With the help of local and foreign expertise, Sime Darby has successfully deciphered the genetics of the oil palm plant, making it the world’s first company to achieve the scientific breakthrough.

The breakthrough was achieved through a collaboration between Sime Darby Technology Centre (SDTC) and Synamatix Sdn Bhd, bio-informatics company.

“This scientific finding will allow us to determine how future trees are grown,” said Sime Darby Plantation Sdn Bhd managing director Datuk Azhar Abdul Hamid during a presentation of the scientific findings here yesterday.

“By mapping out the genome of an oil palm, we can determine certain traits such as height, length of fruit, iodine value and nutrient levels of the trees.”

Other traits, he added, included the tree’s tolerance to drought and diseases and salinity resistance levels.

Genome sequencing is a process where nucleotide bases are determined in the DNA. An understanding of the genes and their functions provides a clearer picture of the various pathways and systems in the organism.

The deciphering of oil palm genetics — or in scientific terms sequencing, assembling and annotating the oil palm genome — is currently 93.8% completed. The estimated size of the genome is around 1.7 billion base pairs while the assembled genome size stands at 1.594 billion base pairs.

Although a further RM100 million over the next three to four years was needed to complete the R&D work, Azhar was confident that the breakthrough would help Sime Darby and the industry as a whole.

Azhar said Sime Darby was committed to allocating 2.5% of its turnover to R&D activities.

“By comparison, we now consider a 1% increase in oil yields an achievement,” he said. “But with the scientific improvement, we can double our yield on the existing hectarage without doing further damage to the environment.”

According to Azhar, the plantation company is expected to begin using the technology for new trees in its replanting process.

“Currently, Sime Darby has a 4% annual replanting policy. This works out to roughly around 13,000ha per year. In 10 years’ time, 15% of our estates will be planted with the new trees.”

The company aimed to complete the replanting of new trees on its Malaysian estates within 30 years, he added.

Prime Minister Datuk Seri Najib Razak, who attended the presentation, said he was thrilled with the prospects of the breakthrough.

“The oil palm industry currently employs some one million workers, ranging from big companies to small stakeholders like Felda settlers.

“Over the past year, we’ve witnessed volatility in financial assets as well as commodities. By improving production yields and providing a stable supply, prices will be more stable and the industry will be able to ensure sustainable income for the small stakeholders,” said Najib.

According to Najib, who is also the finance minister, oil palm product exports rose from RM45.17 billion in 2007 to RM65.2 billion in 2008.

However, the government did not see a need to give incentives nor relax the windfall levy on oil palm companies as yet, said Najib during the press conference.

“I don’t think incentives are necessary at the moment as the new seeds are good enough to provide higher income. But Felda will have to discuss with Sime Darby how to benefit from their research.

“As for the windfal levy, the government has already increased the threshold and will not abolish it just yet,” said Najib.

This article appeared in The Edge Financial Daily, May 13, 2009.