Internal Environment
Strengths
Diversified Business Base
IOI is a diversified business organization engaged in the plantation of oil palm and rubber, resource based manufacturing, and property development and investment. It involved in various activity in palm value chain from beginning seedlings to plantation to crop extraction to diversified value added manufacturing in serving over than 60 global market. IOI also involved in real estate development where it builds residential and commercial townships, real estate investment where it produces and supplies ornamental landscape planting material. Another business is leisure and hospitality.
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Environment Friendly Practices
Environmentally friendly practices are taken seriously by IOI Corporation. IOI practice of environment friendly in reducing the need of fertilizer, reduce the erosion by rain and another practice use by IOI by using kernel shell and fibre to provide renewable energy to steam and extract the palm oil from oil from fruit rather than using gas.
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CSR-Oriented Organization
IOI undertaken CSR by caring for community, enhancing employee welfare and conserve environment. For example, a charitable foundation fully sponsored by IOI Group of Companies which was established in 1998 named Yayasan Tan Sri Dato Lee Cheng that provides scholarships ,gives out Young Achievers such as student.
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High Pile Cash
IOI has owned good liquidity ratio ( current ratio) 2.11 times at year 2014, 2.77 times at year 2015 and 1.53 times at year 2016. This showed that the IOI has high ability to pay back its liabilities.
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Efficient Palm Oil Producers
IOI is the most efficient plantation company in the world. Malaysia's oil palm average yield for the last 20 years is stagnant at 4 tonnes per hectare per year. The group operates 180,322 hectares of oil palm plantations in Malaysia and Indonesia. It has 15 palm oil mills and 90 estates throughout Malaysia will annual milling capacity of approximately 4,7500,000 tonnes of fresh fruit bunches (“FFB”) (Annual Report 2016).
Weaknesses
High percentage of family-based shareholders
One of the weaknesses of IOI is high percentage of family based shareholders with high power voting therefore there is a room for abuse of power.
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Financial Vulnerability
As it operates in many countries and trade globally it subject to financial vulnerability such as financial risk , foreign exchange risk.
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Pressure of increasing operation cost
The expansion of the plantation into Indonesia and also expansion of refinery to Rotterdam, rising of the labor salary and also investment that increasing the operation cost.
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Decrease in operating profit
Recently, IOI had experienced decrease in operation profit for FY2015, which was MYR1,005.90 million a decrease about 15.% compared to FY2014 due to lower average crude palm oil price realised for FY 2015 was RM2,221/MT as compared to RM 2,509/MT for FY2014. (Annual Report 2015)