FGV's plantations business continues to improve with migrant workers' entry

 

FGV Holdings Bhd sees its plantation sector operations continuing to improve this year through mechanisation, replanting programmes, and cost-optimisation initiatives as it manages rising operational costs and energy prices.

Group chief executive officer Nazrul Mansor said as a result of its enhanced recruitment strategies executed throughout the year, the shortage of migrant workers shrunk from 32 percent in 2021 to 13 percent in 2022.

“We are expecting to receive about 5,000 migrant workers in the second quarter of this year and targeting to bring in about 10,000 migrant workers before the end of the year,” he told a media briefing on the group’s fourth quarter financial results ended Dec 31, 2022 today.

Meanwhile, Nazrul said the group’s dedication to promoting sustainability, safeguarding the environment, and upholding ethical recruitment remains unwavering.

Aligned with FGV’s “no recruitment fees” policy, he said the group will reimburse the current and former migrant workers who were employed after June 27, 2019, and had to pay recruitment fees to agents or other third parties in countries of origin.

“The payment to our current 23,333 migrant workers amounting to RM81.64 million will be made in three tranches between March and September 2023.

“Additionally, FGV has created a sinking fund amounting to RM30 million to reimburse former workers who paid recruitment fees during their employment with FGV but are no longer employed by the company,” he said.

As for the withhold release order (WRO) suspension, he said the group’s independent assessor, Elevate, has concluded its on-site assessments.

FGV is currently implementing Elevate’s recommendations and anticipates submitting the final report to the United States Customs and Border Protection in the near future.

“Our vision is to deliver sustainable food and agriproducts to the world. We believe that by prioritising sustainability and exemplary corporate governance, we can create a better future for our planet and generations to come because if sustainability comes first, profit and growth will follow suit,” he noted.

FGV’s net profit rose to RM1.32 billion in the financial year ended Dec 31, 2022 (FY2022) from RM1.17 billion in the previous year, attributed to higher average crude palm oil (CPO) prices and better contribution from its logistics business.

In a filing with Bursa Malaysia today, the group said its revenue surged to RM25.56 billion in 2022 compared with RM19.57 billion previously.

FGV said profit in the plantation division jumped to RM2.1 billion for FY2022 from RM1.6 billion recorded in the previous financial year.

This was mainly attributable to the higher average CPO price of RM4,832 per tonne against RM3,671 per tonne registered in the previous financial year, coupled with a higher sales volume of 19 percent.

“The better performance was also contributed by the improved margin in the downstream and fertiliser businesses and boosted by share of profit from joint ventures amounting to RM106.08 million in the current financial year from RM17.26 million previously,” it said.

- Bernama