Sime Darby Plantation executes 63-year Concession Agreement for 220,000 ha of land in African republic

MONROVIA, 4 May 2009 - Sime Darby Plantation Sdn Bhd has cemented its first African plantation deal, following the execution of an Amended and Restated Concession Agreement (CA) with the Government of the Republic of Liberia.

The CA carves out approximately 220,000 hectares of land in several counties in the African republic, namely Bomi, Grand Cape Mount, Gbarpolu and Bong for both oil palm and rubber plantations. Sime Darby will invest RM70 million initially and will commence work on 10,000 ha of land.

The concession will be held for 63 years by Sime Darby Plantation Liberia Inc. (SDPLI), a wholly-owned subsidiary of Sime Darby Plantation. It was signed in Monrovia on Thursday, April 30th 2009.

Sime Darby Bhd President & Group Chief Executive Dato’ Seri Ahmad Zubir Murshid noted that Africa is the new frontier to develop oil palm plantations due to abundant fertile land which is supported by a sizeable and able workforce.

"It is increasingly difficult to acquire arable plantation land in Asia and thus it is imperative that new frontiers be sought to meet increasing demand. Sime Darby will also have the first mover advantage over future entrants into Liberia in terms of securing choice land,” said Dato’ Seri Ahmad Zubir.

This investment will also expand Sime Darby's global presence. While this investment is part of Sime Darby's upstream operations growth strategy outside South East Asia, it will also act as a springboard for potential upstream expansion to other African countries while providing access to key markets both in Africa and Europe.

Sime Darby currently has a non-plantation presence through its Sime Darby Hudson & Knight (Proprietary) Limited downstream operations in South Africa, which manufactures oils and fats products.

Liberia is located on the west side of the African continent. Currently, it has about 90,000 ha of oil palm planted while rubber is planted across 65,000 ha of its land.

Meanwhile, Sime Darby Plantation Managing Director Dato' Azhar Abdul Hamid noted: "This is a long term commitment for Sime Darby and we see it as an opportunity not just to expand our operations but also as a venture that will bring social and economic benefit to the people of Liberia. Sime Darby is proud to have this unique role, as we share our years of plantation experience with Liberians."

He added: “While any investment has risks, we are confident that with time and effort and the support and cooperation of the Government of Liberia, this will be a mutually rewarding venture.” Dato’ Azhar represented Sime Darby Plantation at the signing ceremony in Monrovia.

The CA also mandates Sime Darby to develop a smallholders' development program (Outgrowers Scheme) for the duration of the agreement. The Outgrowers Scheme will be developed along the lines of a co-operative scheme, with farmers owning stakes through organized cooperatives. Sime Darby will develop and manage an area designated by the Liberian government for this purpose.

"The scheme would create opportunities for farmers to own commercially viable plantation businesses. This will develop entrepreneurship and will go a long way towards developing, improving and simulating Liberia's economy," Dato’ Azhar said.

This scheme will be funded by the Liberian government.

The deal originated back in 1985, when the original CA was signed by the then Kumpulan Guthrie Berhad (Guthrie). Guthrie was however forced to abandon their operations in October 2001 following civil unrest in Liberia. The unrest ended in 2003, and since 2005 the Government of Liberia has taken bold steps to ensure the nation progresses. The new government has managed to attract billions of dollars worth of investments, including from steel giant Mittal Steel and from Chinese corporations.

The CA is expected to be ratified by the Liberian Legislature by August 1st 2009.

KUALA LUMPUR, 12 May 2009 - Sime Darby Bhd announced today that it has successfully deciphered the genetics of the oil palm, making it the world’s first company to achieve this scientific breakthrough.

The company’s success in deciphering the oil palm genetics – or in scientific terms sequencing, assembling and annotating the oil palm genome – is expected to bring multiple benefits to the oil palm industry.

Among the benefits are higher yields per hectarage, as well as crops that are disease resistant, drought tolerant and salinity resistant, among others.

Sime Darby President and Group Chief Executive Dato’ Seri Ahmad Zubir Murshid said that the breakthrough would lead to generation of new varieties of the crop and that would have the potential to double yields in the next three decades.

“By comparison, we now consider a 1% increase in oil yields an achievement,” he said. For the industry this success will also enable palm oil to take pole position in the global edible oils sector.

The sequencing, assembly and annotation of the oil palm genome will enable the identification of several markers or signatures that have the potential to bring several new benefits for the industry.

Some of these markers have the potential to accelerate the production of new varieties of designer oils, while others will make the crop more resistant to disease as well as more tolerant to drought and salinity. The markers will also enable the identification of planting materials that have greater capacity for assimilation of nutrients.

The breakthrough has been achieved through collaboration between Sime Darby Technology Centre (SDTC) and Synamatix Sdn Bhd, a bio-informatics company.

Research into the oil palm genome began in 2003 after Sime Darby recruited top notch biotechnologists and restructured the SDTC for biotechnology research. In November 2005, collaborative efforts on a project to analyze gene expression data began with Synamatix. It was during this time that the possibility of sequencing the genome was explored.

However, it was only in June 2008 when a feasibility study was successfully completed that Sime Darby decided to invest in the genome project. A month later, in July 2008, the Sime Darby and Synamatix researchers successfully sequenced the genome using the best available technique.

The genomic sequencing technology employed is based on an innovative system that enables the sequencing of DNA at ultra high speed, thus making it possible to produce highly accurate sequence information.

Sime Darby is the world’s first company to completely sequence, assemble and annotate the oil palm genome with 30 times coverage (repeated sequencing over 30 times) and with 93.8% completeness.

The breakthrough in sequencing the oil palm genome will have positive financial impact on not only on the Sime Darby Group but also the industry in the long-term. The revenue from oil palm-based operations is expected to increase significantly in the next three decades.

Dato’ Azhar Abdul Hamid, Managing Director of Sime Darby Plantation Sdn Bhd, said, “The potential revenue increase is significant but equally important is the fact that there are new possibilities open to the industry. With higher yields the use of palm oil for non-traditional purposes will not disrupt supply for food.”

Sime Darby expects to start planting the new varieties progressively.

As a responsible player in the world’s oil palm industry, Sime Darby will continue to strive for the betterment of the sector through collaboration with other parties in areas that fit into the Group’s overall business model.

In addition, Sime Darby is also committed to sustainable development in oil palm, as evidenced by its strong support for RSPO (Roundtable for Sustainable Palm Oil) principles and criteria as well as other world bodies involved in sustainable development.

Go to Sime Darby Genomics.

KUALA LUMPUR, 25 May 2009 - Sime Darby Berhad reported a pre-tax profit of RM1.96 billion for the nine-month period ended March 31, 2009, a reduction of 48% over the same period in the previous financial year.

The Group recorded a net profit after tax and minority interest of RM1.30 billion, a decrease of 48% from a year earlier.

The lower contribution was largely attributed to the weaker performance of the Plantation Division, which recorded a 55% decrease in operating profit to RM1.25 billion compared to the previous corresponding period, due to lower average CPO prices realized and lower production experienced across the whole industry as a result of biological tree stress.

However, despite the global slowdown, the Industrial Division continued to perform strongly with operating profit increasing by 29% to RM624 million compared to last year, mainly from its South East Asian and Australasia operations. Going forward, our order book until the end of calendar year 2009 is expected to remain strong.

In addition, the cyclically sensitive automobile and property markets have also begun to show improvement. President & Group Chief Executive of Sime Darby, Dato' Seri Ahmad Zubir noted that the Property Division’s marketing and sales efforts during the Parade of Homes Sales Campaign showed positive results.

Commenting on the results, Dato' Seri Ahmad Zubir Murshid said, "Going forward there remains considerable uncertainty in the economic environment, but we are poised to take advantage of any recovery.” He added that the Group will also leverage on its strong balance sheet to seize the opportunity to acquire undervalued assets given the attractive valuations we are currently seeing.

KUALA LUMPUR, 27 August 2009 - Sime Darby Berhad reported a net profit after tax and minority interest of RM2.3 billion for the financial year ended 30 June 2009, exceeding the Group’s KPI of RM1.9 billion by 20%. The Group recorded a Return on Average Shareholders’ Funds of 10.6% versus the Group’s KPI of 8.8%.

In a year marked by extreme volatility and uncertainty in the global macro-economic environment, the Group recorded a pre-tax profit of RM3.1 billion, a decline of 41% from FY2008, on the back of a 9% decline in revenue to RM31.0 billion as compared to the previous financial year.

The Plantation Division registered a 56% decline in operating profit to RM1.7 billion compared to FY2008. This was principally driven by lower average CPO prices realised for the financial year as well as lower production as a result of biological tree stress and unfavourable weather conditions. However, production has shown significant improvement after bottoming out in 3QFY09 as yields in Malaysia and Indonesia recovered.

Notwithstanding the severe correction in global commodity prices in FY2009, the Industrial Division continued its sterling performance, reporting a 24% increase in operating profit to RM862 million compared to the previous year, driven mainly by its South East Asian and Australasian operations.

Despite the uncertain outlook on the property sector in the beginning of the financial year, the Property Division registered a 4% growth year-on-year in operating profit to RM462 million.

Even in the face of a difficult environment for consumer related businesses, the Motors Division remained resilient and posted an increase of 13% in operating profit compared to the previous year to RM179 million in FY2009.

Commenting on the overall results, Sime Darby President and Group Chief Executive Dato' Seri Ahmad Zubir Murshid said, “I am pleased with the performance of the Group especially since we are emerging from a very challenging business environment in a relatively strong position. Our performance is a further testament of our conglomerate business model.”

He also added that the Group remains committed to pursuing its objectives of divesting its non-core businesses and focusing on its core sectors. “All our businesses must continue to perform above the required hurdle rates to justify their presence in the Group. In fact, since 2005, we have divested more than 30 non-core and non-performing assets and raised nearly RM3 billion. The capital raised has been redeployed to strengthen our core businesses.” he said. “Going forward, we will continue to restructure our portfolio relentlessly in response to changes in the Group’s strategic business environment.”

He also paid tribute to the employees of Sime Darby for their hard work, dedication and commitment in this difficult operating environment. “We strongly believe that our robust pool of talent, combined with their steely determination in the face of such adverse business conditions, will bring the company to greater heights. They are indeed our most valuable asset.”

The Group proposes a final single tier dividend of 15.3 sen per share for the financial year ended 30 June 2009. Including the interim dividend paid of 5 sen per share less Malaysian income tax at 25%, total gross dividend for the year will be 20.3 sen per share.

KUALA LUMPUR, 17 September 2009 - Sime Darby Plantation Sdn Bhd’s mangrove replanting programme at Carey Island, Selangor has received a boost from accounting giant, KPMG Malaysia.

KPMG has contributed RM50,000 towards the project as part of its Corporate Social Responsibility (CSR) initiatives. Its contribution will go towards partly funding the construction of the geo-tube and gabions structure at targeted replanting site.

This structure functions as a wave breaker and at the same time traps mud and sand and gradually stabilise the ground to make it suitable for mangrove replanting. Mangrove seedlings pre-planted in logs made of coir will be planted on the prepared ground.

KPMG Partner-in-Charge of Audit, Mr Peter Ho, presented the cheque to Sime Darby Plantation Managing Director Dato’ Azhar Abdul Hamid at the Kuala Lumpur Hilton here today.

Sime Darby Plantation’s mangrove replanting initiative is part of a collaborative project on conservation and enhancement of biodiversity on Carey Island carried out by Sime Darby Research Centre and Universiti Malaya.

KPMG’s contribution towards the replanting of mangrove trees was not the first collaborative CSR activity carried out between Sime Darby Plantation and KPMG.

On August 1, 2009, KPMG staff planted 300 forest trees at the Wildlife Sanctuary Park in Carey Island as a friendly gesture to support Sime Darby’s group-wide tree planting programme. Sime Darby aims to plant five million trees around its properties by an unspecified deadline.

Under this collaboration, apart from the financial contribution, KPMG employees will also assist during the replanting activity, expected to take place at the end of November.

Sime Darby Plantation’s initiative in conserving the mangrove forest, which plays a vital role in protecting the land against the ravages of the sea especially during the Asian Tsunami of 2004, led to the establishment of the Mangrove Research Centre (MRC) on Carey Island.

The Centre, the first of its kind in the country, allows Universiti Malaya researchers and undergraduates to conduct research on mangrove ecosystem at the centre and conduct field work on site.

The establishment of MRC was one of the outcomes of the collaboration on biodiversity of flora and fauna between Sime Darby Research Centre and the Institute of Biological Sciences and Institute of Ocean and Earth Sciences of Universiti Malaya (UM).

ZWIJNDRECHT, 4 November 2009 - Unimills, leading supplier of vegetable oil based ingredients for the food industry and the European subsidiary of world’s largest palm oil originator Sime Darby, announced today that it has acquired a lecithin production facility, previously owned by IOI Loders Croklaan.

The facility is located on the Unimills premises. All operations and staff will be fully integrated with the Unimills organisation.

The lecithin team processes and packages lecithin both from soy and sunflower seeds, which is then sold worldwide to leading food companies. Terms of the investment were not disclosed.

Unimills acquired both the production and modification processes of lecithin, thus expanding its portfolio of vegetable oil based ingredients for the food industry.

Lecithin, a natural food ingredient isolated from vegetable crops such as soy and sunflower seeds, is used in several food applications such as margarines, confectionery products and animal feed.

In margarines, lecithin enhances smooth oil-in-water emulsions and prevents spattering during shallow frying. In chocolate applications, lecithins are used to tailor viscosity during manufacturing. In animal feed, it is used for its beneficial nutritional properties.

The lecithin facility offers a broad portfolio of native, fractionated and enzyme modified soy and sunflower lecithin for the European food industry.

“We are very pleased with this acquisition as it broadens our current product portfolio of natural vegetable based oil ingredients,” said Alexander van der Klauw, Managing Director of Unimills Europe.

“Already, Unimills is the market leader for the production of hardstocks for margarines in Europe. This acquisition strengthens our leading market position in functional ingredients for margarine manufacturing.

The step fully supports our strategy to expand our offering of innovative and specialized food ingredients, tailored to customer needs.”

Parent company Sime Darby invests 2-3% of its plantation turnover annually in R&D through its five R&D Centres and three customer-focused Innovation Centres around the world.

The main focus of its R&D activities is to enhance productivity, develop innovative food ingredients and explore new opportunities in the agribusiness sector.

Now with the acquisition of the facility, lecithin applications will be part of the European Innovation Centre’s progressive portfolio.

SELANGOR, 24 March 2010 – Sime Darby Plantation Sdn. Bhd. – the plantation and agri-business arm of Sime Darby Berhad, Malaysia’s largest conglomerate – is leading the pack in heeding the Government’s call for public usage of biodiesel in Malaysia.

Witnessed by Minister of Plantation Industries and Commodities, Tan Sri Bernard Dompok and industry officials, Sime Darby President and Group Chief Executive Dato’ Sri Ahmad Zubir Murshid led by example and filled his BMW 730Ld with Sime Darby’s biodiesel, Bio-N (pronounced “Beyond”). Other cars used by Sime Darby’s executives were also filled with Bio-N, apart from a tractor and a motorbike.

Sime Darby Plantation in fact had started using palm biodiesel blend in its upstream operations vehicles since March 2008. The initiative started at the East and West Estates and Mills on Carey Island and later expanded to other estates and oil mills in Selangor and Negeri Sembilan.

Initially the company started with B5 biodiesel (5% biodiesel blend in petroleum diesel) and gradually some estates increased the ratio to up to 10% (B10). For this initiative, upstream operations use about 100 metric tons of pure biodiesel a year.

The usage of biodiesel in Sime Darby Plantation operations vehicles was first mooted by the company’s Managing Director Dato’ Azhar Abdul Hamid.

“As a major producer of palm oil, it only makes sense for our cars to use the Bio-N. We are indeed very pleased that our President himself is leading by example by filling his BMW 740d with Bio-N. There are many reasons why biodiesel is the fuel of the future, and its environmental advantages surely lead the list”, said Dato’ Azhar.

He added that to make biodiesel run on private cars, a government mandate is necessary. He noted that Tan Sri Dompok’s presence at the event augurs well for the future of biodiesel.

In February 2009 the Malaysian Government initiated the usage of palm biodiesel blend in government’s vehicles in the Klang Valley. The government has also announced its plans to start the usage of biodiesel blend other areas in Malaysia beginning 2010. However this has yet to materialise.

To date there are 22 members of the Malaysian Biodiesel Association with total production plant capacity of approximately 2.7 million metric tons a year.

In 2009 Malaysia exported approximately 232,000 metric tons of palm biodiesel or about 12% of the total available capacity.

State-of-the-art facility includes R&D application kitchen, high tech laboratories and new food grade oil processing pilot plant to provide food industrywith shorter lead times and reduced complexity

Zwijndrecht, 6 October 2010 – Sime Darby, the world’s largest listed plantation company, launched Sime Darby Innovation Centre Europe (ICE) in Zwijndrecht, the Netherlands, underlining the Malaysian company’s commitment to innovation and technology. Located within the premises of its European unit Sime Darby Unimills BV, ICE was launched jointly by Neelie Kroes, the Vice-President of the European Commission, and Dato’ Mohd Bakke Salleh, Sime Darby's Acting President & Group Chief Executive.

“This is a proud day for Sime Darby Unimills and the rest of the Sime Darby Group as we have always believed that innovation is a critical element to our success,” says Dato’ Bakke.

Sime Darby has two other Innovation Centres: Innovation Centre Africa in Boksburg, South Africa and Innovation Centre Asia in Johor, Malaysia. The Group has committed between 2% and 3% of its annual turnover to innovation.

“Our new Innovation Centre in the Netherlands not only proves that we seek to understand what drives our customers, it also shows Sime Darby’s long term commitment to sustainable innovation here in Europe,” adds Dato’ Bakke.

Today’s consumers are increasingly conscious of their diets. They want tasty food products that are healthy and safe, based on responsibly produced natural ingredients. With the rapid change of constant consumer demands, Sime Darby aims to anticipate these changes through its global expansion of innovative efforts. The new Innovation Centre features state-of-the-art laboratories and analytical equipment, R&D application kitchen and a unique oil processing pilot plant.

ICE is part of a bigger investment programme to improve the quality and expand capacity which also includes a new loading hall for trucks delivering the products to customers. The new loading hall is equipped with state-of-the-art computerized telescopic bottom loading technology which helps maximize quality and shelf-life of the products.

Sime Darby’s Head of Innovation Centres, Gerhard de Ruiter, says ICE is an important part of the company’s business strategy going forward in Europe.

“ICE reflects today and tomorrow’s operating environment. It is an important next step in the execution of our global strategy to serve our customers for whom integrated partnerships for better and quicker product innovation at the lowest cost are paramount,” says de Ruiter.

He notes that Sime Darby’s approach to innovation stood out positively against the competition, in that it is transparent.

“The company is convinced that the best way to develop new products that feed into customers’ needs is to develop them in close cooperation with the customers. Our innovation team has eradicated the complexity that is often linked to innovative processes. Our expertise in vegetable oil sciences and processing techniques complements our approach. The result is the best vegetable oil-based ingredient that meets the specifications of the customer, and the cooperation means it gets done faster,” adds de Ruiter.

Alexander van der Klauw, Managing Director of Sime Darby Unimills, adds that this unique innovation model is attractive to the industry.

“Our clients have always chosen us for our open and customer focused innovation process, and our ability to provide them with a sophisticated network of expertise, stretching from our trees to their tables,” says van der Klauw.

Sime Darby’s global team of scientists operates as one. They combine a heritage of best practices in agriculture with centuries of expertise in vegetable oil processing and functionality.

For more information on Sime Darby Unimills, click here to visit the website.

The Group receives 16th RSPO certification for its Strategic Operating Unit

Kuala Lumpur, 8 November 2010 - Sime Darby has received its latest Roundtable on Sustainable Palm Oil (RSPO) certification for its Yong Peng Strategic Operating Unit (SOU) in Johor, putting it at the forefront of RSPO compliance.

The certification, received on 28 October 2010, brought the total number of RSPO-certified SOUs to 16. The Group's wholly-owned subsidiary, Sime Darby Plantation, operates 63 SOUs in total and aims to have all the SOUs certified by the end of 2011.

"This is yet another testimony to our strong commitment to the principle of sustainability. Sime Darby, as a founding member of RSPO, is committed to the eight principles of RSPO. Palm oil is a key commodity with growing global demand, and we ensure that it is produced without harming the environment, the society and the animals," says Dato’ Mohd Bakke Salleh, Acting President & Group Chief Executive of Sime Darby Berhad.

He adds that apart from being a food and ingredient resource, the oil palm industry also employs thousands of people worldwide.

"The humble palm oil touches millions of lives globally, and it is pleasing to note that Sime Darby plays an integral part in this aspect. We also take a firm stand that the production of palm oil must be done sustainably,"adds Dato’ Bakke.

Last year, Sime Darby sold 217,000MT of both Sustainable Crude Palm Oil (SCPO) and Sustainable Kernel Palm Oil (SKPO) through both certificate and physical sale. This demand is expected to continue growing in the years to come.

With this certification, Sime Darby now has the capacity to produce almost 532,000MT and 134,000MT of SCPO and SKPO, respectively.

"Our focussed and consistent approach in getting our SOUs certified means that Sime Darby will be at the forefront of the sustainable palm oil business when demand rises. As it stands today, the 16 certified SOUs means we are the world leader in terms of RSPO-certified SOUs," says Franki Anthony Dass, the Acting Executive Vice President of Sime Darby’s Plantation and Agribusiness Division.

Yong Peng Estate and Mill is located in Yong Peng, Johor. The mill gets its fresh fruit bunch (FFB) supply from nine other Sime Darby Plantation estates in the surrounding area. Cumulatively, the mill processes about 64,000MT of FFB a year.

Sime Darby Plantation’s first RSPO certification was obtained just over 2 years ago on 1 October 2008, for Sandakan Bay SOU in Sabah.

Biofuel Sold to Hawaiian Electric Co (HECO) is Segregated Certified Sustainable Palm Oil

Sime Darby Plantation would like to respond to allegations and concerns raised by Rainforest Rescue, an NGO based in Germany, on the sustainability of the biofuels that Sime Darby Plantation supplies to Hawaiian Electric Company (HECO).

As a responsible plantation company and a founding member of the Roundtable on Sustainable Palm Oil (RSPO), we take any queries or concerns about our practices or any breaches of our policies very seriously.

Contrary to the claims of Rainforest Rescue, Sime Darby Plantation has the required policies in place, all of which are in adherence with the standards of the RSPO (more information on www.simedarbyplantation.com). These include both environmental and social policies which are rigorously implemented at all our estates. We are actively pursuing our ultimate goal of obtaining RSPO certification for all our 63 Strategic Operating Units (SOUs) by the end of 2011, an aggressive target that we intend to achieve despite all the inherent challenges faced when undoing the inherited practices of the past.

To date, 16 of our SOUs have been certified by the RSPO, making us the world’s largest producer of certified sustainable palm oil. A further 30 of our SOUs have been audited by independent firms recognised by the RSPO and are awaiting certification. This is no small achievement and is a testament to the fact that Sime Darby Plantation is extremely serious about the sustainable production of the palm oil we produce. We are deeply invested in both environmental and social sustainability as we recognise that our very existence depends on it.

Sime Darby Plantation appreciates constructive feedback and comments in the interest of the continued well-being of the palm oil industry and welcomes anyone who has need for more information or clarification to contact us.