Sime Darby Plantation Sdn Bhd, one of the largest palm oil producers in the world, expects to start its maiden oil palm planting in Liberia by April that marks its first African plantation deal.
Executive-vice president Franki Anthony Dass said the company would initially use 10,000 ha out of 220,000 ha concession land it had in Liberia to plant oil palm.
“Considered as a key investor in Liberia, the country is keen to welcome us there as we would create 30,000 to 35,000 job opportunities,” he told reporters after a media briefing and visit at the company’s plantation in Carey Island, Port Klang yesterday.
Sime Darby Plantation, a division of Sime Darby Bhd, has a 63-year concession agreement with the Government of Liberia to develop 220,000 ha into oil palm and rubber estates which was signed on April 30, 2009.
It was reported that Sime would initially invest RM70mil to work on the 10,000 ha.
Liberia, located in the west side of the African continent, already has 90,000 ha and 65,000 ha of oil palm and rubber plantations respectively as of mid-2009. Franki said the company was also interested to expand into other African countries but that would first be subject to feasibility studies.
“But, (in terms of expansion) we now want to focus on our balance of landbank in Indonesia. We need to start planting there as soon as possible once we sort out the Roundtable on Sustainable Palm Oil (RSPO) certification,” he said.
The company currently has a total landbank of 288,057 ha in Indonesia where 209,383 ha has been used for oil palm plantation.
For Malaysia, it has a total landbank of 359,947 ha where 313,984 ha has been planted with oil palm. To date, 20 of the company’s strategic operating units in Malaysia and Indonesia have obtained RSPO certifications while the other 40 are still undergoing the certification process.
In terms of production for the current financial year ending June 30, Franki expected it to be slightly better or in line with the last financial year’s figure.
“There are several factors that contributed to this such as the El Nino effect for the early part of the year, the current weather condition and to a certain extent, shortages of workers. But, we expect it to pick up in the second half of this year for the next one to two years,” he said.
Sime Darby Plantation’s fresh fruit bunches (FFB) stood at 9.9 million tonnes while crude palm oil (CPO) output was at 2.4 million tonnes for the previous financial year.
It contributed about 56% of the Sime Darby group’s total operating profit of RM3.78bil on the back of total group revenue of RM10.85bil for the financial year ended June 30, 2010.
The operating profit for Sime Darby Plantation for the year under review reflected a 23% increase from the previous financial year ended June 30, 2009. For the first quarter ended Sept 30, 2010, of the current financial year, Sime Darby Plantation registered an operating profit of RM492mil, a decline of 22% compared to the same quarter in the previous year, arising from lower production of FFB. On the price of crude palm oil, Franki anticipated it would average around RM3,000 per tonne this year.
“The CPO price will be supported by supply and demand factors as drought has hurt other edible oil crops such as soybean in Argentina and cooking oil demand from China is also increasing,” he said.
In terms of the company’s average yield and oil extraction rate (OER) in palm oil, Franki said it would continuously improve on that, supported by its research and development (R&D) efforts.
As of the last financial year, the company’s overall FFB yield stood at 21 tonnes per ha and OER was at 21.9%.
Carey Island houses one of three of its R&D centres. All three centres focus on plant bio-technology, bio-processing, molecular diagnostics and natural products. The other two of its R&D centres are located in Banting and UPM, Serdang.
