On the profit lane

Felda makes waves in the shipping world through Sutrajaya.

IT is rare for shippers (cargo owners) to start a shipping line to

transport their products, Felda, the country's single largest shipper, has

done so through Sutrajaya Shipping Sdn Bhd. While the company's success

may have gone largely unnoticed, it is not likely to be ignored much

longer.

Sutrajaya's focused and dramatic growth over the last three years has

not only demonstrated its ability to fulfil national objectives, but

leaves a corporate success trail that the investing public is likely to

pick up soon.

Set up in April 1999, the shipping line reflects a strong nationalistic

streak - to ensure that Malaysia, a world leader in palm oil exports,

keeps its competitive edge by having strong control over its shipments as

well. Invariably, this control also addresses the national concern over

foreign exchange outflow, especially when cargo was sold on cost & freight

(C&F) terms.

This outflow of freight payment to foreign shipping lines contributes to

the service account imbalance. Last year, of the total outflow of about

RM24 billion on freight & insurance, RM12.3 billion constituted net

outflow.

For the six months to December 1999, Sutrajaya recorded a profit- before-

tax of RM2.6 million on the back of a turnover of RM46.5 million.

Operating with only time-chartered vessels, Sutrajaya carried a total of

426,000 tonnes of palm oil from Malaysia to world markets in that period.

Sutrajaya chief executive officer and executive director, Nasaruddin

Abdul Ghani, says that the company recorded such a performance was `a

pleasant surprise'.

By its first full year of operations in 2000, Sutrajaya had firmly

established itself as...