FGV Annual Report 2015

39 WHO WE ARE & WHAT WE DO OUR STRATEGIC INTENT & PERFORMANCE HOWWE ARE GOVERNED CREATING SUSTAINABLE VALUE OUR NUMBERS ADDITIONAL INFORMATION DETAILS OF THE ANNUAL GENERAL MEETING ADDRESSING OUR RISKS & OPPORTUNITIES Felda Global Ventures Holdings Berhad Annual Integrated Report 2015 Strengthening Our Mainstay As we keep our vision fixed on becoming a global integrated agri- business by 2020, we realise that diversification means little without a sturdy foundation. This drives our unending efforts to enhance our Palm Upstream Cluster, which to this day remains our mainstay. To this end, our two-pronged strategy will focus on expanding our landbank and improving overall oil yield for the long term. Where the enhancement of our oil palm yields are concerned, we rely on ongoing initiatives such as new planting materials, upgrades and modernisation of our mill technology and the embedding of best management practices on the ground at our plantations. Among the best management practices we are initiating are nutrient management, canopy management and crop recovery programmes which we believe will fortify the sustainability of our plantations. More on this can be found on page 42 under Palm Upstream Cluster P. 42 Commitment to Transformation Since 2012, our GSB has laid the building blocks for the Group’s transformative growth, becoming a central part of our day-to-day operations. Moving forward we will focus more on our Transformation Programme, to further address our Company’s competitiveness on various levels of the business. The key areas of our Transformation Programme were identified as Revenue Enhancement, Cost Optimisation, Growth, Sustainability, People, and Operational Excellence. The existing programme to effect best management practices on our plantations is both an Operational Excellence and Revenue Enhancement initiative. In 2015, our processing volume of fresh fruit bunches rose as a direct result of instilling best management practices in those estates which have initiated the programme. Encouraged by this early stage success, we will continue scaling this programme to a larger number of estates in 2016. At the beginning of 2015, we launched the streamlining of our Group trading activities under FGV Trading. This is a pivotal move for our future as it centralises the decision-making process under one umbrella. Under the previous structure, each Cluster – Palm Upstream, Palm Downstream, and Trading, Marketing and Logistics (TML) – conducted their own trading of raw materials and finished goods. Today, FGV Trading executes all the buying and selling of resources within our Company. Although still in its infancy, this new structure has begun to yield us revenue enhancements. FGV Trading is a reflection of how our business as a whole is becoming more integrated by the day. It consolidates our trading activities to more effectively distribute internal resources and take advantage of better prices from the external market. In just one year, we have witnessed the synergy of the streamlined structure. Whilst we’re driven to expand our revenue streams, we are also cognisant of implementing Cost Optimisation efforts throughout the Group. In line with our intent to sell off non-core businesses, in 2015 we divested loss-making subsidiary TRT Etgo for RM567.1 million. While this gives us room to concentrate on our primary businesses, we will also be able to redeploy the sales proceeds to be used for repayment of borrowings and working capital requirements in line with our ambitions for the future. Simultaneously, we enhanced and streamlined our procurement processes, allowing us to optimise contracts for the materials and services procured for our Company. Group President/Chief Executive Officer’s Statement More on this can be found on page 52 under TML Cluster P. 52 More on this can be found on page 68 under Corporate Centre P. 68