KUALA LUMPUR (March 4): Sime Darby Plantation Bhd (SDP), which has rebranded its downstream entity Some Darby Oils, is eyeing greater revenue contribution from the downstream business.

“We believe that we have to grow our downstream business so that our overall contribution is not skewed to our upstream business,” said SDP chief operating officer of downstream Mohd Haris Mohd Arshad.

As it stands 80% of the group's output is contributed by its upstream business, and the remaining 20% from its downstream business, he told reporters at the launch of Sime Darby Oils.

When asked if the group is aspiring for the 50-50 balance between its upstream and downstream segments, Haris said it was a “long-term goal”.

“Both upstream and downstream have the ambition to grow our business, it will be nice if we get a 50-50 balance, but I don't think we can do it in five years ” said Mohd Haris,  who is also Sime Darby Oils managing director.

He said the new entity would be involved in different kinds of oils, but palm oil would be the most dominant with an 85% share.

Mohd Haris said SDP’s downstream business currently has a global refining capacity of 3.8 million tonnes of oil. Of that, the group allocates two million tonnes as bulk. Of the balance 1.8 million tonnes, half is used for its frying oils.

Besides frying oils, Sime Darby Oils would also focus on bakery, spreads, specialty ingredients and animal feed businesses, he said.

Moving forward, the group said its downstream business is looking at further expansions into India and Indonesia.

With regards to a potential Indonesian expansion, Mohd Haris said the group would be looking at secondary refining in Java or Sumatra.

He added that the group's Indian expansion plans would be contingent on how it plans to market itself in India. “We have to make the best deal based on the limited resources we have," he said.

Meanwhile, SDP’s Head of Europe, Middle East and Africa, Andrew Timothy  Worrall, said the group is still under represented in the Middle East and North Africa  and would be working on establishing itself further in the region.

Officiating at the launch of Sime Darby Oils, Primary Industries Minister Teresa Kok said the group has achieved a 100% Malaysian Sustainable Palm Oil (MSPO) across its 124 estates and 33 mills nationwide.

“With such a strong commitment from major plantations companies such as SDP, we are confident that Malaysia will be able to move towards a mandatory MSPO certification for our entire palm oil supply by the end of 2019, thus raising the national palm oil industry's standard," said Kok.