Sime Darby Proposes African Palm Oil Plantations

by | Feb 28, 2011

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Sime Darby, the world’s largest public palm oil producer, has proposed a $2.5 billion plantation that it says will meet high environmental standards.

Mohd Bakke Salleh, chief executive of the Malaysian conglomerate, said the group is eyeing 300,000 hectares of agricultural and degraded forest land in Cameroon, in addition to a  200,000 hectare concession granted in Liberia last year, the Financial Times reports.

Cameroon is our second preferred choice after Liberia,” Bakke said, according to Business Green. Planting in Liberia is due to start next month, and Bakke said the company is also considering plantations in Ghana.

The company has not signed any deals on the Cameroonian land, Bakke said. “We are actively looking. We have been shown potential areas in Cameroon, and the development formula is to work with the local communities,” he said.

The plantation would begin with about 5,000 hectares a year, Bakke said.

Palm oil is a key ingredient in many consumer and commercial products including cosmetics, confectionery, cooking oils and biofuels. But palm oil production has come under heavy fire for destroying rainforests and peatland across southeast Asia, leading to habitat destruction and high carbon emissions.

Sime Darby said it does not cut virgin forest, and that African countries are inviting its investments because of its good track record on the environment, Business Green reported.

The company said it uses the best environmental practices in the industry.  It is a founding member of the Roundtable on Sustainable Palm Oil (RSPO), and has committed to have all its operating units certified by the end of the year. About a third of its production is currently Certified Sustainable Palm Oil (CSPO).

The World Wildlife Fund has said that the CSPO standard ensures that plantations have good environmental, social and economic standards. “By buying CSPO, major users of palm oil can avoid contributing to the ongoing destruction of forests in Southeast Asia,” the organization said.

Sime Darby also said that it has planted 260,000 rare and endangered trees in the last three years. It has a zero-burning replanting method, avoids pesticides and composts bio-waste to avoid producing methane, Business Green reported.

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