FGV Annual Report 2015

51 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 Our Strategic Priorities Moving Forward Significant palm-based downstream player Optimise Oleochemical position Selective investments in high-return specialty markets 3 Oleochemicals • Expansion of current business • Product additions (e.g. kosher) • Yield process reliability improvement • Pursue M&A to ensure revenue and PBT realisation • Focus on high return partnership • Business development i.e. R&D projects, IP, patents and licensing FGV CNS TRT US Top 5 FMCG SEA, Top 3 global industrial fats 1 FMCG DOP • Gain larger domestic market share • Increase export margin • New product development • Increase cost saving • Customer care FGV China Oil Low-cost 2 nd generation global player 2 Manufacturing & Processing • Increasing Malaysia sales due to B10 • Use of high FFA feedstock • Ship to EU market for summer blend and US upon EPA pathway approval • Tolling-model for North Malaysia sales Highest quality of CPKO & PKE Derivatives FGVB FGV LV FGVGE FKP Moving Forward In keeping with our group-wide vision to be a global agri-business powerhouse by 2020, we endeavour to build the Palm Downstream Cluster into a leading downstream player. By 2020, FGV aims to be among the global top three in industrial fats, among the top five in Southeast Asia for consumer goods, and become a low-cost player in second generation biofuel. The Group is moving forward with a two-pronged strategy to effect organic and inorganic growth in the Palm Downstream Cluster. Expansion of the Oleochemical business will be via new product introductions and a focus on specialty oleo products. The Manufacturing & Processing sub-cluster focus will be placed on sustainable growth emphasising on plant efficiency, cost optimisation and use of cheaper feedstock. The Cluster will further diversify into ventures and partner with other industry players to ensure optimum return on capital. It is our strategic priority to be in the downstream portfolio where the products are of higher value and margins are greater. Palm Downstream will continue to be a vital player in the Group’s diversification strategy to a well balanced exposure in the Palm Upstream segment. To play this role effectively, the Cluster will work to strengthen efficiency, improve competitiveness and enhance margins. Moving forward, these transformation programmes will be key.