This article first appeared in The Edge Financial Daily, on April 26, 2016.

CAREY ISLAND: Sime Darby Plantation, the plantation arm of conglomerate Sime Darby Bhd, has commenced the first planting of genome-select high-yielding oil palms, which are expected to give 15% better yield than its existing palm oil plants.

Sime Darby president and group chief executive Tan Sri Mohd Bakke Salleh said the new palm will deliver significantly higher oil yields, without the need to increase the hectarage of the group’s existing plantations.

“The genome-select planting material will give us more oil per hectare. With the regular material, we can get between eight and 10 tonnes of oil per planted area. With genome-select, we ought to be getting 15% more, giving us approximately 11.5 to 11.6 tonnes of oil,” he said.

The output of fresh fruit bunches will also increase by about 8%, Mohd Bakke told a press conference at the group’s plantation here yesterday.

“By 2023, we will have enough genome materials to meet all of our replanting requirements. We have a replanting policy of about 5% per annum in Malaysia. We expect the high-yield plants to contribute significantly to our bottom line in the future,” he said, adding that the group currently has 316,000ha of planted land bank in the country.

However, he said the planting of the high-yield plants will only be done in Malaysia, adding that the group is taking a different approach to its Indonesian operations, as the government has imposed restrictions.

“It’s not as though we can ship out or transport the planting material from Malaysia to Indonesia easily, as we have to comply with certain government requirements. We are approaching it differently. We are working with our New Britain Palm Oil’s research facilities in Papua New Guinea to supply better planting material,” he said.

Sime Darby Plantation research and development (R&D) head Dr Harikrishna Kulaveerasingam said the pioneer project will start with the planting of a total of 100ha, out of which half will be planted in its highest-yielding estate on Carey Island, while the balance will be planted in another plantation in Melaka in September.

“This estate (Carey Island) is the highest-yielding estate among Sime Darby’s plantations in Malaysia. Meanwhile, our estate in Melaka is an equivalent of a good location inland, where the soil and rainfall are not as good.

“By doing a comparison between these two sites, we will be able to determine how well this material would perform,” said Harikrishna.

Going forward, Mohd Bakke said the group will continue to invest in R&D to further improve yields of its oil palms, and said that Sime Darby annually allocates between 2% and 3% of its turnover for R&D purposes. Out of the total earmarked for R&D, 10% will be allocated for the genome-select project, he added.

“We are not going to stop here, we will do further work and push the bar to a much higher level. We are confident we can potentially achieve at least 25% increase in the future, compared with the current 15% improvement,” he said.