FGV Annual Report 2020

Downstream Division Our Downstream Division has become of strategic importance to the Group as a means to realise FGV’s vision to become a world class integrated agribusiness player. This has seen the division accelerating the momentum for product development and market penetration by entering joint venture partnerships and mergers & acquisitions. We are currently expanding our export market footprint by exploring sustainable business models as well as developing product portfolios that are tailored to meet different market segments. Our subsidiary Twin Rivers Technologies is spearheading activities to enlarge our footprint in the USA for our palm-based exports. In the meantime, we are exploring partnerships and collaborations to enter the India, MENA and Central Asian markets. Besides palm based food products, the Downstream Division is diversifying into the animal feed and animal nutrition business. This is representative of our drive for a palm- based circular economy that has the potential to make significant contributions to the Group’s revenue. With abundance of by-products generated by our estates and mills, in 2020, we have ramped up production of highly nutritious animal feed to 40,000 MT. Palm Kernel Expeller (PKE), an important ingredient in our animal feed, is also being produced in accordance with world-class food hygiene standards to safeguard the quality and health of livestock. Moving forward, we will be conducting new research to strengthen our animal feed business. We are strengthening our FMCG food business as the new key driver for revenue growth. In 2021, we plan to develop five (5) new market-driven oil and fats products. Our future plan also includes penetrating the Premium Segregated (SG) CPKO market and developing premium PKE as another animal feed product. 362,773 353,625 FY2019 FY2020 Oils and Fats Sales Volume (MT) Marketing & Trading Our Marketing and Trading operations made inroads into the Indian market in 2020. In July 2020, FGV Trading Sdn Bhd (FGVT) formed a joint venture (JV) company with a Hyderabad based company – Pre-Unique India Pvt. Ltd. (PreU). The new JV – FGV – Pre- Unique (India) Pvt. Ltd. based in India. The potential of India’s market is huge, considering that the subcontinent has a population of 1.3 billion. This JV serves as a vehicle for FGV to participate directly in the Indian oils and fats business. India is one of the largest importers of FGV’s crude palm oil (CPO) and refined products. FGVT’s competitive advantage is access to a diversity of customers specific product requirement and hence the ability to fulfill them. In 2020, we have successfully recorded gain in premium oils segments and trading via arbitrage. Moving forward, our new growth areas include marketing FGV’s customised and certified products in destination markets. We will continue looking for trading and downstream collaborations with synergistic customers, suppliers or partners and also explore opportunities to participate in other derivatives and commodities. 78,669 59,083 FY2019 FY2020 Biodiesel Sales Volume (MT) 69 Who We Are How We Operate How We Are Governed Additional Information Sustainability Matters Statement & Discussion By Our Leaders