawa, and the national champion for the track and road race in Seremban. 

In 1971 Ng was crowned as the national champion for the individual road race of the Tour of Malaysia, which covered 1,020km over a span of eight gruelling days. 

He was also named Sportsman of the Year 1970 and received the award from then prime minister Tun Abdul Razak.

“I never expected to be rewarded. During races, I never thought about glory or rewards. There’s only one thing on my mind — to do my absolute best,” said Ng, who admits to being a highly competitive person.

But a competitive streak alone wouldn’t have cut it. Ng led a highly disciplined and regimented lifestyle. 

He would wake up at 5am every day, train for hours, and by 7pm, retire to bed. Success, he says, doesn’t come without sweat and tears. “Up until now, I believe in training. Without training, one cannot be a champion.”

Ng demanded the same commitment from young cyclists when he subsequently moved on to coaching after the Asian Games. 

He started off with the Kuala Lumpur Cycling Club, before eventually training the national squad. “I wouldn’t allow my cyclists to buy a motorcycle or car, because I didn’t want their focus to deviate from cycling. And I’d go from house to house in the evening to check if they were at home. They were not allowed late nights.”

Among cyclists under his tutelage were M. Kumaresan, Tsen Siong Hong, Nor Effandy Rosli, Teoh Chen Hai and Ali Hassan.

Ng is proud of the fact that his cyclists have garnered over 50 gold medals at international events. His enthusiasm and love for sports also rubbed off on all his five children.

Eldest son Edwin is a former national cyclist who now runs a branch of the family’s bicycle shop in Damansara Uptown, while daughters Jillian and Jacqueline specialise in synchronised swimming.

Ng is happy his children share his love for sports. “I never forced them. Whether the interest or commitment is there or not depends on them.”

On how the cycling scene has changed over the years, Ng says while it has become more competitive, cyclists also have it easier these days.

Today, sponsorship is a norm, bicycling technology has advanced a lot, and cyclists are paid a salary, he points out. “It’s true that bicycles are much more expensive now, but the technology is way ahead of what we had. Those days, there’s no such thing as aluminium frame, they were all steel. I remember the bicycle I used in the race with my brother’s friend had only one gear and cost RM75.” 

Last year, another feather was added to Ng’s cap when he was conferred a “Datukship” during Federal Territory Day. 

“During the first few months, I felt uncomfortable when people addressed me as ‘Datuk’. It took me quite awhile to get used to the title,” he says, adding that he is grateful that the government is appreciative of the efforts of former sportsmen.

“My son asked me to get a nicer car, dress up nicely, wear long pants and such, to go with the public image. But that’s not me. I can’t ditch my sports shirts and shorts,” laughs Ng.

Ng, now 64, has been cycling for almost five decades, but he does not have any plans to “retire”. 

Looking fit with a build that puts men half his age to shame, the grandfather of one still coaches at the KL Club and cycles with friends and clients. He has also been running the Joo Ngan Professional Bike Centre in Ampang for more than 20 years, happy that he can help spread the joy of cycling around.

“If I really retire, if you ask me to sit down at home….cannot lah, I cannot do that. I will cycle until I can’t cycle anymore.”

Mandatory health insurance for foreign workers

February 18, 2012 2 comments
KUALA LUMPUR: THE government is making it compulsory by June 2012 for all employers to buy health insurance protection amounting to RM120 per year for each of their foreign workers.

“So far, the government has seen 1.4 million of insurance policies taken up by foreign workers in the construction and restaurant sectors. Those that have not taken up are domestic helpers and estate workers,” said Performance Management and Delivery Unit (Pemandu) director of healthcare NKEA Dr Chua Hong Teck.

“Those employers who fail to fulfil this requirement will see their foreign workers’ permit not renewed by the Immigration Department. This health insurance scheme is an add- on to the health screening requirement by Fomema Sdn Bhd,” he told reporters here yesterday.

“Yes, there is no such law to enforce the mandatory element. It is done administratively by the Immigration Department,” the Pemandu director said after delivering his presentation at a seminar organised by the Malaysian Institute of Management. 

Dr Chua then explained that this scheme provides hospitalisation and medical benefits at government hospitals to foreign workers with coverage of RM10,000 per year for all injuries and sickness. 

A total of 25 insurance companies and two third party claims administrators are participating in this scheme.

“At RM120, it works out to be only RM10 per month. If one can spend RM10 on a packet of cigarettes per month, then it’s not much to provide health insurance for his domestic helper, right?,” said the senior government official from the Pemandu, a unit of the Prime Minister’s Department.

“Bank Negara Malaysia has endorsed this RM120 per year insurance policy as the most value-for-money hospitalisation coverage. Employers who have bought RM50 or RM60 per year policy for their domestic helper is just for personal accident. I’m sure it does not cover hospitalisation. 

“The employer needs to differentiate the various coverage the insurance policies offer,” he added.

To a question if employers can deduct the RM120 per year insurance coverage from their domestic helper’s salary, Dr Chua replied, “this is between the employer and the domestic helper. Right now, government hospitals are experiencing around RM5 million or RM6 million a year in unpaid medical bills incurred by foreign workers. This is being borne by taxpayers’ money. Is this fair to taxpayers like you and me?”

The Health Ministry had since January 2011 wanted to impose this ruling on foreign workers in the plantation sector. It was, however, repeatedly opposed by farmers.

This is because oil palm and rubber plantation firms are already footing the medical bills of their foreign workers under the Workers Minimum Housing Standard & Amenities Act 1990. This law mandates all estate owners to provide healthcare facilities and services for their staff, including foreign workers.

Malaysian Palm Oil Association chief executive officer Datuk Mamat Salleh reportedly said this ruling forces plantation companies to pay a second time what they have already been providing to foreign workers. 

“Injury-related accident cases are already covered by the Workmen Compensation Insurance. Currently, employers are paying RM72 for each foreign worker,” Mamat said. “If our estate members were to participate in the medical insurance scheme, we’ll be paying an extra RM50 million to insurance companies for the 400,000 foreign workers staying in the estates,” he added.

‘Palm oil to trade above RM3,000’

February 16, 2012 Leave a comment
KUALA LUMPUR: OIL palm planters can look forward to another prosperous year as palm oil prices is expected to trade above RM3,000 per tonne due to global demand for the edible oil outstripping supply.

There is continued strong demand for palm oil from traditional markets, with India and China buying large quantities of palm oil to feed its burgeoning population, said the Malaysian Palm Oil Council deputy chief executive officer Dr Kalyana Sundram.

“Prices are unlikely to drop below RM3,000 per tonne. Generally, we feel that the price will be firm for the crude palm oil (CPO). It will be a good year with the first half exciting and the second half, challenging,” he told reporters here yesterday.

“We should be able to export more palm oil this year, possibly breaching 18.1 million tonnes. There is higher demand from Turkey, the Philippines, Nigeria and Vietnam,” he added.

Sundram was presenting his forecast at a luncheon talk titled “Crude Palm Oil – the Next Supercycle” organised by MIDF Amanah Investment Bank Bhd. 

His bullish forecast takes into account that this year’s palm oil output is seen to rise by two per cent to 19.33 million tonnes as more trees mature and bear more fruit bunches, particularly in Sarawak.

On this year’s CPO export quota, Sundram confirmed that Malaysians with refineries abroad could ship over three million tonnes of tax-free CPO. That works out to be 15.5 per cent of the country’s 19.3 million tonnes CPO output forecast. “Like previous years, there’s no change in the CPO export quota. It’s still business as usual,” he said.

He explained that the decision by the Plantation Industries and Commodities Ministry to maintain the export quota was to safeguard the refining industry. The decision also quelled rumours that the government might abolish the duty-free CPO export quota while keeping the 23 per cent export tax for processed palm oil. Currently, Malaysia does not tax refined palm oil exports.

Indonesia, as the world’s biggest palm oil producer, now wants more downstream investments and production of refined palm products. Since October 2011, the Indonesian government has drastically widened the gap between CPO and refined export taxes. As a result, crude palm oil and crude palm kernel oil are cheaper for downstream producers there. Like Malaysia, refined products shipped out from Indonesian shores are also tax-free.

Also present at the luncheon was MIDF senior vice-president research head Zulkifli Hamzah. He said the Indonesia palm oil tax structure had dampened palm oil prices. “We think palm oil prices is likely to average at RM2,950 per tonne this year. The wide gap in the Indonesian palm oil tax structure has pulled prices down,” he said. 

“It’s not all that bearish though. We need to be mindful of the possibility of the US government implementing its third quantitative easing measure in printing more money. If this materialises, it will weaken the US dollar and cause commodity prices to rise,” he added.

Palm oil exporters ask for help

February 10, 2012 Leave a comment
This is written by my colleague Rupa Damodaran.

KUALA LUMPUR: Malaysian palm oil exporters to Iran are feeling the pressure of the US and EU trade sanctions, and now, they have appealed to the International Trade and Industry Ministry (Miti) for help. 

Miti Minister Datuk Seri Mustapa Mohamed said if these pressures were to continue, it would impact exports to the Middle East.  “We are trying to divert them to other growth sectors, so that they will be compensated,” he told a media briefing yesterday. 

Malaysian exporters are not the only ones impacted by the sanctions which target Iran’s central bank. Other Asian exporters are also facing payment problems. 

For 2011, exports to the Middle East increased by 15.1 per cent to RM28.0 billion. Of the total, exports to Iran increased to RM3.21 billion.

According to the Malaysia External Trade Development Corporation, exports were mostly palm oil, electrical and electronic products and rubber.