FGV Annual Report 2020

In July 2020, we launched second compound fertiliser product in 1 kg bottle packaging - SF65 : Baja Subur, complimenting previous product; SB45: Baja Penggalak Bunga dan Buah, which shows increasing demand over the year and by taking opportunity on increasing trend of home gardening during MCO. For year 2020, our fertiliser retail sales rose 30% from 24,000 MT to 34,000 MT, including 20,000 bottles of SB45 and SF65. As at the end of 2020, we recorded fertiliser retail sales of 21,013.16 MT, which included 2,580 bottles of the newly launched Baja Subur. To cater to the growth of the fertiliser retail market, we appointed five (5) new dealers in 2020, bringing the total dealers in our network to 32. FGVAS also introduced new fertilisers for home farming, named LiqGro63, MycoGrow500 and TopGro88. We are currently planning the commercialisation of FOF fertilisers, which is a fortified empty fruit bunches (EFB) compost based fertiliser for mature oil palm. Moving forward, FGVAS is collaborating with AMCO Niaga Sdn. Bhd. to extend our rodenticides line of products for paddy farming. In another collaboration with PT Pandawa, FGVAS is establishing a supply and distribution network for a bio-based weeds solution for the domestic market. We are also exploring the potential usage of microbial inoculum for Palm Oil Mill Effluent (POME) treatment and the introduction of bamboo as a new strategic crop in areas that are uneconomic for oil palm and rubber cultivation. Rubber Operations The Plantation Business’ market and product penetration strategies for the palm oil business are also applicable to FGV’s rubber business. It fits into the Group’s long-term plan to become one of the world’s leading integrated and sustainable agribusinesses with various consumer products. Our rubber business is currently diversifying into the production of green rubber products. Green rubber has the advantages of natural and synthetic rubber compound properties which can be utilised in the tyre industries. Green rubber latex can also be applied in glove making, which has higher profit margins than conventional natural rubber products. To boost this business, we are currently focusing on product quality improvements of raw materials imported for the business. FGV is also studying the viability of venturing into downstream rubber products manufacturing such as glove making. Currently, we are a supplier to Malaysia’s leading rubber glove makers. Outlook and Prospects With FGV charting a new growth path as a world-class agribusiness with an end-to-end supply chain, the Plantation business upstream operations will continue to strive for higher productivity and lower costs. We have in place several key initiatives to achieve these goals. They are: • To continue improving yields with quality planting materials • To establish a high standard replanting model via the utilisation of Space Application for Environment (SAFE) technology for selected replanting areas • To continue our Model Plantation Concept (MPC) at all model sites • To continue replanting activities and mechanisation • To grow higher value-added businesses to support the Group’s new consumer products business • To develop premium quality oils, specialty fats and specialty oleochemicals • To develop biofertiliser products using microbial consortia • To penetrate international markets by the R&D Division • To commercialise 2MW biogas power plant in Keratong 9 Mill, Muadzam Shah, Pahang Renewable Energy Renewable Energy and By-products Division comes under FGV Palm Industries Sdn. Bhd. (FGVPISB). It formed the main backbone of the Group’s waste-to-wealth initiative, supplying and trading 14 type of biomass by-products such as Palm Kernel Shell, Sludge Palm Oil and Shredded Empty Bunch Fibre, contributing additional revenue to the Group. FGVPISB is also driving the Group’s initiative in carbon emission reduction in operating 28 biogas plants, reducing up to 108,197 MT of carbon emission reduction in 2020, besides utilising biogas to power Feed-in-Tariff (FiT) and Rural Electrification Projects in eight (8) sites located in Peninsular Malaysia and Sabah. In October 2020, the division successfully commercialised Triang Biogas power plant which is the largest within the FGV Group. This plant produces 2MW capacity generated from the biogas which is injected into TNB’s electricity grid under the Sustainable Energy Development Authority (SEDA) FiT scheme. Biogas is derived from the POME which is 100% organic and rich with energy to produce electricity. At national level, FGV’s noble efforts had been recognised with three consecutive prestigious National Energy Awards from 2018 to 2020, and won runners-up awards at the 2019 ASEAN Energy Awards at international level, reflecting hard work, passion and relentless commitment to sustainable renewable energy initiatives since year 2000. 71 Who We Are How We Operate How We Are Governed Additional Information Sustainability Matters Statement & Discussion By Our Leaders