FGV Annual Report 2017

FELDA GLOBAL VENTURES HOLDINGS BERHAD CREATING VALUE 12 Sources: USDA, The Economist, International Sugar Agreement (ISA) daily average, MSM Holdings Sources: 2018 National Budget, DFTZ Malaysia, Logistics and Trade Facilitation Master Plan Sugar Sector Global sugar production is forecasted to increase by 6.80% in 2017/18 to 179.2 million MT (recovery seen in Brazil, China, India, the EU and Thailand), hence raw sugar price is expected to decrease to USD0.15 per lb. in 2018 vs USD0.16 per lb. in 2017. Weather-related shocks in producing countries continue to pose the most significant risk to prices and hence refining margins. Logistics & Support Businesses E-Commerce and digitalisation, such as the recent launch of Malaysia’s Digital Free Trade Zone (DFTZ), are some of the key drivers expected to transform the logistics industry in Malaysia, in conjunction with the various public transportation and infrastructure projects as highlighted in the 2018 National Budget which are expected to kick-off soon. INDUSTRY OUTLOOK FOR 2018 Global Sugar Supply/Deficit & Raw Sugar Price Malaysia’s Sugar Imports and Exports 8 2,500 2014/15 2012 /13 2013 /14 2014 /15 2015 /16 2016 /17 2017 /18 2015/16 2016/17 2017/18 0.20 6 2,000 Surplus/Deficit (million MT) Raw Value (‘000 MT) Price (USD/Ib.) 0.18 4 1,500 0.16 2 1,000 0.14 0 500 0.12 -2 0 0.10 -4 0.08 -6 0.06 0.04 0.02 0.00 3.7 -4.9 -3.8 5.7 Surplus Deficit Raw Sugar Price Imports Exports OUR MARKET LANDSCAPE 0.13 0.18 0.16 0.15 1,966 2,009 1,897 1,893 2,063 1,960 317 315 258 288 260 260 DIGITAL FREE TRADE ZONE by 2025 BUDGET 2018 SME Goods Exports: USD38 billion URBAN • RM32 billion MRT2 • MRT3 or Circle Line • LRT3 RURAL • East Coast Rail Link (ECRL) • RM230 million Central Spine – Raub, Bentong, Gua Musang, Kg Relong INTERNATIONAL • High-Speed Rail (HSR) project connecting Kuala Lumpur & Singapore • Upgrade of international airports Employment Opportunities: 60,000 jobs