UPM Holdings says NFC project is viable and profitable

NFC the project and NFCorp the company resurfaced recently when the Auditor General and Parliamentary PAC were quoted in the news. There were some misperceptions on NFCorp when commentaries from the past that were false or incorrect made the pages. To avoid a riled and misunderstood public, and to provide a correct understanding of the matter, it issued a statement to clarify. Fabiani Azmi probed a bit deeper for the details. Over a cup of latte and beef sandwich, he was told more ...

The statement explained that the properties in 1 Menerung were purchased on the account that the construction of a government Export Quality Abattoir (EQA) was deferred. According to the Auditor General’s 2010 report, the EQA would be capable of slaughtering 350 heads of cattle a day. Simple math of 350 heads X 365 days meant 127,750 heads of cattle could be slaughtered in a year. However, working full swing at an optimum of two shifts, 255,500 heads of cattle could be slaughtered in a year. This exceeds the targeted production plan of 2014. But the audit on the project (not the company) showed it had yet to be built.

 

This deferment of the EQA had a major impact on NFCorp’s ability to generate the planned beef production numbers. Up to 2010, NFCorp had more than met the target of cattle imported – 8,897 heads of cattle to be exact. The challenge confronting NFCorp was that this number of cattle could not all be slaughtered due to the limited capacity of the interim mini abattoir. The deferment also affected NFCorp’s plans to build a bio gas plant (for electricity generation from abattoir waste), a second and third feedlot, and a palm kernel crushing plant.

 

A resounding success it could and would be

With an EQA completed, it would have the capacity to slaughter the planned 246,000 heads of cattle. Meeting that target, the NFC project would be a resounding success. The country would be nearer to its beef self sufficiency by several notches. Hundreds of contract farmers would benefit from the industry. Overall, Malaysians would also enjoy better quality beef as opposed to Indian buffalo imports.

 

An independent Business Model and Viability Study on NFC by UPM Holdings commissioned by the government underscored, “On the whole, the NFC Project represents a viable project both from an implementation and profitability standpoint, and is in line with the aspiration to develop entrepreneurs in the feedlot sector provided the project is carried out as outlined in the Implementation Agreement.”

 

Indeed with all infrastructures including the EQA in place, the NFC project would certainly prove successful and beneficial to the country.

 

Unwarranted attack on national food security

The NFC project was only in its second year – hardly a decent gestation for an agricultural project. UPM Holdings in their study pointed, “The NFC project managed by NFCorp is currently at a development and coordination stage. Like any other agricultural project, the NFC project requires time to prove its performance and viability.”

 

Come to think, even expressways take years to meet optimum traffic levels. Expressway concessionaires are given 30 years, likewise NFCorp. Each needs a decent developmental period to succeed.

 

But Rafizi and the oppositions’ incessant vile attacks on a national food security project, one tantamount to sabotage of a country, had been aimed at aborting the foetus, so to speak.

 

Why the cruel ruckus?

All the rumpus and ruckus by the opposition were nothing but political motivations to rile the public to hate the government and to undermine a key national food security project. Talk also had it that the beef cartels were behind the opposition to bring the project down.

 

All this while the beef supply business had been in the comfortable hands of non Bumiputeras. If NFCorp was allowed to succeed in meeting the 20% self sufficiency in beef, the cartels would stand to lose RM400 million in a RM2 billion beef supply industry. In the longer term, these cartels could face colossal business losses when self-sufficiency is further stepped up and more contract farmers come to play.

 

Now we understand.

 

 

About the Writer

Fabiani Azmi is an avid reader of Internet news portals like Malaysia Today as well as other blog sites. He believes the world’s mysteries can be solved. And it does not warrant a paleontologist to investigate.