KUALA LUMPUR: The Federal Land Development Authority (Felda) is prioritising five aspects in its recovery process which include financial restoration, strengthening governance, increasing plantation productivity and wellbeing of settlers as well as development of the new generations.
Deputy director-general Mahadzir Mustafa shared that Felda's recovery efforts began in 2019 after the Felda White Paper was tabled in the Parliament.
"This was followed by the establishment of a special task force which was chaired by Tan Sri Abd Wahid Omar. The recommendations prepared by the taskforce was tabled and approved by the Cabinet last October.
"In addition, our chairman also outlined steps to move forward using the concept of Neuro-linguistic programming (NLP) to change the mindset of both staff and settlers.
"All efforts including from the White Paper and taskforce are critical to ensure that the recovery process can be successful. The appointment of the new director-general, Datuk Amiruddin Abdul Satar, who was the former chief executive officer of KPJ Berhad, has ensured the turnaround process will be based on an effective corporate concept."
On the RM9.9 billion sukuk issued, Mahadzir said Felda has spent RM2 billion on the restructuring of Maybank loans.
"Felda is currently proposing to restructure its other loans such as the Employees' Provident Fund (EPF) and several other financial institutions.
" Thanks to the government-guaranteed sukuk, the sukuk principal will be paid in later years and provides us some time to strengthen our financial position and improve operational efficiency and returns," he said.
Other ongoing initiatives include the Sunrise Project and Restart Project.
Under the Sunrise Project, Felda's investments will be rationalised and restructured and any assets that need to be monetised will be done at the right price to optimise returns.
"The purpose is to see whether the investment is appropriate, including whether it can be continued or needs to be improved. The process needs to be corrected at a reasonable cost or needs to be closed or sold."
He added, the Restart Project aims to improve the financial system and development of data integration to increase efficiency and is aimed at ensuring accurate data information for quick and best decisions.
"In addition to improving the financial system, this project also involves the strength and effectiveness of the skillset of the finance department team as well as interdepartmental processes.
"The initial success of the Restart project has enabled Financial Statements to be prepared within four months after the end of the financial year.
"This is a huge difference compared with previous years, taking up to 14 months in 2019. With further improvements, we will see that the Financial Statements can be concluded in two months next year," he said.
To improve the livelihood of our settlers, the recovery journey is further boosted with the11th and 12th Malaysia Plan where the government has allocated RM2.4 billion among others to upgrade water supply and street lights at Felda schemes. In addition to that, the government has also allocated RM286 million through special Economic Stimulus Package to upgrade roads as well as other community infrastructures for the settlers.
Felda is also focused in its efforts for cost savings as part of its ongoing recovery plan.
He said that this was driven by the 15 per cent annual savings Key Performance Indicator index (KPI) set by the organisation last year.
"This initial achievement is the starting point towards continuous savings in the organisation. Through integrated transformation initiatives, the positive impact on expenditure management can be realised in the next few years in line with the development of our staff," he told the New Straits Times.
He added among the ongoing initiatives to achieve this goal are the Felda Energy Efficiency Initiative and synergy programmes with the government and private bodies.
At the same time, he said, Felda has also focused on strengthening its governance.
Over the past two years, Felda has refined its governance processes including the appointment of its board of directors and the establishment of an integrity unit that comprised a representative from the Malaysian Anti-Corruption Commission.
To further strengthen the integrity of the management, the Felda Anti-Corruption Plan has been formulated and enforced in line with the National Anti-Corruption Plan 2019-2023.
"A copy of the Anti-Corruption Policy Book was distributed to all staff and they have to sign a declaration and pledge to be corruption free.
"This plan aims to enhance the integrity and accountability of staff as well as ensure governance based on the highest level of professionalism."
Other efforts include human resource transformation, Felda digitalisation and a Felda recovery plan monitoring committee.
"The Felda Digitalisation Plan aims to reduce human-factor errors thereby increasing transparency and efficiency of task execution. In addition to ensuring data integrity is preserved, this plan is also able to save operating costs compared to manual and conventional methods.
"The digitalisation of the procurement process, namely E-Procurement, for example, can avoid the risk of conflict of interest during vendor evaluation as well as reduce the cost of maintaining the equipment needed to document applications or tenders."
He added that overall recovery would have been more pronounced with the synergy with FGV Holdings Berhad as Felda now has 81 per cent control of the company. The majority holding would facilitate synergies between the two entities especially in the plantation-related core businesses.
"This also opens up opportunities for Felda to get involved and strengthen the downstream industries that FGV is involved in.
"The benefits of this effort have also begun to bear fruit as the Felda Group as a whole has recorded an increase in revenue and profit for the financial year 2020," he said.