FGV Annual Report 2015

67 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 Rubber With more sustainable products in mind, the Rubber Cluster will pay more emphasis to the market development of FGV Green Rubber. Our present initiatives centre on commercialising our in-house products Ekoprena and Pureprena. We have an on-going collaboration with MRB- Prasarana for the use of our tyres for their Rapid KL buses. In future, this partnership will be extended to research on new product applications and the latest technical findings. At present, Ekoprena and Pureprena is used to retread automotive tyres. But it can also be applied to high performance applications like aircraft tyres and automotive components among others. It is crucial we continue exploring the other niche potentials of our product offerings. A major catalyst for the Rubber Cluster is the accreditation we are aiming to procure from reputable automotive tyre manufacturers. The establishment of our own quality control laboratory will also eventually help to attain better sales premium. On the M&A front, the Rubber Cluster has plans to acquire rubber related downstream businesses in industries like tyre retreads, conveyor belts and even automotive parts. The theme for future acquisitions will centre around rubber compounding companies to produce technical rubber compounds, which channels into various downstream rubber industries like tyre retreads, loose fan belts and other engineering or automotive parts. In line with the Group landbank targets under the Global Strategic Blueprint, greater land areas will also provide us access to more raw material. In turn, this will spur higher production and utilisation rates along our midstream operations. Positioning for 2020 To frame the growth trajectory of this cluster, it is vital to appreciate where it stands within our Company. The rubber operations remain a minor contributor to Group earnings at present, but given the aspiration to top the list of agri-businesses worldwide, rubber is a key area of growth moving forward. Geographically, we aim to continue spreading our presence in Malaysia, Southeast Asia, and also India. Currently, total rubber plantation landbank is over 12,000 hectares. The objective is to rank FGV amongst the top international players in processed rubber by that time. To do this, the Group must build up its processing capacity more than the existing volume of 200,000 MT per annum. In the year ahead, the Rubber Cluster will further embed our transformation pursuits that will clean up basic operations. As integrated thinking becomes more important to the way operations are being managed, more improvements are expected to materialise within the Cluster. This puts the Rubber Cluster in good stead to weather negative market forces that fall beyond its realm of control, and sustainably create value for our Company moving forward. FGV Rubber will focus on improving its sales and production to achieve its 2016 target Our Strategic Priorities for 2016 Market Development (Green Rubber) Increase Sales Volume Reduce Rubber Processing Cost Increase yield Increase Production Volume Our Strategic Initiatives for 2016 To construct a new production line Import raw material Develop in-house rubber grades Green Rubber 1 2 3 4