In today’s market, consumers are increasingly conscious of their purchasing decisions’ impact on the environment and society. Ensuring that products are sustainably sourced and free from exploitative labour practices are among the crucial considerations in their choices. These considerations are essential in F&B, and cosmetics industry, where palm oil is a vital ingredient.
As one of the world’s largest crude palm oil (CPO) producers, FGV Holdings Berhad (FGV) ensures its products meet the highest sustainability standards.
Representing 3% of global CPO production, FGV’s commitment to the sustainability agenda is evident in every aspect of its operations. The company adheres to best practices in environmental, social, and governance (ESG) principles across its supply chain, positioning itself as a leader in sustainable palm oil production and demonstrating that business success can go hand in hand with ethical responsibility. By focusing on sustainable palm oil production, FGV can meet the growing demand for environmentally friendly products while providing tangible benefits to the smallholders and communities it serves.
SUPPORTING FELDA’S MISSION THROUGH INNOVATION
FGV’s deep-rooted connection with the Federal Land Development Authority (FELDA) goes beyond its corporate responsibilities. Established initially as FELDA’s marketing arm, FGV has evolved into a critical player supporting economic empowerment of the community including smallholders and FELDA settlers. FELDA, a Malaysian statutory body founded in 1956, has been instrumental in uplifting Malaysia’s rural poor by resettling them into agricultural communities, enabling them to become self-sufficient farmers.
Today, there are more than 112,000 FELDA settlers on over 450,000 hectares of land across Malaysia. More than just plantations, FELDA settlements are also communities in their own right, with facilities such as schools, clinics, police stations, recreational areas and mosques. At the same time, FELDA also provides scholarships for deserving children of FELDA settlers to pursue further studies in institutions of higher learning.
As of 2021, the average net income of a FELDA settler is around RM4,297 a month, much higher than Malaysia’s minimum wage of RM1,500 a month. The FELDA scheme is undeniably one of the most successful social transformation programmes in Southeast Asian history.
To this day, FGV maintains a strong partnership with FELDA, where settlers provide 42% (or 5.31 million metric tonnes) of the fresh fruit bunches (FFBs) that FGV processes. This partnership ensures that FELDA settlers, who have always been at the heart of Malaysia’s agricultural development, continue to benefit from FGV’s expansive and sustainable business model. FGV also sources FFBs from other independent smallholders in Malaysia, making up an additional 30% of its supply. In total, more than 70% of the FFBs FGV processes come from smallholders, securing them a stable and consistent income.
CREATING VALUE FOR SMALLHOLDERS
FGV’s impact on smallholders extends beyond just purchasing their crops. The company has provided support on sustainability practices for smallholders and FELDA settlers through consultation and capacity building programmes. By doing so, FGV ensures that its palm oil products are sustainably sourced while helping smallholders access more lucrative markets by meeting globally recognised standards.
Moreover, FGV provides logistical support to smallholders through its subsidiary, FGV Transport Services. With a fleet of 500 trucks, the company ensures that fresh fruit bunches (FFBs) from smallholders are efficiently transported to 14 storage hubs across Malaysia, including all major ports and Kuala Lumpur International Airport. This logistical support is crucial for smallholders who rely on FGV to help get their products to market.
A TRADITION OF SOCIAL RESPONSIBILITY
Social responsibility is one of the core elements of FGV’s sustainability commitment. FGV has been supporting FELDA’s nation-building efforts through its corporate social responsibility programmes, centred around alleviating rural poverty. Annually, FGV contributes significantly to Yayasan FELDA, FELDA’s welfare arm, which carries out numerous charitable activities related to poverty eradication, education, and healthcare.
One of the key initiatives supported by FGV’s financial contributions is the operation of the FELDA Haemodialysis Centre. This centre provides vital kidney dialysis treatment to individuals from the B40 group who lack insurance or the financial means to afford the treatment. Beyond healthcare, FGV has also supported disaster relief efforts. In 2021, the company collaborated with Yayasan FELDA to distribute RM300,000 in cash and FGV products to the 300 residents affected by floods in Yan, Kedah. Each household received RM700 in cash and RM300 more in the form of FGV products.
LEADING DURING CHALLENGING TIMES
FGV’s social responsibility extends not just to FELDA settlers but also to the broader Malaysian community. The company’s CSR initiatives are deeply intertwined with FELDA’s original mission to uplift rural communities, ensuring that economic empowerment, social well-being, and environmental sustainability go hand in hand.
During the COVID-19 pandemic, FGV demonstrated its unwavering commitment to community welfare through its FGV Food Relief Bag (FReB) programme. The company distributed 13,000 bags of FGV food products to families in need across Malaysia, including many FELDA settlements. This initiative provided immediate relief to communities facing economic hardship, further solidifying FGV’s role as a responsible corporate citizen who goes above and beyond to support vulnerable populations. Several FELDA settlements were recipients of this relief effort, such as Felda Teloi Timor and Felda Teloi Kanan in Kedah, Felda Chiku and Felda Aring in Kelantan, Felda Kerteh, Felda Jerangau, Felda Neram, Felda Cherul, Felda Seberang Tayu, Felda Bukit Bading, Felda Jerangau Barat, Felda Mengkawan, Felda Tersat, Ladang Felda Chador, Felda Kg. Chalok Rahmat, Felda Selasih, Felda Chalok Barat and Felda Tenang in Terengganu.
SUSTAINABILITY AS A BUSINESS IMPERATIVE
FGV’s commitment to the sustainability agenda has positioned the company as a leader in the palm oil industry. The company’s efforts have created a ripple effect throughout the supply chain, ensuring that smallholders—whether FELDA settlers or independent farmers—are part of a sustainable and profitable ecosystem.
Through its initiatives, FGV has made it clear that sustainability is not just a trend but a long-term investment in the future of Malaysia’s agricultural sector.
A BRIGHT FUTURE FOR FGV AND FELDA
Ultimately, what sets FGV apart from other companies in the palm oil sector is its holistic approach to business and community development. As a key player in fulfilling FELDA’s mission, FGV ensures that its sustainability efforts benefit the environment and the communities that rely on agriculture for their livelihoods.
FGV’s vision for the future is to continue building on the success of FELDA, ensuring that rural communities are empowered through sustainable agricultural practices and responsible business operations. Together with FELDA, FGV is helping to write the next chapter in Malaysia’s development—one that is defined by sustainability, social justice and economic progress for all.
In celebration of the 67th Merdeka and Malaysia Day, FGV launched its inaugural campaign to honor Malaysia’s unity and prosperity. Under the theme “Teruskan Meneroka,” this short video paid tribute to the unsung heroes who contributed to the nation’s progress, including the dedicated efforts of FELDA settlers and smallholders, who supplied 70% of our FFB.
The campaign highlighted FGV’s commitment to nation-building, economic growth, and sustainable practices, while celebrating the achievements and collective efforts of Malaysia’s diverse communities. “Teruskan Meneroka” has been prominently featured on FGV Holdings’ social media channels, including Facebook, Instagram, TikTok, LinkedIn, and YouTube, as well as on www.fgvholdings.com.
