SD Guthrie expands midstream operations while maintaining its agribusiness focus in Malaysia

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SD Guthrie expands midstream operations

Highlights

SD Guthrie adds a midstream segment to its four-vertical strategy, strengthening supply chain coordination between upstream and downstream to increase trading volumes.
Land monetisation is carried out through joint venture participation with state governments and reputable companies, rather than outright sales, aiming to maximise value from less than 10% of land allocated for industrial development.
Agribusiness and plantation operations remain the focus, with 600,000 hectares of land owned and the industrial development zone estimated to be sufficient to support Malaysia’s development plans for at least 30 years.

This article was translated from the original. Read the original version by our correspondent here.

Four-vertical strategy and supply chain expansion

The Edge Malaysia reported that SD Guthrie group president and chief executive officer Mohd Haris Mohd Arshad is building on the foundations laid by his predecessor by adding a midstream segment to the group’s business structure.

He said the group now views its operations as spanning upstream, midstream, downstream, industrial development and renewable energy. Upstream remains its core business, with a focus on improving yields, productivity and cost management, as acquiring new land is difficult and investing in new plantations is expensive.

To support these goals, the company is focusing on ensuring an adequate workforce in Malaysia, mechanisation, digitalisation, precision agriculture and other cost-mitigation measures. Meanwhile, the midstream unit acts as a supply chain coordinator, connecting the group’s upstream production with refining assets in the downstream segment while increasing trading volumes.

Downstream remains the group’s main source of processing revenue, with operations in Malaysia, Europe and South Africa. SD Guthrie is also building a new refinery in Indonesia.

Strategic land monetisation and support for the national agenda

In industrial and renewable energy development, SD Guthrie said its current model focuses on partnering with state governments and reputable companies, with the group taking a significant minority stake rather than leading projects. This approach allows the company to draw on its partners’ expertise while retaining a stake in the value created from its strategic land.

Mohd Haris said there has long been demand for the group’s land, including the possibility of compulsory land acquisition by the authorities. Accordingly, the company has chosen to stop selling land outright for conventional commercial development, preferring instead to participate in projects through joint ventures, except where the government has specific strategic acquisition requirements.

He stressed that the strategy does not signal a shift away from SD Guthrie’s identity as an agribusiness and plantation company. Of the approximately 600,000 hectares of land owned across the group, less than 10% of its total land bank has been identified for industrial development, which is considered sufficient for at least 30 years.

For the company, this approach serves two main purposes: maximising the value of its land for the group while supporting Malaysia’s development plans. This makes industrial development a strategic complement to the agribusiness, rather than a replacement for its core plantation operations.

As we noted earlier, Sime Darby Property is strengthening its portfolio of income-generating assets through its SHIFT25 strategy.

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