In 2024, FGV operated in a dynamic global environment shaped by geopolitical tensions, environmental challenges, rapid technological advancements and shifting economic conditions. These factors influenced global trade, market stability, and supply chains, requiring businesses to remain agile in their strategic planning. For FGV, this meant balancing growth ambitions with risk management while ensuring long-term resilience. The global economy grew at a moderate 2.7%, with inflationary pressures, supply chain disruptions and monetary tightening shaping market conditions. However, the United Nations revised its 2025 forecast to 2.8%, reflecting improved prospects in key markets such as the United States (U.S) and China1. Despite this optimism, geopolitical instability, trade restrictions, and commodity price volatility remained key challenges, driven by supply and demand imbalances, climate-related disruptions, and policy shifts. Malaysia’s economy expanded by 5.1%, supported by strong domestic demand, a stable labour market and growth in agriculture and manufacturing2. Bank Negara Malaysia projected continued expansion of between 4.5% and 5.5% in 2025, driven by structural reforms, increased investments and digital transformation. However, inflation, currency fluctuations, and external trade uncertainties remained considerations for businesses3. Amidst these conditions, FGV focused on operational efficiency, sustainability, and innovation to enhance competitiveness. Through sustainable agricultural practices, supply chain optimisation and digital adoption, the company navigated uncertainties while seizing opportunities. Aligning its strategies with global trends and Malaysia’s economic trajectory, FGV reinforced its position for long-term value creation. Capitals: Material Matters: Stakeholders: Strategic Thrusts: What Happened Ongoing trade restrictions, shifting global alliances, and rising economic nationalism continue to disrupt commodity markets and supply chains. Trade protectionism has increased raw material, freight, and energy costs while causing procurement delays. Global trade realignments have also created bottlenecks in key agricultural inputs, such as fertilisers, adding to price volatility. While higher palm oil prices offer revenue opportunities, affordability concerns remain for key buyers amid inflationary pressures and evolving regulatory requirements. GEOPOLITICAL CONFLICTS Potential Impact • Supply chain disruptions affecting the availability and cost of key inputs, including fertilisers and raw materials. • Higher operational costs due to increased shipping expenses and energy price fluctuations. • Market access challenges as regulatory changes impact exports and customer purchasing power. How We Responded • Secured alternative raw material sources to reduce supply chain risks. • Adjusted logistics strategies to manage rising shipping costs from Red Sea trade disruptions. • Aligned operational strategies with Malaysia’s New Industrial Master Plan 2030 to strengthen supply chain resilience and industrial growth. Outlook Trade restrictions and shifting global alliances may disrupt supply chains, increasing costs for raw materials, freight, and energy while causing procurement delays. As trade policies stabilise, market access and efficiency should improve, easing bottlenecks in key agricultural inputs like fertilisers. Strengthening supply chain resilience and adapting trade strategies will help businesses stay competitive and sustainable despite regulatory changes and inflation. 1 Reuters. (2025, 9 January). UN predicts world economic growth to remain at 2.8% in 2025. https://www.reuters.com/markets/un-predicts-world-economicgrowth-remain-28-2025-2025-01-09/ 2 The Straits Times. (2024, 16 February). Malaysian economy slows in last quarter of 2024, showing risks ahead. https://www.straitstimes.com/business/economy/ malaysian-economy-slows-in-last-quarter-of-2024-showing-risks-ahead 3 Bank Negara Malaysia. (2025). Economic and Monetary Review 2024. https:// www.bnm.gov.my/documents/20124/17523401/emr2024_en_book.pdf TR CG OE EI Risks: TR MR SR 55 COMMITMENT TO STAKEHOLDER VALUE CREATION Sec 04 Operating Landscape
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