The Israeli In KL

When Israeli diplomat David Roet attended a United Nations conference in Kuala Lumpur recently, the Opposition went into full swing trying to discredit the government saying that it wants to establish diplomatic relations with Israel.

In a statement, the Malaysian Ministry of Foreign Affairs (MoFA) explicitly states that the invitations to the Israeli delegates was issued by the UN as per Article III of the Host Country Agreement signed by the organisation and Malaysia so that the UN is able to conduct its conferences away from any of its established headquarters.

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The Article states, in part, that the Forum shall be opened to all UN member states and its Specialised Agencies. This was confirmed by Israel’s Hadashot TV which reported that Malaysia was compelled to host the Israelis, since it was required to grant visas to all delegations in order to hold the international conference.  Therefore, it is immaterial whether or not Malaysia has diplomatic relations with Israel.  It is for the same reason that Fidel Castro was able to attend the UN summit in New York in 1976, 1995 and 2000.

Malaysia-Israeli Relations

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If you walk along Jalan Zainal Abidin in Pulau Pinang which is just off Burmah Road near the Tune Hotel, you will come across an old cemetery.  That is a Jewish Cemetery.  Jalan Zainal Abidin was once called Jalan Yahudi or Jew Street, the only evidence that a Jewish enclave once existed on the island.

Israel first established contact with our pre-independence government in 1956 when Israeli Prime Minister Moshe Sharett visited Malaya to propose the appointment of an Israeli consul in Malaya.  Israel also voted in favour of the Malayan bid to become a UN member in 1957.  Trade between the two countries was in place.  This was banned in 1974, after the Yom Kippur war, but indirect trade (through third countries) was in place.

An Opposition supporter was quick to point out that according to the Israeli Central Bureau of Statistics, between 2008 and 2011 trade between the two countries fluctuated considerably.  Israel’s exports to Malaysia peaked at USD798 million in 2010 while imports from Malaysia peaked in 2011 at USD93.6 million.

Although the preriod shown above shows the statistics was for the period between the end of Abdullah Badawi’s administration and the commencement of the Najib Razak administration, the flourish in trade could be traced back to the Mahathir administration.  In December 1993, as a consequence of the Oslo I Accord, Mahathir wrote a letter to Israeli Prime Minister Yitzhak Rabin.

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Mahathir’s letter to Yitzhak Rabin in December 1993

The photo of the letter may be a bit difficult to read but I shall provide the transcript here:

PRIME MINISTER, MALAYSIA

21 December 1993

His Excellency Mr Yitzhak Rabin Prime Minister of Israel, JERUSALEM

I would like to thank you for your letter of 17 October informing me about the Agreement of Principles and Mutual Recognition between Israel and the PLO.

My government supports this positive development and views it as a first step towards the realization of a comprehensive solution to the Middle East problem. As a demonstration of Malaysia’s support to this development my country was represented at the Donor’s Conference to support The Middle East Peace held in Washington and subsequently pledged a modest financial contribution to the Palestinians to assist in their new tasks. My government has also offered the Palestinians technical assistance under the Malaysian Technical Cooperation Programme.

Malaysia as a matter of general principle is prepared to develop relations with Israel at the appropriate time. In the meantime, we would like to see tangible progress in the implementation of the peace agreement.

The Middle East problem particularly the Palestinian issue has been a cause of instability to the region and I hope the recent agreement between Israel and PLO would contribute to lasting peace to the area.

I look forward to normal relations with Israel.

DR. MAHATHIR BIN MOHAMAD

I intentionally made bold the last line because, while the rest of the content which, obviously was drafted by someone else, Mahathir wrote that bold part saying he looked forward to normal relations with Israel himself.  Yes, it was handwritten.

In the most recent diplomatic history, Obama wished to have normal relations with Cuba.  Diplomatic relations between the US and Cuba was subsequently restored.  The following year, PKR’s Chua Jui Meng, who was the then-Deputy Minister of International Trade and Industry, suggested that Israel could eventually become a destination for Malaysia’s investments (Shanti Nair, Routledge, 1997 p.252).

As a result, in 1999 Israeli exports to Malaysia totalled USD107 million.  In 2000, it was USD732 million, and USD615.5 million the following year.  In 2002, the Israel Ministry of Industry report on trade relations with Indonesia and Malaysia advised Israelis interested in conducting business with Malaysian companies that “there is no opposition to trade and commerce relations as long as a low profile is kept“.

Discretion is essential for these companies, not just in Malaysia but also in Indonesia.  Reputation and financial damage are the risks for companies in these two countries if they are known to be doing trade with Israel.  According to Emanuel Shahaf, the vice chairman of the Israel-Indonesia Chamber of Commerce, “There are two contradictory trends. The pro trend is that Indonesia demands more high-tech things… The negative trend is the political situation is not getting better (when it comes to Israel), in fact it’s getting worse.”

Mahathir’s son Mukhriz, who was the Deputy Minister of International Trade and Industry in 2011 confirmed that Malaysia has had bilateral trade relations with Israel since 1996.

Mukhriz tweeted “Upon request from large foreign investors here, in 1996 the Cabinet instructed MITI to approve import from and export to Israel.” The relevation came as a surprise, especially as the trade ties were established during the Mahathir administration.  Mahathir has been a vocal opponent of Israel and continues to project this false stand via his Perdana Leadership Foundation which openly opposes Israeli occupation of Palestinian land.  Najib took over from Abdullah only in 2009.

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So, thank you Mahathir for his eagerness to start a diplomatic relationship with Israel in 1993.

Congratulations also to the Opposition states as they received a lot of FDI from Israeli companies.  Don’t forget to thank Mukhriz for that information and confirmation.

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Shalom Alekhem!

FGV Acquires Zhong Ling

Media ReleaseZhong Ling Acquisition to Strengthen FGV’s Downstream Position in China

 

KUALA LUMPUR, 16 MARCH 2016 – Felda Global Ventures Holdings Berhad (FGV) is confident its latest venture, the planned earning accretive acquisition of a 55% stake (valued at RM976.25 million) in Zhong Ling Nutril-Oil Holdings Limited (Zhong Ling), will strengthen its presence in high margin downstream activities.

As part of its transformation strategy and aggressive growth plans, FGV has identified the Chinese market as a key pillar of revenue enhancement for the Group, and plans to strengthen its position in China through a strategic acquisition of a stake in a well-known local player.

China is one of the world’s fastest-growing major economies, with Gross Domestic Product (GDP) growth rates averaging 7% from 2014 to 2015. With a population of almost 1.4 billion people, China has become one of the most important markets in the world for edible oils. 

As the largest importer of edible oils, China consumes almost a quarter of the world’s total edible oils (20% of worldwide consumption). FGV views China’s increasing demand potential as an attractive prospective market for expansion of FGV’s downstream capabilities, particularly in the Consumer Packed Goods (CPG) business.

The strong demand for blended cooking oil in China is also anticipated to provide an avenue for FGV’s palm-based products in the massive Chinese market. Ultimately, the Group will be able to penetrate further downstream palm-based products such as margarine, shortenings and food processing ingredients.

According to FGV’s Group President and Chief Executive Officer, Dato’ Mohd Emir Mavani Abdullah: “We view Zhong Ling as a strong local partner for FGV’s downstream expansion in China not only because of its solid brand and deep market insights, but also for it being ranked 10th in the retail cooking oil market in China. Zhong Ling will be a firm avenue for distributing our palm oil products which is our main intention.” 

Established more than 20 years ago, Zhong Ling has a sales network of 60,000 retail outlets covering five southeast coastal provinces of Fujian, Jiangxi, Guangdong, Zhejiang and Jiangsu.

Since its establishment, Zhong Ling has experienced tremendous growth, recording a Compound Annual Growth Rate (CAGR) of about 20% in revenue over the past four years and generating average profit margins in the region of 14% annually (2011-2014). In 2014, the company posted total revenue of RMB2.32 billion (RM1.5 billion), generating RMB326 million (RM207 million) in profits. Furthermore, based on its 2015 management account, Zhong Ling is backed by more than RMB1.0 billion (RM635 million) cash reserve and, most importantly, is a debt free company.

The intended investment has cleared all necessary due diligence, in accordance with FGV’s investment and governance policies. The financial and tax due diligence that FGV has performed covers Zhong Ling’s financials. All subsidiaries under Zhong Ling have been audited annually in accordance with China’s regulations.

In 2011, FGV has made its first foray into China through its joint venture FELDA IFFCO Sdn Bhd. Its subsidiary FELDA IFFCO South China Ltd, which operates in Guangdong, has two refineries and the second largest tank farm in South China. The company manufactures and markets a range of edible oils and fats including shortening and specialty fats for the large and growing Chinese market.