This article first appeared in The Edge Malaysia Weekly on January 19, 2026 - January 25, 2026

WITH plantation companies like SD Guthrie Bhd (KL:SDG) and Kuala Lumpur Kepong Bhd (KL:KLK) venturing into industrial park development, a derivative question would be whether others will follow the land monetisation strategy to bolster profit and reward shareholders.

As the population has grown, land-rich plantation owners have for years been monetising the value of their land by either selling estates close to urban areas to property developers to be turned into townships or venturing into housing or commercial developments themselves. This explains why certain oil palm planters have property development arms as urbanisation encroaches on their estates.

Be that as it may, in the last two years, the industrial park theme has caught investor attention.

Planters with land in Johor are seen as obvious candidates for potential unlocking of value as they stand to benefit from the development of the Johor-Singapore Special Economic Zone (JS-SEZ) that was announced in January 2024.

However, not all may be inclined to go into industrial park development as SD Guthrie, KLK and others have done. Location is a crucial factor but the controlling shareholders may be happy to remain as planters, even if their next generation have different ideas. What are other considerations?

“Having the strategic land, connection [state support would be helpful in some cases for conversion] and partner [property developer] that are able to develop the land into a successful industrial park [execution],” says CIMB Securities’ head of research (equities) Ivy Ng Lee Fang via email when asked what factors may drive the land monetisation strategy for plantation companies.

SD Guthrie’s share price has risen 31% since it announced its first venture into green industrial parks and renewable energy in mid-2024. It has so far revealed 10 collaborations in Johor, Negeri Sembilan, Selangor, Perak and Kedah, which will see the group monetise its land bank. In fact, with 340,000ha of plantation land in Malaysia, the group has earmarked significant tracts for steady annual monetisation. It expects to monetise about 1,000ha a year, which would translate into RM500 million to RM700 million in annual earnings, in turn lifting the group’s full-year net profit to about RM3 billion.

Last month, KLK announced the sale of land in Kulai, Johor, to a joint venture (JV) with property developer Mah Sing Group Bhd (KL:MAHSING), which analysts say will result in a gain of about RM77 million while generating RM10 million in annual profits for KLK over the next 10 years. KLK, which has a property development segment, earlier revealed industrial park initiatives in Tanjong Malim, Perak, and in Ijok, Selangor, via a JV with AME Elite.

Aside from SD Guthrie and KLK, Genting Plantations Bhd (KL:GENP) in 2024 launched Genting Industrial City in Batu Pahat, Johor — a 1,200-acre development with an estimated gross development value (GDV) of RM260 million — in late 2024. It has a property division that has been developing townships in Johor where Genting Plantations has 60% of its total estate land bank.

As for whether the land monetisation theme still has legs in 2026, both Ng and Maybank Investment Bank Research analyst Ong Chee Ting believe so. “More estates could be up for sale if FDI (foreign direct investment) picks up following the tariff uncertainty last year,” says Ng.

Meanwhile, Ong, in a Jan 12 report, points out that the development of industrial parks is a significant component of the 13th Malaysia Plan, with a massive number of data centre projects being proposed in Johor, Negeri Sembilan and Selangor. These projects will require the development of infrastructure and affordable land.

“In our universe of coverage, SD Guthrie, KLK and Genting Plantations are among the largest prime real estate owners in Peninsular Malaysia. Naturally, these plantation companies will be the major beneficiaries of these government initiatives, allowing them to hasten monetisation of land values over time,” he writes, adding that SD Guthrie is now the largest landowner in JS-SEZ.

Ong also highlights renewable energy opportunities for planters with suitable and “well-located land near the national grid and injection points” to participate in Large-Scale Solar projects or the Corporate Renewable Energy Supply Scheme (CRESS).

“We continue to count SD Guthrie, IOI Corp Bhd (KL:IOI), Genting Plantations and TH Plantations Bhd (KL:THPLANT) as potential beneficiaries given that some of their estates in Peninsular Malaysia are located near electricity transmission lines and injection points,” he adds.

Aside from the big names with sizeable land banks in Johor, which other plantation companies have exposure in the state?

Johor Plantations Group Bhd (KL:JPG), whose indirect major shareholder is state-owned Johor Corp (JCorp), has close to 60,000ha in Johor. However, it is likely that property-related ventures will be undertaken by JCorp’s property arm JLand Group rather than JPG.

In fact, on talk that some of JPG’s estates in the Sedenak area have been taken over by its ultimate parent for redevelopment, the group clarifies that none of the 2,808ha that form its Sedenak Estate has been given up for the purpose of industrial park development.

Meanwhile, the Kuala Kabong Estate, measuring 1,261ha, also within the Sedenak area, is actually owned by JCorp and managed by JPG.

“The land is owned by JCorp, and any development of the Ibrahim Technopolis Park (IBTEC) within the area does not involve the disposal or redevelopment of land owned by JPG,” says JPG in emailed responses to The Edge.

IBTEC is a 7,290-acre technology park launched by JLand Group last month. It is located in Sedenak, Kulai, some 50km to the north of the Johor Bahru city centre.

IBTEC aspires to be Asia’s largest innovation sandbox, anchored by data centres in the Sedenak Tech Park (STEP), which are expected to attract global investments in advanced electrical and electronics, medical technology, and life sciences.

The project is expected to have a GDV of RM27 billion, spanning 22 years. IBTEC’s STEP has already attracted RM34.5 billion in committed investments in data centres.

Other listed planters with land banks in Johor include Kim Loong Resources Bhd (KL:KMLOONG), TH Plantations, Matang Bhd (KL:MATANG) and PLS Plantations Bhd (KL:PLS). Note that while IOI Corp is a major landowner in Johor, property development is undertaken by its related company IOI Properties Group Bhd (KL:IOIPG).

Notably, Keck Seng (M) Bhd (KL:KSENG),  which is classified as a company in the industrial products and services sector by Bursa Malaysia, is also an integrated palm oil producer with oil palm plantations, mill, refinery and manufacturing operations in Johor. It has 2,382ha of oil palm plantation in Ulu Tiram, about 30km from Johor Bahru.

Its two other core businesses are hospitality and property development and investment.

With large tracts of agricultural land being hard to come by due to restrictions imposed by the government and sustainability requirements, some say it is unlikely that planters will sell their land. However, for family-owned estates facing difficulty in getting members of the family to take over the business and have land located near urban areas, land monetisation seems like an obvious choice.

“For private, small and mid-sized estates, why not, especially with no heir and if you can sell at near industrial land price?” says a private Johor-based planter.

With more land being carved out from oil palm plantations for industrial parks, what may be the impact on national palm oil production? With shrinking total planted area, the focus will be on better planting materials and good agronomics.

CIMB’s Ng says the impact on production will not be significant as the land converted to industrial land development will not be significant relative to the size of planted estates.

“Both [land monetisation and good agriculture practices] can go hand in hand. Good agri practices for planted areas and land that can be monetised with higher return than estates for shareholders should be considered,” she adds.

M R Chandran, adviser to the Roundtable on Sustainable Palm Oil (RSPO) and vice-president of Malaysian Oil Scientists’ and Technologists’ Association, notes that land monetised in JS-SEZ is often below average in productivity, largely due to ageing palms and severe labour constraints. Hence, converting or divesting such land will have limited impact on overall output.

“The other side of the coin is that large plantation groups can redeploy the monetised proceeds into core operations, particularly for replanting programmes and adopting mechanisation, automation and digitalisation of existing estates. These investments can materially enhance productivity and yields, thereby offsetting any reduction in land bank,” he says.

“In this context, land monetisation is not necessarily value-destructive. When executed strategically, it can strengthen long-term operational efficiency and sustainability, rather than weaken supply capacity.”

In Peninsular Malaysia, Johor is the leader in oil palm planted area, making it the largest crude palm oil producing state.

As for investors wanting to ride the land monetisation theme, SD Guthrie is favoured by Ng and Ong, who have “buy” calls on the stock and target prices of RM6.01 and RM6.31 respectively.

Other plantation stocks on CIMB’s “buy” recommendation list include IOI (TP:RM4.51) and Hap Seng Plantations Holdings Bhd (KL:HSPLANT) (TP:RM2.45).

Ong also has “buy” calls on Genting Plantations, TH Plantations, Ta Ann Holdings Bhd (KL:TAANN) and Sarawak Oil Palms Bhd (KL:SOP), with target prices of RM6.87, 64 sen, RM4.84 and RM5.37 respectively. 

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