Sime Darby demerger boon for young managers
Mahbob Abdullah 

I WORKED in Sime Darby Plantations for 14 years and watched it for many more since I joined the industry. It has always been well-known and famous for its financial prudence. Its managers who were mainly British complained over drinks at the bar that the company was very stingy.

I found their complaints to be true. The company does indeed look after its pennies and makes sure that all the disciplines are in place. Many were cut down in mid-career due to issues of integrity.

As the company grew, it added other companies along the way. Sometimes the acquisitions took the form of a rescue effort. Sime Darby Group has a way of turning such companies around to get them to grow.

But the merger done in 2007 was not to help ailing companies. Golden Hope and Kumpulan Guthrie were well-run entities.

Nonetheless, through the merger, the business grew big enough to acquire companies such as New Britain Palm Oil Ltd.

Today it has 630,000 ha planted with oil palm, rubber, sugar cane and pasture, and a presence in several countries. The total land bank and concessions come close to one million hectares.

Now we have a demerger, and again it highlights the size of Sime Darby Plantations. Its size offers a scale through which it can do many things to bring better results.

The first is, of course, the research work that can be expanded. Oil palm is still a new crop that has yet to reach its full potential.

Its Genome Select can identify the most productive seedlings for planting, while its tissue culture plantlets provide high yield.

Raising the volume will allow it to cover more areas and cut the cost of each plantlet.

Other research and cultivation work will look into developing strains that are resistant to disease and be drought-tolerant.

For much of these activities, the company has built its own teams rather than depend on outside agencies for help.

With its scale of business, it can do so and hire the best brains from wherever they may be.

In addition, there are new aspects of research that come with scientific discoveries. There is much to gain from artificial intelligence, the Internet of Things, sensors, drones and big data analytics – all of which require a new set of skills.

At a more mundane level, we urgently need to engineer a tool to cut fresh fruit bunches without the need for foreign labour as such manpower will be gone one day.

It is true that management quality can fall if we do not keep an eye on training. Fortunately, Sime Darby already has a good team. Further sharpening their sense of professionalism can improve results even more.

Like in research, training is a cost to the business. But it is also an investment on which the future depends.

The company regularly visits agriculture faculties to select graduates who show an interest in working outdoors and with people, and who have drive and leadership.


Need for training

Yet, the gaps in their education can be a matter of concern for the company so much so that it may have to set up its own university with courses in management for junior, middle and senior levels.

The speakers and lecturers can be invited from among foreign universities or leaders in the industry who can give their views on what they had learned on their way to the top, and what it took to get there.

Major companies like General Electric and Unilever have training centres, which they expand to meet their needs.

Some managers can even attend foreign centres where they learn to interact with managers from other industries.

On a more junior level, there is no reason to doubt that even supervisors and mandores also need more training. The expansion of plantations left many without the benefit of good grounding.

In the plantations sector, the biggest factor that contributes to success is leadership. It gets the team to focus on one aim and get things done to expectations and on time. It is even better if everyone enjoys their jobs in the process.

Textbooks and websites are filled with good leadership lessons, speeches and quotations by battle hardy generals, political leaders and corporate leaders who have inspired nations. They were the masters of their profession.

With the demerger, the business will continue to gain from the experience of several leaders. One will be Datuk Franki Anthony Dass who heads the plantations division.


Work made more challenging

As he is also responsible for the refineries in several countries, it means his duties are varied.

But the work is made more complex today with new requirements such as safeguarding the environment, flora, fauna, and community. And Franki is set on ensuring the practices are impeccable.

Having started in Guthrie, even during his early days he would concentrate on his duties, had no time for idle talk, and would rather learn more about his job.

He worked hard and left the results for others to judge. After many years leading the business in Indonesia, he was asked by the new Sime Darby to return to lead the plantations division.

So his background, training and experience led to the position for which he is pre-eminently qualified.

The managing director and executive vice-chairman will be Tan Sri Bakke Salleh whom I know well from Felda when he put me on the boards of several subsidiaries.

He does not waste time or words. He cuts to the root of the problem and moves on to the next challenge. He sticks to his moral compass and avoids the limelight if he can help it.

Having seen the changes over the years what are my views?

I quote what the late Tan Sri Basir Ismail had said: “The merger will reduce the chance for managers to operate as directors of companies and work independently.”

With the demerger, the opportunity has come back, and so we see younger managers emerging to take on senior positions.

In this case, Jeffri Salim Davidson is going to be the group chief executive. He has already worked for many years in Sime Darby and is well prepared for his new duties as he knows the business and the culture well.

That sense of continuity is essential for the company’s direction. For shareholders, it is reassuring to see a succession plan in place.

They will also be more reassured upon seeing that the financial results keep improving. This can come through with research and training, and a strong team consistently in place.

Mahbob Abdullah is a former planter. Comments:

This article first appeared in Focus Malaysia Issue 259.