KEY CONCERNS RAISED BY STAKEHOLDERS Effective investor communication is essential for navigating regulatory developments and potential changes that may impact the business. Maintaining transparency remains a priority to uphold investor confidence amid evolving market conditions. Labour Dependency and Rising Operational Costs • Expanded mechanisation across estates, including Mechanical Assisted Collection and Transport (MACT) and Mechanical Assisted Infield Collection (MAIC). • Implemented automation in mills using an unmanned weighbridge system. • Enhanced digitalisation efforts through FGV’s SMART Plantation initiative, modernising plantation operations by integrating advanced technologies. Labour Shortages and Retention Challenges • Strengthened migrant worker recruitment channels through qualified recruitment agents, ensuring responsible, and ethical hiring practices. • Addressed labour shortages in Sarawak by working with authorities to ease recruitment constraints and exploring alternative sourcing countries. • Enhanced worker welfare programmes in line with global labour standards, including improved accommodation, healthcare access, and fair wages. Concerns Over Yield and Productivity Performance • Strengthened estate practices through the ‘Footprint’ Initiatives, focusing on loose fruit collection, elimination of unharvested area, improve accessibility, and crop security. • Enhanced Good Agricultural Practices (GAP) to mitigate the impact of extreme weather patterns such as El Niño and La Niña. • Invested in high-yielding seedlings and precision agriculture techniques to improve FFB output. Fluctuation in CPO Prices • Enhanced estate productivity through mechanisation, precision agriculture, and optimised fertiliser application to improve yields and lower production costs. • Expanded downstream business to reduce reliance on raw CPO sales, helping stabilise earnings. • Ensured efficient cost management across upstream and downstream operations to build resilience against price downturns. Foreign Exchange (Forex) Risk • Managed Forex risks via hedging strategies to stabilise earnings against USD/RM fluctuations. • Reviewed and optimised financial instruments to minimise currency-related financial exposure. Increase in Raw Material Prices • Implemented a strategic procurement approach, securing key raw materials at optimal pricing windows. • Strengthened supplier partnerships to ensure cost efficiency and supply chain resilience. Uncertainties Surrounding the Withhold Release Order (WRO) by United States Customs and Border Protection (U.S CBP) • Submitted a petition for WRO modification in June 2024 and continued engagement with the U.S CBP. • Invested RM126.73 million in infrastructure and sustainability initiatives for migrant workers, including improved accommodation and welfare. • Reimbursed RM5.54 million in recruitment fees to 1,164 former migrant workers to uphold ethical labour practices. • Established a Sustainability Steering Committee and WRO Task Force to oversee compliance and strengthen governance. Pressure on Compliance & Sustainability Matters • Submitted Scope 1, 2, and 3 emissions data for Science Based Targets initiative (SBTi) validation. • Launched an Enhanced Sustainability Framework with five pillars: Economic Growth, Governance, Social, Environment, and Innovation and Transformation. • Established a Gender Diversity in Top & Key Management Policy. • Improved SPOTT ranking to 20th, achieving a score of 83.4%. Non-compliance with the Public Shareholding Spread (PSS) requirement • Received a directive from Bursa Securities to rectify non-compliance with PSS within six months, i.e., on or before 10 September 2025. • Continued engagement with FELDA and relevant stakeholders to implement the action steps within the stipulated timeframe. OUR RESPONSE TO THESE ISSUES ISSUES IMPACTING VALUE GENERATION Operational Management Market Volatility Sustainability Issues Compliance with the MMLR 77 Sec 05 DRIVING VALUE THROUGH BUSINESS GROWTH (FINANCIAL REVIEW)
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