SIME DARBY PLANTATION

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Transcript of SIME DARBY PLANTATION

  • 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 worlds 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 Malaysias 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 worlds 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