FGV Annual Report 2020

EXPEDITING OPERATIONAL TURNAROUND The Management team has also been expediting the operational turnaround of FGV’s three (3) core businesses, namely, Plantation, Sugar and Logistics & Others. It saw us introducing various initiatives for operational improvement and results achieved so far are outlined below. P LANTAT I ON BUS I NESS Expanded Model Plantation Concept (MPC) 2017 14.8 years 0 - 3 Years 4 - 9 Years 10 - 20 Years > 20 Years 19% 23% 20% 38% 2018 14.3 years 19% 24% 22% 34% 2019 13.8 years 19% 26% 25% 30% 2020 14.8 years 16% 26% 26% 32% Age Profile of Palms We have been pursuing an accelerated replanting programme of 10,000 - 15,000 hectares per year to address the age profile by allocating approximately RM300 million a year. For the first time since its listing, the Group recorded a higher percentage of young and prime trees in 2020. We have brought down the percentage of aging trees from 54% in 2012 to 32% in 2020. This is an advantage because it improves our prospects for better yield and more CPO production. The Operational Excellence Division has initiated the Model Plantation Concept (MPC) Project since 2019 as part of the improvement drives to be “Brilliant at Basic” under the Plantation Sector via Model Sites approach. These Models act as incubators to implement best and lean practices prior to rolling out and replicating it at a larger scale. The focus shall be on 3S concept: “Strengthen, Standardise and Sustain” with the end in mind of the project being on productivity parameters, quality and cost. In 2019, we already established four (4) Model Sites namely Ladang Tembangau 6, Ladang Maokil 7, Kilang Sawit Maokil & Kilang Sawit Besout (focusing on Palm Oil Upstream). Moving into 2020, we expanded the deployment of the MPC Project to our Palm Oil Estate & Mill Operation in Sabah (Ladang Sahabat 11 & Kilang Sawit Embara Budi), Rubber Operation (Kilang Getah Palong 8) and Downstream Operation (DOP Sdn. Bhd.). As of December 2020, through the MPC Project, six (6) out of eight (8) of the Model Sites have been QE/5S certified by the Malaysia Productivity Corporation. Our Kilang Sawit Embara Budi recorded history by becoming the first Model Mill to achieve the highest level of certification of 3-Stars; whereas Kilang Getah Palong 8 is the first rubber factory in Malaysia to be QE/5S certified. List of QE/5S certified Model Sites and its ranking is as follows; Kilang Sawit Embara Budi – Kilang Sawit Besout – Kilang Getah Palong 8 – Kilang Sawit Maokil – Ladang Maokil 7 – Ladang Tembangau 6 – With the improvement seen at these Model Sites, initiatives deployed are being replicated by phases at all of our estates, mills and rubber factories. 37 Who We Are How We Operate How We Are Governed Additional Information Sustainability Matters Statement & Discussion By Our Leaders