FGV Annual Report 2015

49 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 Business Operations Review Palm Downstream This Cluster houses our refining, processing and marketing capabilities to convert Crude Palm Oil (CPO) and Crude Palm Kernel Oil (CPKO) into specialised value added products. Our Palm Downstream Cluster is an important contributor to the Group’s profitability. It is also a part of the Group’s value added strategy to the Palm Upstream Cluster and the Group. This Cluster creates a ready market for Palm Upstream when market prices for CPO and CPKO are not optimal. Palm Downstream has three sub-clusters − Manufacturing & Processing, Fast Moving Consumer Goods (FMCG), and Oleochemicals as described in the table below. Sub-cluster Product Range Capacity Manufacturing & Processing Product • Felda Kernel Products • Felda Vegetable Oil Products (until 31 January 2016) • FGV Biotechnologies • FGV Lipid Venture • FGV Green Energy Process PK and Produce CPKO & PKE Refined, Bleached & Deodorized Palm Oil (RBD) & Palm Kernel (PK) Products • CPKO and PKE • RBD Palm Oil (RBDPO) • RBD Palm Olein (RBDPL) • RBD Palm Stearin (RBDPS) • RBD Palm Kernel Oil (RBDPKO) • Palm Fatty Acid Distillate (PFAD) • PK Fatty Acid Distillate (PKFAD) • Biofuels/Biodiesel • Biodiesel 1,000,000 MT per annum 1,970,000 MT per annum 1,220,000 MT per annum 300,000 MT per annum 308,000 MT per annum 100,000 MT per annum 16,000 MT per annum 100,000 MT per annum 250,000 MT per annum Fast Moving Consumer Goods • Delima Oil Products • FGV China Oil Packed Goods for Consumers & Industry • Edible Oil • Margarine • Shortening • Vegetable Ghee • Industrial Fats • Refinery, bulking & trading DOP combined capacity of 258,000 MT per annum Oleochemicals • TRT US • FGV Cambridge Nanosystems Oleochemicals Products & Others • Fatty Acids • Fatty Alcohols • Refined Glycerin • Methyl Esters • Graphene & Carbon Nanotubes 150,000 MT per annum 80,000 MT per annum 35,000 MT per annum 280,000 MT per annum JV & Associate Companies • FISB • FPG Oleochemicals Specialty Fats, Packed Goods for Consumers & Industry Oleochemicals Products The external market for palm-based products is generally reflected by the CPO supply and demand environment in 2015. Overall, the palm-based product market in 2015 faced several challenges. Biodiesel and oleochemical products were uncompetitive due to the drop in petroluem-based products and the lower price of competing vegetable oils. Overall demand from the major consumption markets like China and the European Union was weak as a result of the direct effect of slowdown in these economies. However, India was an exception where demand for palm-based products remained steady, bolstered by the growing middle- class population. Growing middle-class population in India and China and other growing economies in Southeast Asia will be the demand and growth driver for vegetable oil products in the coming years. In tandem with this, we believe that food demand will see a corresponding upward trajectory and will be propelled further due to preference for healthier food options. Financial Summary: FGV Downstream Cluster Revenue & PBT (excluding JV) Revenue (RM million) PBT (RM million) 6,424 -52 2013 2015 6,103 -14 2014 2014 3,438 9 2015 2013