KUALA LUMPUR: Prime Minister Tan Sri Muhyiddin Yassin today expressed hope that the Federal Land Development Authority (FELDA) would be ranked among the most successful global corporations in the future such as those on the Fortune Global 500 list.

Armed with land bank totalling 832,000 hectares or more than two million acres, FELDA has the capability and huge potential to become the world's top plantation group once more, he said.

"I realise that this is not easy to achieve. However, with its three-pronged strategy (Restart, Revitalise and Reform) and the new management's commitment as well as government support, it is not impossible to do," the prime minister said in his pre-recorded speech for the virtual launch of the 2021 FELDA Settlers Day today.

Muhyiddin said one issue that could hamper FELDA's efforts to rise again to be on a par with the world's renowned plantation companies is the debt issue, which must be resolved to facilitate the process to "restart" FELDA.

Therefore, he said, the government has agreed to partially write off settlers' loans totalling RM8.3 billion through a conditional settlers' loan adjustment initiative especially for the earlier-generation settlers.

He said this conditional write-off involves, among others, a partial adjustment of the replanting loan balance up to Dec 31, 2019, amounting to RM8 billion which will benefit 92,441 settlers or 82 per cent of the 112,638 settlers.

To revitalise FELDA so it would return to a strong footing, Muhyiddin said, the government has also approved the issuance of government-guaranteed sukuk valued at RM9.9 billion to strengthen FELDA's business model.

According to him, part of the sukuk issuance is used to restructure loans with financial institutions as well as for the takeover of FGV Holdings Bhd.

The prime minister also expressed confidence that the loan restructuring would allow FELDA to refocus efforts on strengthening its core business.

"The Cabinet's approval of the proposal by the Special Task Force (on FELDA's rehabilitation) previously will also enable FELDA to increase its shareholding in FGV up to 81.3 per cent.

"I am given to understand that this development would create a plantation synergy that could boost productivity and hence the FELDA group's profits," he said.

In addition, he said, the expansion of FELDA's participation in downstream industries that have a higher profit margin would enable FELDA to achieve its target to return to profitability by 2023.

He noted that FELDA has started to implement smart agriculture to manage 458,000 hectares of its and settlers' farming land nationwide by using the precision agriculture concept, in line with the national agenda towards the Fourth Industrial Revolution.

With the cooperation of the FELDA community, Muhyiddin said, the system can enhance plantation operations through the monitoring and collection of more detailed information as well as savings on operating costs of more than RM200 million within five years.

-- BERNAMA