FGV Annual Report 2018

43 REMAINED FOCUSED ON VALUE CREATION 01 02 05 03 07 06 04 08 09 ANNUAL INTEGRATED REPORT 2018 MANAGEMENT DISCUSSION & ANALYSIS The LSB Sector reinforces our core business by connecting and controlling the flow of assets to drive group-wide efficiencies via Logistics and Support Businesses (Information & communications technology, engineering, security, properties, and hospitality services). This Sector assists in enhancing FGV’s performance and driving improvements in our business activities, in line with our strategic goal to grow our business in adjacent fields. It also contributes to Group synergy by containing leakages and ensuring full utilisation of our capabilities. Our Logistics arm possesses one of the world’s largest bulking and storage facilities for edible oil with a capacity of 1,065,200 MT comprising 866,900 MT located in Malaysia and Indonesia, 38,300 MT in Pakistan, and 160,000 MT of capacity in China through our 13 liquid terminals. The transportation business is also instrumental to the Group’s aimtobe a total logistics solutions provider inMalaysia, with 427 liquid tankers and cargo trucks, while we are also embarking into Third-Party Logistics (3PL) for the FMCG business and LOGISTICS & SUPPORT BUSINESSES SECTOR building our capacity and capabilities in warehouse & logistics solutions. Additionally, in 2018, we upgraded our fleet capability through the purchase of 10 units of prime movers. In 2018, through our subsidiary Felda-Johore Bulkers Sdn. Bhd. and FGV Transport Services Sdn. Bhd. (FGVTS, formerly known as Felda Transport Services Sdn. Bhd.), we recorded bulking throughput of 7.01 million MT, with transport volume of 5.18 million MT. The transport volume increased by 2% from 5.09 million MT in 2017 following higher tonnage carried for external customers. Our bulking volume decreased by 7% from 7.56 million in the previous year as a result of lower throughput due to a high stock position, and as customers extended their stay and occupied the storage tanks. This reduced the tank storage utilisation rate to 7.34 times from 7.92 times in 2017. Through our subsidiary in Pakistan, F.W.Q. Enterprises (PVT.) Ltd., we diversified into liquid bulk storage with new capacity of 38,300 MT in Port Qasim. In 2018, the facility commenced operations and achieved a utilisation factor of 80% to serve the growing local market. TOTAL STORAGE CAPACITY* (MT) 200,000 800,0000 600,000 400,000 1,000,000 2016 2017 2018 995,890 1,026,900 1,065,200 BULKING VOLUME (MILLION MT) 7 6 5 4 2 1 3 8 2016 2017 2018 6.53 7.56 7.01 * including FGV China Oil’s storage capacity of 160,000 MT MANUFACTURED CAPITAL