15/06/2010 (The Star Online) - AT a glimpse, Sime Darby Bhd and Felda Group can be best described as the two most successful and largest oil palm plantation entities owned by the Government that have strong reputations, given their diversified empire both locally and abroad.

Sime Darby is currently one of the world’s largest public-listed oil palm plantation groups with about 524,626ha of plantation land in Malaysia and Indonesia.

The unlisted Felda Group, however, is the world’s single largest plantation group should it combine both its own estates and smallholders’ estates nationwide. It holds an even larger hectarage – over 555,456ha.

Sime Darby and Felda are definitely plantation giants in their own right, both sharing about the same synergies in terms on their highly strategic upstream, downstream, oils and fats, oleochemicals and manufacturing divisions – all related to the highly lucrative oil palm business.

Felda, for example, is said to contribute about 8% to the global palm oil production and around 18% to the national output.

Therefore, Sime Darby’s announcement yesterday to appoint Felda Global Ventures Holding Sdn Bhd group president and CEO Datuk Mohd Bakke Salleh as its new president and group chief executive is perceived by industry observers as a high-profile item on Sime Darby’s agenda than just welcoming a new person on board.

Bakke has been known for turning around Lembaga Tabung Haji in early 2000. He was in the midst of listing TH Plantations Bhd prior to assuming his “national service” (dubbed by those familiar with the industry) at Felda Holdings Bhd in 2005.

Similarly, Bakke who now has his hands full with the on-going reorganisation of Felda units – Felda Global Ventures and Felda Holdings Bhd – has now been shortlisted to join Sime Darby.

Since last year, Felda has embarked on a series of “internal reorganisation” which led to the splitting up of its businesses into four global business lines – multicrop, oils and fats, oleochemicals and logistics and services – and the creation of five organisational support divisions,

Some have even described Bakke as the maestro in turning around companies given his qualification as a chartered accountant.

Having said that, what Bakke may bring to the table for Sime Darby would be highly monitored by both local and foreign fund managers, who are most keen to see major changes – like a separate listing to differentiate Sime Darby as a fully dedicated plantation blue chip counter in Malaysia unlike its current status which focuses on plantation, property, motor, heavy equipment, energy and utilities.

To some foreign investors, Sime Darby under the previous leadership of Datuk Seri Zubir Murshid failed to truly reflect Sime Darby’s strong synergy in the oil palm plantation sector due to its emphasis on too many areas strategic core businesses.

Bakke is also speculated to play an important role in Sime Darby’s plan to list its Indonesian plantations on the Jakarta Stock Exchange by 2011.

Bakke’s initial role is seen as to further unlock the value of Sime Darby plantation assets – which would remain as the group’s mainstay in the foreseeable future – before he moves on to further ship shape Sime Darby’s other core businesses.