BANGI: FGV Palm Industries Sdn Bhd (FGVPI) is targeting RM1 billion in profit before tax by 2030, driven by a strategic shift in its business model and improved operational productivity.
FGVPI chief executive officer Hamdan Ismail said the company is currently transitioning from its traditional role as a primary processor to a "buy fruit, sell oil” business model, which is expected to begin on Oct 1.
He said the strategic roadmap includes progressively increasing its profit-before-tax target to RM400 million in 2027, RM600 million in 2028, RM800 million in 2029, and RM1 billion the following year.
"I have calculated this trajectory based on the shift in our business operations. By moving towards direct oil sales, we are positioning FGVPI as a high-value profit-generating entity,” he said in his speech at a ceremony to present non-formal education recognition with the Malaysia Productivity Corporation here today.
FGVPI is a subsidiary of FGV Holdings Bhd
that operates 63 palm oil mills nationwide, making it one of Malaysia’s largest palm oil mill operators, responsible for processing fresh fruit bunches from smallholders and Federal Land Development Authority (FELDA) settler communities.
To drive this growth, Hamdan said RM45 million has been allocated for human capital development involving its 5,800 employees, with a focus on increasing annual productivity by 30 per cent.
"I want to see a 30 per cent increase in productivity. It may seem difficult, but I have done the calculations on paper and it is achievable.
"Competent workers will lead to efficient operations. Efficient operations will certainly increase productivity, which in turn will strengthen FGV’s competitiveness,” he said.
On operational excellence, Hamdan said FGVPI had maintained an oil extraction rate of more than 21 per cent at all its mills nationwide, with the Chuping Palm Oil Mill recording the highest rate at 24 per cent.
Hamdan said FGVPI, as one of the country’s leading palm oil industry players, would also step up efforts to raise its palm kernel recovery rate beyond the five per cent target to increase returns to FELDA settlers.
"Although the industry average is low, FGV, as a leading player, must strive to exceed the five per cent target to enable higher fruit prices.
"Higher returns to settlers will help keep the economic cycle moving, while contributing to the well-being of millions of FELDA settlers and the wider FELDA community,” he said. - Bernama
