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to maintain and support our
MSPO certification. However,
the Indonesian Sustainable Palm
Oil (“ISPO”) audit on PTNJL
remains status quo from last year
as authorities await a definitive
outcome of the ongoing legal suit
pertaining to PTNJL’s HGU before
the ISPO certification process can
be resumed.
Outlook
The palm oil industry continues to
be challenging with geopolitical
uncertainties, protectionist
policies, recent EU resolution
to ban palm-related biodiesel
by January 2021 and uncertain
weather conditions. The industry is
also struggling with long-standing
labour shortages and rising
operating costs. These factors will
continue to accentuate the bearish
sentiment in the overall market.
While more areas are expected to
attain maturity in this financial year,
we expect the division’s earnings
to continue experiencing some
pressures in the near term as a result
of the prevailing low CPO prices and
required expenditure in developing
our greenfield estates. Nevertheless,
the Board believes that on balance,
this sector will continue to benefit
from the growing demand given
that palm oil is a significant and
versatile raw material for both food
and non-food (i.e. oleochemicals and
biofuel) industries and is confident
of its sustainable growth over the
long-term. We also continue to see
significant opportunities to grow
the division through acquisitions
as our capital structure continues
to provide us with the flexibility
to execute our growth strategy,
including the funding of our
acquisitions.
Pineapple
The current total pineapple harvesting
area in our estates in Johor stood at
154 hectares (or 381 acres). For the
year under review, volume of pineapple
harvested increased by 9.60% to 3,698
MT from 3,374 MT in the previous
year. Currently, the division grows 3
pineapple cultivars – Josapine, MD2
and N36. The division is looking to
plant more of the MD2 variety given the strong demand for the same.
MD2 is popular due to its high quality, sweetness and golden yellow
colour. Further, MD2 has a much higher yield per hectare compared
to the other variants and has a longer shelf life, which makes it
ideal for export. Due to the flat terrain at our Ladang Ayer Hitam,
approximately 90% of the operations thereat are mechanized i.e. from
plastic mulching to foliar application, which to some extent has helped
address issues of labour shortage.
40%
of the
pineapples
produced in
fye2019 are
exported
3.13 FYE2018
3.55 FYE2019
Pineapple Segment
Revenue
(RM Million)
Pineapple Production
(MT)
FYE2018
FYE2019
760
720
N36
210
320
MD2
42.2
-
OTHERS
2,362
2,658
JOSA
Kumpulan Fima Berhad
(11817-V)
Annual Report 2019
48