FIMA CORPORATION ANNUAL REPORT 2016

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FIMA CORPORATION BERHAD

(21185-P) |

Annual Report

2016

PLANTATION (contd.)

ESTATE DEVELOPMENT

Ladang Cendana, Kemaman, Terengganu

The Group’s estate, Ladang Cendana in Kemaman, Terengganu, is approaching the tail-end of its planting

programme. As at 31 March 2016, approximately 489 hectares have been planted. The acute dry weather had

delayed the estate’s planting activities and the rate of planting will pick-up in this current year. As part of the

Group’s efforts to reduce its labour requirements, the infrastructure at Ladang Cendana is developed to facilitate

mechanized in-field FFB evacuation.

Ladang Dabong, Kuala Krai, Kelantan

Site clearing works on 250 hectares in Ladang Dabong and the establishment of oil palm nursery sites were

completed in FYE2016. Barring a reoccurrence of extreme weather conditions, field planting is expected to

commence during this current year.

Ladang Aring, Gua Musang, Kelantan

Site clearing and terracing works on this estate measuring 404.68 hectares is on-going and is expected to be

completed during this current year and thereafter, field planting will commence.

Ladang Sg. Siput, Perak

In the process of preparing for Environment Impact Assessment (EIA).

Good progress was also made in terms of infrastructure developments such as roads and buildings, including

housing for staff and workers, offices and storage facilities at the each of the Group’s estates.

Land Clearing

Road

Terracing

Main Drain

Field Drain

Chambering

Holing

Mucuna Bracteata Planting

Palm Planting

Completed

In progress

Not Started

Legend:

Ladang Cendana

Ladang

Dabong

Ladang

Aring 1

Ladang

Aring 2

Kemaman

Kuala Krai

Gua

Musang

Gua

Musang

Phase 1

380.38 ha

Phase 2

388.69 ha

250.00 ha 202.34 ha 202.34 ha

Land Preparation Status Of The Group’s Greenfield Estates

Ladang

Sg. Siput

Sg.

Siput

2,000 ha

Authorities Approval

FUTURE OUTLOOK

Palm oil prices fell sharply in 2015 and a marked improvement was seen in the first quarter of 2016, driven by

concerns on the effects of El Nino and overall reduction in the inventory stock levels. The Board is of the view that

the palm oil industry will continue to benefit from increasing demand for vegetable oil and the Division’s outlook,

therefore, remains positive.

The Board is also optimistic about the prospects of the Group’s FFB production uptrend in the coming years given

the sizeable area of new plantings and additional areas moving into the productive age. This will bode well for the

Group as CPO prices improve.

MANAGEMENT DISCUSSION

AND ANALYSIS

(contd.)