Nov. 4 (Bloomberg) -- Sime Darby Bhd., Malaysia's biggest diversifiedgroup, may spend as much as 2 billion ringgit ($526 million) to buy powerand oil palm plantation assets in Asia and sell its unprofitablebusinesses to bolster earnings.Sime may buy assets in Indonesia, Thailand and Malaysia, Group ChiefExecutive Ahmad Zubair Murshid told reporters after a shareholders'meeting in Kuala Lumpur. It's also in discussions to sell fourunprofitable units for 200 million ringgit within 18 months. He declinedto identify the businesses.

Kuala Lumpur-based Sime, controlled by state-run investment funds, istrying to boost returns as part of a pledge by Prime Minister AbdullahAhmad Badawi to revamp government-linked companies to bolster productivityand lure investment to the $115 billion economy. ``Sime has been a sleepyindustrial conglomerate, and there seems to be an impetus to improveprofits via divestments and the acquisition of core assets that will beearnings accretive,'' said Alan Richardson, who helps manage $2.7 billionin Asia excluding Japan, at Baring Asset Management in Hong Kong. Therestructuring ``takes time, and when the price goes up it'll be a surpriseto investors.'' Barings bought about 3 million Sime shares in July,Bloomberg Data showed.

`Similar Earnings'

``This year will be spent on restructuring and re- capitalizing thebusiness,'' Ahmad Zubair said. Sime will have a ``similar earningsperformance to the year just ended,'' Sime Group Finance Director MartinGiles Manen said. The company has about 3 billion ringgit in cash, headded.

For the year ended June 30, Sime Darby's profit rose 13 percent to 918.7million ringgit on a 9 percent gain in sales to 14.9 billion ringgit. Thecompany has identified four locations to buy oil palm plantation land inKalimantan and Sumatra in Indonesia, he said, adding that Sime currentlyowns 80,000 hectares of plantation land.

Sime is no longer interested in buying a stake in Aarhus United A/S, anedible oil refiner owned by United International Enterprises Ltd., AhmadZubair said. United International is a Danish company that owns oil palmplantations in Malaysia through its United Plantations Bhd. unit. Hedidn't provide more details.

Palm Oil Prices

Palm oil prices are ``softening,'' Ahmad Zubair said, and will probablytrade between 1,350 ringgit and 1,400 ringgit a metric ton in the next 12months, he said. Palm oil futures on the Malaysian Derivatives Exchangedropped 1 percent to 1,422 ringgit a metric ton as at 2:51 p.m. localtime.

Palm oil is used by Nestle SA in its Milo beverage and by Body ShopInternational Plc to make shampoo. Malaysia is the world's biggestexporter of the edible oil. It competes with soybean oil, which accountsfor about a third of the global vegetable-oil supply.

Sime is also expanding its power generation business in Thailand,Indonesia and Malaysia, with the aim of raising its power generationcapacity from 800 megawatts to 2,000 megawatts, Ahmad Zubair said.

The company sells cars made by Bayerische Motoren Werke AG and Ford MotorCo., tractors, excavators and landfill compactors by Caterpillar Inc. andHasting Deering bulldozers in Asia and Australia. It also has interests inproperty development, engineering and construction.

Bakun

Ahmad Zubair also said the Bakun Dam project in Malaysia's Sarawak stateis 20 percent completed, which is behind a scheduled 30 percent completionat this date.

It is ``working hard'' to complete the $2.4 billion, 2,400- megawattproject by 2007, Ahmad Zubair said. The Bakun Dam is Southeast Asia'sbiggest hydropower project.

The dam, being built by a group of seven companies led by Sime, has beenpostponed twice since the early 1980s and has attracted criticism fromenvironmental and social groups, which say the project has displaced about10,000 indigenous people living in the area.