Case Study: Strategy Implementation and Evaluation

By now, everyone of us have probably read, hear and seen in the media the issue faced by of one of our
national company, The National Feedlot Corporation or better known as NFC.
Your tasks, as a group is to:
i.

List the main problems or issues faced by the NFC.

ii.

Find out the possible causes of the problems or issues using the Cause and Effect Diagram.

iii.

Suggest a detail solution of each of the causes you have identified.

iv.

The real main purpose of establishing NFC is: To help the country to build a formidable
company that will make Malaysia self-sufficient, independent from importing beef in such a large
quantity from other countries. With this noble purpose still in mind, how can we make this
vision become a reality?

v.

Present your findings and suggestions to the class.

Here are some of the vital information needed to solve the organisation problems:
Appendix 1 The Meaning of Feedlot (Source: thefreedictionary.com)
Feedlot = a management system in which naturally grazing animals are confined to a small area which produces
no feed and are fed on stored feeds
Beef feedlot = for the fattening of cattle. Many systems are used depending on feedlot costs, feed costs,
availability of cattle, age at which cattle are available, value of output.
Permanent feedlot = outdoor, large-scale feedlot utilizing steers from 6 to 18 months of age in short or long keep
systems. Feed is cereal grain 75% and roughage 25% although programs vary enormously. Based on utilization
of large volumes of cheap grain or other similar feeds such as brewer's or distiller's grains, beet pulp, orange
pulp. A popular management unit in North America.
..
Appendix 2 Corporate Information regarding The National Feedlot Corporation (NFC) (Source: NFC
Official Website http://www.nfc.com.my)
The National Feedlot Corporation (NFCorp) is the envisioned centre of production for beef and beef products in
Malaysia. As a High Impact Project under Ninth Malaysia Plan,National Feedlot Centre project will be instrumental in
attaining the 40% self sufficiency for beef production by 2015.
Mandated as an integrator for the project, National Feedlot Corporation Sdn Bhd is owned by Agroscience Industries
Sdn Bhd with participation from the Government of Malaysia. Its commercial interest is the development of a planned,
integrated and sustainable Malaysian beef industry through the development of the fully integrated livestock farming
and beef production facility that manages the importation of livestock, feedlotting, slaughtering, processing, packing
and marketing of beef in Malaysia.
NFCorps mission is to lead the industry in a manner that fosters excellence and integrity, improves the feedlot
business environment and ensures the success of its community. NFCorp will actively advance and promote the
interest of the Malaysian beef industry; develop environmental and animal welfare standards; quality assurance;
training programs and best management practices.
NFCorp is positioned to take the lead role in carrying out the large scale commercial agriculture through various
projects such as develops the National Feedlot Corporation which is located in Gemas Negeri Sembilan fodder contract

farming, satellite feedlot farming and other programs to support the development of Malaysia for the beef production
industry and as a hub for regional beef development.

NFC Vision and Mission

The Malaysian livestock industry is an important and integral component of the agricultural sector, providing gainful
employment and producing animal protein as food for the population. The government has laid out plans to further
develop the industry towards achieving self-sufficiency level specifically in the ruminant sector; and a national feedlot
project came into the picture.
The National Feedlot Center which is located on an earmarked 5,000 acres of land in Gemas, Negeri Sembilan is the
envisioned centre of production for beef and beef products. As a High Impact Project under the Ninth Malaysia Plan,
National Feedlot Center project will be instrumental in attaining the 40% self-sufficiency for beef production by 2010,
as targeted by the Ministry of Agriculture and Agro-based Industries.
Our company, National Feedlot Corporation Sdn Bhd which has been entrusted as the integrator of the project will
actively advance and promote the interests of the feedlot industry; develop environmental and animal welfare
standards, quality assurance and training programs and working to keep feedlot operators abreast of emerging best
management practices.
NFC will stand as a fully integrated player in the Malaysian livestock industry. Within its team of key people, NFC has
extensive and invaluable experience of this industry particularly in the cattle livestock and in the position to be the
market leader in beef-cattle farming in Malaysia.

Appendix 3 NFC News Release Loan Agreement Spells It Loud and Clear (Source: NFC Official Website
http://www.nfc.com.my)

News Release 9 Feb. 2012

Loan Agreement Spells it Loud and Clear
Loan to be managed responsibly in ensuring the projects success and in the interest of repayment
KUALA LUMPUR --- National Feedlot Corporation Sdn Bhd (NFCorp) in a statement issued today said the
loan agreement signed on 6 December 2007 between NFCorp and the Government of Malaysia represented
by the Ministry of Finance saw the funds deposited into a special loan account for the purpose of remittance
and repayment of the loan facility.
Loans have to be repaid at 2% interest and served in full. The issue of NFCorp managing its loan monies
amounting to RM250 million is the companys to administer and utilize responsibly, said NFCorp CEO Wan
Shahinur Izmir.
And as a private company it will make the best decisions in the interest of the company whether for the
short or long term.
NFCorps business operations are guided by a comprehensive loan agreement which categorically outlines
the terms and conditions including the progressive draw-downs for NFCorp and its deliverables.
Amounts drawn-down from the special loan account are irrevocable which means it cannot be returned.
In addition, the interest rate for the funds transferred to the special loan account becomes operable
regardless of how much of the RM250 million has been specifically drawn down for the various stages of the
project.
No other party to my knowledge is being made responsible for repaying the loan as per the loan agreement
that we signed, and in this respect, completely negates the issue of public funds abuse. It is not a grant or
free money but a repayable loan, emphasised Izmir.
On the note of investing in short term investments, NFCorp explained that the loan agreement did not
stipulate any expressed prohibitions on investments.
The loan is not to be used as we see fit, but to be managed responsibly in the interest of paying back the
loan and making the project successful," said Izmir.
In the course of the project implementation, the government had temporarily halted the building of an export
quality abattoir that was to be completed and rented to NFCorp. This was to facilitate a feasibility study of the
viability of the feedlot project that has since been completed by an independent consultant appointed by the
government.
With an export quality abattoir capable of 500 heads of cattle a day, the possibility of the beef production
numbers would be achieved. The contract farmers under the Entrepreneur Development Programme and
NFCorp targets would be able to see 246,000 heads of cattle bred by 2015 and deliver 44,000 metric tonnes
of beef. We would be a highly successful venture, said Izmir.
It is during this breather or lull period that the NFCorp monies were put to good use with the objective of
gaining greater returns for the company, till full business operations could be resumed.
Rather than just placing the monies in money market instruments, it was deemed more astute business to
invest in property in the short-term.
Making the investments in the property sector is putting the money where it is sound, as each investment
has been calculated for its secure and definite returns. Moreover, tenanted properties bring in rental income
that is considered a plus point, if not a bonus in fund management.
The idea of NFCorps loan money being equated to public funds by hardline critics is a political play
intended to deceive the public.
The property market is sound and secure, more protected, and less volatile than others, reiterated Izmir.
In any business situation or context, money market instruments have not been known to be lucrative. Many
companies in the private sector know the value of making investments in property for its stability and higher
returns.

Appendix 4 News NFCorp Explains Investments (Source: STAR Online 10 Feb 2012)

NFCorp explains investments

PUTRAJAYA: The National Feedlot Corporation's (NFCorp) investments in the property sector were made during a lull
period.
NFCorp executive officer Wan Shahinur Izmir Salleh said the lull occurred when the Government temporarily halted the
building of an export quality abattoir that was to be rented to NFCorp.
It was during this breather' or lull period that the NFCorp monies were put to good use with the objective of gaining
greater returns for the company till full business operations could be resumed, he said in a statement yesterday.
Tenanted properties bring in rental income that is considered a plus point, if not a bonus in fund management, he
added without mentioning the properties or their locations.
PKR strategic director Rafizi Ramli had claimed that the family of Datuk Seri Shahrizat Abdul Jalil owns two more luxury
suites in Singapore besides the condominium units in Kuala Lumpur and the republic.
Rafizi alleged that the Marina Bay suites in Singapore were bought under the names of NFCorp chairman Datuk Dr
Mohamed Salleh Ismail and National Feedlot Centre (NFC) executive director Wan Shahinur Izran Salleh.
Dr Salleh is the husband of the Women, Family and Community Development Minister while Wan Shahinur Izran is their
son.
Wan Shahinur Izmir said the loan agreement signed on Dec 6, 2007, between NFCorp and the Government saw the
funds deposited into a special loan account for the purpose of remittance and repayment of the loan facility.
Loans have to be repaid at 2% interest and served in full. The issue of NFC managing its loan monies amounting to
RM250mil is the company's responsibility to administer and utilise.
The loan is to be managed responsibly in the interest of paying back the loan and making the project successful, he
said.

..
Appendix 5 News NFCorp Breached Loan Terms (Source: NST Online 15 Feb 2012)

NFCorp breached loan terms 15 February 2012 | Last updated at 01:58AM

KUALA LUMPUR: The National Feedlot Corporation (NFCorp) has breached the loan conditions under the
agreement with the government because it has used the money, which is meant for the cattle industry, for other
purposes.
Minister in the Prime Ministers Department Datuk Seri Mohamed Nazri Abdul Aziz said the loan was granted
to NFCorp on the basis it could help meet the governments objective of reducing beef imports.
It (the National Feedlot Centre) is a national project. This company (NFCorp) submitted a proposal stating it
was capable of meeting this goal. The loan was given based on this.

There has been a constructive breach of trust. The money, which is meant for the cattle industry, was used
for something else. It was specifically for a project that could raise cattle and the produce be sold at a
cheaper price. But the money was used for something else. You dont need to be a lawyer to see that there
has been a breach of trust, he said at a press conference here yesterday.
The Padang Rengas member of parliament reiterated his statement on Sunday that the government could
recall the loan as NFCorp had bought multi-million condominiums and made other purchases instead of
focusing on cattle breeding. "I said NFCorp must return the money. I never said anything about Shahrizat
(Women, Family and Community Development Minister Datuk Seri Shahrizat Abdul Jalil). This has nothing to
do with her," he stressed.
The de facto law minister said until the RM250 million federal loan was recovered and those responsible
hauled to court, the people would not be satisfied. He also expressed confidence the money could be
recovered from NFCorp as the full amount had not been drawn down and the company's assets were still
frozen.
"The public is more concerned when the money would be recovered. There is no compromise.If the
Malaysian Anti-Corruption Commission (MACC) finds an individual guilty of an act that can be considered an
offence under the law, then he must be charged. Once the money is recovered, it is only fair the government
re-tenders the project."
Commenting further, he said it was a moot point to insist Shahrizat stepped down. "It has been two months
and people are still clamouring for her resignation. If she resigns now, does it mean the money is
considered taken and not returned?"
The NFCorp controversy unfolded after the 2010 Auditor-General's Report said the RM250 million project
had not met the targets set by the government. In December 2007, the government had approved a soft
loan to enable the corporation to start a national feedlot centre in Gemas, Negri Sembilan. Shahrizat's
husband, Datuk Seri Dr Mohamed Salleh Ismail, is NFCorp executive chairman.
........................................................................................................................................................................................

Appendix 6 News NFC Executive Chairman Claims Trial to 4 Charges (Source: NST Online 12 March 2012)

NFC executive chairman claims trial to 4 charges

Datuk Dr Mohamad Salleh Ismail, 63, claimed trial to two counts of CBT and misappropriating RM40m of the
corporation's money by using a cheque to bank it into the bank account of his company, National Meat and
Livestock Corporation Sdn Bhd(NMLC).
He allegedly committed the offence at a branch of CIMB Islamic Bank Berhad at Jalan Burhanuddin Helmi,
Taman Tun Dr Ismail, here, between May 6 and Nov 16, 2009.
Salleh also pleaded not guilty to two counts of CBT and misappropriating RM9,758,140 of NFC's money with
four cheques to purchase two units of One Menerung Condominium, located here, for NMLC.
The accused was alleged to have committed the offence at the same bank branch between Dec 1 and 4,
2009.
Deputy Public Prosecutor Dzulkifli Ahmad applied for all charges to be tried jointly and Judge S.M. Komathy
Suppiah allowed the application.
Counsel Badrulmunir Bukhari urged the court to set bail at RM50,000 for each charge in light of his client's
cooperation with investigators.
The Judge granted bail at RM500,000 for all charges and fixed April 13 for mention.

Dzulkifli was assisted by DPPs Awang Mahmud Amardajaya and Azimul Azami.
The accused was also represented by Datuk Ahmad Reza Abdullah, Wan Azmir Wan Majid and Y. Seelan.

Appendix 7 NFC News Release Loan Repayment Deferment Requested (Source: NFC Official Website
http://www.nfc.com.my)

NFC Official Statement Release 19 March 2012

Loan repayment deferment requested due to delay in building

export quality abattoir and infrastructure, says NFCorp
KUALA LUMPUR --- National Feedlot Corporation (NFCorp) has today issued a statement to clarify that
NFCorp had written to the government on 27 October 2009 to ask for a deferment on the loan repayment as
a result of the construction of an Export Quality Abattoir being put on hold as well as the incompletion of
infrastructure by third-parties for the Pusat Fidlot Nasional (National Feedlot Centre /NFC) in Gemas, Negeri
Sembilan as highlighted by the Auditor General in his 2010 Report.
According to the Implementation Agreement and in subsequent meetings with the government, the Export
Quality Abattoir was to have been built in 2008 and rented to NFCorp to meet its production targets.
However, the abattoir was delayed and has yet to be built today. Delayed infrastructure included the 7.5 km
concrete road leading to NFC and the provision of a water system comprising pools, piping and tube wells.
These, the company said, had severely disrupted the targeted beef production numbers of NFCorp and its
projected business turnover.
In further clarifying, NFCorp said that the government had allocated a separate fund to the Veterinary
Services Department for the construction of the Export Quality Abattoir and infrastructure. It therefore could
not build these items from its soft loan.
Consequently, NFCorp had written to the government to ask for a deferment on the loan repayment to begin
after the completion of the crucial government-built Export Quality Abattoir.

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