59 ANNUAL INTEGRATED REPORT 2021 ADDITIONAL INFORMATION HOW WE ARE GOVERNED REINFORCING SUSTAINABILITY The effect of unfavourable weather, pandemic disruptions and a shortage of skilled harvesters hindered our Upstream productivity in 2021. Prolonged dry weather in the previous couple of years and the first quarter of 2021 caused higher incidence of male inflorescence and inflorescences abortion among young mature and prime age palms, which resulted to low bunch production for the year. Apart from that, the yield of older palms also declined towards the end of the year. We also faced a labour shortage during the year due to increased field workers’ medical leave during the intensive nationwide vaccination process, and border closures that resulted in unavailability of migrant worker. By end-2021, FGV’s plantation workforce stood at 68% of total requirement, which meant a shortage of skilled harvesters for our plantation. This led to overall yield loss in 2021. Impact due to COVID-19 pandemic was estimated at 70,197 MT or 0.28 MT/Ha. Furthermore, incomplete and delayed completion of fertiliser application and manuring rounds in previous years amplified the effect on low FFB yield in 2021. However, as we took proactive measures to improve productivity, we managed to apply 297,178 MT of fertilisers to our plantation areas, covering 100% of our 2021 target. This should boost our FFB yield in the coming year. As a result of all these factors, FFB production decreased to 3.98 million MT, a 7% decline from 4.29 million MT in FY2020. Furthermore, the harvested FFB were not of optimal ripeness due to weather and the oil palm age profile. Plantation Workforce 33,859 31,837 26,973 2019 2020 2021 Fortunately, there was no significant adversity from the heavy floods that impacted the nation in the last month of 2021. Only 2% of our planted areas were affected and we promptly diverted our harvesters to unaffected areas during the event to ensure their safety and FGV’s business continuity. The lower FFB received at mills impacted our CPO production. During the year, FGV produced 2.68 million MT of CPO. We processed a total of 13.04 million MT of FFB, an 8% reduction from 14.13 million MT, in line with the 5% decrease in utilisation factor to 65% from 70% the previous year. The utilisation factors of mills were hampered by the lockdowns and restrictions imposed during the year in certain affected areas. However, Oil Extraction Rate (OER) and Kernel Extraction Rate (KER) showed slight increases due to better mills performance as we continued to focus on stringent process control. Difficulties in recruiting migrant workers were aggravated by the pandemic lockdowns and are expected to continue till the third quarter of 2022. While we engage in periodic follow ups with the Government for updates on the opening up of foreign recruitment, we are making efforts to achieve 100% plantation workforce requirements by extending existing migrant workers’ employment voluntarily, and intensifying our Recruit, Retain and Repatriate (3R) programme to increase labour supply. To expedite the recruitment of incoming migrant workers once restrictions are lifted, we have put in FGV’s Recruitment Procedures in-line with the current Government’s requirement and guideline. To retain our workforce, we are improving the workers’ accommodations, increasing recreational activities and welfare for better living conditions, providing wage security through FGV e-wallet and e-productivity apps, and granting full accessibility to their passports. In addition, FGV has conducted engagements with the local communities surrounding our estates and mills to campaign on the benefits of being part of FGV’s workforce as an attractive career path. The initiative has been expanded toward providing entrepreneurial and relevant skills training to increase knowledge transfer, efforts to enhance community welfare, and improving work standards with the implementation of mechanisation at estates and mills.
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