No more hotels for Felda

Posted: 03 Nov 2013 08:12 PM PST

After much criticism, Felda finally decided to stop its 'hotel-buying spree' and instead stay focus in its plantation sector.

Nothing's wrong when it acquired three hotels - 2 in Malaysia and 1 oversea - or having a foot in the tourism industry but Felda should continuously enhance its mainstream and downstream activities as it opens more opportunities to the settlers and others to venture into its core business, palm oil.

Felda currently owns three hotels – Hotel Sri Costa in Malacca which it purchased for RM24 million, Grand Borneo Hotel in Sabah costing RM86 million and the RM497 million Grand Plaza serviced apartments in Bayswater (pic), London.

All three were bought in the past one year.

Deputy Minister in the Prime Minister's Department said the oil palm giant will focus on its current stable of hotels, two of which are located in Malaysia.
"As of now, Felda has no plans to buy other hotels. The conglomerate will focus on its current hotel operations," Razali said in a written parliamentary reply last week.
Razali said since 1990, Felda, through its subsidiaries, has managed six residences in Perak, Terengganu, Johor, Pahang and Sabah.
The Malaysian Insider had reported the London purchase had shocked industry players over the price paid by Felda Investment Corp (FIC) UK Properties. The property located in London's Bayswater suburb is a popular area among Malaysians living in London.
Critics had said Felda should invest in ventures related to its core business of plantations rather than property or tourism.
In justifying the purchases, Razali said Felda wanted to penetrate the tourism sector both within and outside the country in an effort to strengthen its non-core businesses.
As such, the planter had chosen both Malacca and Sabah for its presence in the tourism industry before spreading its wings to United Kingdom, which it felt was a location with good potential.
DAP secretary-general Lim Guan Eng had asked Felda chairman Tan Sri Mohd Isa Samad to own up to the "real reasons" behind Felda's decision to invest nearly RM600 million in the hospitality sector, saying that the company needed to explain to its settlers, numbering over a million.

Isa had defended the purchase of the London hotel, saying that it was not an "extraordinary issue".

Many, including those in Umno and among Felda settlers themselves, were not satisfied with Isa's explanation, and that could be part of the reasons why he lost dismally in the recently concluded Umno elections for the vice president post.

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