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Sime Darby Plantation warns labour shortage may get worse for plantation companies in 1Q

Sime Darby Plantation warns labour shortage may get worse for plantation companies in 1Q
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PUTRAJAYA (Jan 13): Until job vacancies in oil palm plantations are filled, the labour shortage situation will likely get worse for plantation companies in the first quarter of 2022 (1Q22) before the situation improves, Sime Darby Plantation Bhd said.

Managing Director, Mohamad Helmy Othman Basha said the industry is short of 70,000 workers as borders were shut down to prevent the spread of Covid-19 and until the vacancies are filled, the situation will be bad.

“The shortage in labour has resulted in the loss of tax revenue to the government and we should look for other opportunities and not depend on foreign workers,” he said during his slide presentation at the one-day Palm Oil Economic Review and Outlook Seminar 2022 at Marriot Hotel, organised by the Malaysian Palm Oil Board (MPOB) on Thursday (Jan 13).

The shortage of workers has been identified as the cause of the 20% to 30% decline in the production of fresh fruit bunches.

MPOB Director of Economics and Industry Development Division, Fauziah Arshad said the government should come up with relevant policies to ensure Malaysian palm oil continues to be relevant.

"Our palm oil (industry) may not grow as stellar as before, due to limitation of plantation areas and we cannot compare the volume with Indonesia. However, we can strengthen export opportunities.

"The Malaysia-India Comprehensive Economic Cooperation Agreement and the Malaysia-Turkey Free Trade Agreement are examples of success in the export of processed palm oil. Hence, we should review bilateral trade arrangements to enhance our trade with importing countries," she said.

Fauziah noted that while Malaysia’s palm oil exports have reached 90% of its production, the export ratio between processed and crude palm oil has decreased, and if this continues, Malaysia would not be able to achieve its downstream expansion targets.

Meanwhile, the Deputy President of the Malaysia Biomass Industries Confederation (MBIC), Kester Chin said biomass production and processing are not at their full potential.

"Total of biomass value is 95 million tonnes but only 28 million tonnes are mobilised," he noted.

Chin said the government should find solutions to these challenges, such as establishing a joint venture with feedback owners and consulting with MBIC, as well as finding access to funding for biomass ventures.

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