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Capital expenditure (“CAPEX”)
The division’s CAPEX spend in FYE2020
totalled RM20.20 million compared to
RM28.56 million in FYE2019. This was
primarily incurred on replanting and new
plantings of oil palm, construction of
staff and workers quarters, infrastructure
upgrading works and purchase of
equipment and vehicles.
Infrastructure at all our new
developments have been designed
to facilitate infield mechanisation.
We provide good quality housing for
our workers and further investments
in workers’ housing as well as other
estate infrastructures will continue in
this current financial year. Rollout of
the upgraded IT system across all our
Malaysian estates which commenced
in 2018 has been completed during the
year. The new IT system would provide
the Group’s head office more visibility
and control of the estates’ operations.
Sustainability Standards Certification
All of our developed Malaysian estates
have successfully attained MSPO
certification. Selected employees have
been sent for training to ensure that
we have the necessary competencies
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 in light of geopolitical
uncertainties, protectionist policies
namely and in particular, the EU
resolution to ban palm-related biodiesel
by January 2021, as well as the impact of
the prolonged Covid-19 pandemic on
the demand for palm oil products and
overall global economic growth. The
division could also potentially be faced
with labour supply uncertainties if the
country’s borders continue to be closed
due to the pandemic for extended
periods. On this note, we are aware that
we have to step up our already on-going
mechanisation and automation initiatives
to further reduce our dependency on
manual/foreign labour, drive productivity
and cost efficiency.
While more areas are expected to
attain maturity in this current financial
year, we expect the division’s earnings
to continue experiencing pressures in
the near term as a result of the required
expenditure in developing our Malaysian
estates. Nevertheless, we believe that
on balance, this sector will continue to
benefit from the growing demand given
Plantation Division : Taking Root
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. Further, expanding
the Group’s plantation landbank has
been and remains the long-standing
objective of the Group. As such we
continue to see significant opportunities
to grow the division through acquisitions
as the Group’s strong capital structure
continues to provide us with the
flexibility to invest for future growth.
Malaysia Palm Oil Trade
Statistics April 2019 to March
2020
Year
Export
(MT)
Import
(MT)
April
1,654,499 62,112
May
1,715,719 61,789
June
1,397,140 101,250
July
1,486,485 40,069
August
1,736,300 51,055
September
1,409,089 71,112
October
1,641,973 85,034
November
1,405,638 74,684
December
1,396,157 123,029
January
1,213,539 85,033
February
1,082,417 66,735
March
1,184,702 79,216
Source: MPOC
Palm Oil in Numbers
No.
1
in
Productivity
Oil palm has the highest
yield per hectare among the
vegetable oil seed crops.
It uses 7% of the world’s oil
farming land and accounts
for 32% of production
Source: Oil World,2016
2x
the Oil
2
different oils can be
produced - crude palm oil from
the palm mesocarp and crude
kernel oil from the palm kernel
Employment
The industry supports over
3 million jobs
including 650,000
smallholders in Malaysia
Continuous
Innovation
Industrial Revolution
4.0
technologies
such as Internet of Things, Blockchain, Big
Data and Drone applications are actively
applied in its management systems
Palm Oil
contains
transfat and high in tocotrienol
Source: MPOC
Annual Report 2020
kumpulan Fima Berhad
(197201000167)(11817-V)
42