FGV Annual Report 2020

In Conversation with Group Chief Executive Officer Q 5 FGV ’ S I NT EGRAT ED FARMI NG BLUEPR I NT FGV Integrated Farming have identified five (5) agribusiness that could add additional revenue and support the value chain of other businesses. Consolidated large-scale, fully integrated, high-tech rice production from seeds-to-plate Production of PKE - based animal feed and animal nutrition with enhanced formulation Fully integrated dairy farming for fresh milk production. An e-Commerce platform for fresh produce marketing & distribution. High Value Tropical Fruits Large Scale Oil Palm Intercropping Farming (MD2 Pineapple, Cavendish Banana & Watermelon) Large Scale Paddy & Rice Farming Animal Nutrition & Protein Integrated Dairy Farming End-to-end e-Commerce FGV is expanding its Integrated Farming and Consumer Products businesses. What is your direction for them? These two businesses are not entirely new to FGV, and have been part of the Plantation Business for some years. What is new is that they will be diversifying into other types of agriculture besides oil palm. By taking this route, we will be able to reduce our dependency on CPO prices. In addition, we will be moving down the value chain and enjoying higher profit margins. By bringing these businesses to the fore, we will get closer to realising FGV’s new vision to be an agribusiness player involved in the entire farm-to-fork value chain. Our market research shows that Integrated Farming and Consumer Products have good prospects. So far, we have invested in a few key projects. We expect our Integrated Farming business to be able to generate an EBITDA (earnings before interest, taxes, depreciation and amortisation) margin of 15% by 2023. For consumer products, our plan is to focus on fast-moving consumer goods (FMCG) products that utilise raw materials from our upstream Plantation and Integrated Farming businesses. Since we do not have wide-ranging food manufacturing expertise, we are exploring opportunities for partnerships with experienced vendors to speed up our entry into the FMCG food business. 42 FGV HOLDINGS BERHAD Annual Integrated Report 2020