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Operations Management Essay

2255 words - 10 pages

Company Background
Almost 200 years ago, pioneering English planters established rubber plantations in Malaya, most of which later converted into oil palm. These pioneers were Alexander Guthrie, Daniel and Smith Harrison, Joseph Crosfield, William Sime and Henry d’Esterre and Herbert Mitford Darby – founders of three companies that makes Sime Darby Berhad today. The below table shows the three entities and their trades. (Sime Darby Online, 2014)

These three entities merged in November 2007 to form the Sime Darby (SD) that it is today. SD is a Malaysia-based multinational conglomerate comprising of five core businesses: plantations, property, motors, industrial and energy & utilities, with ...view middle of the document...

This also goes hand in hand with SDP’s good agricultural practices and social enhancements. Following are the RSPO’s P&C (RSPO Online, 2013) :
• Commitment to transparency.
• Compliance with applicable laws and regulations.
• Commitment to long-term economic and financial viability.
• Use of appropriate best practices by growers and miller.
• Environmental responsibility and conservation of natural resources and biodiversity.
• Responsible consideration of employees, and of individuals by growers and mills.
• Responsible development of new plantings.
• Commitment to continuous improvement in key areas of activity.

Upstream Operations
Upstream operations include the development of oil palm and rubber plantations, cultivation of oil palm and rubber, management of estates and milling of fresh fruit bunches (FBB) for CPO and palm kernel.

a) Upstream Malaysia
SDP’s operations in Malaysia is represented by 129 oil palm estates spanning 326,594 hectares of planted area in Peninsular Malaysia, Sarawak and Sabah and 8,107 hectares of rubber plantation in Peninsular Malaysia. The Malaysian operation’s total CPO production is 100% certified by the RSPO. A total of 33 Strategic Operating Units (SOUs) and 3 bulking installations throughout Malaysia are engaged in the processing of the company’s FBB harvests. (Sime Darby Plantation Online, 2014)

b) Upstream Indonesia
In Indonesia, SDP is represented by its subsidiary PT Minamas Gemilang (Minamas), which was set up in April 2001 and headquartered in Jakarta. It has a total land bank of 294,862 hectares out of which 204,800 are planted with oil palm. The operation comprises 71 estates and 23 SOUs located in Sumatera, Kalimantan and Sulawesi. The Indonesian operation’s total CPO production is 86% certified by RSPO. (Sime Darby Plantation Online, 2014)

c) Upstream Liberia
In 2009, SD through its subsidiary, SDP, signed a 63-year concession agreement with the Government of Liberia for 220,000 hectares of land to be developed into oil palm and rubber plantations. A new company, Sime Darby Plantation (Liberia) Inc., was set up to manage the oil palm and rubber plantations. The concession area is spread out in different counties – Grand Cape Mount, Bomi, Bong, and Gbarpolu and there are currently five (5) estates namely Grand Cape Mount, Bomi, Matambo, Lofa and Senjeh Estates. (Sime Darby Plantation Online, 2014)

Downstream Operations
SDP’s downstream activities are represented in 14 countries namely Malaysia, Singapore, Indonesia, Thailand, Vietnam, Japan, China, Germany, United Kingdom, South Africa, Dubai, The Netherlands, Canada and the United States of America, where refining of the CPO is undertaken for production of edible oils and fats products, oleochemicals and biodiesel. (Sime Darby Plantation Online, 2014)

Supply Chain
Palm oil is the most efficient oilseed crop in the world. One hectare of oil palm plantation is able to produce up to ten times more oil than other leading oilseed crops. Below is...

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