FGV Annual Integrated Report 2019

66 FGV HOLDINGS BERHAD • As of end-2019, the selected estates practising GAP achieved a yield of 20.57 MT/Ha. • Our award-winning planting material, the Yangambi seed, dominates Malaysia’s seed market, commanding almost 44% of market share. • Labour efficiency has increased with our harvester- to-land ratio improving to 1:24. Through the mechanisation plan, we expect to increase the ratio to 1:25 within the next five years. • Integrated Pest & Disease Management has led to a pest management product for Rhinoceros beetle management that kills up to 43% of the beetles even 24 months after application, reducing up to 48% of the total costs of chemical pest control. • Our collaboration with the Group’s FMCG business resulted in the production of the ADELA Gold and ADELA Industrial Margarine products. • We have also developed fluidised palm oil and an animal fat replacer. The animal fat replacer can be applied to burger patties, nuggets and other related meat products. • Our other research efforts in the Downstream area yielded products destined for our integrated farming business: - Palm kernel protein — adds nutrients and energy to poultry feed. - Calcium soap—high-energy fat that can be used as dairy cattle feed to increase milk production. • New product development for FMCG To support the Downstream sector, R&D works closely with FGV’s FMCG arm to develop new products that have good commercialisation potential. We leverage on food technology to develop new food products for the Group, and we are directly involved in the development of higher value palm oil-based products. • Supporting the new revenue portfolio Moving forward, we are also helping the Group grow its new integrated farming business with crops such as MD2 pineapple and Cavendish bananas. FGV has already established a MD2 pineapple seed garden in Johor, with a view to scaling up both for the local and domestic markets. In addition to PKE, the biomass produced from pineapple and banana production can potentially be processed for animal feed production. UPSTREAM KEY OUTCOMES DOWNSTREAM KEY OUTCOMES INTELLECTUAL PROPERTY To protect our research findings, the R&D Division also registered for Utility Innovation (UI) on intellectual property with good potential for further commercialisation. A recent UI filed was for ‘Innovation in Oil Palm Replanting Using Geospatial Technology’. In simpler terms, we have developed a system that combines the use of satellite data, drones for image capture of the estate and GIS-rendered 3D models to improve our replanting process. The new methodology has improved the conventional replanting method by minimising the errors that occur during the manual tape measurement of distance when planting trees. This has resulted in the highest precision in field geo-positioning, which leads to optimal planting density and therefore, maximum yield. Overall, the new method can reduce manpower requirements by 50% while at the same time doubling productivity. DOWNSTREAM VALUE-CREATION ACTIVITIES MANAGEMENT DISCUSSION & ANALYSIS STATEMENTS AND ANALYSIS