Sime Darby signs plantation deal with Liberian government

ERJ staff report (R&PN)

Monrovia, Liberia -- Sime Darby Plantation Sdn. Bhd. has signed a 63-year concession agreement with the Liberian government to establish natural rubber and oil palm plantations in Liberia.

The deal calls for Sime Darby eventually to establish plantations on 220 000 ha of land in different regions of Liberia, including Bomi, Grand Cape Mount, Gbarpolu and Bong counties, the company said.

Initially, the firm will invest RM70 million (euro 14.8 million) to begin operations on 10 000 ha. "It is increasingly difficult to acquire arable plantation land in Asia and thus it is imperative that new frontiers be sought to meet increasing demand. Sime Darby will also have the first mover advantage over future entrants into Liberia in terms of securing choice land,” said Sime Darby Bhd President & Group Chief Executive Dato' Seri Ahmad Zubir Murshid.

There was no immediate word on when Sime Darby expected to begin shipping rubber and palm oil from its Liberian plantations. Kumpulan Guthrie Bhd., Sime Darby's predecessor company, signed a concession agreement with Liberia in 1985, but was forced to abandon plantation operations there in 2001 because of civil unrest, the company said.

In addition to the plantations, Sime Darby agreed to establish a cooperative smallholders' development program in which small rubber farmers would own stakes. This plan will go a long way toward establishing entrepreneurship in Liberia and improving the impoverished country's economy, the company said.

Currently, Sime Darby's only African operation is a South African non-plantation subsidiary, Sime Darby Hudson & Knight (Proprietary) Ltd., which manufactures oils and fats. The Liberian plantation agreement will act as a springboard for further African expansion, the company said, although it did not specify what the further expansion would be.

The Liberian legislature is scheduled to vote Aug. 1 on ratification of the concession agreement, Sime Darby said.

From Rubber & Plastics News (A Crain publication)

Press release from Sime Darby