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Friday, November 30, 2007

Felda makes RM110m foray into Saudi Arabia

The Federal Land Development Authority (Felda) is allocating RM110 million for its first overseas investment in Saudi Arabia, focusing on real estate developments, hotels and restaurants in the kingdom, particularly in the holy city of Mecca.

Its chairman Tan Sri Mohd Yusof Noor said 20 per cent of the allocation has been spent on opening a restaurant, while 75 per cent is for the running of a hotel in Mecca.

"We will start operating our first restaurant by next month and a 54-room hotel by January next year," he told reporters after receiving an investment licence from Saudi Arabia General Investment Authority's (Sagia) country director for Asean, Meshari S. Al-Khaled, in Kuala Lumpur yesterday.

Sagia's investment licence, which is hard for foreign companies to get, is needed for foreign companies to invest in and own real estate in Saudi Arabia.

"The investment licence would allow us to start our restaurant and expand our services in Saudi Arabia in future. We are also looking to invest in similar sectors in other parts of Saudi Arabia," he added.

While many Malaysian companies have obtained investment licences from Sagia in the past, Felda is the first that allows 100 per cent foreign-ownership. The licence was awarded to Felda subsidiary Felda Global Ventures Middle East Sdn Bhd.

With the licence, Felda Global Ventures Middle East will form its new Saudi Arabian subsidiary, which will be known as FGV Arabia Ltd, to be jointly owned by Felda Global Ventures Middle East (90 per cent) and Felda D'Saji Sdn Bhd (10 per cent).

Mohd Yusof said FGV Arabia will engage in real estate developments, own or provide management services for hotels, hotel complexes and restaurants.

"We consider Saudi Arabia as a prime, promising and strategic location for executing Felda's investment strategies in the Middle East," he said.

Meanwhile, Al-Khaled said Malaysia is currently the fourth largest investor in Saudi Arabia, after the US, Europe and Japan.

Established on July 1 1956, Felda was set up to help the government carry out rural land development schemes and to uplift the economic status and living standards of the rural community.

To date, Felda has developed about 480 new areas, totalling 853,313 hectares which have become plantation and settlement areas.

By New Straits Times (by Kamarul Yunus)

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