FGV backs government plans to diversity settlers income stream

FGV backs government plans to diversity settlers income stream

KUALA LUMPUR – The government’s plan to diversify the income streams of Felda settlers to alleviate the settlers’ financial situation is a positive move.

In a statement today, FGV Holdings Bhd (FGV) said it would be happy to participate in strategic discussions to seek viable solutions and explore potential synergies that would benefit all stakeholders.

“FGV also agrees that there is an urgent need to discuss the terms of the Land Lease Agreement (LLA) with the Federal Land Development Authority (Felda) as this matter has been raised repeatedly over the last three years, causing much uncertainty and concern for our shareholders,” it said.

Under the current terms of the LLA, FGV is required to pay a fixed lease payment of about RM250 million per year for 99 years, which was paid irrespective of prevailing crude palm oil (CPO) prices.

FGV contended that when the LLA was negotiated in 2012, the average CPO price was RM2,843 per tonne while the CPO price on April 10 was RM2,047 per tonne.

“FGV has also committed to pay Felda a 15 per cent share of estate operating profits,” it said, adding that the company had met all of its obligations under the LLA.

Under the new management, FGV said it would focus on its groupwide transformation plan, adding that the results of its first quarter of 2019 would be announced next month.

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