The remaining capex for 2023 will be used primarily for asset replacement and upgrading to improve operating efficiencies
by AFIQ HANIF / pic MUHD AMIN NAHARUL
FGV Holdings Bhd is allocating more than RM1 billion in capital expenditure (capex) for the fiscal year ending Dec 31, 2023 (FY23), its largest annual capex through-out company operation.
FGV group CFO Datuk Mohd Hairul Abdul Hamid said RM400 million of the capex would be used to replant old oil palm trees, which would necessitate the purchase of a large amount of machinery and seedlings.
As of the end of September 2022, FGV had invested nearly RM500 million compared to RM468.3 million on capex in 2020 and RM600.4 million in 2021.
“The remaining capex for 2023 will be used primarily for asset replacement and upgrading to improve operating efficiencies and meet regulatory requirements,” he said.
In response to the US Customs and Border Protection (CBP) ban, group CEO Datuk Mohd Nazrul Izam Mansor stated that he hoped the ban on the group’s palm oil products will be lifted by the end of 2023.
“We have set a deadline of the first quarter of this year to submit the application (March 31, 2023). It will take some time for the US CBP to consider the petition and we hope to have it lifted by the end of the year, if not sooner,” he said on the sidelines of a recent media visit to the group’s subsidiary Delima Oil Products Sdn Bhd in Pasir Gudang, Johor.
Since the import ban on Sept 30, 2020, the CBP had issued a with hold release order to eight Malaysian companies that manufacture rubber gloves and palm oil products due to forced labour concerns.
Out of the eight companies, six companies are still on the list. The initial eight were FGV, YTY Group, Maxter Glove Manufacturing Sdn Bhd, Sime Darby Plantation Bhd, Smart Glove Corp Sdn Bhd, Brightway Group, Supermax Glove Manufacturing Sdn Bhd and Maxwell Glove Manufacturing Bhd.
Meanwhile, FGV projects a 10% increase in fresh fruit bunches (FFB) production to 14.5 million this year through the entry of nearly 10,000 foreign workers. Last year, FFB production drop to 13.1 million tonnes caused by a lack of manpower.
“This year, we expect to get almost 10,000 additional foreign workers with 5,000 of that number with 42.8% market share.
“We have the vision to become leading local trusted brands for a wide range of household kitchen essentials, including cooking oil and fat, daily staple, convenient sauce, ready-to-eat or -cook products and beverage segment,” he said.
Delima Oil distributes its food products both locally and internationally, with six offices in Peninsular and East Malaysia and more than 30 countries in North America, North Africa, the Middle East, Eastern Europe, Central Asia and South-East Asia.
- This article first appeared in The Malaysian Reserve weekly print edition