44 FGV HOLDINGS BERHAD ABOUT FGV MANAGEMENT DISCUSSION & ANALYSIS VALUE CREATION 2021 Challenges Increase in production cost due to escalating material costs, overhead costs and tax Unstable currency/forex due to market uncertainties and geopolitical tensions Shortage of migrant workers and abscondment impacting FGV’s productivity RSPO certification suspension for FGV mill complexes COVID-19 pandemic challenges that led to increased costs and supply chain inefficiencies Uncertainties surrounding the CBP’s WRO on the Group’s palm oil and palm oil products Adverse weather with the onset of climate change irregularities Group Chief Executive Officer’s Strategic Review A YEAR OF STRATEGIC PROGRESS FGV Holdings Berhad (FGV) stayed responsive and driven to deliver strategic achievements on significant fronts, though beset by several operational challenges, such as: Staying resilient, we continued to gain traction in overcoming these challenges and ended the year recording an eight fold increase in Profit After Tax and Minority Interest (PATAMI) of RM1.17 billion. The results achieved put us in good standing for our journey ahead. Further details on FGV’s Business Strategy can be found on page 36. Within a marketplace of increased global regulations and impacts on commodities, a new FGV is set to emerge. One that can ride volatility in commodity prices, supported by stable returns from our reputed brands and other value-added products. An FGV that embraces the circular economy and takes the lead in sustainable agribusinesses. Last but not least, an FGV that is able to sustainably deliver its mandate to key stakeholders over the long term. Our vision is clear and our direction is set. Adhering to our strategic roadmap, 2021 was the year for FGV to “Strengthen andGrow”, enabled by the execution of Key Strategic Initiatives across FGV’s businesses. We came together as a Group to identify ways to optimise and harness synergies in our performance. This led to good progress on several fronts and financial improvements as global CPO price continued to soar. Capitalising on our gains, we are now in a strong position to meet the set goals of our Strategic Business Plan. FGV continued to make good strategic progress, and achieved record profits buoyed by bullish prices. I take pleasure in presenting to you the year’s strategic review.
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