FGV Annual Integrated Report 2019

57 ANNUAL INTEGRATED REPORT 2019 03 S E C T I O N Leveraging on our well-known brands such as SAJI, ADELA and SERI PELANGI and venturing into new market segments • ADELA Gold made significant inroads into the mass-blended cooking oil category. • SERI PELANGI led the market with 40% volume share within the yellow fats category in Malaysia. • Partnered with DKSH Holdings (Malaysia) Berhad, Malaysia’s leading market expansion services provider, to tap into the food service sector. • Venturing into regional markets of focus for Downstream such as Cambodia, and further into the Phillipines, Thailand, Laos and Africa. Venturing into the animal feed business • PKE used to be sold to feed manufacturers at a very low price. • Now PKE is used in three animal feed products targeted at cattle, with production growing by more than 100% and revenue increasing by 76% in 2019. • Appointed an animal nutrition specialist to add further value to these products. • New products introduced in 2019: - Premium PKE Our chemical-free PKE is derived fromamechanical press process and has high oil content of between 5% and 6%. - Premium Palm Kernel Pellet Our palm kernel pellet contains 85% premium PKE and is mixed with other ingredients such as soybean hull, maize, molasses, wheat pollard and salt. Supporting the government’s initiative towards implementation of B20 biodiesel • Continued our collaboration with the Malaysian Palm Oil Board (MPOB), following the good working relationship and positive results gained from the B10 biodiesel usage test. • From September 2019, MPOB and FGV embarked on a six-month trial project involving the use of B20 for diesel vehicles. • This was in line with the government’s aspiration to introduce B20 biodiesel, to be implemented in 2020. DOWNSTREAM KEY HIGHLIGHTS The Downstream Division continues to take further initiatives to add value to our Manufactured Capital. These include: Cost Optimisation • The Downstream Division was able to obtain cost savings of RM4.4 million in 2019 due to cost reductions in production, maintenance, utilities and operations. • Rationalisation of mills to increase utilisation factor. • Commercialisation of by-products business by entering into synergistic collaborations. • Increase production of premium quality oil. • New product development for animal fat replacer, dairy fat replacer and premium frying oil, as well as new animal feed formulations for premium beef, dairy cattle and goats. • Merger & acquisition initiative for oil & fats and speciality oleochemicals. OUTLOOK & PROSPECTS FOR PLANTATION SECTOR MANAGEMENT DISCUSSION & ANALYSIS STATEMENTS AND ANALYSIS