BUILDING VALUE AT OUR CORE SEC 5 54 GROUP BUSINESS REVIEW Overview We operate one of Southeast Asia’s largest oil palm research centres, primarily focusing on innovation and scientific research across the industry. Our R&D efforts cover the entire supply chain, aiming to enhance yields and milling processes. We also customise downstream products through sustainable methods and optimise waste for new product development, all while exploring new revenue opportunities. We produce the award-winning planting material, Yangambi ML161, and boast a fertiliser manufacturing with a capacity of 700,000 MT annually. During the year under review, sales volume of Yangambi ML161 seeds increased by 8%, reaching a total of 27.05 million units. This growth was driven by rising demand for seeds stemming from increased sustainable replanting activities. Despite this growth, our market share experienced a slight decline, dropping by 2% to 39.4%, primarily attributed to the increased seed supply from competing producers in the market. In the Fertiliser segment, total fertiliser sales in 2023 went down by 30%, influenced by a reduction in orders from estates due to carry forward orders from previous years. Additionally, sales of rat bait decreased by 17%, totalling 270,844 boxes, as a result of reduced demand from key plantation companies, leading to adjustments in the rat bait programme. As part of the Group’s ongoing initiatives, we remain dedicated to enhancing productivity through our 25:23 initiative, aiming for a 25 MT per Ha FFB yield and 23% OER. Leveraging the Internet of Things (IoT), we promote estate modernisation through mechanisation and advanced technologies to reduce reliance on migrant workers and improve labour shortages. Furthermore, we offer upskilling and reskilling programmes for estate operations. We achieved two research breakthroughs in 2023 that are scheduled for launch in 2024: In 2023, FGV Agri Services Sdn Bhd, the commercial arm of the R&D segment, formed partnerships with Pertubuhan Peladang Kebangsaan (NAFAS) and Pandawa Agri Indonesia to introduce Weed Solut-Ion.This environmentally-friendly product for weed management has been proven to reduce herbicide use by 50%. Thoroughly tested and validated in the market, Weed Solut-Ion underscores our dedication to sustainable agriculture. Furthermore, FGV Fertiliser Sdn Bhd through a strategic collaboration, has commercialised a Controlled-Release Fertiliser in sachet form. In addition, the segment remains steadfast in its dedication to sustainability through innovation, exemplified by its research centre, Pusat Penyelidikan Pertanian Tun Razak (PPPTR), which has been instrumental in the oil palm industry for 55 years since its establishment in 1968. Yangambi ML161 Seed Sales Volume (Million Units) 27.05 25.03 21.30 2023 2022 2021 Rat Bait Sales Volume (Million boxes) 0.27 0.33 0.30 2023 2022 2021 Fertiliser Sales Volume (Million MT) 0.50 0.72 0.64 2023 2022 2021 A new value-added fertiliser contains specialty compound that supports healthy growth and sustainable yield. Value Added Fertiliser Improved high oil yield planting material prioritises distinctive traits aimed at producing high FFB yield and OER, intending to enhance efficiency and productivity in the palm oil industry. Improved High Oil Yield Planting Material RESEARCH & DEVELOPMENT
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