FGV Annual Report 2017

ANNUAL INTEGRATED REPORT 2017 UNDERSTANDING OUR BUSINESS CONTEXT 43 OUR PERFORMANCE BY SECTOR: PLANTATION Management Discussion & Analysis Seedlings Sales Volume Million Units Seeds Sales Volume Million Units Ramets Sales Volume Million Units Rat Bait Sales Volume Million Boxes Fertiliser Sales Volume Million MT 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 R&D and Agri-Services Cluster Our R&D cluster sold 20.60 million units of Yangambi oil palm germinated seeds and maintained its share of Malaysia’s seed market at 42%. Of the total, approximately 0.50 million seeds were exported to countries like Papua New Guinea, Sri Lanka, Indonesia and Thailand. Felda Agricultural Services Sdn. Bhd. (FASSB), our cluster flagship company, entered into a partnership with PT Mitra Agro Servindo to penetrate the oil palm seedmarket in Indonesia.This partnership enables FASSB to export 1.30 million seeds to Indonesia from July 2017 to July 2018. Our fertiliser division, FPM Sdn. Bhd. (FPM), continued to focus on increasing its plantation-based clients and expanding its compound fertiliser sales volume. Through aggressive marketing activities, FPM managed to register fertiliser sales of 0.72 million MT in 2017, a 4% improvement from 0.64 million MT in the preceding year. Another prominent product under the cluster is our rat bait, known as BUTIK. In the period under review, we recorded sales of 0.27 million boxes, a 13% growth compared to 0.24 million boxes in 2016. This achievement was mainly due to extensivemarketing activities that were supported by our advisory team, as well as the replanting programme undertaken by the oil palm industry. Our innovation push was driven by initiatives such as the patented FGV Integrated Breeding Database (FIBD). This improves our agriculture yield by enabling real-time end-to-end monitoring of the oil palm breeding process. The data collected is used for analytics and management reporting. In addition, we launched two products to address plant tissue culture needs, such as callogenesis and embryogenesis using PLANTgerminus TM and EZgrow TM for shoot and root development. Irrigation systems covering 200 Ha of Sahabat 59 were installed to improve FFB production in dry areas and are expected to be completed in March 2018. Plans are afoot to irrigate other dry areas such as Sahabat 17 and Serting Hilir. The cluster embarked on crop diversification through the establishment of a coconut seed garden, which will commence production in 2025. This effort will minimise the dependency on oil palm and be in line with our business plan to diversify the Group’s revenue stream. Trading In 2017, FGVT delivered a total of 3.20 million MT CPO, Processed Palm Oil and Lauric Oil, 58% of which went to local markets and export destinations such as China, Pakistan and India. The improvement in local sales were mainly attributed from higher CPO export duties and lower demand from importing countries due to its high domestic stocks. Trading margins improved during the year under review,with the adoptionof initiatives which focus on internal oil and reduction in long forward sales to a maximum of one plus twomonths forward. 2.89 21.26 0.87 0.24 0.64 2.45 20.60 0.92 0.27 0.72 Our R&D and Agri-Services consolidate over four decades worth of research expertise towards becoming a premier frontrunner in oil palm research.