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Thursday November 29, 2007

Synergy renamed Sime Darby



KUALA LUMPUR: Synergy Drive Bhd, the merged entity of Sime Darby Bhd, Golden Hope Plantations Bhd and Kumpulan Guthrie Bhd, has been renamed Sime Darby Bhd.

President and group chief executive Datuk Seri Ahmad Zubir Murshid said the new Sime Darby, which will re-list tomorrow, strongly reflected the long-standing brand and equity market values as a conglomerate with multiple core businesses locally and internationally.

Datuk Seri Ahmad Zubir Murshid
“I look forward to the re-listing as we have been off investors' radar since October and I think the market will rate us positively,” he said after the launch of the group's new logo by Prime Minister Datuk Seri Abdullah Ahmad Badawi yesterday.

On a potential discount on Sime Darby given its status as a non-pure plantation player, he said: “I feel strongly that we are in the balance cycle of our core businesses.

“Plantation contributes about 47% to our total revenue and there is potential that over 50% will be generated from the non-plantation business. Within our core businesses, there already exist strong brand products.”

He admitted that there had been discounts on conglomerates in the past 10 to 20 years but investors now were more open to companies with multiple business portfolios.

On concerns over Sime Darby's 60% interest in the Bakun project and undersea cable transmission lines, Zubir stressed the project would add value to the existing core businesses and that it had the potential to provide steady income stream to the group.

“We hope to conclude negotiations (on Bakun) with the involved parties as soon as possible.

“However, to be fair, it will not be completed this year since we only received the letter of intent recently,” he added.

When talks were completed, Sime Darby would be able to provide details including the financing plans, he said.

Earlier, chairman Tan Sri Musa Hitam said Sime Darby expected its revenue and profit to grow by at least 10% a year.

After its flotation, the group will be the largest on Bursa Malaysia with a market capitalisation of over RM50bil.

Sime Darby, through the merger, will be the world's leading plantation group with 543,000ha of land.

Zubir said: “We believe the integration of our plantations will generate more cash through cost efficiency and yield improvement.

“If we concentrate on collecting six loose palm fruits from each tree, we can easily generate RM30mil in profits. And if we improve one tonne of oil yield per hectare, that will give us about RM200mil in operating profits per year.”

Asked if Sime Darby was keen on acquiring a stake in Proton Holdings Bhd, he said: “Our focus is always on premium brand.”

He said the group completed the restructuring of its motor division this year and “I don't think we will take on another task at the moment.”


SIME : [Stock Watch] [News]

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