Partnership will plant over 1 million trees under the scope of Project RELeaf

Petaling Jaya, 15 December 2021 - Ramping up reforestation efforts to plant three million trees in Malaysia by 2023 via Project RELeaf, Nestlé Malaysia inked a Memorandum of Agreement (MOA) with the world’s largest producer of certified sustainable palm oil, Sime Darby Plantation (SDP). Under the MOA, over 1 million trees are set to be planted across 1,200 hectares of riparian zones and steep slope areas within SDP’s oil palm operation areas.

Launched in 2020 by Nestlé Malaysia, Project RELeaf aims to restore riparian and forest ecosystems across the Kinabatangan Wetlands and Merisuli Forest Restoration Areas in Sabah, as well as in forest reserves along the Central Forest Spine in Peninsular Malaysia. This is also part of Nestlé’s global efforts to fight climate change and reduce the Company’s carbon footprint.

Through the MOA with SDP, Nestlé will be producing and supplying over 1 million seedlings and conducting planting activities at the sites. Planting sites will be located at selected SDP estates in both Peninsular Malaysia as well as the East Malaysia regions of Sabah and Sarawak.

Mr. Juan Aranols, Chief Executive Officer of Nestlé (Malaysia) Berhad, said, “Safeguarding the environment is a key priority for Nestlé. This is why we have initiatives in place to help preserve and conserve the country’s natural biodiversity and these include our reforestation efforts such as Project RELeaf, aiming to plant three million trees by 2023. Now, we are pleased to partner with SDP, who is also the main supplier of Nestlé Malaysia’s certified sustainable palm oil. By working together, we can help to reduce total emissions along our value chain while preserving natural ecosystems.”

“This partnership will also contribute to our global pledge to achieve zero net greenhouse gas emissions by 2050,” he added.

Mr. Mohamad Helmy Othman Basha, Group Managing Director, of Sime Darby Plantation, said that the Company is very pleased to be working again with a like-minded partner to realise its commitments of protecting and conserving biodiversity as well as contributing to combat climate change.

"Restoring forests and planting trees on a large scale are important nature-based solutions to increase carbon sinks, as part of our response to climate change. Over the last 12 years, we have planted over 1.5 million trees through various tree-planting projects, including our involvement in a previous project with Nestlé. Sime Darby Plantation is truly excited to renew our collaboration with Nestlé today with RELeaf,” said Mohamad Helmy.

“Over the next five years, we plan to double the number of trees we have planted through our tree-planting projects. And whilst we are on track to achieving our target of 40% reduction in carbon intensity by 2030, the success of our tree planting projects will be fundamental in how we lay the groundwork towards making and realising a Net Zero commitment,” added Mohamad Helmy.

All conservation and biodiversity activities that take place under Nestlé Malaysia’s RELeaf Project will be in accordance with the RSPO Management and Rehabilitation of Riparian Reserve Guideline 2018.

Project RELeaf builds on the pioneering Kinabatangan Rileaf Project, which concluded in 2020 and saw one million trees planted in Sabah. Under Project RELeaf, 3 million trees are targeted to be planted by 2023.

Petaling Jaya, 30 December 2021 - Happy days for 156 migrant workers who boarded MAS MH8780, an all-expense-paid chartered flight arranged by Sime Darby Plantation (SDP) to Kolkata, India. The workers, all of whom were employed by SDP at various estates across Malaysia, boarded the flight at the KLIA International Airport around 5.10 pm and are expected to arrive in Kolkata on 30 December 2021 at 6.40pm local time, in time for the New Year.

Since July 2020, Sime Darby Plantation (SDP) has been helping its migrant workers who faced travel restrictions and border closures amid the COVID-19 pandemic to return to their respective countries such as India, Indonesia, Nepal, Bangladesh and Sri Lanka. Since 2020 a total of 5,138 migrant workers have been reunited with their families.

“Many of our workers have been waiting to get back to their families and we are pleased to be able to make this a reality,” said SDP's Group Managing Director, Mohamad Helmy Othman Basha “Due to the pandemic, the lockdowns and border closures, arranging for their passage home has been challenging but we will continue to do our very best to help reunite them with their families,” Mohamad Helmy said

To date, SDP has chartered six flights to India and Indonesia for its migrant workers, when commercial flights were unavailable. The Company has also assisted some of its workers from India via the "Vande Bharat Mission" project organised by the Indian High Commission with Air India Express and Oscar Holidays.

With reports of more rains in the next several days, SDP is monitoring the situation closely and is co-ordinating efforts to gather more information from communities in affected areas.

To repatriate its workers, SDP worked with local and international agencies, including the Malaysian Immigration Department, various embassies, and KLIA authorities. SDP had also taken all necessary precautions and adhered to guidelines set by the Ministry of Health, Malaysia (MOH) and the World Health Organisation (WHO) at all times. All foreign workers underwent the compulsory COVID-19 tests, and the authorities were notified of the results within 24 hours before departure.

The Company has also complied with additional safety and health requirements for incoming passengers imposed by several countries. This included arranging connecting domestic flights from the point of arrival and providing fully paid hotel vouchers and accommodation for mandatory periods of quarantine. SDP also arranged to have its Indian workers fully vaccinated to fulfil their home country's requirements before flying back.

In addition to free passage to and from their countries of origin, SDP provides all workers with equal benefits such as free housing in comfortable and fully furnished premises, subsidised utilities, free medical facilities, and paid overtime and annual leave. SDP has also empowered its workers, ensuring they are able to engage in proactive dialogue with estate management, to care for their needs.

SDP mobilises teams and resources to assist affected communities

Petaling Jaya, 27 December 2021 - Sime Darby Plantation Berhad (SDP) has ramped up flood relief efforts in its operational areas as well as the surrounding communities and schools. The Company has allocated a total of RM7 million for this initiative, of which RM5 million would be utilised by its philanthropic arm, Yayasan Sime Darby (YSD), to ensure that the immediate needs of local communities are taken care of in the aftermath of recent floods. Meanwhile, SDP is continuing to provide all necessary assistance to its flood-affected workers within its operations, allocating an estimated RM2 million to ensure their well-being and to provide for their immediate needs.

SDP’s flood relief initiative involves affected areas located in the districts of Klang, Kuala Langat, Kuala Selangor and Sepang in the state of Selangor, as well as in Bentong, Temerloh and Lipis districts in Pahang. The Company mobilised both manpower and other resources as soon it became apparent that the situation was deteriorating. Together with YSD, SDP has provided aid and assistance, including food supplies and essential items such as clothes, diapers, towels, first aid kit, sanitary pads, pillows and blankets, portable cooking equipment, cleaning tools, as well as on-ground assistance and medical attention to the affected communities. SDP is also working closely with other NGOs who are delivering assistance in the affected areas to ensure that all aid reaches the communities.

To date, SDP has identified over 1160 families in the affected areas and delivered assistance to over 950 of them. Help is underway for the rest of the affected families, including an entire village of orang asli with 74 families in Kampung Sg. Kurau in Carey Island which will receive assistance from the Company today. In addition, SDP has also to date identified 4 schools in Carey Island where its post flood relief efforts will be focused on.

When flood waters subside, SDP aims to provide post-flood relief support to local communities which will include more cleaning equipment such as water jets, floor wipers, safety boots and gloves; important household appliances and items such as rice cookers, gas cooking stoves and mattresses, as well as more hygiene and health kits including COVID-19 self-test kits and face masks. Additionally, critical repair works will also be provided for houses and schools, together with important supplies and furniture to assist schools to reopen in January 2022.

With reports of more rains in the next several days, SDP is monitoring the situation closely and is co-ordinating efforts to gather more information from communities in affected areas.

"We are cognisant that mobile communications may be affected or limited, and certain areas may be inaccessible at this point in time. Nevertheless, we will continue to do our very best to reach out to the communities via alternative on-ground efforts," said Roslin Azmy Hassan, the Chief Executive Officer of SDP’s Upstream Malaysia operations.

"Communities within and near SDP’s operations are urged to reach out to our teams on the ground to ensure that they have access to support for their immediate and urgent needs. We would also like to encourage all NGOs working in the affected areas around our operations to contact the nearest SDP estates so that all relief and clean-up efforts can be coordinated more effectively to benefit our local communities," he added.

To reach out for aid and assistance or to coordinate flood relief efforts, members of the public and NGOs can contact the nearest SDP estates or the following numbers:

• Mr. Tang Men Kon (Regional Chief Executive Officer, Selangor & Pahang): +6019 226 5211
• Mr. R Vijayakumar (Regional General Manager, Selangor): +6019 693 5241

Mr. Suhaimi Abu Bakar (Regional General Manager, Pahang): +6013 292 5991

• The Group declares a total dividend of 20.28 sen per share for FY2021
• The Group reimburses foreign workers for recruitment fees which may have been incurred to secure employment

Petaling Jaya, 18 February 2022 - Sime Darby Plantation Berhad (SDP) registered a profit before interest and tax (PBIT) of RM3.68 billion, nearly double the PBIT of RM1.85 billion in FY2020. Net profit for the period increased 90% YoY to RM2.26 billion, compared to RM1.19 billion in the previous year.

The Group’s strong performance in FY2021 was attributed to higher realised crude palm oil (CPO) and palm kernel (PK) prices as well as better oil extraction rates (OER) which compensated for lower fresh fruit bunch (FFB) production. FFB production was impacted by the prolonged labour shortage in the Malaysian palm oil industry.

In the fourth quarter of FY2021 (4Q FY2021) the Group more than tripled its PBIT and net profit year-on-year (YoY) to RM1.08 billion and RM468 million respectively, representing a 224% and 214% increase from the previous corresponding quarter.

In 4Q FY2021, the Group’s Upstream segment recorded a PBIT of RM958 million, 173% more than 4Q FY2020’s PBIT of RM351 million. This strong showing was supported by higher realised CPO and PK prices which increased from an average of RM2,664 to RM4,179 and from RM1,673 to RM3,363 per metric tonne (MT) respectively. Furthermore, OER improved to 21.79% from 21.35% in 4Q FY2020.

The Group’s Downstream segment, Sime Darby Oils, also rebounded from a PBIT of RM7 million in 3Q FY2021 to a record quarterly PBIT of RM287 million in 4Q FY2021. This also represents a 42% YoY improvement from RM202 million recorded in the previous year. The improvement was mainly attributable to improved sales volumes in its European operations and higher margins from its Asia Pacific bulk operations.

Key Highlights

• 4Q FY2021: Although FFB production was lower, strong prices boosted the Group’s performance, resulting in all segments recording higher YoY profits.
• FY2021: The Group almost doubled its PBIT to RM3.68 billion from RM1.85 billion in the previous year, despite a loss arising from an impairment charge of RM279 million to the Group’s immature rubber plantation in Malaysia, which was significantly affected by pestoliopsis disease and acute labour shortage.

Addressing the Withhold Release Order and Notice of Findings issued by the United States Customs and Border Protection

• On 17 February 2022, the Group’s 15,078 current foreign workers were reimbursed an aggregate sum of RM38.55 million for recruitment fees they may have incurred to secure employment with SDP. The reimbursements were paid in a single lumpsum payment to the foreign workers.
• Each worker was informed of the reimbursement details in writing and received their monies on 17 February 2022. They have full access to various channels of communication to raise any questions or concerns.
• All amounts payable to qualifying current foreign workers have been verified by independent third-party auditors.
• Meanwhile, the Group has enhanced its internal policies and procedures in several other areas:
  • Payslips are now available in English, Bahasa Malaysia and Bahasa Indonesia whilst Wage Code Glossaries in workers’ national language (Benggali, Cambodia, Hindi, Myanmar, Nepali, Sasak, Sinhalese, Tagalog, Tamil) have also been developed and deployed.
  • Each worker has been given an information pack to explain his/her payslip and wage components in the relevant native language. The information pack covers various payslip components such as the calculation of wages and productivity incentives, as well as special gratuitous payments or bonuses, and records of working and overtime hours as well as absence and unsatisfactory work.
  • Continuing to comply with its policy of not employing undocumented workers in its operations, the Group has embarked on a regularisation exercise of undocumented workers, particularly in the East Malaysian states of Sabah and Sarawak. SDP has also taken the additional step of working with local consulates to assist workers in ensuring that all their dependants are documented as well.
  • Extending its enhanced policies and SOPs to include its contractors and vendors, the Group will also ensure that all contract workers are legally employed, in possession of their passports and are at least paid minimum wages.
  • On health and safety of its workers, the Group is implementing enhanced Health & Safety protocols and procedures for estates and mills. These improved measures take into consideration inputs from workers whilst ensuring compliance to regulatory requirements and best practices.

Chairman, Tan Sri Dato’ Seri Haji Megat Najmuddin bin Datuk Seri Dr Haji Megat Khas said:

The Group delivered an outstanding set of results for FY2021, thanks in large part to the tenacity and resilience of our people in overcoming the numerous challenges we faced throughout the year. I am proud of the dedication and hard work of our employees across our operations and whilst challenges remain, I am confident that their passion will carry us through 2022.

Group Managing Director, Mohamad Helmy Othman Basha said,

Although the Group closed FY2021 with an outstanding set of results, the path ahead remains challenging. On 28 January 2022, the United States Customs and Border Protection (USCBP) issued a finding that certain Sime Darby Plantation Berhad (SDP) palm oil products are produced using convict, forced or indentured labour.

Though the finding came as a disappointment, we are forging ahead to address all the challenges, keeping the welfare and wellbeing of our workforce our top priority.

Whilst the Group embarks on reimbursing recruitment fees and related costs to current and past foreign workers that may have been charged by third-party agents in source countries, we are also looking forward to the completion of the independent assessment of our Malaysian operations. Meanwhile, the Group has implemented several measures to improve its existing governance structures, policies and procedures.

The Group will also be looking to continue to address the current acute labour shortage by reducing our dependence on manual labour. Our focus on the mechanisation, automation and digitalisation of our plantation operations will be another top priority for us in 2022 as we look towards reinventing the nature of work in our plantations and intensifying our efforts to recruit more local workers.

We believe 2022 will be a transformative year for the Group.

OUTLOOK FOR FY2022:

The Group expects palm oil prices to remain elevated, at least throughout the first half of 2022 as supplies are only anticipated to increase in the second half of the year in line with the high-crop season. With the recent decision by the Malaysian Government to lift the freeze on the intake of foreign workers which has been in place since June 2020, the Group is cautiously optimistic that this may provide further support for its FFB production, particularly from its Malaysian operations to increase in the second half of the year, in line with palm oil’s typical peak production period.

Barring any unforeseen circumstances, the Group expects its performance for the financial year ending 31 December 2022 to be satisfactory.

DIVIDEND:

The Group has declared a final dividend of 12.38 sen per share, which together with the interim dividend of 7.90 sen per share, amounts to a total single tier dividend of 20.28 sen per share for FY2021. The total dividends declared in FY2021 is higher compared to FY2020’s total dividends of 11.57 sen per share. 

Petaling Jaya, 24 March 2022 - Sime Darby Plantation Berhad (SDP) hari ini mengumumkan penyertaan 11 rakan niaga yang terpilih bagi Program Pembangunan Vendor (PPV) Bumiputera yang dikelolakan oleh syarikat tersebut untuk meningkatkan daya saing usahawan Bumiputera dalam pasaran tempatan dan antarabangsa.

Pengumuman tersebut dibuat sewaktu berlangsungnya Hari Pembangunan Usahawan Sime Darby Plantation 2022 di ibu pejabat syarikat tersebut di Ara Damansara yang dirasmikan oleh YB Tan Sri Noh Haji Omar, Menteri Pembangunan Usahawan dan Koperasi. Turut diumumkan di majlis tersebut, enam syarikat vendor Bumiputera yang dianugerahkan sijil tamat penyertaan setelah mengikuti dengan jayanya program tersebut sepanjang tempoh lima tahun yang lalu.

Menurut Pengarah Urusan Kumpulan, Mohamad Helmy Othman Basha, komitmen SDP untuk membantu usahawan Bumiputera melalui program PPV telah bermula sejak tahun 2014 lagi, sewaktu syarikat itu masih lagi merupakan anak syarikat dalam Kumpulan Sime Darby. Komitmen tersebut diteruskan selepas SDP mula tersenarai sebagai syarikat berhad pada akhir tahun 2017. Sehingga hari ini, jumlah perolehan SDP yang melibatkan vendor-vendor Bumiputera melalui program tersebut telah melebihi RM200 juta.

“Peranan syarikat-syarikat berkaitan kerajaan seperti kami untuk membantu membangunkan para usahawan Bumiputera supaya menjadi lebih kompetitif adalah amat penting. Melalui Program Pembangunan Vendor Bumiputera, Sime Darby Plantation tidak hanya membantu memperkasakan para usahawan, kami juga membina kerjasama yang rapat dengan rakan-rakan niaga yang boleh dipercayai dan bertanggungjawab dalam memastikan keberkesanan aktiviti-aktiviti perolehan dalam mencapai nilai optimum dan menjaga kepentingan pemegang-pemegang saham,” ujar beliau lagi.

Vendor-vendor yang di terima untuk menyertai PPV di SDP berpeluang untuk menimba pengetahuan dan meningkatkan kemahiran melalui pelbagai program latihan yang disediakan oleh SDP serta agensi-agensi teknikal terpilih yang merangkumi pelbagai subjek kemahiran seperti pengurusan perniagaan, logistik, kualiti dan produktiviti.

Bersesuaian dengan fokus syarikat tersebut kepada inisiatif-inisiatif mekanisasi dan inovasi perladangan, Ketua Pegawai Pekhidmatan Operasi SDP, Adi Wira Abd Razak berkata, pada tahun ini SDP juga telah mengenalpasti vendor Bumiputera yang akan bekerjasama dalam projek-projek penyelidikan dan pembangunan.

“Kami ingin mempelawa lebih ramai lagi syarikat Bumiputera untuk mendaftar sebagai vendor kami, terutamanya syarikat-syarikat yang boleh memperkenalkan inisiatif-inisiatif inovatif, serta membantu menyelesaikan pelbagai cabaran yang dihadapi industri sawit Negara seperti masalah kekurangan pekerja yang memberi impak kepada produktiviti,” ulas beliau lagi.

Dalam menyahut cabaran aspirasi Dasar Keusahawanan Nasional untuk menjadikan Malaysia sebuah negara keusahawanan cemerlang menjelang 2030, di majlis tersebut SDP turut mempelawa para usahawan Bumiputera, khususnya dari golongan B40, untuk mengusahakan tanaman alternatif di lot-lot tanah terpilih di bawah talian pembekalan elektrik yang berlokasi di sekitar kawasan operasi Sime Darby Plantation di seluruh negara. Setakat ini, beberapa projek penanaman nenas telahpun diusahakan oleh para usahawan Bumiputera di lot-lot tanah tersebut.

Syarikat-syarikat yang berminat untuk mendaftar sebagai vendor Sime Darby Plantation Berhad adalah dipelawa membuat permohonan di laman sesawang: https://procure.simedarbyplantation.com

• RM1,500 new minimum wage to start on 1 May 2022
• More than 24,000 workers in Malaysia to benefit from new rates

Kuala Lumpur, 24 March 2022 - Sime Darby Plantation Berhad (SDP) today announced that it will implement the RM1,500 monthly minimum wage for all workers across its Malaysia operations on 1 May 2022. In addition to that, SDP is also implementing additional incentive programmes to encourage productivity among its workforce and attract more locals to join the industry.

SDP currently has more than 24,000 plantation workers in Malaysia. The roll-out of the new minimum wage will require the recalibration of hourly/daily rates and revision of previous benchmarks for wage calculations across the board. This will benefit all workers and employees across the board. Coupled with the enhanced productivity incentives, the more attractive take home pay will hopefully appeal to more locals in joining the workforce.

At the recent 15th National Seminar 2022 organised by the Incorporated Society of Planters (ISP), Plantation Industries and Commodities Minister, YB Datuk Zuraida Kamaruddin remarked that the plantation sector should not be facing any problem in implementing the new minimum wage. She added that the average salary level in the palm oil industry can be up to RM2,000 to RM2,500 per month.

Effective 1 March 2022, SDP had streamlined the minimum wage rate for all its Malaysia-based workers to RM1,200 a month regardless of their location. SDP’s last wage rate adjustment was in May 2020, following a government decision to raise the minimum wage for workers in municipal council areas to RM1,200 a month and RM1,100 for those in non-municipal council areas. More than 16,000 workers in areas within or adjacent to a City or Municipal Council benefited from that adjustment.

“We decided to streamline the current minimum wage rates to RM1,200 a month across the Malaysia operations, as we work towards implementing the RM1,500 minimum wage rates,” said Mohamad Helmy Othman Basha, SDP’s Group Managing Director. “We also decided to enhance productivity incentives to ensure that SDP’s workers are well compensated and rewarded for their productivity.”

On top of their wages and productivity incentives, plantation workers at SDP operations enjoy several other free and subsidised benefits provided by the Company. These include free housing for themselves and their dependants, subsidised utilities, free medical treatment for employees and their immediate dependants, and various amenities such as school bus transport for employees' children, child-care centres and recreational facilities.

Since the pandemic, SDP has been actively recruiting Malaysians to take up the various job opportunities available in its operations. The company provides relevant training for all new employees and offers opportunities for career enhancement for those who are interested.

“We are integrating new technologies and innovations into our operations to increase productivity and upskill the workforce, we are reimagining plantations to transform many outdated practices that have been holding this industry back.

“In the very near future, we are looking forward to enticing local workers back into the palm oil industry, albeit one that is radically different; where workers are highly skilled and their capabilities well rewarded,” added Mohamad Helmy.

Yayasan Sime Darby contributes 3,000 seedlings for the collaboration’s first tree planting site in Sua Betong Estate

Nestlé Malaysia and Sime Darby Plantation (SDP) recently commenced their first reforestation collaboration under Project RELeaf with a tree-planting programme in SDP’s Sua Betong estate. Yayasan Sime Darby (YSD) has committed RM2 million to support Nestlé’s replanting efforts in this project. YSD’s contribution includes the purchase of seedlings comprising 23 different types of tree species to be planted as part of the three million trees. These seedlings will be planted at seven selected locations across SDP’s operations in Peninsular and East Malaysia. To kick off the collaboration, 3,000 seedlings were planted in Sua Betong estate by 150 volunteers from Nestlé Malaysia and SDP.

Spearheaded by Nestlé Malaysia, Project RELeaf aims to plant three million trees across Malaysia by 2023 to restore and improve forest ecosystems and protect wildlife as well as critical water supplies. As part of the project, Nestlé Malaysia and SDP signed a Memorandum of Agreement in December 2021 to plant over one million trees across 1,200 hectares within SDP’s oil palm operation areas to restore degraded forest along riparian zones, hilly and flat terrains. This will help establish forest linkages that reconnect key forest fragments to allow wildlife to move freely between patches of forests and increase the availability of food sources such as wild fruits for various wildlife species.

Mr. Juan Aranols, Chief Executive Officer of Nestlé (Malaysia) Berhad, said, “At Nestlé, we are deeply aware of the importance of conserving natural ecosystems which are vital to establish wildlife corridors, helping to mitigate the risk of human-animal conflict. This is also key for the conservation of precious water resources and to protect biodiversity, in addition to supporting livelihoods of local communities. Forests are also the green lungs of the planet, providing a nature-based solution for carbon sinks that are fundamental to combat climate change. To this end and in conjunction with the United Nations International Day of Forests, we are accelerating our reforestation efforts together with our partners as part of Project RELeaf. With Nestlé's well-established presence of 110 years growing with Malaysia, this is another way to further make a positive impact, contributing to a greener Malaysia for future generations to come. This is also in line with Nestlé’s global ambition of achieving net-zero greenhouse gas emissions by 2050.”

According to Mohamad Helmy Othman Basha, SDP’s Group Managing Director, the tree-planting programme in Sua Betong, Negeri Sembilan was a perfect opportunity for SDP volunteers to be involved in an impactful reforestation initiative as the company celebrates its 200-year anniversary in 2022. “We are pleased to kick-off our collaboration with Nestlé under Project RELeaf and by getting our volunteers involved in this important initiative. Reforestation, biodiversity conservation and volunteerism are some of the hallmarks of our illustrious 200-year history. We are excited to continue charting our future by taking action to respond to climate change and laying the groundwork towards making and realising our net-zero commitment,” said Mohamad Helmy.

Chief Executive Officer of YSD, Dr. Hajjah Yatela Zainal Abidin added, “We are pleased to collaborate with Nestlé Malaysia once again in this endeavour to safeguard our precious environment. YSD has supported Nestlé since 2013 in replanting efforts along the riparian areas of Sabah’s Kinabatangan River under Project Rileaf concluded in 2020, working with the local communities there and planting more than 800,000 trees in over 350 hectares. With the success of this collaboration, we are optimistic that the nationwide replantation effort taken under Project RELeaf will be an even bigger success. This partnership will complement our efforts under the YSD Environment pillar in taking proactive measures in combatting climate change.”

Project RELeaf also aims to uplift livelihoods for surrounding communities by generating alternative sources of income, such as via direct employment, work contracts, and purchasing of seedlings. To raise greater environmental awareness via learning and recreational programmes, Nestlé will also be engaging with local communities with an all-around reforestation experience.

Petaling Jaya, 18 April 2022 – Sime Darby Plantation Berhad (SDP) is transforming all its 33 Malaysian palm oil mills into certified food safety facilities by end of 2023, after which the same standards will be rolled out across the Group’s operations in Indonesia, Papua New Guinea, and the Solomon Islands. As part of this exercise, mill safety and sustainability standards will also be raised to meet stringent international food production standards.

According to SDP’s Group Managing Director, Mohamad Helmy Othman Basha, this transformation is part of the larger undertaking to reimagine and reinvent oil palm plantation operations. “We have redesigned plantations, by mechanising, automating and digitalising several aspects of work that have always been done manually. Our journey now takes us into our mills where we will deliver world-class food-safety assurance to our customers while ensuring operational efficiency and safety,” said Mohamad Helmy.

The immediate priority is to achieve food safety compliance that is certified to the HACCP (Hazard Analysis Critical Control Points) standards. Currently, four SDP mills (Giram, Sabah; Tennamaram, Selangor; Sua Betong, Negeri Sembilan; and Ulu Remis, Johor) have successfully attained HACCP certification, while another 29 mills will be evaluated by HACCP certifiers over the next few months. Recognised as a global benchmark in ensuring food safety, HACCP is used by several of the world’s best manufacturers as a systematic approach to managing food-safety risks at all stages of food production.

Despite it being a crucial stage in the palm oil supply chain, mill operations are less in the spotlight compared to the vast green landscapes of oil palm plantations and the clean industrial façades of palm oil refineries. However, it is at the “mill stage” that oil palm fruits from estates are milled and processed into unrefined palm oil and other derivatives which are then used as ingredients for palm oil refineries to produce various consumer food products.

Mohamad Helmy said, the experience and knowledge shared by Sime Darby Oils, SDP’s downstream entity, in instilling food safety as well as Health, Safety & Environment (HSE) culture throughout its global refineries will be extremely valuable as SDP embarks on transforming all its mills. “To fulfil our customers' requirements, we are not only looking at continuously improving the processes at our refineries but are now going the extra mile with our mills to ensure food safety at the supply base. Food safety is our top priority as we aim to adhere to the highest international standards and take the lead in this area for palm oil milling,” he added.

In addition to addressing food safety, SDP has also set a mission target of ‘Zero Fatality, Zero Class 2 Incidents* and Zero Environmental Non-compliance’ for all its mills. This target is underpinned by a range of comprehensive Health, Safety & Environment (HSE) key performance indicators, and full-time internal auditors will conduct regular audits at all 33 mills to ensure that they are on track with their HSE targets. To support this initiative, SDP has appointed a Chief Medical Officer, a new position that has been created to further enhance healthcare services throughout SDP’s operations and health awareness amongst workers.

To ramp up efficiency, the Group has adopted the Overall Equipment Efficiency (OEE) metrics to track mill performance in terms of capacity and availability. With OEE, which is the gold standard for measuring manufacturing productivity globally, SDP hopes to better identify, understand, and then, close any operational gaps.

(* Note: Class 2 Incidents refer to work-related incidents (such as injury or illness) which cause permanent disability to those within SDP’s premises or place of work assigned by the company)

• Higher profit of RM1.06 billion marks a positive start to the year as the Group continues to leverage on high commodity prices
• Comprehensive assessment report on Malaysian labour practices submitted to the USCBP 

Kuala Lumpur, 20 May 2022 – Sime Darby Plantation Berhad (SDP) registered a profit before interest and tax (PBIT) of RM1.06 billion for the first quarter of the year ending 31 December 2022 (1Q FY2022), a 35% increase year-on-year (YoY) from RM788 million.

Following its stellar performance in FY2021, the Group continued to register stronger YoY performance in 1Q FY2022 as crude palm oil (CPO) and palm kernel (PK) prices remained buoyant. Realised CPO prices in 1Q FY2022 averaged at RM4,465, a YoY increase of 40% compared to RM3,185 per metric tonne (MT), whilst average realised PK prices in the same period increased by 84% YoY to RM4,105 from RM2,230 per MT. The higher average realised prices compensated for lower fresh fruit bunch (FFB) production as the Group continues to be impacted by the prolonged labour shortage in the Malaysian palm oil industry. At the same time, the Group also experienced a decline in its Indonesian FFB production as production was seen normalising from 1Q FY2021’s record high production.

Sime Darby Oils registered a 23% increase in PBIT of RM132 million in 1Q FY2022 compared to RM107 million in 1Q FY2021. The improved results was mainly attributed to higher margins recorded by its Asia Pacific bulk operations which partially mitigated lower sales volumes and margins in its Asia Pacific differentiated and European operations.

Key Highlights

• The Group’s recurring PBIT grew by 50% to RM1.01 billion from RM677 million in 1Q FY2021 whilst PBIT from non-recurring transactions decreased by 58% to RM47 million from RM111 million. Non-recurring transactions in the previous year included higher gains from larger areas of land acquired by the Malaysian Government. 
  
   

Chairman, Tan Sri Dato’ Seri Haji Megat Najmuddin bin Datuk Seri Dr Haji Megat Khas said:

The Group has started the financial year with a solid set of results on the back of continuing high commodity prices caused by ongoing supply chain disruptions.

As palm oil plays a crucial role in fulfilling the demand for vegetable oils in the global market, I am confident that SDP will be able to leverage on current opportunities and continue to deliver an encouraging performance in 2022. 

 

Group Managing Director, Mohamad Helmy Othman Basha said:

As SDP marks its bicentennial, we salute those who came before us. The foundational values and principles they built this company upon have enabled us to grow, embrace change and face our challenges head on, over the last 200 years. These same values drive us today and underscore our commitment to continuous improvement.

On 26 April 2022, SDP submitted a comprehensive report to the United States Customs and Border Protection (USCBP) to address the requirements of the United States’ import regulations and international labour standards. SDP has engaged with the USCBP on the submission and will continue to give our full cooperation as we work towards modifying (uplifting) the finding. Our commitment to continuous improvement extends beyond our own operations to include our entire supply chain, which we hope will help the industry to move forward proactively.

OUTLOOK FOR FY2022:

The Group believes that while palm oil demand may be impacted by current elevated prices, this will be mitigated by the tight supply and availability of alternative vegetable oils as well as supply chain disruptions caused by the ongoing Russia-Ukraine conflict. The Group anticipates lower overall FFB production against FY2021, as the intake of new foreign workers for the plantation industry is only expected to arrive in the second half of the year.

Barring any unforeseen circumstances, the Group expects encouraging performance for the financial year ending 31 December 2022.

• 2Q FY2022 Net Profit increased by 32% to RM812 million
• Interim dividend of 10 sen per share declared

Petaling Jaya, 23 August 2022 – Sime Darby Plantation Berhad registered a net profit of RM812 million and RM1.53 billion respectively for the second quarter (2Q FY2022) and six-month period (1H FY2022) of the financial year ending 31 December 2022.

Buoyant crude palm oil (CPO) and palm kernel (PK) prices continued to support the Group’s stronger year-on-year (YoY) performance, although its fresh fruit bunch (FFB) production was impacted by prolonged labour shortage experienced in its Malaysian operations. In the second quarter, average realised CPO and PK prices increased by 44% and 40% YoY respectively to RM5,213 per metric tonne (MT) and RM3,339 per MT.

Meanwhile, the Group’s downstream segment, Sime Darby Oils, registered a profit before interest and tax (PBIT) of RM243 million in 2Q FY2022, a 66% increase compared to RM146 million in 2Q FY2021. The higher profits were mainly attributable to better margins recorded by its Asia Pacific operations which mitigated the lower margins in its European operations as well as the overall lower sales volume achieved.

Key Highlights

• 2Q FY2022: Higher YoY PBIT for the quarter was supported by non-recurring profits of RM232 million (compared to a loss of RM44 million in 2Q FY2021) relating to gains on disposal of land in Malaysia.
• 1H FY2022: The Group recorded recurring PBIT of RM1.93 billion (an 18% increase from RM1.63 billion in FY2021) resulting from higher realised commodity prices as well as increased margins in its bulk and differentiated products.

Chairman, Tan Sri Dato’ Seri Haji Megat Najmuddin bin Datuk Seri Dr Haji Megat Khas said:

I am pleased that the Group continues to record a solid performance in the second quarter of 2022. However, with CPO prices seeing a sharp correction, and the persistent labour shortage affecting productivity, we will focus on finding ways to mitigate these impacts on our Malaysian production. 

 

Group Managing Director, Mohamad Helmy Othman Basha said,

The shortage of legal migrant workers in Malaysia has affected our productivity whilst new measures instituted to create a better working environment have increased cost of production. To address these issues, we have taken bold steps to mechanise, automate and digitalise work that has traditionally been performed manually, thus reducing our labour requirements.

Even as we implement plans to mechanise and automate the Malaysian operations, we have started a whole new exercise to transform our palm oil mills into certified food safety facilities across our operations.

With these efforts in place, the Group is determined to attract more local and highly skilled talent into our plantations. We are committed to continue leading efforts that bring positive change to the industry.

OUTLOOK FOR FY2022:

With the gradual moderation of CPO prices, palm oil has now become more competitive for destination markets, prompting an increase in demand as buyers replenish inventories. The Group expects CPO prices to remain firm at least until the end of 2022. Unfortunately, the delay in the intake of new legal migrant workers continues to disrupt the Group’s harvesting and related activities in its Malaysian operations. This is expected to affect the Group’s overall FFB production, which is anticipated to be lower compared to FY2021.

Barring any unforeseen circumstances, the Group expects its performance for the financial year ending 31 December 2022 to be satisfactory. 

 

DIVIDEND:

The Group is pleased to declare an interim dividend of 10.00 sen per share for FY2022 up from 7.90 sen per share in FY2021.