Can Mohd Nazrul bring FGV back to its former glory?

Mohd Nazrul Izam Mansor, the new CEO for FGV starts today.

By ZAIDI ISHAM ISMAIL
editor@dagangnews.com

KUALA LUMPUR 23 August - It was 2012 and the country's more than 100,000 oil palm smallholders waited with bated breath.The anticipation was high and reached fever pitch as the world watched the listing of Felda Global Ventures Holdings Berhad or FGV.

It was dubbed as the world's second largest initial public offering at the time after Facebook's listing and everybody had high hopes for the company.

But fast forward to present time, FGV is now mired with legacy issues and its share prices dived 90 percent to around RM1 from RM4.55.

What has happened to this once proud and widely respected firm?

Analysts said the part of the reason why FGV is in the doldrums is due to political interference as its biggest owner is the government-owned Felda.

FGV is also straddled with aging oil palm trees as well as low yields and high production costs.

"FGV is also grappling with aging smallholders and low visibility among international investors and is always under the radar.

That is why its share prices are weak," an analyst from Mayban Securities told DagangNews.com.

Not to be confused, FGV is the commercial arm and one of Felda's subsidiaries. And today, FGV opens a new chapter when a new chief executive officer clocks in.

Mohd Nazrul Izam Mansor starts work today and the expectations are high.

Nazrul was former Felcra Berhad chief executive, a government agency which rejuvenates idle and abandoned lands throughout the country to be more productive by converting them into agricultural land.

A former FGV top executive said Nazrul will not have a free hand in managing FGV because as a subsidiary of Felda, he has to toe the line.

"It will not be easy for him to make decisions totally based on commercial reasons as he has to kowtow to Felda.

While at the same time, the settlers expect good dividends.

So it will be a bit of a headache for Nazrul, the FGV insider told DagangNews.com.

Meanwhile, a second FGV source said managing people, earning trust will be a huge challenge for Nazrul as well as motivating the staff.

"Growing the business should be his main task such as enriching the current business cake, expanding the cake and now confidently look for a brand new cake.

Speaking to DagangNews.com, the source said since Nazrul is relatively unknown, all eyes will be on him.

But Felcra raked in a net profit of RM105 million and this augurs well on Nazrul's potential ability and this would be the launching pad that he needs.

Nazrul needs a strong "pull factor" and exemplary leadership to steer FGV through these difficult times.

"He needs to do a delicate balancing act involving his professionalism, Felda and politics. This will be a great challenge.

All eyes will be on Nazrul as he navigates this politically sensitive entity which is also due to be privatisated.

But at least, the crude palm oil prices are high currently which would hopefully strengthen his first 100 days in the hot seat. - DagangNews.com