BUILDING VALUE AT OUR CORE SEC 5 52 In 2023, our FFB production reached 3.64 million MT, a 9% decrease from 2022. Yield reduced by 7% to 13.60 MT per Ha from 14.57 MT per Ha in 2022. The yield was adversely affected due to reduced fertiliser application over several years, a consequence of labour shortages and the Movement Control Order (MCO) period. Additionally, the the slow progress of rehabilitating our young matured and prime-age palms, along with delays in thinning out densely planted palm areas, significantly affected FFB production. FFB processed experienced a notable decrease of 11%, to 12.69 million MT compared to 14.25 million MT in 2022, mainly due to the reduction in external crops received. Throughout the year, our steadfast commitment to sustainability standards for external parties has led to a reduction in the number of FFB received. In response, we are actively expanding our supplier base with a strong emphasis on sustainability compliance. We are committed to providing capacity-building support and facilitating the exchange of best practices with FFB suppliers and dealers to promote sustainable practices across our supply chain. Of the total FFB received, 28% was produced internally, while 42% came from FELDA settlers and 30% from third parties. Correspondingly, CPO and PK productions declined by 10% and 12%, respectively, reflecting the lower FFB processed. The Utilisation Factor (UF) decreased to 67% from the previous year’s 71%. The segment’s performance was further affected by the increase in the CPO cost ex-mill to RM2,761 per MT versus RM2,144 per MT in 2022, driven by higher expenses in upkeep and maintenance, manuring and labour costs. During the year, we streamlined operations by rationalising one mill in Sahabat, Sabah to enhance operational efficiency, bringing our total mills to 66. This adjustment brings our combined mill capacity to 3,161 MT per hour. Looking ahead, we will assess the need for mills in selected complexes and invest in upgraded machinery and equipment to increase UF and optimise performance. On the other hand, the Oil Extraction Rate (OER) for 2023 improved slightly to 20.68% from 20.35% in 2022, attributed to better crop quality received and enhanced mill performance from the OER improvement programme. However, the Kernel Extraction Rate (KER) decreased marginally to 5.02% from the 5.06% recorded previously. To address this, we have established a KER Taskforce to improve and control mill processing parameters and minimise losses. We recognised the need for substantial improvements in our operational efficiency. In line with our continuous improvement efforts, we have initiated several measures to enhance our crop harvesting processes and productivity. These targeted strategies include: GROUP BUSINESS REVIEW Monitoring and analysing yield data from underperforming estates to identify and address productivity issues. Implementing precision agriculture technologies such as Estate Area Remote Sensing (EARS), I-maps and eDespatch Notes. Standardising and streamlining task processes into smaller, more manageable ‘mini-tasks’ and conducting micro-monitoring via Daily Operational Reports (DOR). Monitoring the ripeness of harvested crops to ensure quality standards. Identifying rehabilitation areas that are affected by excessive under-pruning and under-weeding. Business Plan 1 5 2 4 3 Total Rehabilitated Area 7,487 Ha
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