FGV Annual Report 2015

59 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 Sugar Our Strategic Priorities Moving Forward 1 2 Local Overseas New Refinery • Construction of 1.0 million MT capacity refinery in Johor - target completion by Q4/2017 • Reduced refining cost by 40% (From USD116/MT to USD68/MT) • Targeted increase in domestic market share from 65% to 80% (minimum target) by 2019 Trading • Operationalisation of MSM Trading International DMCC, trade of raw and refined sugar and toll manufacturing refined sugar with Prai and Perlis • Trade & distribution of refined sugar via an establishment in Indonesia M&A • Pursue M&As and strategic alliances in sugar-related assets • Expand value chain upstream (plantations & mills) and downstream (refineries and sugar-based companies) • Active target countries: Indonesia and India Beyond that, the Sugar Cluster is prepared to commence Phase 2 of the refinery in Johor by 2025, which would raise capacity by another 1 million MT per annum. In total, this would enlarge the Group production capacity to 3.25 million MT per annum. In the long term, capacity building will allow FGV to increase its competitiveness on end product pricing. This is set to become our competitive edge as we venture into neighbouring countries, transforming Malaysia into a regional hub for high quality refined sugar. In order to become a regional hub, the Cluster is keeping an active eye on expansion opportunities outside Malaysia. The new trading office in Dubai is one example of such an expansion. In addition to that, the Sugar Cluster is continually seeking growth all along the value chain, in both upstream and downstream segments. Our active target locations in mind at present include Indonesia and India where we are looking not just at M&As but strategic partnerships. In the meantime, initiatives to transform the Cluster internally remain a priority for 2016. For one, the upgrading of our production facilities will take precedence in order to enhance operational efficiencies. This will be executed in the storage, handling and packing segments. Cost rationalisation programmes will additionally take a front seat to allow the Sugar Cluster the ability to create more value in time to come. FGV’s Transformation Plan provides clear direction as we steer our sugar business to global stature.