• Strengthening FFB supply through strategic collaborations with external suppliers, including independent smallholders and Government-Linked Company (GLC)-owned estates. • Achieved over 50% traceable FFB, meeting the annual target. • Increased CPO and PPO production, leading to a 7% rise in sales volume, in line with nationwide production growth. • Maintaining compliance with the EUDR for crude palm kernel oil (CPKO). • Delivered nearly 45,000 MT of palm kernel (PK) to crushing plants, resulting in the production of 15,570 MT of CPKO, in accordance with EUDR requirements. KEY INITIATIVES ACHIEVEMENTS BUSINESS PERFORMANCE REVIEW CHALLENGES AND MITIGATION • Sharp fluctuations in global CPO and PPO prices, impacting revenue stability and margin predictability. CHALLENGES • Implemented hedging strategies and continuous market analysis to align sales and procurement decisions with price trends. MITIGATION ACTIONS • Increased CPO and PPO sales volume by 7% to 3.18 million MT. • Strengthened engagement with external estates and smallholders to achieve Traceability-to-Plantation (TTP) and enhanced digital tracking of FFB supplier data. • Monitored daily freight rate movements and secured preliminary vessel sourcing based on sales planning to optimise shipping costs. RESULTS • Escalating freight rates from key export hubs, driven by higher fuel costs and supply chain disruptions, could increase operational costs. • Difficulty in verifying traceability data from external FFB suppliers. • Conducted engagements with external suppliers and established a Grievance Management system to address non-compliance matters. • Leveraged digitalisation enhancements for collective planning, mitigation, and monitoring across the bulk oils supply chain. OUTLOOK AND PROSPECTS The bulk commodity business continues to navigate a landscape shaped by fluctuating global vegetable oil production and evolving tariff structures in key markets. Regulatory pressure on sourcing and traceability, particularly with the introduction of the EUDR, is influencing market access and buyer expectations. Indonesia’s biodiesel mandate remains a key driver of demand. These developments present a mix of risks and growth opportunities, reinforcing the need for a responsive, compliance-driven market strategy to sustain revenue and competitive positioning. To capitalise on opportunities, FGV will prioritise premium oil sales in high-value markets, expand its presence in key destinations, and maximise refinery capacity in East Malaysia. Securing ISCC and the Supply Chain Certification Standard (SCCS) will further strengthen FGV’s sustainability credentials. FGV’s collaboration with FELDA for Pusat Mengumpul Sawit (PMS) operations will support settlers, while optimising tank management at the Kuantan Bulking Installation will enhance efficiency. To mitigate challenges, FGV will strengthen market monitoring, refine hedging strategies, and improve logistics efficiency. Upgrading the digital platform will enhance trading capabilities, FFB supplier management, traceability, and sustainability. Periodic checks, training, and screenings of external FFB suppliers will ensure responsible sourcing and compliance with FGV’s Sustainability Policy, reinforcing the company’s commitment to ethical practices and operational resilience. 93 Sec 05 DRIVING VALUE THROUGH BUSINESS GROWTH (BUSINESS REVIEW)
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