FGV Annual Report 2016

FELDA GLOBAL VENTURES HOLDINGS BERHAD 52 Since listing in2012, the operating environment has changed substantially, reflecting developments in the global economy and the evolving views of Stakeholders. The relatively stable prices of commodities and trade agreements have been disrupted leading to uncertain pricing and supply chains, while Stakeholders' expectations have changed to focus on new priorities. As FGV works with a limited pool of resources, it became clear to Management under the leadership of GP/CEO, Dato' Zakaria Arshad and the Board of Directors in 2016 that a change in strategy was required for FGV to optimise shareholder value creation. The revised Becoming Best in Class: 2017-2020 FGV is a forward-looking organisation focused on creating long-term value for our Stakeholders. From the very start, the Group's activities have been guided by a comprehensive Strategic Plan outlining our goals and ambitions by 2020. The Plan specifies discrete goals and milestones that must be met in order to achieve our targets. strategy is intended to achieve more realistic business targets within the parameters of our resources and the challenging market environment. The SP20 replaces FGV's Global Strategic Blueprint to define the Group's strategic intents, the strategic thrusts to get there and quantified targets by 2020. The SP20 is focused on taking operational excellence to greater heights while increasing efforts to produce high margin derivative products to mitigate the effect of volatile commodity prices. A set of Key Enablers and Guardrails have been incorporated into the SP20 to enhance operational capabilities, discipline and integrity within which the business must operate. The Key Enablers are: • The Group's Structure & Business Model • Our People and Processes • Our Financial Resources and Discipline The Guardrails are: • Integrity, Governance and Risk Management • Corporate Culture • Sustainability and Innovation STRATEGIC PLAN 2020 (SP20) OUR 2020 VISION 2020 Operation Targets Strategic Thrust Strategic Intent Best in Class Operation Commitment to Sustainability & Social Responsibility Leader in Good Corporate Governance and Ethical Values Strong Financial Management in Driving Growth Thriving for Operational Excellence Moving Down Value Chain Innovation & Sustainability Growth in Adjacent Fields Expansion of Core Business FFB Yield: 20.50 MT/Ha FFB Volume: 6.25 million MT FFB Processed: 18.15 million MT CPO Volume: 3.99 million MT OER: 21.98% Age Profile: 12 - 13 years old MANAGEMENT DISCUSSION & ANALYSIS