FGV Annual Integrated Report 2019

65 ANNUAL INTEGRATED REPORT 2019 03 S E C T I O N UPSTREAM VALUE-CREATION ACTIVITIES 1. Boosting upstream productivity — To help boost the productivity of our Upstream Division, the R&D Division conducts research into ways to enhance Upstream yields. This is carried out in a variety of ways, all with the ultimate aim of increasing oil yield: Premium Planting Materials — We have developed seeds, seedlings and ramets that are steadily improving in terms of quality and yield potential. We have also invested in ensuring the sustainable production of planting materials through cryopreservation and micropropagation methods. Good Agriculture Practices (GAP) — Site-specific GAP have now been implemented in 30 estates across the Group, to achieve the target yield of 20 MT/Ha. A dedicated agronomist is assigned to every region to consistently monitor optimum GAP implementation based on site-specific requirements. Irrigation Systems — We are testing the effectiveness of adding irrigation systems to our plantations of mature palms to ensure production levels remain consistent, given the adverse weather conditions that can affect Southeast Asia. Experimental Mill for OER Testing — We have built an experimental mill with a capacity of 1.5 MT to record, monitor and test real-world OER outcomes based on the use of different planting materials. Value-Creation Initiatives The following initiatives have been planned to support our value-creation activities: • Advanced technology has improved planting materials with the use of advanced genomics, cloning and leveraging on big data. In this context, we have carried out molecular breeding to expedite oil palm breeding and oil palm DNA fingerprinting, which is targeted at sustainable palm oil production. • GAP – The R&D Division utilises agronomy research and advisory activities to drive good agricultural practices. In addition, we implement strategies that leverage on precision farming and integrated pest & disease management to maximise yield by minimising crop losses, and on bio-solutions. • Using geospatial technology to produce accurate blueprints of oil palm replanting areas to ensure we are replanting efficiently. Precision agriculture is also used to proactively monitor plant health. • OER/yield improvement initiatives are carried out by establishing an estate checker to monitor the quality of our FFB and of our grading activities. ToughFar System — We have selected one estate to implement mechanisation by introducing and testing the ToughFar manuring system, a quicker and more efficient way to apply fertilisers. 2. Reduction of inorganic fertiliser • Fortified Organic Fertiliser (FOF) is FGV’s innovative fertiliser that combines inorganic fertiliser and compost. This environmentally friendly product aims to reduce inorganic dependencies that can enhance the productivity of oil palm trees. • Replanting is carried out with biodegradeable mulch to reduce fertiliser losses and promote better palm growth. • Developing special biofertilisers that contain beneficial microbes as a plant growth enhancer for our plantation estates. The product has been tested in the main nursery and will be evaluated in oil palm trees that are at the immature stage. • By-products utilisation (POME irrigation system and EFB compost) as inorganic fertiliser reduction initiatives and soil amelioration initiatives. 3. Reduction of labour dependency through mechanisation in order to optimise worker utilisation to reduce processing time and eliminate multiple handling of the oil palm fruit. MANAGEMENT DISCUSSION & ANALYSIS STATEMENTS AND ANALYSIS