CORPORATE PROFILE

CORPORATE PROFILE
May 2014
Disclaimer
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achievements of the Company may differ materially from any future results, performance or achievements expressed or implied by such forward-looking
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environment in which the Company will operate in the future, and must be read together with such assumptions. Predictions, projections or forecasts of the
economy or economic trends of the markets are not necessarily indicative of the future or likely performance of the Company, and the forecast financial
performance of the Company is not guaranteed. No reliance should be placed on these forward-looking statements, if any.
2
1. Information Background
Significant Shareholders
(Total number of shareholders 49,057)
Top 10 Shareholding Position as at 31 Dec 2013
No. Shareholders
Shareholding Breakdown as at 31 Dec 2013
No. of shares
%
1 FELDA
729,629,800
20.00%
2 Felda Asset Holdings
680,722,800
18.66%
3 Permodalan Nasional Berhad*
297,634,000
8.16%
4 Lembaga Tabung Haji
283,710,100
7.78%
285,017,400
7.81%
6 EPF Board
254,405,700
6.97%
7 Pahang State Government
182,407,575
5.00%
8 Sawit Kinabalu Sdn Bhd
89,010,989
2.44%
9 National Association (Qatar)
85,433,900
2.34%
10 Chief Minister State of Sabah
65,934,066
1.81%
2,953,906,330
80.97%
694,245,170
19.03%
3,648,151,500
100%
5
Kumpulan Wang Persaraan
(Diperbadankan)
Shareholding
31 Dec
2012
31 Dec
2013
Changes
92.0%
90.1%
-2.1%
Bumi
81.4%
78.9%
-3.1%
Non- bumi
10.6%
11.1%
+4.7%
Foreign
8.0%
9.9%
+23.8%
Total
100%
100%
Malaysian
Share Information as at 7 April 2014
Item
No. of Shares
11 Others
3.65 billion
Price as at 14 February 2014
RM4.55
Market Capitalization
RM16.6 billion
Shareholder’s Funds
RM6.57 billion
Bursa Stock Code (5222)
FTSE Bursa Malaysia KLCI Constituent
Total
*Including ASB, ASW2020, AS1M and ASM
MSCI Malaysia Index Constituent
Securities Commission Shariah Stock
4
History
1956
Federal Land
Development Authority
("FELDA”)
was
established
as
a
statutory body under
Land
Development
Ordinance
2007 Incorporation of
FGV as a wholly owned
subsidiary of FELDA
2012
Adoption of
New Business Model
1959 – 1990
More than 850,00 Ha of
land granted by state
government
under
Group Settlement Area
Act 1960 (“GSA”) had
been brought under
cultivation
through
FELDA operations
1980
2008
2009
28 June 2012
2013 FGV gained full
FGV acquired
FGV North America from
FELDA
FGV was listed on the
Main Market of Bursa
Securities on 28 June
2012
Koperasi
Permodalan
Felda
(“KPF”) was established
under the Co-operative
Act
FGV acquired
49% equity interest in
FHB from FELDA
control of FHB by
acquiring 51% from KPF
1990
FELDA decided
to stop further intake of
small holders
2010
FGVH acquired
sugar business
1995 Incorporation of
Felda Holdings Berhad
(“FHB”) as a wholly
owned subsidiary of
FELDA
2011
MSM Holdings
was listed on the Main
Market
of
Bursa
Securities
LAND STRUCTURE
FELDA
Granted by state governments under Group
Settlement Area Act 1960 (GSA)
More than 850,000 Ha of Land
Felda Small Holders
479,765 Ha
• Small holders own the land
• Managed by FELDA/small holders
• Contractual arrangements with FELDA
355,864 Ha
• 99-year lease
6
Corporate Structure
FGV
100%
100%
FGV
Plantations
Sdn Bhd
100%
100%
FGV
Sugar
*FGV
Downstream
100%
Felda Holdings Bhd
Pontian United
Plantations Berhad
40%
100%
100%
FGV Plantations
(Malaysia) Sdn
Bhd
FGV
Kalimantan Sdn
Bhd
.
50%
Trurich
Resources Sdn
Bhd
50%
MSM
Holdings
Felda IFFCO
100%
100%
FPM Sdn Bhd
100%
100%
MSM Company
Bhd.
TRT Holdings
ETGO Inc
100%
95%
Felda Technoplant
Sdn Bhd
KGFP
100%
TRT Holdings
Inc
100%
100%
FGV North
America
100%
11%
PT Citra Niaga
Perkasa
Astakonas Sdn.
Bhd
76.9%
Felda Agricultural
Services Sdn Bhd
72.7%
Felda-Johore
Bulkers Sdn Bhd
Felda Plam
Industries Sdn Bhd
100%
Delima Oil
Products Sdn Bhd
Felda Rubber
Industries Sdn Bhd
83%
Felda Kernel
Products Sdn Bhd
51%
Felda
Transport Services
67%
Felda Vegetable
Oil Products Sdn
Bhd
51%
Felda Engineering
Services Sdn Bhd
51%
50%
FPG Oleochemicals
Sdn Bhd
Felda Marketing
Services Sdn
Bhd
72%
100%
95%
95%
TRT
ETGO
KGPF
MSM
PT Landak
Bhakti Palma
PT Temila Agro
Abadi
: Twin Rivers Technologies
: Enterprises de Transformation de Graines Olégineuses du Québec
: Kilang Gula Felda Perlis
: Malayan Sugar Manufacturing
MSM Properties
Sdn Bhd
Malaysian Cocoa
Manufacturing Sdn
Bhd
71.4%
*Other
Businesses
*Other
Businesses
7
1. Competitive Advantages
Competitive Advantages
1 1. Third largest oil palm plantation operator in the world
2
Leading global,
integrated and
diversified agribusiness
player
Largest CPO producer in the world
3 2. Strong R&D support
4
Focused on palm and Malaysia while diversified across select commodities
5 5. Largest producer of refined sugar in Malaysia
9
1 Third Largest Oil Palm Plantation Operator in the
World
In 2013, FGVH’s FFB production accounted for 5.3% of Malaysia’s total production
423,464 Ha of Oil Palm Plantation Estates (1)
Global Market Share by Mature Planted Area(2)
’000s Ha
%(3) 3.5%
2.9%
2.1%
1.6%
1.6%
217
217
1.2%
1.1%
1.1%
0.6%
500
469
Peninsular Malaysia
East Malaysia
450
Perlis
Kedah
Sahabat
Sabah
Penang
Lahad Datu
Terengganu
Kelantan
391
400
350
Perak
Sahabat Complex
Tawau
Pahang
Negeri
Sembilan)
Selangor
288
300
(1)
250
Sarawak
Malacca
Sampadi Complex
200
Johor
158
148
150
140
86
100
50
Our Operations
0
Sime
Darby
Golden
Agri
FGVH
Ast ra
Agro
Wilmar
Salim
Ivomas
KL
Kepong
IOI
First
Resources
Plantation Estates
Source: Frost & Sullivan, FGVH, various company annual reports and websites
2012 statistic
Total planted area – 361,003 ha (1)
FGVH is the third largest oil palm plantation
operator in the world, with a 2.1% market share
Notes: (1) Includes LLA, FAS and Pontian oil palm plantation
(2) Based on mature hectarage (oil palms aged 4 years and beyond)
(3) % of global mature oil palm planted area. In 2012, there was 13.4 million hectares of mature oil palm planted area globally. Source: Frost & Sullivan
10
2
Access to the CPO Output of the Largest
Producer in the World
FHB provides us with access to the downstream oil value chain
2012 CPO Production
FHB’s Market Share in CPO Production (Malaysia), 2012 (2)
MM MT
MM MT
Market
Share (%)
3.5
6.2%
4.5%
4.5%
3.6%
2.8%
3.5
3.3
2
17.6%
12.8%
4.6%
3.6%
3.3
3
3
2.5
Market
Share (%)
2.4
2.4
2.5
1.9
1.5
2.4
2
1.5
1.5
1
1
0.5
0.5
0
0
0.86
0.67
(3)
Source: Oil World, MPOB, various company annual reports and websites
Source:, Oil World, FGVH, MPOB, various company annual reports and websites
Notes: (1) Market share is calculated based on statistic figures from MPOB
11
Access to the CPO Output of the Largest
Producer in the World (cont’d)
2
Our productivity is supported by higher than average yields and extraction rates
Our FFB Yield Continues Exceeds Malaysian Benchmarks
FFB Supply Balanced Across Multiple Sources
MT / Ha
Total Sources of FFB (MM MT)
Total: 15.2 MM MT
21
14.5 MM MT
16.0 MM MT
16.1 MM MT
20
19.9
19.8
0.3
14
0.3
4.9
0.2
4.7
5.4
0.3
5.3
8
4.8
4.8
5.3
5.6
18
2
5.2
4.7
5.1
4.9
17
-4
2009
2010
2011
2012
20
19.7
19.2
19.6
19.2
18.8
19
19.0
18.9
18.0
2009
2010
2011
Average FGVH FFB Yield
2012
2013
Malaysia Palm Oil Board benchmark
%
MM MT
20.7%
20.5%
20.5%
FELDA Agricultural Services
3.3
3.4
3.3
MT / Ha
4.3
3.2
20.5%
FELDA Small Holders
Third Parties
CPO Productivity (3)
CPO Extraction Rates
20.8%
20.7%
20.6%
20.5%
20.4%
20.3%
20.2%
20.1%
20.0%
FELDA-Leased and Managed Land (1)
20.5%
20.5%
3.1
20.4%
20.4%
3.0
3.2
20.4%
4.1
4.1
4.1
3.9
4.0
3.9
20.3%
4.0
3.9
3.9
3.8
3.0
3.9
3.7
3.7
2.8
2009
2010
2011
Average CPO extraction rate
CPO Production (RHS)
2012
2013
Malaysia Palm Oil Board benchmark
3.5
2009
2010
Average CPO per ha of oil palm
plantation estate
Notes: (1) A small proportion of the FFB produced by the FELDA-leased land is sold to third parties. In 2011, this amounted to 70K MT of FFB
(2) Computed by multiplying FFB yield with average CPO extraction rate
2011
2012
2013
Malaysia Palm Oil Board benchmark
12
3
R&D Support
Through, Felda Agricultural Services(1)
Areas of Focus Strengths
Benefits
Oil Palm
Breeding &
Selection
• Active since 1968 via Tun Razak Agricultural Services Center
• Germinated Seeds: Award-winning Felda Yangambi brand
Biotechnology
• Research center located in Enstek, Nilai
• Biomolecular marker research
– Filed patents for 2 types of markers(2)
Agronomy &
Crop Protection
Programs
• Focus on four main
using integrated pest management
with emphasis on biological control
• Production and sale of rat bait
Increase yield and efficiency
Reduce production costs
Applied
Technology
Downstream
R&D
pests(3)
• Electronics and wireless sensor network technology
• Geographical information systems
Ensure environmental
sustainability
Maximize profits in the long run
• Focuses on food and non-food product development.
Notes: (1) Includes (i) a phosphate transport marker that can be used to detect oil palms with lower phosphate fertilizer requirements and (ii) a Ganoderma
boninsense marker that is intended to be used to develop Ganoderma boninsense-tolerant planting material
(2) Namely, rats, leaf-eating caterpillars, rhinoceros beetle and the fungal pathogen Ganoderma boninense
13
Focused on Palm and Malaysia While Diversified Across Select
Commodities ...
4
Revenue Split by Segment (1)
Revenue Split by Geography (2)
RM MM
% Revenue
74%
17%
8%
1%
100%
Revenue
14000
US &
Canada
4%
12000
10000
Asia
7%
Others
10%
8000
China
9%
6000
Malaysia
70%
4000
2000
0
Plantation
Sugar
Downstream
Others
(palm oil and
Total
rubber)
Rationale for crop diversification across the value chain
Key benefits
 Complementary crops: palm and rubber
 Diversify macroeconomic exposure / risk
 Natural hedge against commodity volatility
 Broader reach to global customers and end-customers
 Downstream businesses protect upstream margins
Notes: (1) FYE 2013 Revenue Split by Segment (consolidated)
(2) 2012 Annual report (before consolidation)
14
5
Largest Producer of Refined Sugar in Malaysia
Our annual sugar production capacity is over 1.1 MM MT
Sugar Assets Owned by FGVH
Leading Market Share in Malaysia in 2012
% of Total Production Volume
Central
Sugar
Refinery
43.1%
MSM
56.9%
51%
• 100% acquired in 2010
Leading Market Share in Malaysia of 57% in 2012
• IPO in June 2011 on Bursa Malaysia
(KLSE:MSM)
• Market capitalization of MYR3.5 billion as at
17 February 2014
• Share price as at 17 February 2014 RM5.00
Source: Frost & Sullivan
Notes: (1) Exchange rate of USD1 = MYR3.08 as of 28 Sep 2013 (Bloomberg)
15
Milestones (cont’)
Full integration of FGV & FHB operations across the palm and rubber value chain
Midstream
Upstream
Plantations &
Support
•
Plantation land in
Malaysia and
Indonesia (incl. JV)
Mills
•
•
1 palm oil mill
(Pontian United
Plantation.
1 Kernel crushing
plant (not in
operation)
Refineries, Crushing,
Oleochemical & Trading
Downstream & Logistics
Packed Consumer Goods
Bulking & Logistics
• 5 palm oil refineries
through JV
• Soy & canola
crushing – Canada
• Oleochemical facility
in US
• Biodiesel facility in
Kuantan
• 12,611 ha of oil palm
plantation for R&D
purposes
FHB
• R&D support for
upstream &
downstream palm,
rubber & sugar
• High yielding oil
palm seed
production facility
• Production of
fertilizer
• 71 palm oil mills
– 20.7 MM MT of
annual milling
capacity
• 3.3 MM MT of CPO
produced
• 7 palm oil refineries in
Malaysia & Pakistan
with annual refining
capacity of over 2.5
million MT
• 10 bulking
installations
• 4 kernel crushing
plants in Malaysia
• 2 warehouses
• One oleochemical
plant in Kuantan
through JV
• 11 rubber processing
facilities in 3 countries
with total annual
processing capacity of
257,600 MT
– 486 storage tanks
with 752,250 MT
capacity
– 88,000 MT storage
capacity
• Production of
packed goods for
consumers and food
services industry
• Production of
1.5 MM MT of RBD
products
• 7 distribution depots
• 437 lorry tankers &
cargoes
16
Integrated Across Palm Value Chain
Manufacturing , Logistics and Others (MLO)
Upstream
Midstream
Plantation Estates
Mills
• 335,336 ha of oil palm
• 72 palm oil mills
plantations in
Malaysia
• 38,775 ha of oil palm
plantation in
Indonesia
• Produced 5.0 mil MT
of FFB in 2013
• 20.7 mil MT of annual
Refineries
• 5 palm oil refineries
through JV
Downstream
Logistics
• 10 bulking installations
• 4.3 mil MT capacity if
• 486 storage tanks with
RBD products via JV
milling capacity
• 7 palm oil refineries
752,250 MT capacity
• 3.2 mil MT of CPO
• 5.2 mil MT capacity
• 2 warehouses - 88,000
produced in 2013
(including JVs )
RBD Products &
Packed Goods
MT storage capacity
• 7 distribution depots
• Transportation services
– 251 palm oil tanker
and associates.
• 1.3 mil MT capacity of
packed products via JV
and associates.
Oleochemicals
• 2 oleochemical plants
through JV
• Located in Kuantan,
M’sia and Quincy, MA.
USA
• Product: Methyl esters,
fatty alcohols and
glycerin
and 186 lorries.
17
1. Industry Overview
18
Palm oil is the largest and fasting growing vegetable oil
Palm oil is the highest
yielding oil crops
Palm oil is the largest and fastest growing vegetable oil,
contributing to ~1/3 of overall vegetable oil production
Oil yield per hectare (MT/ha)
Total global vegetable oil production (million MT)
150
Palm1
140.3
4.0
128.6
Coconut
2.7
Olive
118.9
11.7
100
10.6
1.1
Peanut
17.4
1.0
Sunflower
0.9
50
Soybean
10.7
17.1
34.9
36.5
35.8
37.3
10.0
153.2 Olive
133.7
121.8
1.2
Rapeseed
146.4
12.0
18.4
20.5
37.8
35.9
41.1
2007
22.4
11.5
23.1
14.1
23.4
2.4%
Coconut
1.1%
Cotton
1.6%
Peanut
0.8%
Palm kernel
5.1%
Sunflower
4.8%
Rapeseed
5.0%
38.9
41.6
42.0
Soybean
3.1%
44.0
45.9
47.7
50.6
Palm
5.9%
2008
2009
2010
2011
0.4
Cotton
0.3
Corn
0.2
0
0
1
2
3
4
2005
2006
xx%
CAGR
('05-'11)
Palm oil alone has contributed to almost 50% of overall growth in
vegetable oils over the last 5 years
1. Exclude yield from palm kernel
Source: Foreign Agricultural Service (FAS), USDA; JP Morgan
19
Palm oil industry has grown at over 18% CAGR
Palm Oil market value 2005-2012 (USD Bn)
Total market
size (USD Bn)
60
53
50
48
+18%
42
42
40
32
31
30
20
15
18
10
0
2005
2006
2007
2008
1. EIU Data on CPO Spot price in USD
Source: USDA FAS (world production), MPOB (prices), EIA (oil prices), James Fry (LMC) CPO price analysis presentation
2009
2010
2011
2012
20
Growth has been driven by both volume and value
Palm oil supply has grown by 7% p.a. between
2000 and 2012
World palm oil production (Mln Mt)
Palm oil prices have grown by 9% p.a. between
2000 and 2012
CPO price (US$/t)1
60
55
1200
52
44
+7%
40
34
24
25
28
36
46
1022
48
41
949
901
+9%
900
878
780
37
683
30
600
443
390
20
300
0
479
471
422
310 286
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1. EIU Data on CPO Spot price in USD
Source: USDA FAS (world production), MPOB (prices), EIA (oil prices), James Fry (LMC) CPO price analysis presentation
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
21
Malaysia and Indonesia are the dominant producers
Demand is global but increasingly concentrated in emerging markets
...while consumption less concentrated
Upstream is concentrated in SEA...
Top Palm Oil producing Countries in 2012 (Mln Mt)
60
3.9
50
19.0
2.1
1.0
0.9
55.3
Domestic Palm Oil Consumption Countries in 2012 (Mln Mt)
60
50
40
30
28.5
20
Top 2 producing
countries account for
~86% of total
production
16.1 53.7
Top 3 consuming
countries account for
~40% of total
demand
40
3.1
30
2.2
1.6
1.4
1.2
5.6
10
6.3
20
7.8
0
10
8.4
0
Source: USDA
22
1. Felda Global Ventures Holdings (FGV) and
Economic Transformation Programme
23
12 New Key Economic Areas:
Palm Oil as Key Driver of Malaysia Economic Activity
Propelling Malaysia Towards Becoming a High-Income Developed Nation
Middle Income
Nation
6% p.a. Growth
Rate
High Income
Nation
Advantages of Malaysia
Palm Oil Industry
•
•
•
Fourth largest contributor to the
Malaysian Gross National Income
(GNI) – 8%
100 years of experience
Strong market leadership in terms
of productivity and R&D
24
FGV Towards Economic Transformation Programme (ETP)
In transforming Malaysia’s palm oil industry and in driving the productivity
improvement, the following items are the focus of the ETP:
Entry Point Projects (EPP)
FGV
Upstream
1. Accelerating the replanting of oil palm
2. Improving fresh fruit bunch yield
3. Improving worker productivity
4. Increasing the oil extraction rate
5. Developing biogas at palm oil mill
Downstream
6. Developing oleo derivatives
7. Commercializing second generation biofuels
8. Expediting growth in food-and health-based downstream
25
1. Growth Drivers
26
Malaysia exports 90% of palm oil production which contributes 41% to the total
world palm oil exports
Malaysian Palm Oil Production and Exports
Million MT
20
17.8
18
15.5
16
14
12
10
8
6
4
2
0
2009
18.2
16.6
18.2
16.6
19.0
17.2
Malaysian Palm Oil Exports Vs
World Palm Oil Exports
Million MT
45
40
41.7
35.5
39.0
36.9
35
30
25
20
15
15.5
16.6
16.6
17.2
10
5
0
2010
Exports
2011
Total Production
2012
2009
2010
Malaysia
2011
2012
Total
Industry employs directly ~570 000 workers and accounts for ~7% of
national GDP
Source: USDA
27
Key Growth Driver
Growth Drivers
Demand for food and edible vegetable oils
– Population growth
– Economic growth
– Increasing world urbanization rate
World Palm Oil Consumption
2012 World Vegetable Oil Consumption
Billion
Million MT
183.6
200
180
160
140
120
100
80
60
40
20
0
171.7
8.0
7.0
6.0
113.8
Others
28%
Palm Oil
28%
5.0
4.0
80.9
3.0
45.6
51.7
21.8
2.0
1.0
11.1
0.0
1990
2000
Palm Oil Consumption
2010
Rapeseed Oil
13%
Sunflower Oil
8%
Soybean Oil
23%
2012
Total Oil & Fats Consumption
World Population (RHS)
Source: USDA, MPOC
28
1. Appendix
29
Palm Oil
What is it used for?
•
Palm fruit oil is consumed worldwide in more than 100 countries. In some parts of the world, palm fruit oil
is often still consumed in its unrefined state, as an ingredient of traditional dishes, where it contributes its
characteristic golden red color and unique flavor. However, to most users, palm oil is more familiar as a
refined vegetable oil product purchased at their local store and incorporated into their everyday foods.
•
Foods with palm oil elements are baked goods, instant noodles, baby formula, cake mixes, breakfast bars,
potato chips, crackers and other snacks such as French fries.
•
Of the oils and fats on the market, palm fruit oil serves well many of might best meet today’s consumers
criteria. It is healthful, abundantly available, relatively inexpensive, and technically suitable for most food
products.
•
Palm oil has become the largest internationally traded vegetable oil in the world proving its acceptance in
the global market.
•
About 90 percent of palm oil currently goes into food and consumer goods applications and the remaining
10 percent goes into non-food applications.
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Oil Palm is cultivated in 43 countries
throughout the World
Oil palm trees
Ripe fresh
fruit bunch
(FFB)
harvested
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FFB and Palm Fruit
Fruitlets
Opened fruitlet
Mesocarp
(Palm Oil)
FFB
Bunch weight
Fruits per bunch
: 20-30kg
: 2500 - 3000
Kernel (Palm
Kernel Oil)
Shell
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Harvesting process
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Transportation of FFB to mill
Delivered to mill within
24 hours
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Mill and Crushing Plant
Mill
Tresher
Crushing Plant
Crushing Plant
Storage tanks
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By products of FFB
Shell
Mesocarp
Fibre
Empty Bunch /
Shredded Efb
Compost
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Overview of Palm Oil Value Chain
FFB
Milling
EFB
CPO
Palm Kernel
Biomass
Crushing
Refining
Crushing
Crushing
Refining
By-product
CPKO
Refining
Refining
Refining
Legend:
Product
Refining &
Fractionation
RBD PO
Process
RBD Palm
Olein
Edible Oils &
Fats
RBD Palm
Stearin
Oleochemicals
Refining &
Fractionation
RBD PK
Olein
RBD PKO
RBD PK
Stearin
Biodiesel
Industrial and Consumer Products
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Palm Oil Application
RBD Palm stearin is used in the
confectionery and bakery as well as
soap industry. Eg. Margarine,
shortening, vanaspati
RBD Stearin
RBD Palm Olein is the liquid fraction
obtained by the fractionation of palm oil
after crystallization at controlled
temperatures. It is especially suitable for
frying and cooking. Main applications of
RBD Palm Olein include salad and
cooking oils in households, industrial
frying fat of instant noodles, potato
chips, doughnuts and condensed milk.
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THANK YOU
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