FGV Annual Report 2013

The Group has a total landbank of 446,656 hectares, of which 390,234 hectares or 87.4 percent are in Malaysia, while the remainder 56,422 hectares are in Indonesia. Of the total hectarage, some 347,517.50 hectares have been planted with oil palms and another 12,372 hectares consist of rubber plantations. Owing to legacy issues, about 53 percent of the Group’s oil palms have passed their prime, being more than 20 years. To correct the age profile and improve yields, the Group has adopted a two-prong strategy focusing on an aggressive replanting programme of 15,000 hectares per year and through brownfield acquisitions of plantation land in Malaysia and overseas. The Group is aiming for a more favourable age profile of 12 years by 2019. To achieve this target, the Group has embarked on an optimal replanting rate of 15,000 hectares to reduce the total hectarage of old palms by around 5 percent per annum. After two consecutive years of exceeding this target, the progress in 2013 was impeded by floods with only 14,494 hectares replanted. During the year under review, one major acquisition exercise was completed while another two expected to be completed in 2014. In July 2013, the Group acquired 21,037 hectares of greenfield and brownfield landbank in Kalimantan, Indonesia. Some 8,193 hectares will be planted with oil palms, while 12,844 hectares of land will be developed for rubber cultivation. As a monoculture planting strategy exposes the Group to inherent risks, the plan is to increase our rubber plantation area to 30,000 hectares in South East Asian region by 2020. The Group aims to accelerate the process of improving the age profile of its palms through brownfield acquisitions. On 1 October 2013, the Group completed the acquisition of Pontian United Plantations Bhd (PUP). The PUP acquisition comprises 15,161 hectares of mostly mature oil palms, which in 2013 produced an average yield per hectare of 22.77 tonnes. The Plantation embarked on several productivity improvement initiatives during the year. They include the implementation of new processes and the upgrading of boilers at the mills, leading to improved consistency and efficiency of mill operations. In the interest of sustainability, a total of 19 mills have also been installed with Empty Fruit Bunches (EFB) pressing facilities. This initiative is not only environmentally friendly, but the shredded EFB can be sold either on its own or can be further processed at two other plants into Dried Long Fibre. CEO’s Review Ulasan Ketua Pegawai Eksekutif PLANTATION Perladangan INDONESIA* Planted/ Ditanam 15,022 - - Unplanted/ Tidak ditanam 23,753 12,844 4,803 Total/ Jumlah 38,775 12,844 4,803 56,422 Total Plantation/ Jumlah Tanaman 374,111 27,331 45,214 446,656 Total Land Bank Jumlah Tanah Simpanan MALAYSIA OIL PALM Kelapa Sawit RUBBER GETAH OTHERS** LAIN-LAIN** Planted/ Ditanam 333,368 12,372 2,538 Unplanted/ Tidak ditanam 1,968 2,115 37,873 Total/ Jumlah 335,336 14,487 40,411 390,234 * Trurich landbank is calculated based on 50 percent JV. Tanah simpanan Trurich dikira berdasarkan pegangan usahasama 50 peratus. ** Others -includes other crops and unplantable areas e.g. river, road, and offices. Lain-lain –termasuk tanaman lain dan kawasan tidak boleh ditanam seperti sungai, jalan raya dan pejabat. Felda Global Ventures Holdings Berhad 28