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KUALA LUMPUR, March 31 -- The ongoing strategic transformation plan of FGV Holdings Bhd has put the company on the right track with all the potential to become a great company with the right leadership in place, chairman Datuk Wira Azhar Abdul Hamid said.
The outgoing chairman, who is leaving the plantation company on April 1 after about three-and-a-half years at the helm, said the turnaround plan needed to ensure that FGV has a stronger and more diverse earnings base, moving away from almost complete reliance on palm oil and the vagaries of crude palm oil price.
“We sought to capitalise on clear opportunities in the domestic market and to tap into the tremendous potential within our own circular economy.
“The operational turnaround had given us the essential springboard from which the group could launch new plans that would eventually offset the annual RM248 million payment we had never failed to make to FELDA under the land lease agreement,” he said in his farewell message to the shareholders.
Azhar said FGV’s strategy to fill the domestic demand through the decision to move into integrated farming and alternative crops was based on the existing synergies as FGV already had the land and the know-how to expand beyond palm oil and rubber within the agri sector.
“Also, domestic demand for food items such as dairy and fruits at the national level has contributed to an annual food import bill of about RM51.46 billion. Hence, we realised that the opportunities in import substitution are tremendous,” he said.
He said that by 2025, FGV expected this new sector to contribute RM1.7 billion to revenue.
“While the potential for growth in this sector is obvious, success is not guaranteed unless close attention is paid to execution on the ground, in distribution and in the marketing of the products,” he said.
Besides that, he said FGV is also targeting about RM14 million revenue from the selling of electric power to Tenaga Nasional Bhd following its venture into renewable energy sourced from the capture of methane at its mills.
Azhar said although many of these projects are still in their early stages of design or implementation, they would certainly offer FGV a more diverse earnings base.
“I am also pleased to be leaving FGV in a much improved financial and operational position, with a strong management team in place.
“As there is still much to be done and even more to be achieved, I wish the incoming chairman, Datuk Dzulkifli Abd Wahab, and all my colleagues in FGV the very best,” he added.