Malaysian Sime Darby to close operations in Liberia in restructuring strategy

LIBERIA Sime Darby Plantation, a Malaysian oil palm planation company has disclosed that it will be closing its operation in Western Liberia by the end of this year in a move that seeks to improve the company’s balance sheets.

The company said that it will divest its assests in Liberia by end of the year under the group’s asset monetization strategy under which sale proceeds will be used to cut borrowings, reports FrontPageAfrica.

The company has employed over 1,700 workers in the region contributing not less than US$1.2 million monthly through various financial transactions including purchase of plan oil seeds and taxes.

Sime Darby began scaling down its operation in Liberia since July this year when it laid off 350 peeple and up to 750 in total have been redundant since July this year.

The oil palm grower had signed a 63-year concession agreement with the Liberian government to develop 220,000ha in Grand Cape Mount, Bomi, Gbarpolu and Bong Counties into oil palm and rubber plantations.

To date, 10,508ha have been planted in five estates, namely, Matambo, Grand Cape Mount, Zodua, Bomi and Lofa. Out of the total planted area of 10,508ha, 10,401ha are planted with oil palm and 107ha with rubber.

Group managing director Mohamad Helmy Othman Basha said the group’s Liberian unit, which has a land bank of more than 10,000ha, has been continuously loss-making over the years.

He said Sime Darby Plantation is in talks with three parties on the planned sale adding that the group has already informed the Liberian government of its intention to exit.

“Liberia asset remains loss-making but we are quite confident that in the next few months we will exit in an appropriate manner. We have been present there for more than 10 years, so when we leave, we want to do so in the best way possible,” he added.

During its seconder quarter of the year ending June 2019, the company earned revenue of RM2.88 billion (US$ 684.8m) which was a drop compared to RM3.08 billion (US$730m) generated in the second quarter last year.

The company attributed the performance to the group’s upstream oil palm operations registering losses due to lower crude palm oil (CPO) prices.

Sime Darby Plantation is the world’s largest oil palm plantation operator by area. The compnay has entered into a marketing partnership with Abu Dhabi Vegetable Oil Company (ADVOC) to increase its presence North Africa region.

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