SD Guthrie expects Indonesian production to fall 10% next year due to El Niño

Thursday 05 Nov 2026

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KUALA LUMPUR (Nov 5): SD Guthrie Bhd (KL:SDG) expects its Indonesian production to fall by about 10% next year due to dry weather caused by El Niño, with a potentially bigger impact in 2028 if conditions persist.

“For next year, there could be about a 10% reduction, and it could be higher in 2028 based on our historical trend,” chief executive officer of the group's upstream Indonesia Adrianudin Raj Azman told the press during the group’s earnings briefing on Thursday. The impact could be lower if rainfall picks up, he noted.

The expected production hit comes following a prolonged dry period in Indonesia.

Normal dry periods span two months, according to Adrianudin, but this stretch of no rainfall under El Niño spanned around four months from July. “So the impact is quite severe.”

Illustrating the severity of the dry spell, he explained the group’s Indonesian upstream operations faced difficulties in watering its nurseries, and even had to outsource water. Its mills also had to stop on certain days due to insufficient water.

The impact of the unfavourable weather reflects on production as early as five months to as late as 15 to 18 months, Adrianudin explains.

That said, conditions have improved with rainfall, though “still not sufficient for us yet at the moment to fill our reservoirs”, Adrianudin added.

“Looking at the weather forecast, we are anticipating quite good rainfall in November,” he noted.

At end-2025, more than half of the group’s planted area was in Malaysia, while 31.3% was in Indonesia and 16.2% in Papua New Guinea and the Solomon Islands.

At press time, shares of SD Guthrie were up eight sen or 1.35% at RM6.01, valuing the group at RM41.56 billion.

Edited ByPresenna Nambiar

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