FGV Annual Report 2020

Chairman’s Statement LEVERAGING ON EXISTING STRENGTHS Our plans to diversify into complementary and adjacent businesses will benefit all stakeholders, especially smallholders who we regard as our partners. FGV buys two thirds of its fresh fruit bunches (FFB) from FELDA settlers and independent smallholders, who are an integral part of our supply chain. Indirectly, we provide these smallholders access to international markets and ensure that they are paid fair market rates in accordance with international prices. This link can only get stronger when we present them with opportunities to become FGV Agro Farmers in our new Integrated Farming ventures. Our farm-to-fork strategy means going into food production across the entire value chain. There is more revenue to be generated from moving products than concentrating in upstream production. Fortunately, FGV has a Logistics & Others business, but it needs to be revitalised with entrepreneurial drive to become more business-oriented. To achieve this, we have re-designated all Chief Operating Officers in the Plantations and Logistics & Others buisness as Divisional Directors. Our goal is to give them a sense of purpose to engage in business development, pursue growth and gain recognition in the marketplace as decision makers. EXECUTION OF BUSINESS PLAN In 2020, FGV entered the second year of the three year Business Plan known as BP21, where the Board had identified four strategic thrusts for management execution. From the 2019 theme of “Stop the Decline”; FGV was expected to “Sustain Performance” in 2020. While FGV is fully committed to sustainability and human rights, ensuring that such commitment is concretely translated into practice at all levels of our operations is not an easy task, especially when certain traditions that may not be entirely in line with human rights standards have been part of industry norms since time immemorial. And despite our intensified efforts since the past several years to bridge gaps, some challenges still remain in bringing our entire enterprise to fully meet international standards. While the path forward was agreed upon, the speed of execution slightly missed the mark. This can be attributed to a number of factors such as persistent legacy issues to a work culture that is still evolving. This lack of urgency has thus resulted in slower execution, time lost and other wastages; understandable perhaps, given the many changes in leadership since 2019. EMBEDDING SUSTAINABILITY As a responsible business, we must go to greater lengths to embed sustainability in the way we run our company. At FGV, we strongly believe that adhering to sustainability and human rights principles is the right thing to do and should be part and parcel of any company’s values and culture. 32 FGV HOLDINGS BERHAD Annual Integrated Report 2020