KUALA LUMPUR (May 7): Sime Darby Plantation Bhd (SDP) is making a foray into green industrial park, starting with the proposed development of the Kerian Integrated Green Industrial Park (KIGIP) in Perak.

The world largest palm oil producer by acreage said the group and its largest shareholder Permodalan Nasional Bhd (PNB) intend to collaborate in this 1,000-acre development, strategically located in SDP’s Tali Ayer Estate in Perak. A joint proposal was submitted to the Ministry of Investment, Trade and Industry (Miti) in February.

“The decision to actively participate in the KIGIP development is an important milestone for us as we venture into the natural adjacency of plantation companies,” SDP group managing director Datuk Mohamad Helmy Othman Basha said in a statement.

“We will establish strategic partnerships to develop our land where it makes the most sense to do so, and thus, establish a new and sustainable revenue stream.”

The solar farms for KIGIP will be owned and operated by SDP, as renewable energy has been identified as a key strategic pillar and revenue source for the group.

He added that the company is well positioned to expand into this area due to its land bank and strong balance sheet.

SDP said renewable energy is expected to contribute significantly to the group within the next five years. Moving forward, the company will identify less productive agricultural lands to convert them into solar farms.

KIGIP is an initiative driven by the federal government in close collaboration with Perak. It is conceptualised to attract green electrical and electronics (E&E) investments into the country.

The industrial park will have easy access to the North-South Expressway providing essential connectivity with major logistics hubs, making it attractive for potential tenants.

KIGIP was announced by the government in Budget 2024, and the plan also involves the establishment of 660 acres of solar farms as the principal green energy source for the area, designed to attract semiconductors and E&E investments, two of the fastest growing sectors in the global economy.

Separately, SDP is also exploring opportunities with partners to develop data centres, which typically consume large amounts of energy.

SDP is set to changes its name to SD Guthrie.

At 12pm, the stock was traded seven sen or 1.58% higher at RM4.50, bringing it a market capitalisation of RM31.12 billion.