FGV Annual Report 2017

FELDA GLOBAL VENTURES HOLDINGS BERHAD UNDERSTANDING OUR BUSINESS CONTEXT 26 one palm oil refinery to improve the utilisation factor and processing costs, in line with our cost efficiency efforts. Under the Sugar Sector, production volume stood at 1.02 million MT (2016: 1.04 million MT) with annual sales of around 1 million MT (2016: 1.03 million MT) in which 86% went to the domestic market, representing 58% market share. However, the Sector’s overall performance was affected by a 20% higher average raw sugar cost and weakened Ringgit. MESSAGE FROM THE GROUP PRESIDENT/CHIEF EXECUTIVE OFFICER Management Discussion & Analysis Operational Excellence 4.85 million MT of FFB production and average CPO production cost of RM1,562 per MT Workers’ retention programme by building 527 blocks of new housing to accommodate 14,000 workers Replanting target of 5-6% (~15,000 Ha) of our total mature area to improve age profile Enhance mechanisation in the areas of harvesting and in-field collection to improve labour productivity Consolidate the Palm Kernel Shell business for the export market and improve the shell recovery rate to 1.20% 28 mills to be ready for RSPO certification Rationalise two mills to increase mills’ utilisation factor and reduce processing costs Moving Down Value Chain Increase number of key wholesalers (KWS) for cooking oil by 20% from the current base of 200 KWS nationwide Develop higher yielding and quality oil palm seeds Obtain kosher certification through kosherised fractionation system in the US oleochemical plant As for our Logistics and Others Sector, we stored 7.56 million MT (2016: 6.53 million MT) of oils and grains in our bulking and warehousing facilities, and increased the transport volume to 5.09 million MT (2016: 4.39 million MT), both were contributed by higher volumes of CPO produced. We also completed the construction of a 38,300 MT edible oil storage facility in Port Qasim, Pakistan and fully operationalised the additional storage capacity of 31,000 MT in Pasir Gudang, Johor. We have made significant strides in human capital development especially in the areas of manpower optimisation, skills development and rewards & benefits. We offered Voluntary Separation Scheme (VSS) to 330 senior management staff, which achieved 12% acceptance. We established FGV Academy to develop employees’ professional skills in plantation management, business development and marketing. As one of our incentives to motivate our people, we rewarded FGV shares under our Long Term Incentive Plan (LTIP) to eligible employees. 2018 PRIORITIES Moving forward, we will continue to improve our business plan and maximise our effectiveness to achieve sustainable performance, as guided by the Group’s four Strategic Thrusts as stipulated below. EP EC GE HR YI