Sime Darby Plantation launches first estate in west African republic

Monrovia, 19 May 2011 – Sime Darby Plantation Sdn Bhd, the world’s largest producer of certified sustainable palm oil, planted its first palm seedling in Liberia today, at a poignant ceremony that was significant in more ways than one for many of those present. The ceremonial planting marked the commencement of large-scale plantation activities in the African republic. Concurrently, Sime Darby Plantation’s Matambo Estate, its first in Liberia, was launched.

This is Sime Darby’s third tour of duty in Liberia, as the two previous attempts were interrupted by war. “We believe in Liberia and its people,” Sime Darby Group Chairman, YABhg Tun Musa Hitam said in his opening address, drawing cheers from those present. The former Kumpulan Guthrie had operated rubber plantations in the republic between 1981 and 2002. The two civil wars that wrecked Liberia (1989 to 1996 and 2001 to 2003) forced Guthrie to withdraw from the country then. Liberia transitioned into peace in 2006, when United Nations’-brokered general elections saw the formation of an elected government. Guthrie merged with two other plantation companies to form Sime Darby Bhd in 2007.

This milestone was subsequent to the cementing of an Amended and Restated Concession Agreement (CA) between Sime Darby Plantation and the Government of the Republic of Liberia in April 2009. The CA granted Sime Darby Plantation with a 63-year concession of 220,000 hectares of land to develop palm and rubber plantations in Liberia. The concession area is mostly abandoned agricultural land and degraded forests that were neglected during the civil wars.

With the commencement of planting activities, Sime Darby Plantation is on schedule to develop 120,000 hectares of its concession area in the first 11 years of the CA. The entire concession area is expected to be fully planted by 2030.

His Excellency Joseph Boakai, Vice President of Liberia, was the guest-of-honour at the ceremony in Grand Cape Mount County. He was accompanied by a high-level contingent from the Sime Darby Group led by Musa, and Franki Anthony Dass, the Managing Director of Sime Darby Plantation.

At the ceremony, Musa said: “The ceremonial planting of our first oil palm is testimony to our commitment to develop and nurture a mutually beneficial relationship between the Sime Darby Group and the citizens of the Republic of Liberia. We will continue to ensure the land under our care is developed sustainably – that means Sime Darby will apply its best practices at its Liberian plantations, just as it does in Malaysia and Indonesia.”

Musa noted as well that once its entire concession area is fully operational, Sime Darby Plantation would directly employ 35,000 people, which does not consider the indirect impact of renewed economic activity in the surrounding areas.

Sime Darby Plantation has to date invested RM50 million in Liberia. This was primarily to establish and rehabilitate the infrastructure required to commence operations in Grand Cape Mount and Bomi Counties. The company’s Matambo Estate is located in Grand Cape Mount.

Musa added that demand for palm oil is expected to be robust in the foreseeable future as global population growth and increasing disposable income in countries such as China and India mop up supply.

Indonesia and Malaysia today produce 85% of the world’s crude palm oil, accounting for about 30% of the global edible oil market. Sime Darby Plantation itself produces 2.4 million tonnes of CPO, of which almost a million tonnes is already certified sustainable palm oil. A fully operational upstream capacity in West Africa would provide Sime Darby Plantation with greater access to markets on the Atlantic rim, Europe and Africa, offering significant savings in logistics and distribution.

In line with the Sime Darby Group’s commitment towards sustainable agriculture, Sime Darby Plantation will undertake a Social & Environmental Impact Assessment (SEIA) prior to developing its concession land in Liberia.

“As is our policy, we will retain any areas of high conservation value forest and will employ agricultural practices that are designed to minimise impact on the environment,” said Musa.

In addition, Sime Darby Plantation will also build centralised housing complexes to house its estate workers in Liberia. These villages will be similar to the company’s facilities in Malaysia and Indonesia and will feature amenities which include workers' quarters to community halls, fully equipped schools and day-care centres, dispensaries and clinics. One such complex will be developed for every 3,200 hectares of plantation established. The Matambo Estate will house the first of such complexes.