Executive Director's Management Discussion and Analysis

Chairman's Statement - Tiong Chiong Ong

On behalf of the Board of Directors of Rimbunan Sawit Berhad, it is my privilege to put forward to you the Annual Report of our Company and Group for the financial year ended 31 December 2020.

On the local front, the domestic economy was severely affected by the movement control order (“MCO”) and the necessary actions taken to contain the COVID-19 outbreak. The Group was fortunate that most of its operations were allowed to operate during the MCO period as the palm oil industry is considered an essential sector. Malaysia’s Gross Domestic Product (“GDP”) is projected to decline by between 3.5% to 5.5% in 2020, after growing 4.3% in 2019.

After a period of low price lasting about 18 months, crude palm oil (“CPO”) price increased sharply since November 2019 to reach RM3,014 per metric tonne (“MT”) level in January 2020. However, the onset of the COVID-19 pandemic and the resultant lockdown measures introduced by governments globally caused a sharp decline in CPO price to around RM2,074 per MT level in May 2020. Subsequently, restocking activities undertaken by major consuming countries such as India and China coupled with lower production due to unusually wet weather led to a surge in CPO price to around RM2,700 – RM3,600 per MT level in December 2020.