50 / 204
The terminal which was completed
in this current financial year has
locational advantages as it will
allow for more efficient loading.
have the necessary competencies
to maintain and support our MSPO
certification. However,
the Indonesian Sustainable Palm
Oil (“ISPO”) audit on PTNJL
remains status quo from last year
as authorities await a definitive
outcome of the ongoing legal suit
pertaining to PTNJL’s HGU before
the ISPO certification process can
be resumed.
Outlook
The palm oil industry continues to
be challenging with geopolitical
uncertainties, protectionist
policies, recent Eu resolution
to ban palm-related biodiesel
by January 2021 and uncertain
weather conditions. The industry is
also struggling with long-standing
labour shortages and rising
operating costs. These factors will
continue to accentuate the bearish
sentiment in the overall market.
While more areas are expected to
attain maturity in this financial
year, we expect the division’s
earnings to continue experiencing
some pressures in the near term as
a result of the prevailing low CPO
prices and required expenditure
in developing our greenfield
estates. Nevertheless, we believe
that on balance, this sector will
continue to benefit from the
growing demand given that palm
oil is a significant and versatile
raw material for both food and
non-food (i.e. oleochemicals and
biofuel) industries and is confident
of its sustainable growth over the
long-term. We also continue to see
significant opportunities to grow
the division through acquisitions as
our capital structure continues to
provide us with the flexibility
to execute our growth strategy,
including the funding of our
acquisitions.
Fima CORPORATION Berhad
(21185-P)
Annual Report 2019
46