Corporate Information » CEO’s Statement
* Extracted from Integrated Report 2022
With record-breaking revenue, Boustead Plantations Berhad closed out 2022 on a high note, two consecutive years of revenue of more than RM1.0 billion after its relisting in 2014.
We are pleased with the outstanding performance demonstrated in 2022 which showed us achieving profit for the year of RM589 million.
"In line with our commitment to strengthening our operations to ensure the sustainability of our business, we have embarked on a multipronged approach to address the age profile of our estates. "
The Group’s results were boosted by higherthan- expected prices for both CPO and PK, with the former fetching an average of RM5,066 per metric tonne (MT) and the latter averaging RM3,156 per MT. We were able to reduce our gearing ratio to 0.3 times and increase our earnings per share by more than 2.5 times year-on-year, while our market capitalisation maintained at RM1.5 billion as at 31 December 2022.
The Group engages in the full spectrum of the palm oil value chain, from planting and replanting to harvesting FFB and producing CPO and PK. In terms of the Group’s landbank, 72,300 hectares (ha) have been planted with oil palms, covering Peninsular Malaysia, Sabah and Sarawak.
Our older palms are disproportionately high across all of our estates, and this is especially true in Sarawak and selected areas in Sabah. In line with our commitment to strengthening our operations to ensure the sustainability of our business, we have embarked on a multipronged approach to address this issue.
The roadmap to transform the Group continued with the enhanced Plantations Performance Improvement Programme 2.0 (PPIP 2.0), emphasising digitalisation and mechanisation to boost yield maximisation following the success of the initial PPIP blueprint. PPIP 2.0 is premised on four strategic and innovative thrusts intended to boost business processes through business unit collaborations, creative transformation of the existing system, as well as incorporation of technology and digitalisation measures.
The Group has embarked on a 25-year Replanting Programme to secure a more ideal age profile for our estates. We are driven by our replanting blueprint which will enhance our field infrastructure to optimise our mechanisation initiative, in order to improve the overall yield profile of our estates. During the period under review, we were able to replant 2,400 ha of our estates.
In tandem with our replanting efforts, we inked a green financing agreement, which will enable us to enhance our plantation assets.
We have also augmented the replanting exercise by disposing selected plantations as part of our asset rebalancing strategy to bring us closer to gaining a more balanced profile in the years ahead by bringing our total acreage of trees older than 20 years down to a more manageable level. Our research and development arm, Applied Agricultural Resources Sdn Bhd, provides us with expertise in sustainable agronomic practices as well as high-quality planting materials, which has further increased our yield.
In line with our focus on integrating Fourth Industrial Revolution technologies for datadriven decision-making, we have been able to obtain accurate information from spatial data to enhance yield and crop recovery. With the data we have gathered employing artificial intelligence (AI), we have been able to zero in on problem areas and take care of underperforming palms and other site-yield limiting factors.
The effectiveness of patented potential Ganoderma disease suppressive microbes was put to the test in the field for the first time in 2022, marking the beginning of this phase of testing.
In 2022, one of the cutting-edge research frontiers we were exploring was the use of thermal cameras and AI algorithms to quantify rats in images as a more accurate estimate of the rat population in a given area, allowing for more effective integrated pest management recommendations.
We have adopted the use of a variety of equipment that is contributing to greater efficiencies in harvesting operations, infield crop evacuation, and external crop transportation. These efficiencies are helping us produce more with less.
Our unwavering commitment to sustainability and quality has not gone unnoticed. During the year, we signed an understanding with Cargill Palm Products Sdn Bhd for the longterm supply of high-quality, sustainably-produced palm oil. Additionally, our dedication to upholding excellence was recognised with Boustead Tawai Palm Oil Mill earning ISO 9001:2005 certification, completing the certification of all 10 mills in our portfolio. These achievements further solidify our position as a leading player in the palm oil industry.
Erratic supply circumstances, geopolitical volatility, and CPO’s price competitiveness relative to other edible oils are expected to keep supporting the price of CPO. By 2023, it is anticipated that Indonesia’s biodiesel programme will have increased domestic demand for palm oil, thereby offsetting the country’s surplus production.
For the year ahead, to achieve a higher standard of planting and a higher sustainable yield, we intend to continue capitalising on the availability of higher-yielding semiclonal and bi-clonal planting materials, wellselected superior palms for cloning with lower mantling rates, and improved planning and monitoring thanks to available spatial information technologies.
We are also focused on maximising the effectiveness of fertiliser application and minimising nutrient loss through the use of smart fertiliser spreaders in addition to further exploring the use of our in-house nitrogen-fixing bacteria and Ganoderma disease suppressive microbes.
In addition, we plan to raise the bar for collecting weather data, designing efficient drainage systems, and keeping an eye on the water table so that we can maximise the yield productivity in potentially acid sulphate soils and other flood-prone areas.
"Our focus in 2023 will remain on asset rebalancing and PPIP 2.0 initiatives by enhancing yield and estate efficiency, as well as improving cost efficiencies."
We intend to pursue the optimisation of unutilised land, alongside increasing digitalisation and introducing advanced technologies across our operations and organisational processes. In addition, we anticipate palm oil production to remain strong, supported by the reduction of labour shortage concerns.
Along with increasing mechanisation, we intend to continue replanting programme and strategically disposing of selected plantations in order to reduce the acreage of ageing palms.
I would like to express the appreciation to our former Chairman, Dato’ Haji Ismail Haji Lasim, for his leadership and also to my predecessor, Zainal Abidin Shariff, for his stewardship in managing the Group.
Acting Chief Executive Officer
28 April 2023