Tuesday June 28, 2011
Taib suggests investment arm start-up for profitable Salcra to diversify investments
By YU JI
KUCHING: A proposal has been put up to expand Sarawak Land Consolidation and Rehabilitation Authority’s (Salcra) role, which last year doubled its dividend payout.
“Start an investment arm,” Chief Minister Tan Sri Abdul Taib Mahmud said Sunday, during Salcra’s Gawai dinner.
“Participants should be encouraged to invest, through the authority, in other sectors and businesses that can ultimately lead to bigger profits for Salcra. The question in business always is: How can we build upon present successes?”
Taib spoke about “a rule” in business. “When businesses don’t expand, you stay stagnant, which puts the business at more risk of a decline. To avoid that, Salcra should diversify its scope, its investment portfolio.”
The authority could invest in building more oil palm refineries, for example, the Chief Minister said. Such investments should expand and strengthen existing businesses, and with different sub-sectors supporting the main entity.
“Say you have RM3mil in savings, that means you can borrow another RM3mil, bringing the total to RM6mil in available funds. Go invest in subsidiary companies, or other people’s companies or other government agencies’ programmes.”
In saying that, however, Taib said Salcra must not adopt a bull-headed approach. “This is just a suggestion. I’m not telling you that you must do it. In the same way, Salcra can only encourage participants, and not make this compulsory.”
Salcra was set up in 1976, following a Second Malaysia Plan mid-term review. The authority mainly engages in plantations, from rubber to oil palm estates, with the latter presently being its core business.
As a public body, it operates its own estates mostly through joint-ventures on native customary rights land.
Presently, Salcra 18 oil palm estates across Sarawak, with trees that were planted as long ago as 30 years.
Salcra chairman Tan Sri Alfred Jabu, who is also Deputy Chief Minister and Agriculture Modernisation Minister, said Salcra would begin planting new trees at old estates.
He said the authority was aiming to improve efficiency, and was learning from industry leaders.
Speaking prior to Taib, Jabu’s welcoming address saw him touch on expansion plans. Jabu said Salcra would embark on more high-yield rubber plantations and also engage in aquaculture.
“Our extended role is about synergy and about the best overall achievements we can do,” Jabu said.
“In Salcra’s work, we are excellent paymasters, on loans and on dividends, seeking ways to improve on environmental concern measures, while acting as a springboard for every, regardless of background, to better opportunities.”
Jabu said he was proud many former Salcra employees had gone on to earn the respect of industry leaders, in the public and private sectors.
He also said Salcra’s responsible practice was one of the best ways to counter “irresponsible accusations by foreign non-governmental organisations”.
Last year, Salcra’s dividends hit a high of RM74mil, doubling its performances from the year before. “Year to date, output has continued to increase. As such, I am confident dividends for 2011 will meet and exceed last year’s.”