GCEO’s Statement A Business sustenance In the recent years, we have conducted a structured replanting exercise to improve the age profile of our oil plam plants in a strategic imperative to mitigate declining yields associated with old and ageing plants. Ensuring an optimal age profile for our oil palm plants is critical for the future sustenance of FGV and to provide assurance that the livelihood of those dependent on our business is not adversely affected. In 2012, the average age profile of our oil palm plants was 16.2 years. Of that, about 49% were trees over 20 years old. The replanting exercise has significantly improved the age profile. Currently, young and prime aged plants amount to 54%, compared to 36% in 2012, while plants classified as old and very old have dropped to 32% from 49%. It is typical in the industry to replant at the rate of 4-5% annually and maintaining our replanting rate will result in FGV achieving our optimum age profile by 2026. There is however, a downside to replanting in that it is investment intensive. Over the past 9 years, FGV has invested an average of RM300 million each year on replanting. Dear valued stakeholders, Sustainability continues to gain prominence in FGV. Across 2020 and 2021, our sustainability journey has taken on a decidedly strategic orientation - revenue generation leveraging on our embrace of the circular economy - no doubt this will continue into 2022 and beyond as an intrinsic part of revenue base expansion and revenue diversification. In 2020, we instituted the Waste-to-Wealth initiative to optimise our use of the natural resources, notably by-products from palm processing in keeping with our efforts on circular economy. Today, we generate a range of products, some of which have been successfully commercialised, validating the efficacy of our Waste-to-Wealth initiative. On a broader front, FGV is doing our part in future-proofing the palm oil industry. We are passionate about changing the narrative for Malaysian palm oil, by taking a holistic view and approach towards sustainability. This is to ensure that Environmental, Social and Governance (ESG) considerations continue to take centre stage in all of FGV’s endeavours. Integrating Sustainability with Operational Excellence 10 FGV HOLDINGS BERHAD RESPONSIBLE BUSINESS ABOUT THIS REPORT RESPECTING HUMAN RIGHTS
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