[GRI 2-1, 2-2, 2-6]
About Sime Darby Plantation
Sime Darby Plantation Berhad (‘SDP’ or ‘the Group’) is a vertically integrated palm oil company headquartered in Malaysia. The Group was publicly listed on Bursa Malaysia in 2017 after a strategic de-merger from the multinational conglomerate, Sime Darby Berhad. SDP is engaged in the full spectrum of the palm oil value chain, which includes upstream plantations, downstream operations, research and development, and renewables in the agribusiness sector. With a market capitalisation of MYR35.96 billion4 and a workforce of more than 80,000 employees, SDP is amongst the largest companies listed on Bursa Malaysia. As the world’s largest producer of certified sustainable palm oil (CSPO), producing 14.7% of global CSPO in 20215, our operations are 100% certified by leading international and national sustainability certification bodies.
Despite lower fresh fruit bunch (FFB) production due to labour shortages, revenue and net profits soared in 2021 as a result of high crude palm pil (CPO) and palm Kernel (PK) prices, and better oil extraction rates. The Group achieved an overall revenue of MYR18,695 million, a 43% increase compared to MYR13,081 million in FY2020. Net profit was 90% higher.
Since our last report, there have been several changes to our operations. In January 2020, the Group divested a 100% equity interest in Sime Darby Plantation (Liberia) Inc. (SDPL). The Group also divested land in Malaysia, several small joint ventures in Singapore and Indonesia, and our oleochemical business in Malaysia. Refer to page 60 of our 2021 Annual Report and corporate website for more information.
4 As of April 2021
5 Global RSPO CSPO production in 2021 is estimated at 14.6 million tonnes. Source: RSPO Impact. Available at: https://rspo.org/impact
Overview Of Our Operations
240 ESTATES SPANNING > 700,000 haMalaysia, Indonesia, Papua New Guinea (PNG), Solomon Island (SI)
67 MILLSMalaysia, Indonesia, PNG, SI
10 Palm Kernel CruchersMalaysia, Indonesia, PNG, SI
11 RefineriesMalaysia, Indonesia, Thailand, South Africa, Netherlands, United Kingdom
5 R&D & 3 Innovation CentresMalaysia, Indonesia, PNG, Netherlands, South Africa
1 Genetic Testing FacilityMalaysia
AS OF APRIL 2021
Global RSPO CSPO production in 2021 is estimated to be 14.6 million tonnes.
The SDP value chain
AS OF APRIL 2021
Global RSPO CSPO production in 2021 is estimated to be 14.6 million tonnes.
The SDP value chain
The Group’s land bank totals 744,630 hectares across Malaysia, Indonesia, and Papua New Guinea (PNG) and Solomon Islands. More than 50% of our plantations are situated in Malaysia. Another 33% and 16% are located in Indonesia and PNG and Solomon Islands, respectively.
In 2021, our mills consistently sourced 9.12 million tonnes of fresh fruit bunches (FFB) for processing into crude palm oil (CPO) despite labour shortages and government-mandated hiring freezes resulting from pandemic movement restrictions.
Aside from palm oil, the Group is also involved in rubber production in Malaysia. Our PNG and Solomon Islands operations, New Britain Palm Oil Limited (NBPOL), also manage sugar cane plantations and cattle pastures in PNG. We are PNG’s largest commercial producer of high-quality beef and the country’s only producer of commercial sugar.6
Sime Darby Oils (SDO) is a single, integrated solutions provider of oils and fats operating in 12 countries worldwide. SDO offers a variety of oils and fats products, including commodities, speciality products and other palm oil derivatives.
SDO is also involved in refining and trading coconut, sunflower, rapeseed, soybean, and corn oils.6
For an overview of supply chain volumes, see Responsible Sourcing
Innovation and R&D
SDP is driven by operational excellence, innovation, and sustainability. We operate a network of Research & Development Research & Development (R&D) and Innovation Centres internationally, with over 190 technologists, scientists, and technicians helping us improve every aspect of our value chain. Through strategic and operational R&D, we are committed to developing, applying, and transferring relevant knowledge, research findings, and technologies to improve our plantation yields and milling processes, and customise our downstream product range. Our R&D team seeks new ways to ensure high quality, traceable refined palm oil and palm kernel products across our operations.
Our renewable energy subsidiary, Sime Darby Plantation Renewable Energy Sdn Bhd (SDPRE), focusses on value-accretive activities in the renewable energy sector. We leverage the assets and by-products of SDP’s core business to strategically embark on solar, biogas, and biomass projects aligned with the Group’s sustainability goal of lowering carbon emissions. Since its inception, we have built and currently operate 12 biogas plants across Malaysia, Indonesia, and Papua New Guinea, and solar projects in Malaysia.
See Renewable energy
Financial and Operational Highlights
Group Employees by Geographic Region 2021 (%)
FFB Processed and CPO Produced 2019 — 2021
Note: 2019 production data includes volumes from former operations in Liberia.
6 The focus of this report is on the palm oil business of the Group.
Available at: https://rspo.org/impact [Accessed 23 Feb 2022]
Managing the COVID-19 pandemic[GRI 3-3]
In early 2020, the COVID-19 pandemic struck the world, disrupting lives, livelihoods, communities, and businesses worldwide. We recognised the impending risk to our people and the businesses they depend upon. Acting swiftly, we implemented procedures and practices to protect lives and ensure the safety of our employees and their families whilst maintaining business continuity and support for surrounding communities.
Our prompt action has allowed us to pursue business with minimal disruption. More importantly, we ensured that our employees’ health and welfare, jobs, wages, and related benefits were secure and not negatively impacted by the pandemic. We developed initial action plans to ensure an immediate response to contain the spread of the virus within our operations, safeguard our employees, and support surrounding communities. Two years into the pandemic, we are now focused on developing long-term strategies, business continuity plans, and sustainable support measures for the communities and lives of the people connected to SDP.
The health and well-being of our employees and surrounding communities remain our top priorities during the pandemic. We have adopted and revised the standard operating procedures (SOPs) to strictly adhere to the national SOPs and reduce the risk of exposure to the virus. Some of these measures were implemented from the start of the pandemic and continued to be emphasised following unfortunate COVID-19 related fatalities:
|Maintaining good hygiene||
|Detection and isolation procedures||
|Communications and briefings||
SDP offered dedicated support during lockdowns to our foreign workers in Malaysia at remote plantations and regularly communicated on COVID-19 measures and practices. Through worker helplines, we fielded requests from those wishing to return home to their families. In July 2020, when borders briefly re-opened, SDP supported the repatriation of foreign workers to their home countries, primarily Indonesia, India, Bangladesh, Nepal, and Sri Lanka. At the peak of the pandemic, when commercial flights were unavailable, SDP chartered six flights for over 5,000 workers. We continue to support workers by helping them obtain the paperwork and access the tests required to return to their respective home countries.
In 2021, SDP helped set up vaccination centres near our operations and workers’ residences. Foreign workers could walk-in for vaccines without an appointment. They also received communication support from consular and embassy staff from their respective countries.
Maintaining access to food in remote locations
Given the remoteness of a few of our plantations, we ensured employees and neighbouring communities had access to stable food supply. In some regions, we provided additional food baskets to workers and community members to support local government initiatives. These food baskets included rice, cooking oil, flour, sugar, salt, canned sardines, biscuits, and tea bags, as well as hygiene kits comprising bar soap, detergent, sanitary pads, shampoo, toothpaste, and face masks.
We distributed 6,850 food baskets to all communities as part of a Kami Prihatin (We Care) campaign from July to December 2021. We also worked to support local governments and provide rice packages through the Musi Banyuasin Regency Government. Our efforts included distributing over 8,000 sembako, or subsidised basic goods packages, to impacted communities around our Indonesian operations.
Offering employment opportunities
Under the Kami Prihatin campaign, SDP also offered employment opportunities at our Upstream Malaysia operations for locals seeking work during these challenging times. These roles included working at our estates as harvesting specialists, fruit collectors, drivers, and mechanics. SDP recruited a total of 130 workers through this initiative.
Providing access to medical care
Recognising the strain the COVID-19 pandemic placed on the healthcare system to provide care, emergency response, vaccines, and personal protective equipment (PPE), SDP provided support to government healthcare facilities and medical care for workers and their communities. Some of our initiatives included:
Collaborating with government to launch a five-month vaccination drive for special needs individuals (Malaysia)
Providing 51 ventilators to 12 general hospitals in Peninsular Malaysia in partnership with YSD (Malaysia)
Providing financial support to clinics and health authorities (PNG)
Spraying disinfectant and providing hand washing stations (Indonesia, PNG)
Launching vaccination drives to support inoculation of employees and workers (Indonesia, Malaysia)
Donating medical equipment to health workers in Lawang Wetan (Indonesia)
Holding blood donation drives (Indonesia)
Supporting education for children
Together with Yayasan Sime Darby (YSD), SDP Malaysia contributed to the CERDIK Education Fund (Tabung CERDIK), a corporate social responsibility (CSR) initiative spearheaded by government-linked companies and government-linked investment companies. This partnership provided school children from the bottom 40% income group (B40) with laptops, tablets, and internet connectivity to support digital access to education. A total of 1,986 students from B40 families living in and around SDP operations benefitted from this programme.
|Food baskets||MYR 1,027,500||MYR 184,800.00|
|Monetary contributions to hospitals/health authorities||MYR 860,170.00|
|In-kind contributions (PPE, medical equipment)||MYR 4,500,000||MYR 2,145,500.00||MYR1,314,200.00|
|Contributions to government initiatives||MYR 2,000,000|
In Malaysia, SDP has donated approximately MYR10 million to YSD. This represents roughly 50% of the over MYR20 million used by YSD in their COVID-19 emergency relief work since 2020. YSD has been an instrumental programme partner in ensuring the success of these initiatives.