FGV Annual Report 2016

FELDA GLOBAL VENTURES HOLDINGS BERHAD 48 CLUSTER PERFORMANCE: RESEARCH & DEVELOPMENT AND AGRI-SERVICES (RD&A) Expanding Our Horizons FASSB successfully registered and launched its award-winning Felda Yangambi ML161 oil palm germinated seed in Indonesia. With this launch, we expect to sell 1 million seeds in Indonesia in the coming year and become the first Malaysian company to successfully export oil palm seeds to Indonesia. The expansion of our footprint is in line with our Group's overall strategy to develop itself into a best-in-class global agribusiness by 2020. Other achievements in the year came from three (3) key initiatives namely the completion of targeted irrigation activities for 2016, the launch of a new organic fertiliser in a greenfield market and the successful implementation of an Innovation and Creative Cycle (ICC) project to increase oil palm seed germination rates by 7%. In the area of applied technology, FGV Applied Technologies Sdn Bhd (FGVAT) completed a number of projects involving the construction of pilot plants for larger scale trials such as the pilot plant to produce animal feed from Palm Kernel Expeller (PKE) and also for enzymatic oil extraction. Meanwhile, it also completed a number of projects under its Food Technology Unit, and these projects are now ready for commercialisation. Finally, the Cluster also realised RM3.0 million in savings after implementing an aggressive cost saving programme. MOVING FORWARD The Cluster has already identified a number of initiatives for 2017 that will sustain the momentum from 2016. These initiatives outline the goals for the Cluster under the SP20 to improve collaboration with the other Clusters and nurture new innovations. These initiatives include: • Increasing irrigation activities for oil palm estates • Further strengthening overseas markets for oil palm seed • Enhancing the commercialisation of R&D products, e.g. GTI and Palma Shield • Increasing sales of fertilisers in both dealers' and retail markets • Expanding our advisory and laboratory services • Expanding the market for rat bait into paddy plantations and urban areas • Implementing our pilot Coconut Upstream Project (Buko Pilot Project) • Developing a process to produce epoxy propanol and glycerol carbonate using glycerol as feedstock to increase the value of glycerol, a by-product of biodiesel production RM3.0 million in savings after implementing an aggressive cost saving programme. Mechanisation equipment such as Tekam Twister, a subsoiler for fertiliser manuring improves productivity significantly. MANAGEMENT DISCUSSION & ANALYSIS