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Felcra not listing oil palm & rubber business

KUALA LUMPUR: Felcra Bhd, an agency under the Rural and Regional Development Ministry, no longer wants to list its oil palm and rubber business on the stock market.

Established in 1966, Felcra was previously known as the Federal Land Consolidation and Rehabilitation Authority. 

Instead of opening up new land settlements for agriculture, as in the case of Federal Land Development Authority (Felda), Felcra empowers existing landowners in rural areas to better manage their crops through economies of scale.

Last year, Felda gained global branding when the public listing of its unit, Felda Global Ventures Holdings Bhd, raised RM10.5 billion.

When asked on Felcra’s plans for an initial public offering, chairman Datuk Bung Mokhtar Radin said Felcra is not like Felda because the 60,000ha oil palm and rubber plots managed by Felcra belong to smallholders. 

“Felcra does not own the land. We only manage the crops for a fee and in return, we accord dividends to the landowners. Lawyers have advised us that it would be difficult to lease the land from smallholders.”

Asked if Felcra still wants to participate in the capital market, Bung Mokhtar said: “We are still at the analysis stage. We are identifying a subsidiary for listing.

“We don’t want to be totally dependent on the oil palm and rubber business. We want to diversify into property development. We have land in Kuala Lumpur, Perak and Langkawi.” 

Bung Mokhtar was speaking after Rural and Regional Development Minister Datuk Seri Mohd Shafie Apdal witnessed the signing of a corporate integrity pledge between Felcra and the Malaysian Anti-Corruption Commission. Also present was Felcra chief executive officer Datuk Ramlee Abu Bakar.

“We’re looking to partner with a developer from the private sector to develop a 1.8ha land along Jalan Semarak in Kuala Lumpur,” Ramlee said.

He noted that this mixed development near the Kuala Lumpur City Centre has an initial gross development value of up to RM900 million. “We are awaiting approval from the Finance Ministry. Once we secure the approval, we hope to start working with a partner.”

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