KUALA LUMPUR: Sime Darby Plantation Bhd (SD Plantation) today said it will work with major shareholder Permodalan Nasional Bhd to develop the 404 hectare Kerian Integrated Green Industrial Park (KIGIP), in Perak.

In a statement today, the company said a joint proposal was submitted to the Ministry of Investment, Trade & Industry (MITI) in February.

The development will be located in SD Plantation's Tali Ayer Estate in Perak.

KIGIP, conceptualised to attract green electrical and electronics (E&E) investments into the country, was announced by the government in the 2024 Budget.

The plan involves the establishment of 267 hectare of solar farms as the principal green energy source for the area, designed to attract semiconductors and E&E investments, two of the fastest growing sectors in the global economy.

"The decision to actively participate in the KIGIP development is an important milestone for us as we venture into the natural adjacency of plantation companies," SD Plantation's group managing director, Datuk Mohamad Helmy Othman Basha said.

Conceptually, SD Plantation said about 67 per cent of the main zone will comprise industrial areas, whilst the balance will house other infrastructure such as commercial and residential facilities and large green spaces.

Its plans are subject to feasibility studies, due diligence, legal requirements, and other internal approval processes.

On its push into industrial park development, Mohamad Helmy said the company is well positioned to expand into the industrial park development area due to its landbank and strong balance sheet.

"By collaborating in such projects, instead of just signing off our land, we aim to secure more sustainable revenue streams for our shareholders," Mohamad Helmy said.

The group holds strategic landbanks in various states throughout Malaysia, and active discussions are currently ongoing with several state agencies to develop these lands into industrial parks.

The intention is to replicate KIGIP's green energy model where feasible.

SD Plantation said the solar farms for KIGIP will be owned and operated by the company, as renewable energy has been identified as a key strategic pillar and revenue source for the group.

It is also a key component of SD Plantation's net-zero strategy, specifically, a 42 per cent reduction target in Scope 1 and Scope 2 Energy and Industrial carbon emissions by 2030.

Renewable energy is expected to contribute significantly to the company within the next five years.

SD Plantation said the solar farms for KIGIP will be owned and operated by the company, as renewable energy has been identified as a key strategic pillar and revenue source for the group.

SD Plantation said moving forward, the company will identify less productive agricultural lands to convert them into solar farms.

SD Plantation started leasing its land to third party solar farms under the government's Large Scale Solar (LSS) schemes 1 and 4.

For LSS4, about 40 per cent of the quota for solar farms awarded by the Energy Commission of Malaysia was on SD Plantation's land.

Additionally, under the Corporate Green Power Programme, 38 per cent of the quota was produced on the company's land, some for its own use.

Separately, the group is also exploring opportunities with partners to develop data centres, which typically consume large amounts of energy.

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