Malaysia Floods 2014 Preliminary Damage and Impact Assessment to FGV

Presented by Group Strategy/R&D Cluster/Upstream Cluster Date: 29 December 2014

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Executive Summary

• Majlis Keselamatan Negara (MKN) has defined disaster as “an incident that occurs unexpectedly, complex in nature, resulting in the loss of lives and damage to properties and the environment as well as interfering in the daily activities of the local community.”

• As of 12pm, 29 December 2014, MKN reported 101,702 people from Kelantan, Terengganu, Pahang, Johor and Perak have been placed at flood relief centers.

• Summary as per below table from MKN as of 29 Dec 2014:

Disaster Overview

State No of Flood Victims as at 29 Dec 2014

Districts Criticality (Last recorded : Danger level), Criticality Level (%)

Kelantan 31,441 Gua Musang, Jeli, Kota Baharu, Kuala Krai, Machang, Pasir Mas, Pasir Puteh, Tanah Merah, Tumpat and Kota Bharu

• Tangga Krai Sungai Kelantan (34.11m : 25m), 36% • Jambatan Guillemard (22.63m : 16m), 41% • Tambatan Diraja (6.88m : 5m), 38% • Sungai Golok, Rantau Panjang (10.41m : 9m), 16%

Terengganu 32,736 Kemaman, Dungun, Kuala Terengganu, Besut and Hulu Terengganu

• Sungai Kemamam (37.6m: 36m), 4.44%

Perak 7,774 Hulu Perak, Kuala Kangsar and Perak Tengah

• Tasik Temengor, Hulu Perak (247.69m)- alert level • Sungai Selama, Selama (14.86m)- alert level

Johor 328 Mersing n/a

Pahang 29,423 Kuala Lipis, Kuantan, Muadzam, Jengka, Termerloh

n/a

Source: Bernama and Majlis Keselamatan Negara

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Executive Summary Disaster Timeline Overview

Dec

15 16 17 18 19 20 21 22 23 24 25 26 27

News 3

News 1

12/26/14

News 4

12/17/14 12/24/14

Activity

Timeline

12/16/14

News 2

Date Timeline News

15/12/2014 Starting Consistent heavy rainfall occurs across the entire country

16/12/2014 News 1 Estates in Kuantan, Gua Musang and Kuala Terengganu area show signs of increased water levels

17/12/2014 till 23/12/2014

News 2 Estates in Jengka, Sahabat Selatan, Mersing, Temerloh Selatan, Muadzam, Serting and Kuala Lipis region show signs of increase water levels

24/12/2014 News 3 • Dangerous level of flood seen in Kuala Lipis and Gua Musang area. • Estates such as Chiku 04, Chiku 08, Aring 06, Aring 08, and Aring 10 road

access were inaccessible because of the flood. • Food and water supply were cut off until today. • Flood victims were forced to evacuate to the nearest rehab center.

26/12/2014 News 4 Flood in Kuantan, Terengganu and Jengka is still at a dangerous level but is able to withstand up till now.

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Flood Damage Assessment

• Flood casualties towards the company – Estates involved: 9 estates

– Area of estates flooded: 23,730 ha

– Number of employees and foreign worker affect by the flood: 6,200 people

– Daily harvest is down by 50%

– Milling activity is down to only 40% of its full daily capacity

• The company’s employees and flood victim were given aid in terms of food and tools. – RM150 per family

– RM 50 per foreign workers

Current News

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Flood Damage Assessment

Palm oil hits near 1-month high due to monsoon

(Sun Daily, 24 December 2014)

Rainfall is delaying harvesting of fresh fruit bunch (FFB) and mill operations in east coast of Malaysia.

Malaysian palm oil future rose to their highest as monsoon rain pounded the production of CPO

Palm oil hits near 1 month high on monsoon woes

(Malaysian Insider, 24 December 2014)

Pahang is the largest state in Peninsular Malaysia and accounts to more than 15% of the country’s total crude palm oil supply.

Bursa Malaysia had edged up 0.6% of March contract to RM2,223 (USD 636) per tonne with price trading at their highest since November

News Affecting Palm Oil Industry

2090

2110

2130

2150

2170

2190

2210

2230

26

/11

/20

14

28

/11

/20

14

30

/11

/20

14

2/1

2/2

01

4

4/1

2/2

01

4

6/1

2/2

01

4

8/1

2/2

01

4

10

/12

/20

14

12

/12

/20

14

14

/12

/20

14

16

/12

/20

14

18

/12

/20

14

20

/12

/20

14

22

/12

/20

14

24

/12

/20

14

26

/12

/20

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One Month MPOB CPO Price

Palm oil Dec output set to fall (New Straits Times, 25 December 2014) Production is set to fall 11% to 1.56 million

tonnes from 1.75 million tonnes in November.

Output typically declines from November through February because of low-production season mainly because of the monsoon

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200367369401

911

1,7241,757

2,105

3,556

Temerloh Utara

Temerloh Selatan

Muadzam Kuantan Kuala Lipis Gua Musang

Esti

mat

ed L

oss

of

FFB

(MT)

Serting Jengka Terengganu

7,407 4,386 3,660 417 764 769 836 1,898 3,593

Estimated loss of FFB (MT)

Affected hectarage, ha

Flood Damage Assessment As at 29 December 2014, the opportunity loss of FGV’s FFB production is estimated to be 11 kMT, only 0.2% of forecasted annual production

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Flood Damage Assessment

As of 29 December 2014, FGV losses due to the flood is estimated to be at RM21 million (flood damages and opportunity loss*).

440

Terengganu

545

Temerloh Utara

577

Termerloh Selatan

922

Jengka

1,400

Muadzam

1,493

Kuantan

Esti

mat

e Lo

sses

(R

M ‘0

00

)

2,361

Kuala Lipis

3,040

HQ

3,395

Gua Musang

6,521

Serting

260

Mersing

350

Trolak

Stop production (mill)*

Pump house damage

Off Spec CPO

Transportation Revenue Losses*

OER losses

Aid costs

Dead trees

Loss in production (supply)*

Road and Infrastructure Damages

Machinery cost (repairs)

Estates Damage

Gua Musang and Kuala Lipis are some of the major areas that were badly affected by the flood with damages cost at RM6.5 million and RM3 million respectively. *opportunity loss

*transportation and off spec losses affected by the flood

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Flood Damage Assessment

CIMB Analyst Report and Remarks- 28 December 2014

State Internal Analysis CIMB Report

Kelantan 2% 7%

Terengganu 0.22% 4%

Pahang 4% 39%

Negeri Sembilan 0.12% 3%

Table 1: FGV estates that was directly affected by the flood

FGV total estates that were affected is estimated to be 6.34% compared to CIMB assumption of 67% (Internal Analysis, 29 December 2014) Assessment done by CIMB analyst had stated

that 67% of FGV were exposed to the flood, although this is based on the total landbank in the affected states

However, internal analysis shows that the total percentage of estates affected within the flood area is far less from what was assumed.

GENP

14%

KLK

27%

IOI

28%

Sime Darby

30%

FGV

67%

Pahang

Terengganu

Kelantan Johor

Negeri Sembilan

Kedah

Perlis

Perak

Figure 1: Plantation companies’ estates exposure to the various Malaysian states impacted by the floods (% of total estates)

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Gua Musang

Flood Damage Assessment

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Gua Musang

Flood Damage Assessment

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Kuala Lipis

Flood Damage Assessment

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Thank You