Eng - IOI Group

management’sdiscussionandanalysis • review of core business operationsINTRODUCTIONThe activities of this segment are principally palm-based as 98.4% of the Group’s plantation land is planted with oilpalm whilst the balance 1.6% comprises rubber and orchards. Our oil palm plantation related activities include thebreeding and production of superior clones and seedlings, the planting and cultivation of oil palms and the milling offresh fruit bunches (“FFB”) harvested from oil palm estates into crude palm oil (“CPO”) and palm kernel (“PK”) at CPOmills. The CPO and PK produced by our CPO mills in Sabah are processed by our own refinery and kernel crushing plant(“KCP”) in Sandakan, Sabah, the activities of which are included in the resource-based manufacturing segment. CPO andPK in Peninsular Malaysia are sold to third parties.With the recent acquisition of the Pamol estates, the number of estates owned by the Group increased from 53 to 65 asat 30 June 2003 while the Group’s CPO mills has increased by 2 units to 11 mills. The Pamol acquisition increases theGroup’s total titled area by 24% to 136,333 hectares.As at 30 June 2003, approximately 62% of the Group’s plantation holdings are in the state of Sabah with the remaining38% in Peninsular Malaysia, mainly in the central and southern parts of the Peninsular.49IOI Corporation BerhadAnnual Report 2003