IJM PLANTATIONS BERHAD 29th ANNUAL GENERAL with ACGT Sdn Bhd (ACGT) and Genting Green Tech Sdn Bhd...

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Transcript of IJM PLANTATIONS BERHAD 29th ANNUAL GENERAL with ACGT Sdn Bhd (ACGT) and Genting Green Tech Sdn Bhd...

  • IJM PLANTATIONS BERHAD 29th ANNUAL GENERAL MEETING

    Friday, 22nd August 2014, Holiday Villa, Subang Jaya

  • Our thoughts and prayers go out to the victims and families of the Malaysian Airlines MH17 tragedy

  • IJM PLANTATIONS BERHAD 29th ANNUAL GENERAL MEETING

    Friday, 22nd August 2014, Holiday Villa, Subang Jaya

  • Brief Business Recap (1/3)

    OIL PALM PRODUCTS

    Oil Palm Tree -> Total crop production -> Crop yield per hectare

    OIL PALM ESTATES

    Fresh Fruit Bunches (FFB)

    Fresh fruit bunch

    Fruit

    Oil Extraction Rate (OER)

    Kernel Extraction Rate (KER)

    PALM OIL MILLS

    Crude Palm Oil (CPO)

    Palm Kernel (PK)

  • FFBCPO

    Bulk Products (CPO, PPO) & Industrial

    (Oils & Fats) Marketing &

    Trading Refining & Processing

    Palm Oil Milling & Kernel Crushing

    Planting (Immature &

    Mature)

    Research & Development

    UPSTREAM Outside Crop Outside CPO DOWNSTREAM

    Branded Products Oleochem & Other Inds.

    Brief Business Recap (2/3)

    OIL PALM SUPPLY-CHAIN

    Transportation, Bulking & Shipping

  • Gentle

    Brief Business Recap (3/3)

    OIL PALM PRODUCTIVITY & AGE

    REPLANTING

    Sigmoid Curve : FFB Yields vs Age Profile

  • AGM PRESENTATION TODAY

    PERFORMANCE SNAP-SHOT FYE2014

    STRATEGIES FOR HIGHER PERFORMANCE

    “Nurturing Sustainability”

    QUESTIONS & ANSWERS SESSION

    # From MSWG etc.

  • PERFORMANCE SNAP-SHOT FYE2014

  • IJMP ESTATES CROP PRODUCTION FYE14 production and yield impacted by palm biological stress,

    replanting in Malaysia with start-up yields in Indonesia

    REGION FYE14 ‘000 mt

    FYE13 ‘000 mt

    Variance ‘000 mt %

    SANDAKAN (Older trees)

    174 201 -27 -13

    SUGUT (Younger trees)

    412 436 -24 -6

    MALAYSIA 586 637 -51 -8

    INDONESIA (Start-up yields)

    144 55 +89 +162

    GROUP 730 692 +38 +5.5

  • IJMP MILLS PALM PRODUCT EXTRACTIONS Improvements in OER & KER extractions in FYE14

    OER / KER FYE14 FYE13 Variance %

    OER (%)

    MALAYSIA 20.8 20.7 +0.1 +0.5

    INDONESIA 23.2 22.5 +0.7 +3.1

    KER (%)

    MALAYSIA 4.8 4.8 0 0

    INDONESIA 3.5 3.2 +0.3 +9.4

  • FYE 14 FYE 13 Variance %

    Crop Production (`000 mt )

    730 692 +38 +5.5

    Revenue (RM millions)

    647 486 +161 +33

    CPO Price (RM/pmt)

    2,348 2,577 -229 -9

    Unrealised FOREX (RM millions)

    (21) (9) -12 -131

    Profit Before Tax (RM millions)

    109 157 -48 -30

    Nett Profit (RM millions)

    89 120 -31 -26

    IJMP FYE 2014 FINANCIAL RESULTS

  • Supply-demand factors

    Biofuel mandates

    Climatic factors eg. El Nino

    Stock levels

    Crude oil prices

    Competing edible oils

    CPO Producers : Commodity - Price takers NOT price makers

    ‘BEARS AND BULLS’ ON CPO PRICES

    Population Growth

    Trans-fat

    Hedge- funds

    Differential tax structures

    Govt. Policies

    Emerging markets

    Product development

    Macro- Economy

  • OUTLOOK FOR FYE2015 & BEYOND

    1. MALAYSIA EXPECTING RECOVERY IN CROP PRODUCTION

    -Sustaining high oil yield >5 mt/ha -Caveat El Nino in 2014

    2. INDONESIA

    EXPECTING DOUBLING (2x) OF CROP PRODUCTION WITH

    IMPROVING YIELDS

    3. CPO PRICE

    UNFORTUNATELY, CPO PRICE HAS DROPPED TO

    ~RM2,000 pmt

    4. LONG-TERM PLAN TO JUMP THE

    PERFORMANCE CURVE

    STRATEGIES ARE IN PLACE TO SUSTAIN PERFORMANCE

  • STRATEGIES FOR HIGHER PERFORMANCE

    “Nurturing Sustainability”

  • ADOPTING A BALANCED APPROACH TOWARDS PERFORMANCE AND SUSTAINABILITY

    Sustainability

    Profit People

    Planet

  • PROFIT Productivity & Innovations

    PLANET Care for Environment

    PEOPLE Investor in People

    PEOPLE Returning to Community

    PROFIT Productivity & Innovations

    PLANET Care for Environment

    PEOPLE Investor in People

    PEOPLE Returning to Community

    Make Meaning, Make Profit

    IJMP MANTRA : NURTURING SUSTAINABILITY

  • NURTURING SUSTAINABILITY: Profitability

    PROFIT Productivity & Innovations

  • PALM OIL IS STILL A PROFITABILITY BUSINESS

    65 58

    52 56

    190

    161

    113

    191

    215

    157

    109

    0.0

    50.0

    100.0

    150.0

    200.0

    250.0

    2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0

    500

    1,000

    1,500

    2,000

    2,500

    3,000

    3,500

    IJMP PBT (FY04 – FY14)PBT RM’mils

    CPO Price pmt

    CPO Price (RM/pmt) 1,554 1,500 1,373 1,511 2,544 2,641 2,246 2,760 3,049 2,620 2,385

    Mature Area ‘000 18 18 20 23 23 23 24 25 26 28 34

    PR OF

    IT LO

    SS

  • JUMP TO THE NEXT CURVE – GAME CHANGER

    Land-bank & Performance

    Time

    SANDAKAN,SABAH First 10,000 ha

    INDONESIA Next 30,000 ha-40,000 ha

    1985 1998 2008/9 2014/15 2020

    SUGUT,SABAH Next 20,000 ha

  • LOCATION OF OPERATIONS & OIL PALM PLANTED AREA

    MALAYSIAN OPERATIONS

    KEY ENABLER

    INDONESIAN OPERATIONS

    GAME CHANGER

    DRIVERS FOR PERFORMANCE

  • MALAYSIAN OPERATIONS KEY ENABLER Sustaining High Productivity

    with Cost Effectiveness

    IJMP STRATEGY : MALAYSIAN OPERATIONS

  • MALAYSIAN OPERATIONS : 11 ESTATES & 5 PROCESSING PLANTS

  • Oil palm trees  planted per 

    hectare of land

    PRODUCTIVITY IN IJM PLANTATIONS KEY PERFORMANCE INDICATOR : OIL YIELD

  • PRODUCTIVITY IN IJM PLANTATIONS Oil Yield : Fresh fruit bunches (FFB) per mature area x Oil Extraction Rate (OER)

    Average 4 mt of oil  per hectare

    ( Enough for >150 people/ha

  • 4 5.

    2

    4.0 4.0 3.6

    4.0 3.9 3.8 Malaysia

    IJMP (M)

    OIL YIELD OF IJM PLANTATIONS BERHAD

    Last 6 years, IJMP average 5.4 mt/ha ie. >38% higher that National average

    >5

  • HIGHEST OIL-YIELDING PLANTATION PLCs Desktop research based on latest productivity in 2014

    AS OF 1 AUGUST 2014 PERIOD FFB Yield OER Oil Yield (Financial Year) (tonnes/ha) (%) (tonnes/ha)

    MALAYSIA 1 IJM PLANTATIONS BHD (M) A - M 25.0 20.8% 5.20 2 IOI CORPORATION BHD J - J 24.5 20.8% 5.10 3 UNITED PLANTATIONS BHD (M) J - D 22.4 22.1% 4.95 4 HAP SENG PLANTATIONS BHD J - D 23.0 21.3% 4.90 5 KUALA LUMPUR KEPONG BHD O - S 22.5 21.5% 4.83 6 SIME DARBY BHD J - J 22.5 21.3% 4.78 7 UNITED MALACCA BHD M - A 21.6 20.7% 4.46

    SINGAPORE / INDONESIA 8 GOLDEN AGRI-RESOURCES LTD J - D 21.0 22.7% 4.76 9 FIRST RESOURCES LIMITED J - D 18.7 23.1% 4.32 10 KENCANA AGRI LIMITED J - D 16.1 20.2% 3.25

  • OIL PALM RESEARCH THRUST Oil Palm Breeding & Seed Production, Agronomy Advisory

    Integrated Pest Management & Collaborative Research

  • REPLANTED AREA IMMATURE PALMS

    ZERO-BURN REPLANTING

    REPLANTING EXCELLENCE Zero Burn Replanting of Aging Palms in Sandakan

    Using IJM planting material with good replanting practices leading to early and sustained high yields

    OLD TREES YOUNG REPLANTS HIGH YIELDS

  • IJMP Stakeholders Engagement ‘Walk with CEO’ – Sept 2013

    BUFFALO

    WHEEL BARROW

    MOTORISED WHEEL

    BARROW (SEMUT)

    MECHANICAL BUFFALO -

    (BISON PAYAKING)

    ESTATE MECHANISATION Evaluating time-motion, cost-productivity analysis and managing change

  • ESTATE MECHANISATION Enhancing accessibility and improving in-field crop avacuation

  • WATER RESOURCE MANAGEMENT Risk management in anticipation of prolonged drought in operations

  • INDONESIAN OPERATIONS

    GAME CHANGER Organic growth, shifting gear to scale up crop production,

    operating and constructing new mills

    IJMP STRATEGY : INDONESIAN OPERATIONS

  • INDONESIAN OPERATIONS : 5 PARCELS OF LAND & 1 MILL

    PARCEL 1 (PBP) Primabahagia Permai

    PARCEL 3 (PTS) Sinergi Agroindustri

    PARCEL 4 (PPA) Prima Alumga, Lampung

    IPS PALM OIL MILL PARCEL 5 (KBSA) Karya Bakti Sejahtera Agrotama

    PARCEL 2 (IPS) Indonesia Plantation Synergy

  • LANDSCAPE CHANGE IN INDONESIAN OPERATIONS

    LAHAN TIDUR JADI KEBUN SAWIT

  • IPS PALM OIL MILL COMPLEX WITH BIOGAS FACILITY

  • SITE FOR SECOND PALM OIL MILL IN INDONESIA

  • HUMAN-SIDE OF PLANTATION IN INDONESIAN OPERATIONS Amenities eg. housing, utilities, clinic, ATM-facility / cadetship training

  • WATER CATCHMENTS IN INDONESIAN OPER