1. BUSINESS PROJECT 1
MBA UNIKL 2013
SIME DARBY PLANTATION
SALEHUDIN BIN MOAMED YUNUS
60397212107
SUPERVISOR:
DR. BUERHAN SAITI

2. INTRODUCTION
• To measure and evaluate business
performance
• To understand industry and business
structure
• To utilize prevailing data from public
domain
• Evaluate opportunities, trend and market
innovation

3. COMPANY VISION AND MISSION
Vision
• To be a leading multinational corporation delivering
sustainable value to all stakeholders
Mission
• We are committed to developing a winning portfolio of
sustainable businesses
• We subscibe to good corporate governance and high
ethical values
• We continously strive to deliver superior financial
returnthrough operational excellence and high
performance standards
• We provide an environment for our people to realize their
full potential

4. COMPANY PROFILE
Name
:
Sime Darby Plantation Sdn Bhd
Address
:
Main Block, Plantation Tower, No. 2, Jalan PJU 1A/7,
Ara Damansara, Petaling Jaya, Selangor Darul Ehsan,
47301 Malaysia
Telephone :
+ 603 7848 4370
Fax
:
+ 603 7848 4363
Website
:
http://www.simedarbyplantation.com/
Country
:
Malaysia

5. BACKGROUND OF
SIME DARBY PLANTATION
• Sime Darby was founded in 1910 and grew to
become the largest conglomerate in Malaysia.
• Sime Darby Plantation (SDP) is the agricultural
division of Sime Darby Group and with the
merger of Sime Darby Berhad, Golden Hope
Plantations Berhad and Kumpulan Guthrie
Berhad in 2007,
• SDP is one of the world’s largest palm oil
producers with 2.4 million tonnes of Crude Palm
Oil (CPO) annual output.

6. ORGANIZATION CHART

7. CURRENT ISSUES
• Greenpeace has accused SDP for on-going forest
destruction in central Kalimantan and also for open
burning (Greenpeace International, 2008).
• There are also allegation on planting on peat soils and
endangering Orang Utan habitats.
• Land bank expansion limitation is also seen in Malaysia,
whereby, oil palm can only be cultivated in idle land or
designated agriculture land.
• Currently there are some challenges faced in decision
making process about production and operations,
finance, human resource management and other
business units in a complex situation. This results to
delays in decision making process which often brings
losses to the company.

8. PESTEL ANALYSIS
POLITICAL
• Palm oil plantation
causing unhealthy
deforestation.
• A healthy GDP
growth for the last 10
years.
• Supports by both
government
ENVIRONMENT
• Poses threat to
tropical forests and
wildlife habitats.
• Malaysia and
Indonesia has
identified palm oil
based biodiesel to
reduce the petroleum
dependency.

9. PESTEL ANALYSIS
SOCIAL
• Contribute to the
community and
environment.
• Improve the standard
of living in Indonesia.
TECHNOLOGICAL
• Constantly strives to
develop better
technologies and
environmental friendly
techniques in
cultivating palm oil.

10. PESTEL ANALYSIS
ECONOMY
• Malaysia’s palm oil
industry accounts for RM
53 billion gross national
income being the fourth
largest economy
contributor.
• Economic Transformation
Program, Malaysia
targets to achieve palm
oil GNI of RM 178 billion
by 2022
LEGAL
• Licensing matters
• Regulates the
guidelines of
plantation.

11. SWOT ANALYSIS
STRENGTHS
• SDP practises environmental friendly
operation and sustainable plantation
process.
• Has a Biogas plant in Carey Island turning
methane gas into electricity.
• The world’s largest listed plantation
company by planted area.

12. SWOT ANALYSIS
WEAKNESSES
• Poor road infrastructure in plantation.
• The industry is also vulnerable to
unpredictable weather condition.
• SDP is not utilizing the wastes cakes form
the milling process and unproductive palm
oil trees.
• Palm Oil Mill Effluent (POME

13. SWOT ANALYSIS
OPPORTUNITIES
• Increasing demand for CPO
• Rising health issue
• Availability of land in Indonesia
• Availability of low cost workers
• Supports by both government
• Switching to renewable energy

14. SWOT ANALYSIS
THREATS
• Price fluctuation of CPO could lead to
lower demand of palm oil
• Limited supply of high quality seeds
• Land ownership issues
• Recently in Borneo, palm oil industry has
faced Ganoderma basal stem rot (GBSR)
disease which is caused by the woodrotting fungus

15. High Rivalry among
Competitors
• The market production size is limited to
the geographical location but this does not
limit the market player
• Major player as a market follower very
close behind
• Increasing of minor players

16. Low Threat of New Entrants
• Start-up capital for a palm oil plantation of
palm oil processing mill is very high
• Need to obtain a series of approval and
onsite inspection to ensure that the
organisation follow the regulations of
health, safety and environment

17. High Threat of Substitute
• 80 % of the palm oil is used for edible use
such as oil, fats and shortening
• Though palm oil yields four times
production compared the closest yield
which is rapeseed
• Olive oils poses the highest threat as it is
recognized as the healthiest of all and
touted and the best of all edible oil.

18. Low Bargaining Power of
Supplier
• The raw materials needed for the
cultivation are high quality seeds, land and
fertilizers
• Seeds and fertilizer being produced by
Sime Darby
• Involved in both upstream and
downstream activity and grow their own
seedling in their nurseries.

19. Low Bargaining Power of
Buyers
• Demand for palm oil increases and price
being pre-determine
• The major buyers are from European
Union, China and India and with little
control over price

20. LIQUIDITY/EFFICIENCY
RATIO
YEAR
2009
2010
2011
2012
CURRENT
RATIO
1.7
1.64
1.76
1.5
QUICK
RATIO
0.99
0.99
1.05
0.84
ACCOUNT
RECEIVABL
E
TURNOVER
INVENTORY
TURNOVER
6.55
7.63
7.91
8.12
3.2
3.3
3.3
3.3

21. SOLVENCY RATIO
YEAR
2012
DEBT
PERCENTAGE
44.2
2011
42.1
2010
43.8
2009
37.91

22. PROFITABILITY RATIO
YEAR
2012
2011
2010
2009
SALES
(RM)
47,602.3
41,858.8
32,506.2
31,013.9
PROFIT
MARGIN
8.72%
8.75%
2.24%
7.35%
GROSS
PROFIT
MARGIN
23%
25.82%
26.23%
22.26%
RETURN
ON
ASSETS
11%
12.3%
8.35%
8.9%

23. PROCESS OF PRODUCT

24. BCG MATRIX

25. COMPETITIVE PROFILE MATRIX

26. OPERATION
• Employee in operation management has
lack of education background
• Social issues emerging in the respective
estate.
• Dependence of source of worker from
Indonesia.
• Some work needed outsourcing expertise

27. FINANCIAL
•
•
•
•
Increased of debt percentage
High operating cost
Spent more into biodiesel market share
Profit margin only stable at the two last
year

28. HR MANAGEMENT
• Job oppurtunity not attract Malaysian
• Low motivation employee ( foreigner
worker )
• Issue with work passport legal

29. BUSINESS PROJECT 2
• How SDP to sustain their leading in oil
palm industry
• How to improve biodisel product from
question mark to being star in BCG matrix
• Designs ways for inter collaboration of
business units on business decision and
formulating a marketing mix and
segmentation