FGV HOLDINGS BERHAD | ANNUAL INTEGRATED REPORT 2023 55 GROUP BUSINESS REVIEW Outlook In the coming years, our R&D efforts will focus on enhancing FFB yield and OER, addressing labour challenges through IoT and advanced technologies, and promoting sustainability-driven innovations. Additionally, we will concentrate on developing high-value crop-planting materials through cloning and smart farming techniques. These efforts align with our commitment to supporting food security while fostering innovation in the agricultural sector. Continuing from 2023, new R&D projects include developing bioplastics from palm oil mill waste, Napier pellet for ruminant feed and developing poultry feed with Palm Kernel Expeller (PKE). To drive business growth, we are strategically expanding our operations and strengthening market presence to maximise profitability. This involves the introduction of premium planting material with improved high oil yield. Additionally, we aim to fortify our position in overseas seed markets and foster strategic partnerships to further enhance our growth trajectory. For Fertiliser segment, we aim to increase the compacted fertiliser plant by expanding its capacity from 130,000 MT to 200,000 MT, enabling us to efficiently meet the growing demand for our products. In addition, we are progressing towards commercialising new value-added compound fertiliser products, further diversifying our product offerings and capturing additional market segments. We are also committed to elevating operational efficiency through the adoption of cutting-edge technologies in digitalisation, automation, and mechanisation. These efforts aim to establish a Smart Plantation Model at a designated site in Pahang, which will serve as the benchmark across all our estates and mills. Through R&D and commitment to responsible practice, FGV is advancing towards a better future. Overview With over half a century of expertise, our Rubber segment commands an 11% share of the domestic market, producing around 51,000 MT of rubber annually. Leading the production of Technical Standard Rubber, we operate seven rubber processing facilities spread throughout the ASEAN region. We also produce Green Rubber products, which distinguishes us in the industry. In 2023, sales volumes for the segment’s two primary products, Standard Malaysia Rubber (SMR) and Mixture Rubber (MR), dropped to 51,158 MT from 91,665 MT recorded in 2022, due to decreased raw material purchases amid a highly competitive sourcing market. This reduction to a lower UF of 33%, coupled with a significant increase in production costs. To counter these challenges, we concentrated our efforts on several strategic areas: FGV Rubber Palong 8C received Forest Stewardship Council Certification for its Green Rubber products 1 Securing raw materials from alternative markets to ensure a steady supply and cost-effectiveness 2 Implementing cost optimisation measures for diesel and electricity consumption efficiency 3 Expanding into downstream rubber products and setting new sales targets for Green Rubber RUBBER
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