FGV Annual Report 2020

In Conversation with Group Chief Executive Officer Q 6 What were the key challenges of 2020? What actions were taken to address them? CHALLENGE #1 : IMPACT OF COVID-19 ON OPERATIONS. The key challenge in 2020 was managing the impact of the COVID-19 pandemic. We are in the food business, supplying palm oil and sugar to customers in Malaysia and overseas. With the closure of food and entertainment outlets during the Movement Control Order and slowdown of the hospitality business, domestic demand for our products fell. Overseas, the closure of ports in our traditional markets saw us diverting our exports to other markets. Total of 33% of FGV revenue is from exports, so the diversion helped especially with higher CPO prices. Another challenge was to ensure the safety of our workers during the pandemic. CHALLENGE #2 : GOVERNMENT RESTRICTION ON MIGRANT LABOUR Another challenge was the Government restriction on migrant labour that affected the oil palm industry as a whole. As at 31 December 2020, FGV had 27,376 migrant labour. Our mills and refineries, however, are staffed entirely by locals. But when it comes to estates, we are dependent on migrant labour, although less so than other plantation companies. The industry has made appeals to the Government on this issue, and we look forward to a positive outcome in 2021. Meanwhile, FGV continues to aggresively recruit local applicants to work in the estates. FGV has been proactive in preparing for the COVID-19 pandemic with the establishment of the COVID-19 Task Force. The pandemic affected our operations and productivity, especially in Sabah. We closed five mills there in March and April 2020 as a precautionary measure because of the high incidence of COVID-19 cases near our mills. However, other mills in the country continued to operate albeit with reduced manpower. (More details on FGV’s management of the COVID-19 pandemic can be found in Section 5 of this report). 44 FGV HOLDINGS BERHAD Annual Integrated Report 2020