Our Strong Leadership Paves The Way 26 FGV HOLDINGS BERHAD ADVANCING OUR STRATEGIES RESPONSIBLY In the year under review, the Group focused on the execution of its four strategic thrusts of Operational Improvement, Product & Market Penetration, New Growth Areas and Financial & Capability Building. Our efforts yielded tangible results that positively impacted our bottom line, increased our efficiency as well as strengthened our growth potential. We made good progress in our recruitment efforts as the Upstream business significantly reduced the labour shortage it had been experiencing since the pandemic hit in 2020. By the end of 2022, we managed to bring in more than 10,000 plantation workers, reducing our labour shortage from 32% in 2021 to 13% in 2022. During the year, our FFB production rose to 3.99 million MT and we improved our FFB yield to 14.57 MT per Ha as a result of better yield from our palm trees and higher labour productivity from the increased number of workers received at the end of 2022. Our Upstream estate and mill operations are currently being reviewed, and several initiatives, such as the Good Agricultural Practices (GAP) and mechanisation programmes, are being implemented to improve estate and mill practices. We remain clear that our estate operations are the mainstay of the business and must be well managed for us to leverage our many inherent strengths. The Downstream business, meanwhile, drove operational improvements to increase efficiency and mitigated the impact of increased packaging costs with inventory management strategies. Throughout the year, our Sugar Sector was focused on improving the reliability of its refineries in pursuit of higher productivity. Boiler rectification works are also ongoing and expected to be completed soon in MSM Sugar Refinery (Johor) Sdn Bhd (MSM Johor). The refinery in MSM Prai Berhad has also commenced rejuvenation works for long-term sustainability. Group Chief Executive Officer’s Review The Downstream Division continued to grow market share of FGV’s flagship products, where Saji cooking oil achieved 45.7% and Seri Pelangi margarine achieved 43.9% in 2022, both higher than the year before. We launched five new Stock Keeping Units during the year which were Saji Cooking Oil 3 Kg, Saji Beras Basmathi & Aroma, Adela Tub Sunflower Oil and Non-Hydrogenated Margarine to sustain the visibility of our brands and meet consumers’ needs. In addition, we made significant strides in penetrating Cambodia, Vietnam, and the North American markets with our olein and palm-based products. Our Sugar Sector also expanded its sales channels in 2022, forging partnerships to supply sugar to convenience stores as well as the Food & Beverage sector. In the year under review, we explored further opportunities for the foods business. For example, we advanced our dairy business by entering into a conditional Joint Venture Agreement to develop an integrated dairy farm business in Chuping, Perlis. This move complements our existing Linggi fresh milk processing plant, which was recently upgraded to increase its processing capacity to 30,000 litres per day. FGV also launched a new high-quality feed for native chickens, produced in collaboration with Padiberas Nasional Bhd (BERNAS), to reduce the country’s dependence on imported chicken feed and improve the circularity of paddy by-products. We also took the lead in collaborating with FELDA via Projek Pembangunan Peneroka and Program Pembasmian Kemiskinan Tegar to establish contract farming arrangements for the supply of native chickens in the market. At the launch of the Sun Bear Management Guidelines with our partners; PERHILITAN, MNS and UKM. Operational Improvement Product & Market Penetration New Growth Areas
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