FGV transformation office to unveil operational turnaround plan

In a statement, FGV chairman Datuk Wira Azhar Abdul Hamid(pic) said the company was confident the appointments would further strengthen the board

KUALA LUMPUR: FGV Holdings Bhd's high-powered task force to turn around the loss-making plantation giant, announced on Tuesday there were serious issues at multiple levels of the organisation.

According to the findings of the Transformation Office (TO), set up in April 2018, the issues ranged from poor work discipline, operational inefficiencies to leakages that need to be addressed immediately. 

“The TO will submit its final report to the board in the next few weeks,” it said, adding the TO was finalising audits into estate and mill operations and downstream processes. 

The world's largest crude palm oil (CPO) producer said the TO would unveil and an operational turnaround plan which is performance centric, focused on profitability and returns, with clear and measurable deliverables. 

Also to be reviewed was the group’s non-core businesses to unlock value and to redirect resources towards the group’s core businesses. 

“It is the board’s view that with a performance centric management team, FGV will be able to extract much more value from its assets than it has in the recent past,” FGV chairman, Datuk Wira Azhar Abdul Hamid Azhar said.

“Right now, there are several leaks that have to be plugged and process improvements, which when implemented, will lead to immediate bottom-line improvement,” he added. 

FGV announced on Tuesday it suffered net losses of RM23.23mil in the second quarter ended June 30, 2018. This was a sharp contrast with the net profit of RM37.25mil a year ago.

For the first half its posted net losses of RM21.89mil compared with net profit of  RM38.96mil in the previous corresponding period. Its revenue fell by 17.4% to RM7.04bil from  RM8.53bil.

On Juy 5, the board had set up a three-member special board committee (SBC) due to many operational shortfalls and the inability of management to offer convincing explanations, solutions or strategic plans.

The SBC's tasks were: 

i. Monitor the performance of FGV closely;