Sime Darby Makes Big Move into Green Development

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by KnowESG
KnowESG_Sime Darby Makes Big Move into Green Development
Image courtesy of https://theedgemalaysia.com/

Sime Darby Plantation (SD Plantation) is leveraging its extensive land holdings in Malaysia to create a new, long-term source of income. The company will participate in the development of the Kerian Integrated Green Industrial Park (KIGIP) in Perak, Malaysia.

SD Plantation and its main shareholder, Permodalan Nasional Berhad (PNB), will work together on the 1,000-acre project situated on SD Plantation's Tali Ayer Estate. A proposal was submitted to the government in February.

KIGIP, announced by the government, aims to attract eco-friendly electrical and electronics (E&E) businesses. The park will also have a 660-acre solar farm, supplying clean energy to attract companies in semiconductors and E&E, two of the world's fastest-growing industries.

The project is a joint effort between the federal government and Perak state.

"The decision to actively participate in the KIGIP development is an important milestone for us as we venture into the natural adjacency of plantation companies,” SD Plantation’s Group Managing Director, Datuk Mohamad Helmy Othman Basha said. “We will establish strategic partnerships to develop our land where it makes the most sense to do so, and thus, establish a new and sustainable revenue stream.”

He highlighted the company's strong finances and land holdings as advantages in this venture.

KIGIP will have easy access to the North-South Expressway, connecting it to major airports and seaports, making it attractive to businesses. The main industrial zone will cover about 1,000 acres, currently part of SD Plantation's Tali Ayer Estate. Roughly two-thirds of this zone will be for industries, with the remaining area for things like shops, homes, utilities, and green spaces. Future development phases will depend on how the first phase goes. Final approval requires feasibility studies, due diligence, legal steps, and internal go-aheads.

"Working together on projects like this, instead of just selling our land, allows us to get more reliable income for our shareholders," Mohamad Helmy said.

SD Plantation will own and run the solar farms at KIGIP. Renewable energy is a key part of the company's strategy to reduce its carbon footprint and become net zero by 2030. Solar energy is expected to be a major source of income for the company within five years. In the future, the company plans to convert less productive agricultural land into solar farms.

SD Plantation has land in many Malaysian states and is discussing developing these areas into industrial parks with several state agencies. They aim to use KIGIP's green energy model wherever possible. The company is also looking for partners to develop data centres, which use a lot of energy.

SD Plantation already leases land for solar farms under government programs. For instance, about 40% of the land used for solar farms awarded in a recent programme was on SD Plantation's property.

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Source: Sime Darby

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