30/10/2012 (Fox Business) - Sime Darby Bhd. (4197.KU) is considering substantially accelerating the rate at which it replants oil palm plantations over the next few years to boost long-term productivity.

"It will be in our company's interests to increase the replanting rate to up to 6% from the current around 3%, particularly in view of the increasing age profile of some plantations in Indonesia," Henry S. Barlow, a director at the palm oil producer, told Dow Jones Newswires on Monday.

Sime Darby is one of the world's largest palm oil companies, producing more than 2.4 million tons crude palm oil a year, about 5% of the global total.

Some of the company's plantations in Indonesia that are 15-20 years old--usually seen as middle-aged when it comes to oil palms, which usually produce commercially for 25-30 years--are yielding just 15 metric tons per hectare of fresh fruit bunches compared with 25-40 tons at high-yielding estates, Mr. Barlow said.

Sime Darby is considering the accelerated replanting program to replace low-yielding oil palms, he said, adding that the replacement would be gradual--to ensure that near-term output doesn't drop.

Replanted trees usually begin to produce palm oil around three years after planting, he said.

Mr. Barlow said the company is also increasing production of palm oil that is certified as sustainable.

"All our oil palm plantations in Malaysia--more than 300,000 hectares--are certified as sustainable by the Roundtable on Sustainable Palm Oil," Mr. Barlow said.

In Indonesia, around 80% of Sime Darby's more than 200,000 hectares of plantations are certified as sustainable, he said.

"Sime Darby wants to optimize the sustainable acreage in Indonesia at the earliest, as many of these estates were planted in the 1990s by the previous owners and we are trying to bring them in line with the stringent standards of RSPO," he said.

The RSPO is a grouping of conservationists, planters, buyers and other stakeholders formed in 2004, mainly to promote environmentally friendly practices at oil palm plantations.

Sime Darby has started planting oil palms on more than 5,000 hectares of its 220,000 lease holdings in Liberia, Mr. Barlow said, adding that preliminary indications are that the commodity can be planted on over 60,000 hectares.

"We are flexible with the ratio of planting oil palm and natural rubber in Liberia, depending on the agroclimatic conditions," he said.