FGV Annual Report 2014

• Bringing on board Ankara-based Nanokomp Ileri Teknoloji Malzemeleri Arge Dan Ins San Tic Ltd Sti (Nanokomp) as a collaboration partner into our graphene and carbon nanotubes venture with UK-based Cambridge Nanosystems Ltd (CNL). Nanokomp intends to use graphene in epoxy resins to produce prepregs, a form of composite fibre, mostly for the European market. Although it may take time to commercialise new graphene products, we are very excited about the opportunity to pioneer the use of palm waste in cutting-edge new materials and technologies. As the thinnest yet strongest material known, graphene has been touted as “a wonder material that can change the world”. Its possible applications cut across industries, from micro-electronics to healthcare and oil and gas, with more than 10,000 patents for use in a range of products including ice-resistant graphene-enhanced paint in the aeronautics industry and fluids that increase the efficiency of oil drills. Supporting these corporate developments, we are implementing changes at the organisational level encompassed by the New FGV Way. This entails creating greater operational and cost efficiencies across all our operations and businesses, whilst building our internal capabilities and capacity. It gives me pleasure to share that we have seen some quick wins in these areas. Operationally, we are improving yields and oil extraction rates adopting best practises in our plantations and mills, especially in terracing our estates and collecting the loose fruit at the foothills as they contain the most oil. We have also begun to employ the latest ablation methods and mechanised our operations to reduce the labour intensity of our plantations in the face of a shortage of Indonesian workers. Tightening our reins on costs, we are driving more effective procurement processes; restructuring some of our businesses into tolling; adopting a tablet-based Plantation Micro Macro Programme (PMMP) to enhance our estate management; using drones, new higher-yielding Yangambi oil palm seeds developed in-house, and the best pesticides and compost. We have also invested in more efficient graphite and aluminium poles to harvest our fresh fruit bunches (FFB). These efforts are supported by a Group-wide mindset change to adopt an objectives-based rather than process-based approach in everything we do. Various initiatives have been implemented to support this New FGV Way, inclusive of setting up the Innovative and Creative Circle, a structured programme that encourages employees to put forward ideas on how we can increase our productivity and efficiency. We also launched our PRIDE core values of partnership, respect, integrity, dynamism and enthusiasm. During the year, the management team and I went on an extensive roadshow to all our plantations, operating companies and units to share these values which we believe are critical towards establishing a high-performance culture. Although we have accomplished much that we can be proud of in 2014, there is more to be done as we strive to achieve our ultimate goals. In 2015, we will focus on further diversification of our business to mitigate risks and increase our income. Among our key targets will be to set up a trading arm for palm oil, rubber and sugar. We are also looking at further geographical expansion to fill in gaps along the value chain of our palm, rubber and sugar businesses while building the FGV brand, instilling the New FGV Way as part of our corporate culture and reaping the benefits of a more energised and cohesive workforce. We have our work cut out for us, and I believe that guided by our highly professional team, as well as with the commitment of our 19,000 passionate employees, we have what it takes to achieve our 2020 vision. Our message to everyone is to work smart, remain resilient and uphold our integrity in everything we do. Together, we can achieve our corporate aspirations. Dato’ Mohd Emir Mavani Abdullah Group President / Chief Executive Officer In 2015, we will focus on further diversification of our business to mitigate risks and increase our income. Introduction Performance Highlights About FGV Reports Financial Statements Others Strategy and Value Creation Performance Review & Progress Foreword to Shareholders Annual General Meeting Annual Report 2014 pg 19