FGV to focus on productivity, efficiency improvements
The Star Online (02/05/2018) - PETALING JAYA: Diversified plantation group Felda Global Ventures Holdings Bhd image: https://cdn.thestar.com.my/Themes/img/chart.png (FGV) primary focus this year is to continue with productivity and efficiency improvements across all the company’s business operations.
Concurrently, the company will intensify efforts on land bank expansion, development of high speciality products and expand products geographical footprint across the region, says group president and chief executive officer Datuk Zakaria Arshad.
FGV, the world’s largest crude palm oil (CPO) producer, produces around three million tonnes annually. Its principal divisions include plantation, sugar as well as logistics and support businesses.
Zakaria said in the company’s latest annual integrated report that FGV’s journey to reach its goals would be guided by four strategic thrusts namely; operational excellence, moving down value chain, growth through portfolio balancing and optimise financial & human capital.
Under operational excellence, FGV targets production of 4.85 million tonnes of fresh fruit bunches (FFB) and average CPO production cost of RM1,562 per tonne, replanting target of 5% to 6% (15,000ha) of total mature area to improve age profile and enhanced mechanisation in harvesting and in-field collection to improve labour productivity.
He also noted that growth through portfolio balancing will include opportunistic value accretive land bank expansion, synergistic strategic alliances in key consumption countries, commencing its sugar refinery operation in Johor by middle of this year as well as growing the logistics and support businesses’ capabilities to generate external opportunities.
Other key focus would be divestment of non-core and non-performing assets investments, manpower optimisation and talent development and enhancing the terms of existing joint venture agreements, Zakaria added.
On another note, Zakaria pointed out that FGV went through a period of leadership challenges in 2017 that affected the general perception towards the company.
“However, our board members’ steady-handed approach and openness had allowed us to overcome this difficult chapter and made us more resilient going forward.
“It is not just “business as usual” for we are boosting our forward momentum with a new board composition and renewed focus on our commercial agenda to distinguish ourselves as a progressive, value-driven entity in the marketplace.”
In the same annual report, chairman Datuk Wira Azhar Abdul Hamid also described that “last year was difficult for all of us. FGV grabbed the headlines for the wrong reasons”.
“The outside world looked in and it found several gaps and lapses in our governance, our operational standards and in some cases, our judgment.
“There were revelations that shocked our stakeholders and fingers were pointed in accusation at our leaders. It was a traumatic period. However, all that is now in the past, a past that is behind us, which we will look back upon only as lessons learnt and a reminder of a history never to repeat.”
He pointed out that FGV has renewed its focus on strategy and performance management, emphasising the need to set clear goals and targets.
“The FGV’s Strategic Plan (SP20 (V2)) was approved by the board at the start of 2018 and we will track performance to ensure that we meet both our aggressive internal expectations, and those of all our shareholders as well,” he said.