A case analysis on Far East Holdings Berhad: diversification strategy.

Far East Holdings Berhad (FEHB) was incorporated in Malaysia on 6th August 1973 under the Companies Act,1965, as a private limited company under the name of Far East Holdings Sdn. Bhd.On 26” September 1988,it was converted to a public company and its name was changed to its present form.FEHB’s operation is based in Kuantan,Pahang. FEHB’s main activities are cultivation of oil palms,productions and sales of fresh fruit bunches,crude palm oil and palm kernel and investment holding.The headquarters of FEHB is dedicated and committed to provide oil palm plantation advisory and management services to all of its estates.The principal activities of the subsidiaries of FEHB consist of oil palm plantation and palm oil mill.In 2016,the instabilities in the business environment and particular markets where FEHB works present difficulties to FEHB's business operation.FEHB keeps on working in a time of high unpredictability in CPO costs.In the long haul,interest for supply of palm oil ought to stay solid in accordance with world populace.Aside from that,worldwide utilization of palm oil is additionally represented by rising luxuriousness and expectation for everyday comforts,interest in more advantageous and economically created palm items,subsequently in a roundabout way will expand utilization of palm oil.FEHB realise that they had start affected from the fluctuation crude palm oil price from the financial year 2011 when their revenue and profit was declining almost every year until 2015. FEHB’ s management team think that this is high time for FEHB to find a solution to this problem of continuous declining revenue and profit in a long term.FEHB should start planning not too much depending on palm oil operation to generate company’s income.FEHB may start thinking of diversify their business,product or services to lower the effect of fluctuate CPO price.