Eng - IOI Group

management’sdiscussionandanalysis cont’dOperating Risk Management cont’d• In the case of palm oil, for instance, normal price fluctuations are manageable risks whilst unduly sharp fluctuationsand cyclical trends are strategically balanced by the Group’s positioning in different segments of the palm oil valuechain, namely plantation, refinery, oleochemicals and specialty oils and fats. The Group’s exposure to differentsegments of the palm oil chain also provides better visibility and enables better risk management execution thatenhances value beyond mere balancing out the effects of price fluctuation.• For the property segment the judicious selection of locations when acquiring land bank and the choice of productmix when making property sales launches during different phases of the property market cycles are the most crucialfactors in managing market and operation risks.Financial Risk Management• The Group’s operations which have expanded substantially in recent years, most notably, the recent acquisition ofthe Loders Croklaan Group, a substantial foreign investment, expose it to a variety of financial risks, includingforeign exchange risk, interest rate risk, market risk (including commodity price risk), credit risk, liquidity andcashflow risk.IOI Corporation BerhadAnnual Report 200346