FGV Annual Report 2014

R&D and Agri Services Cluster was incorporated on 10 September 2014, its main focus being in Research and Products & Services. The Cluster consists of FGV R&D, FGV Applied Technologies Sdn Bhd, Felda Agricultural Services Sdn Bhd (FASSB) and FPM Sdn Bhd Fertiliser. The Cluster's vision for 2020 is to be a leading research institution in oil palm, rubber and sugar. The Cluster devotes significant resources to oil palm breeding and selection program over the last 40 years and have an R&D team dedicated to improving both FFB and oil yield per hectare. Our high yielding seedlings, the award winning DxP Yangambi, is being used in Palm Upstream's group replanting program of 15,000 hectare per annum, aiming to improve the overall crop-age profile. We are also actively involved in bio-molecular marker research: where the development of markers are tied to specific traits such as oil yield, compact or dwarf palm, high concentration of unsaturated oil and disease tolerance. With these developments, we will be able to reduce the time and cost for commercialisation of new varieties and also helps improve efficiency in clonal production. R&D and Agri Services Cluster Research Products & Services FGV R&D FGV Applied Technologies Sdn Bhd Felda Agricultural Services Sdn Bhd FPM Sdn Bhd Financial Performance and Industry Outlook The Cluster recorded revenues of RM418 million for the year ending 31 December 2014, a decrease from RM850 million in the previous year. Reasons for lower revenues were lower CPO and fertiliser prices. Following the acquisition of Felda Holdings Berhad, this has also contributed to lower revenues for the year as most of the transactions are now deemed internal. Nevertheless, Profit Before Tax and Zakat (PBTZ) for the Cluster for the year ended 31 December 2014 was RM87 million PBTZ, due to cost control measures undertaken by the management. However, a lower profit margin from the fertiliser business affected overall profitability – 2014 saw a 15 percent decline compared to the previous year. Felda Global Ventures Holdings Berhad pg 86 BUSINESS OPERATIONS REVIEW R&D AND AGRI SERVICES