Published on: Friday, November 20, 2009 |
Kota Kinabalu: Agriculture and Food Industry Minister Datuk Yahya Hussin on Thursday expressed regret that Pantai Manis Assemblyman Datuk Abdul Rahim Ismail had raised the losses suffered by Sabah Rubber Industry Board (LIGS) in 2008.
As a former Minister to the Ministry concerned, he said Abdul Rahim should have been more aware of the reason for the losses.
The losses, he said, were due to the drop in the price of rubber in the world market, which is outside the control of the LIGS.
"By raising the issue, it is like the Malay proverb, sudah terang lagi bersuluh, sudah gaharu cendana pulaÉsendiri sedar perkara yang nyata (you already know the actual reason but still keep on asking)," he said in his winding up speech at the State Legislative Assembly.
He said he had already provided a written reply to the issue during the 13th State Legislative Assembly on Aug 3 this year.
The LIGS, he said, suffered losses of RM55.4 million and not RM58 million as reported. However, the losses were merely a paper loss, he added.
The global financial crisis caused huge losses to the majority of multi-national corporations and companies in the US and later spread to other organisations, he said.
As an organisation involved in international business, he said the LIGS was not spared from the impact of the crisis.
Hence, he said that the losses suffered by LIGS were not an isolated case.
He said the main factor for LIGS' losses were due to the sudden drop in the price of Standard Malaysian Rubber (SMR) during the fourth quarter of 2008.
As an example, he said the price of SMR20 dropped from RM10.22 per kilo in July to RM4.27 per kilo in December, a drop of RM5.95 per kilo or 58 per cent.
Prior to the sudden price decrease, Yahya said the LIGS bought huge quantities of rubber from the smallholders at a price higher than the average price of RM6.94 per kilo.
"But because of the drop in the price of rubber, the latex which was processed to SMR rubber could only be sold at RM5.64 a kilo," he said, adding this caused a huge loss to the LIGS.
On Abdul Rahim's contention that the LIGS is going to go bankrupt soon, Yahya refuted the claim, saying that the organisation's financial problems were caused by the losses it suffered in 2008.
He said LIGS' financial situation is still firm with net assets worth RM85 million.
No LIGS staff has been laid-off even though the organisation is facing financial difficulty, he said.
The organisation also, he said, did not apply for assistance packages or the stimulus package offered by the State government to restore its financial standing.
On the issue of LIGS' debts to rubber buyer agents, he said it is a normal practice in business where the credit term of 90 days are already agreed to between the organisation and the agents.
"I would like to state here that LIGS does not owe anything to the smallholders who sold their rubber to the LIGS," he said.
On Sabah's dairy industry, Yahya said he is perplexed by Abdul Rahim questioning the role of the Sabah International Dairy (SID) considering his last post with the State Cabinet was as Agriculture and Food Industry Minister.
The SID's role in this respect, he said, has been processing and marketing fresh milk produced by dairy farmers since it was formed in 1982.
Without the SID, he said the State's dairy industry would not be what it is today with Sabah being the largest dairy producer in the country.
To a question from Bingkor Assemblyman Justin Guka, he said the Sebrang Livestock Research Centre in Keningau would continue its role in the dairy and deer sector.
He said the centre has successfully produced a dairy cow hybrid named Sabah Sahiwal Freisian, a hybrid mix of the Pakistan and Netherlands cow.
The Sahiwal Freisian dairy cow, he said is better suited to the humid tropical climate in Sabah and able to produce beef with quality on par with other beef-producing countries.
The farm, he said is also a tourist attraction as between 2004 and 2009, a total of 3,086 visitors went through its gates.
On other developments, Yahya said the Sabah Land Development Board (SLDB) will be assisting in the State's production of rice. The SLDB, he said, has carried out idle paddy field rehabilitation over 500 acres in Membakut.
He said Phase One over an area of 85 acres has already been planted with the yield to be harvested at the end of this month.
