Media statement by Lim Guan Eng in Kuala Lumpur on Monday, 23^rd May 2011: 

The government should be helping the people instead of helping Felda to increase its present profits from the sugar business of RM232 million in 2010 by increasing sugar price by 20 cents from RM2.10 to RM2.30 per kg 

DAP regrets that the BN government is more intent to help Felda increase its present profits from the sugar business of RM232 million in 2010 than helping the people by increasing the sugar price by 20 sen from RM2.10 to RM2.30 per kg. The profits earned by Felda in the sugar business was revealed during the listing of its subsidiary, MSM Malaysia Holdings Bhd.

For the first time ever, Felda Land Development Authority (Felda), a statutory body founded in 1956 to alleviate poverty among rural Malays via a land resettlement scheme, will be floating its sugar business. This follows the RM1.5 billion acquisition in January 2010 of Kuok Brothers-controlled PPB Group Bhd's sugar assets, namely Malayan Sugar Manufacturing Co Bhd (now known as MSM Malaysia Holdings Bhd), a sugarcane farm in Perlis, a 50% stake in Kilang Gula Felda Perlis Sdn Bhd (KGFP) and a 20% share in Tradewinds (M) Bhd.

Currently, Felda, which owns one of the world's largest diversified agriculture groups, is targeting to list MSM, in which it has an 85% stake, around July. The remainder stake is owned by Koperasi Permodalan Felda Malaysia Bhd.

The initial public offering, to be managed by CIMB Investment Bank Bhd, values the company at RM2.46bil or RM3.50 a share. MSM houses the sugar plantation and refining operations of Felda. MSM produces close to 60 % of the refined sugar production in Malaysia and is valued at approx MYR 2.3 billion, For 2010 MSM made a profit of RM232 million.

This profit of RM232 million should be sufficient to cover any savings in sugar subsidies from the government increase in sugar prices. Domestic Trade, Cooperatives and Consumerism Ministry secretary-general Datuk Mohd Zain Mohd Dom had announced that the sugar price increase was to reduce government sugar subsidy by RM116.6 million from RM400 million per year.

What is RM 116.6 million compared to RM 232 million in profits earned by MSM last year? Instead of doing its corporate social responsibility to help Malaysians, especially the poor, Felda would benefit from the RM116.6 million extra to be paid by Malaysians.

The BN government can easily transfer this M116.6 million cost to MSM since it is owned by Felda. Instead, in line with BN's misguided and corporate-centric policy of helping the rich companies at the expense of poor ordinary Malaysians, BN has chosen to hit the pockets of 27 million Malaysians first than the already huge profits of corporate giants such as Felda or MSM.

BN has not been able to explain why no action has been taken to reduce gas subsidies of RM 19 billion annually to Independent Power Producers(IPPs), when it can take action to reduce diesel and gas subsidies of a few hundred million ringgit that hurts ordinary Malaysians. A more just and fair socio-economic policy should be to cut the subsidies of the rich first instead of the poor.

DAP calls on the BN government to withhold any action on cutting diesel or sugar subsidies that affect ordinary Malaysians until action is first taken to cut gas subsidies to IPPs. The failure by BN to do so clearly shows that BN is about Barang Naik instead of PR (Price Reductions).

*Lim Guan Eng, DAP Secretary General & MP for Bagan