Sime Darby

Background

The modern Sime Darby Berhad corporation was created in 2007 through a merger of three companies.

Sime, Darby and Co. Limited

In October 1910, British businessmen William Sime and Henry Darby established Sime, Darby and Co., a fledgling player in the lucrative rubber industry. The company later diversified to cultivating palm oil and cocoa and met with enormous success. At the time of the company's founding, William Middleton Sime was a 37-year-old Scottish adventurer and fortune seeker. He had two failed ventures behind him – one in import-export business and the other in coffee plantations – when he left his job as a mercantile assistant in Singapore. Henry Darby was a wealthy 50-year-old English banker who owned property in Northern Malaya.

A senior partner of the audit firm of the Sime Darby group was found dead in September 1973. In two suicide letters, he alleged he was doped and deceived by Dennis Pinder, chairman and managing director of Sime Darby, related to the audit of Sime Darby. Subsequently, Dennis Pinder was alleged that he misappropriated over S$3 million. At that time, Sime Darby was one of the largest companies in Singapore and Malaysia. Pinder was jailed after pleading guilty to criminal breach of trust in October 1975.

In 1977 Sime Darby Holdings was acquired by Malaysian investors – mainly through Tradewinds (Malaysia) Sendirian Berhad. In December 1979 with the incorporation of two new Malaysian entities, Sime Darby Berhad (SDB) and Consolidated Plantations Berhad (CPB), Sime Darby moved its headquarters to Kuala Lumpur and became a Malaysian registered and managed concern.

Guthrie

The company was founded in Singapore in 1821 by Alexander Guthrie. It was the first British trading company in South East Asia. Guthrie introduced rubber and oil palm in Malaysia in 1896 and 1924 respectively. Guthrie Group was made a public company in 1987 and was subsequently listed on the Kuala Lumpur Stock Exchange (KLSE) in 1989 in what was then the largest public issue in Malaysia.

Golden Hope

In 1905 Harrisons and Crosfield, a British tea and coffee trading company, purchased several small estates in Malaysia for £50,000 and amalgamated them to form the Golden Hope Rubber Estate. In 1982 Harrisons and Crosfield sold three large plantation groups – Golden Hope, Pataling, and London Asiatic – to Malaysian concerns for £146 million. The business was renamed Golden Hope Plantations Berhad in 1990 after Pemodalan Nasional Berhad took majority equity of the company. Its interests originally were in tropical agriculture but, while plantations have remained a core business interest, the company has diversified into other areas including glycerine manufacture, fruit juices and real estate. The group now has 83 subsidiaries based in seven countries. The main estate and plantations are Carey Island and Banting in Selangor.

Merger

In January 2007, the "three Malaysian giants": Sime Darby, Guthrie and Golden Hope, merged into the vehicle entity named Synergy Drive and on 27 November 2007, Synergy Drive was renamed Sime Darby Berhad.

Sime Darby had a land bank of 850,000 hectares in 2011. The Malaysian government-linked company Amanah Saham was the largest stakeholder in 2011, followed by the government's Employees Provident Fund and the government-run Permodalan Nasional Berhad (PNB, the national capitalization agency). CEO of the firm was Datuk Mohd Bakke Saleh, who was also the CEO of Bank Islam, another government-linked company, in 2010.

Businesses

Sime Darby is an international conglomerate involved in many types of businesses ranging from agriculture to ports management. Plantation sector remains the most important sector for the company.

Plantation

Sime Darby operates palm oil and rubber plantations in Malaysia, Indonesia and Liberia. Plantations are Sime Darby's largest revenue generator, accounting for the majority of the group's profits in recent years.

Sime Darby is one of the largest palm oil producers in the world, supplying about 2.47 million metric tonnes or 5% of world supply. The company has a total planted area over 500,000 hectares and a land bank over 900,000 hectares. About two-thirds of the Sime Darby's palm oil production comes from Malaysia, and one-third from Indonesia. The company's recently developed estates in Liberia were not yet in production as of 2012.

A related company in the Sime Darby group, Sime Darby Biodiesel Sdn Bhd, produces biodiesel from crude palm oil.

Property

Sime Darby Property is involved in the property development business in eight countries, namely Malaysia, Singapore, Indonesia, Philippines, Vietnam, People's Republic of China, Australia and United Kingdom.

Industrial

The company is involved in the purchasing, leasing and selling of industrial equipment such as Caterpillar Inc. heavy duty trucks and tractors.

Motoring

The company has motor dealerships in eight countries. It owns Auto Bavaria in Malaysia, which sells BMWs and MINIs. With partnership with Ford, it sells Ford's cars and trucks together with the Land Rover brand. Besides that, it is the main dealership of Porsche and Alfa Romeo in Malaysia. It is also a major BMW dealer in Singapore, Australia, New Zealand, India and Thailand. In southern China, the company sells BMW and Rolls-Royce.

In addition, Sime Darby co-owns Inokom Corp Bhd, a joint-venture with Hyundai Motor Company which assembles and sells Hyundai vehicles in Malaysia.

Logistics

The company is involved in Ports & Logistics and Water Management in the province of Shandong, in the North-Eastern China region.

Healthcare

The healthcare division has a hospital and college of its own. The Sime Darby Medical Centre, formerly known as Subang Jaya Medical Centre, and its college, formerly known as SJMC Academy of Nursing and Health Sciences, was established in 1995 and currently is known as Sime Darby Nursing and Health Sciences College.

Other businesses

Tesco Stores (Malaysia) Sdn. Bhd. is a joint-venture between Sime Darby Berhad and Tesco PLC. Its inception in 2001 saw Sime Darby hold a 30 per cent stake in the joint-venture. Tesco currently operates 49 hypermarkets in Malaysia.

Controversies

Sime Darby has been accused of violating the land rights of local communities in Liberia, where they hold a concession for 220,000 hectares of farmland. Local environmental and human rights groups have called Sime Darby's contract with the Liberian government a "land grab," and say that the contract does not account for the ownership rights of the rural communities who live inside the concession area. In 2011, representatives of one community made a formal complaint to the Roundtable on Sustainable Palm Oil (RSPO), and in 2012 a group of communities signed onto a statement criticising the contract. Sime Darby contends that its contract is legal and was completed with a democratically elected government, saying "there is no evidence whatsoever that it violates human rights." For their part, civil society activists in Liberia state that the contract makes no protection for the land rights of rural communities and have called for renegotiation.

In 2013, Sime Darby was accused of lighting some of the fires on Indonesian plantations that caused widespread pollution issues in Malaysia and Singapore. However, the company denied being responsible for the fires. It has made public commitments not to develop on peat.