Sime Darby Plantation sees higher 2024 output as labour situation eases
The palm oil producer is expecting the 2024 production growth to rise at least 5% from last year.
05/03/2024 (Free Malaysia Today), Petaling Jaya - Sime Darby Plantation Bhd, one of the world’s largest palm oil producers, expects 2024 production growth to rise at least 5% from last year, as the country’s labour situation improves, said a top executive today.
Sime Darby Plantation’s group managing director Helmy Othman Basha said the firm’s higher production this year will be driven by reducing its reliance on foreign labour through a shift to automation and local worker recruitment.
“We believe there will be a growth in our production (for 2024). We think it’s above 5%,” Helmy said in an interview on the sidelines of the Palm and Lauric Oil Price Outlook Conference 2024.
Sime Darby Plantation’s fresh fruit bunches (FFB) production was 8.71 million metric tons in 2023, a 6% increase from 2022, the company said last month. The firm’s oil extraction rate last year was at 21.18%, slightly up from 2022.
Helmy said the company had sufficient workers and would not need to bring in new harvesters until 2026.
Malaysia’s palm oil industry, which relies on foreign workers for 70% of its plantation workforce, has suffered a labour crunch in recent years, in part because of the Covid-19 pandemic.
The labour shortage eased last year with the return of foreign workers to the country.
In his speech at the conference today, plantation and commodities minister Johari Ghani said improved labour market conditions in the world’s second-biggest producer of palm oil would increase its 2024 crude palm oil production marginally by about 1% compared to last year.
He said the Malaysian Palm Oil Board expects production at 18.75 million tons in 2024, compared to 18.55 million tons in 2023, driven by the improving labour situation.
At 5pm, Sime Darby Plantation’s share price was down 10 sen or 2.29% at RM4.26, giving it a market capitalisation of RM29.46 billion.