FGV HOLDINGS BERHAD | ANNUAL INTEGRATED REPORT 2023 19 CHAIRMAN’S STATEMENT Given that we face some challenges that are quite distinct from other major plantation companies, our financial considerations necessitate a different approach. Following a thorough review, the Board has approved and declared a final dividend of 3 sen per share for a total dividend payout of RM109.4 million for the year. BP25 ADVANCING RESPONSIBLE GROWTH We aim to advance responsibly while focusing on developing strategies that align with our goal of creating sustainable, long-term value for our shareholders. The Business Plan aims to expand FGV’s reach beyond its traditional business. It was developed following an extensive evaluation of our current position, recognising existing and upcoming challenges, and identifying immediate and future opportunities. Our Business Plan prioritises operational efficiency across divisions and business units through Key Strategic Initiatives (KSIs). We allocate strong emphasis on modernising and mechanising operations, along with a focus on fertilisation and replanting efforts. We are reinforcing process controls in our mills and refineries, aimed at optimising utilisation factor and plant capacities to advance product development and market penetration. We are exploring growth opportunities through a new logistics business arm and distribution centre. Diversification of our portfolio and expansion of our markets are being achieved through More information can be found in Business Plan on pages 10 to 11. the development of high-value products. These are complemented by strategic marketing initiatives to enhance brand equity and presence for long-term value creation. Underpinning these efforts is our focus on reinforcing sustainability through intensifying our Environmental, Social and Governance (ESG) initiatives. We prioritise human rights, fair labour practices, as well as governance and risk management. We are also looking into renewable energy and waste-to-wealth initiatives to maximise opportunities for sustainable energy use and material management. PROGRESSING TOWARDS SUSTAINABLE PRACTICES FGV’s business strategy centres around sustainability. For us, success is defined by achieving financial growth and meeting our social obligations. This means ensuring the prosperity of smallholders and our community, and building a future where economic advancement and environmental responsibility and sensitivity go hand-in-hand. In 2023, we progressed into the second stage of our three-year Sustainability Strategy that focused on integrating sustainability practices at the operational level. We established a Sustainability Steering Committee, led by the Group Chief Executive Officer, to ensure identified initiatives are cascaded effectively throughout the organisation. We have also set up a Withhold Release Order (WRO) Task Force aimed at overseeing sustainability issues and working towards lifting the WRO suspension imposed by the United States (US) Customs and Border Protection (CPB). We are committed to aligning our labour practices with industry and global standards. With the Minister of Plantation and Commodities at the launch of the MSPO certification sticker on our Saji cooking oil label. Within this context, FGV’s core business model operates rather distinctively, given its unique blend of commercial objectives and social obligations. FGV’s role as Malaysia’s largest off-taker of smallholders’ Fresh Fruit Bunch (FFB) sets it apart from other plantation companies. We procure FFB primarily from Federal Land Development Authority (FELDA) settlers and independent smallholders. These account for over 70% of FGV’s total processed FFB. FGV’s performance in 2023, therefore, cannot be evaluated solely on commercial metrics. To understand the success of our model, we must also consider its impact on local communities, its social enterprise role in supporting smallholder livelihoods, and its contribution to the national economy. Despite facing the same market volatility and environmental challenges that impact the broader agricultural sector, FGV has to focus more on balancing commercial success with social responsibility. Total Dividend 3 sen per share
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