PROMOTING ECONOMIC GROWTH SEC 2 28 Downstream business To address the high dependency on upstream products mainly crude palm oil, FGV aims to embark on higher value-added products for increased returns. As such, we are committed to delivering high-quality nutritious and affordable consumer products to all Malaysians. While Saji has been awarded the Sustainable Best Brand award for consumer products, FGV’s premium cooking oil and margarine brand, Adela has expanded into the Middle East and North Africa (MENA) markets. The launch of Adela margarine underscores FGV’s commitment to delivering premium products to meet global demands. PROMOTING ECONOMIC GROWTH Plantation Upstream business FGV’s plantation business implements the Plantation Business Operational Excellence Roadmap, which identifies specific operational locations as model sites. The model sites, including a rubber factory, three oil palm fields, three palm oil mills, and one downstream operation, Delima Oil Products (DOP), aim to achieve Top Quartile (Leading Industry Standard) operations and increase business profitability and viability. These sites serve as pilot locations for various operational excellence projects, facilitating the development of human capital preparedness and competencies. The replication of the programme started in FY2022, with additional sites obtaining 5S internal and external certification, including eight estates, 23 mills, three rubber factories, and three refineries. Competency training in various continuous improvement modules has increased, with an additional 697 employees trained in FY2022 and 572 employees trained in FY2023. Our long-term goal is to expand coverage to all of our operational locations through various improvement programmes to increase productivity at operational sites. Replanting Exercise We have implemented a structured replanting exercise to address the unfavourable age profile of our oil palm plants and make sure that they fall within the very old range. It is a crucial strategic move to mitigate the falling yields that come with old and very old palms. The replanting exercise has significantly improved the age profile. In 2023, FGV replanted about 19,862 ha of very old palm trees versus the group’s target of 24,630 ha. Cost of replanting until maturity is RM20,000/ha-RM25,000/ha. Currently, oil palm trees classified as old (24,718 Ha) and very old (47,475 Ha) have dropped by 2% & 25% respectively as compared to 2022 (old: 25,325 Ha, very old: 63,016 Ha). Sugar MSM Malaysia Holdings Berhad (MSM), our Sugar business, implements operational excellence initiatives as part of continuous improvement and innovation to secure greater business sustainability. In FY2022 and FY2023, MSM maintained its annual production capacity of refined sugar for the domestic and export markets at 2.05 million metric tonnes. The premium brand Gula Prai holds a market share of over 60% in the local refined sugar industry in FY2022 and FY2023. Logistics & Support In 2023, the Logistics & Others Sector remained steadfast in its sustainability commitment, spearheading a series of initiatives to reduce environmental impacts and improve operational efficiency. Notable highlights include fuel and energy reduction efforts at our bulking terminals, in which we achieved more than 10% decrease in consumption through the implementation of Cost Improvement Program (CIP). Additionally, measures were implemented to control truck idling, resulting in a reduction of 0.18kg of carbon emissions. These actions underscore our ongoing dedication to sustainable practices and operational excellence. Gula Prai has been the preferred choice among consumers since 1964. FGV strives to produce the highest quality CPO through efforts such as replanting.
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