The years 2008 and 2009 will be remembered as the period when the world went into its worst economic recession since World War Two. Although major economies are experiencing a slowdown in their rates of decline and there are signs that the global recession may be near its bottom, the recovery process is likely to be slow and painful with unemployment a major problem to be resolved. Against this backdrop, the Group is cautiously optimistic that FY2010 will be a better year for the Group, having put in place policies and controls to better manage its key risks and exceptional losses of the nature experienced in FY2009.

FFB production volume from our estates in Malaysia is expected to rebound from its decline in FY2009 due to more favourable weather conditions and better yielding trees coming to maturity. We have begun planting on our land in Indonesia. With 78% of our Group planted acreage in Malaysia within the prime ages of 7 to 20 years old, production volume will increase steadily over the next few years to meet increasing demand. Demand for palm oil and its products remain strong supported by resilient demand from the food sector, price competitiveness over other edible oils and higher consumption in emerging markets such as China and India. Prices of palm oil are also expected to be underpinned by the relatively low world vegetable oil stock to usage ratio and strong biofuel commitments from developed countries.

Prospects for the Group’s resource-based manufacturing business are expected to remain mixed, with soft demand and compressed margins in the oleochemical sector but stable volume and margins in the refinery and specialty fats sectors. We are continuing to invest in building new capacity to grow our downstream businesses and our refinery expansion in the Netherlands to produce mainly value added margarine ingredients and our Bionexus-status plant in Johor to supply enzymatic components to the Group are expected to be completed by the second quarter of 2010.

With a development land bank of approximately 6,000 acres, the Group’s proven track record in township development will provide a strong base for the Group’s property business. Our strength in township development has also enabled the Group to build more commercial properties in existing mature developments for investment to earn good rental returns. The property market in Singapore has shown encouraging signs of revival lately and this is expected to further improve once the integrated resorts are completed beginning in the first quarter of 2010. This augers well for our projects in Sentosa Cove which we expect to commence launching by the middle of 2010. The successful privatisation of IOI Prop has also provided the property business with access to a much larger balance sheet and the necessary financial resources to complete its large-scale projects.