FGV HOLDINGS BERHAD | ANNUAL INTEGRATED REPORT 2023 61 GROUP BUSINESS REVIEW Outlook The Marketing & Trading segment is strategically positioned to navigate through a market that is anticipated to be influenced by bearish trends. These trends are driven by forecasts of increased soybean and vegetable oil production, a stronger US dollar affecting global purchasing power and inflation, and evolving dynamics in key markets such as China and Indonesia. In light of these factors, the segment’s focus will be on optimising profitability, integrating ESG principles into our daily operations, strengthening our value and supply chains, and continuing to support the Downstream segment in various markets. Our strategic approach is underpinned by the BP26 strategy, aimed at fostering stronger relationships within the supply chain. This inclusive approach encompasses independent smallholders, FELDA settlers, dealers, freight service providers, and operators of storage and bulk facilities. The objective is to establish a more cohesive and efficient supply chain to navigate the complex market dynamics. Additionally, we will leverage our Roundtable on Sustainable Palm Oil (RSPO)-certified mills to secure premiums for our oils, thereby enhancing the value of our products in a competitive market landscape. As part of our dedication to being a responsible palm player, we remain steadfast in adhering to rigorous compliance standards across markets, RSPO Supply Chain Sustainability Standard and ISCC, to align with our sustainability commitments. FGV continuously drives productivity, efficiency and sustainability through rigorous processes and inventive solutions. CHALLENGE RESPONSE The WRO issued by the US CBP continues to affect access to the international market due to allegations of violations of labour rights • Diversifying sales channels and markets by expanding into new regions, targeting niche markets, and developing value-added products to cater to diverse consumer preferences Increased competition in the consumer and industrial marketplace • Continuous market monitoring of other countries’ policies, CPO price, and margin spreads • Intensively engaging with customers to understand and meet their requirements and expectations • Enhancing the Distributorship Business Model to expand the number of distributors locally and globally Fluctuations in the global price of vegetable oils • Optimising hedging mechanism for forward sales of oils • Regularly reviewing our sales to committed and uncommitted buyers and stay informed about market developments
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