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Kumpulan Fima Berhad (11817-V) •
Annual Report 2018
Plantation Division
Average CPO
price realised
(RM/MT)
Group FFB
Production
(MT)
FYE2014
2,068
FYE2017
149,753
FYE2015
2,207
FYE2018
198,644
FYE2016
2,064
FYE2017
2,625
FYE2018
2,342
Estate Operations
Indonesia
As noted in the letter from the Group
Managing Director, PTNJL has instituted
legal proceedings to challenge the
revocation of PTNJL’s land title pursuant
to the Ministerial Order issued by the
Menteri Agraria dan Tata Ruang/Kepala
Badan Pertanahan Nasional Republik
Indonesia and the matter is currently
pending before the Mahkamah Agung.
Notwithstanding, the local government
in Kabupaten Nunukan has up until
today allowed PTNJL to continue with
its plantation operations until the final
determination of the matter by the courts
and we are happy to report that there
have not been any material disruptions
to PTNJL’s operations. We attribute this
to the strong relationship that PTNJL
has cultivated and continue to have at
the grassroots level through PTNJL’s
economic and social contributions to the
local community over the years.
Should the outcome of the court’s
decision result in a final adverse
judgment, we do not anticipate that it
will have further material impact on the
Group’s balance sheet moving forward
as we have reflected our estimate of loss
by recognising a gross impairment loss
of RM44.74 million on property, plant
and equipment (“PPE”) and biological
assets in last year’s results of which,
as shareholders may recall, RM29.37
million and RM11.52 million (net of tax)
respectively, had been charged to other
expenses and reversal of revaluation
surplus of PPE previously recognized,
respectively, in the Group’s Statements
of Comprehensive Income. However,
future earnings may be affected.
Malaysia
The mature areas at the Group’s Ladang
Amgreen in Miri, Sarawak has reached
approximately 822 hectares (FYE2017:
474 hectares) and is further expected
to increase to 2,387 hectares by the
end of this current year. Management’s
immediate focus will therefore be
on maximizing yields and improving
agronomic standards of the fields.
Majority of the planting at this estate
were undertaken mainly between the
years 2012 – 2015 so the anticipated
increase in yields provide a basis for FFB
volume growth in the near term. We are
also currently considering the proposal
to revive the proposal to build a palm oil
mill in Miri (which was deferred last year)
as a stand-alone business and possibly
at a different location. This project is still
in its early stages including project and
site evaluations, as well as preliminary
engineering and design. Nevertheless,
we are excited by the prospects of this
project in terms of the economic benefits
that it can bring to the Group and the
surrounding communities and hope to see
it come to fruition. In the meantime, crops
harvested from Ladang Amgreen are sent
to a third-party mill for processing.
As at 31 March 2018, approximately 786
hectares have been planted at Ladang
Cendana in Kemaman, Terengganu.
Unfortunately, as a consequence of
elephant encroachment at the estate
during the year, over 17,000 young palms
planted between the years 2015-2016
on an area measuring approximately
127 hectares have to be replaced. This
will inevitably result in delays before the
new palms can be harvested. Estate
management is proactively looking at
ways to provide a safe wildlife corridor
for the elephants and other animals to
ensure that they do not wander off their
intended course and into neighbouring
communal/estate areas.
Planting and development at our
greenfield estates in Kelantan has been
progressing well with 110 hectares and
396 hectares planted at Ladang Dabong,
Kuala Krai and Ladang Aring, Gua
Musang, respectively. Planting on the
remaining areas at the estates has been
planned for this current financial year.
The permission and approvals for land
development at our greenfield estate
in Sg. Siput, Perak measuring 2,000
hectares have been obtained from
various authorities after much delay.
An environmental impact assessment
and 4,013 MT, respectively (FYE2017:
41,619 MT and 3,419 MT, respectively).
The Group’s average oil extraction rate
(“OER”) of 22.1% was slightly lower
compared to 22.7% OER recorded in
the previous year mainly due to lower
crop quality from smallholders and higher
rainfall of approximately 4,033.10 mm, the
highest in 5 years, which led to excessive
moisture in the fruit bunches.
Volume of FFB processed increased
28% to 234,029 MT from 183,328
MT in the previous year. Cost of FFB
production averaged RM359.56 per MT
while processing costs decreased from
RM34.47 per MT to RM28.53 per MT in
line with the higher FFB processed.