Turning Strategy Into Outcomes ANNUAL INTEGRATED REPORT 2022 41 Business Strategy INTRODUCING BP25 To achieve our aspirations, our Strategic Thrusts are supported by the Group’s Key Strategic Initiatives (KSIs) that will be implemented between 2023 and 2025. For 2023, we have set the theme for the Group as ‘Expand’, reflecting our aim to grow our business activities and enhance our range of products in the market while increasing revenue and profitability over time. The establishment of our KSIs, aligned with Operational Improvement, Product & Market Penetration, New Growth Areas and Financial & Capability Building, will shape the direction of our upcoming approach. STRATEGIC BUSINESS PLAN The BP25 has been established based on a comprehensive assessment of where we stand now, understanding our current and future challenges as well as identifying the opportunities that are present now and in the future. In the Plantation Sector, the business and its operations are subject to a range of external factors that can significantly impact performance, as the events of the past two years have demonstrated. Nevertheless, we remain committed to get the basics right, innovate and ensure good labour and agricultural practices to maximise production, which will help mitigate any potential headwinds. In the Sugar Sector, the high input cost environment is expected to persist. Besides the strategic hedging of raw sugar, currency and crude oil, the main focus will be on ramping up the productivity of the refinery at MSM Sugar Refinery (Johor) Sdn Bhd and ensuring the reliability of other refineries, while also growing our sales channels. As for the Logistics & Others Sector, each of FGV’s businesses will be supported with greater opportunities for growth going forward as economies are now operating at more robust levels compared to the pandemic period. Regarding the food industry, we recognise its significance, durability and opportunities, especially as populations continue to grow and countries seek to establish greater levels of food security. In Southeast Asia, the foods segment is expected to grow at a CAGR of 18.3% up to 2027, while in Malaysia, growth will be at a CAGR of 7.9% up to 2027, reaching a value of USD51.1 billion in 2023. The focus will therefore be on the fresh produce, animal feed, dairy and cooking ingredients categories1. • Improve operational efficiency through enhanced modernisation and mechanisation, and replanting efforts • Boost capabilities in Logistics through external opportunities • Reinforce process controls in mills • Increase sustainability engagements and intensify Environmental, Social and Governance initiatives • Uphold human rights and fair labour practices • Strengthen brand equity and presence • Tighten governance practices and risk management Operational Improvement Product & Market Penetration • Improve refineries’ utilisation factor and plant capacity • Develop a large-scale farming area • Maximise renewable energy potential and intensify waste-to-wealth initiatives • Grow value-add products by focusing on higher-value markets and by-products • Explore higher-value markets and product segments • Establish a distribution centre and commission new Logistics business • Enhance labour strategy to Recruit and Retain • Promote cost optimisation throughout business operations • Improve talent management and develop internal capabilities New Growth Areas Financial & Capability Building 1 Source: Statista, March 2023
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