We try to employ anyone we can who would be appropriate to take on the local role, says CFO

by ASILA JALIL / pic by BLOOMBERG

SIME Darby Plantation Bhd is scouting for potential staff at prisons and drug rehabilitation centres, as part of its efforts to hire more locals to overcome its foreign labour shortage woes.

The palm oil-based plantation group is currently short of 2,500 workers or 10% of its foreign labour in Malaysia due to the Covid-19 pandemic.

It’s estimated to lose between 5,000 and 6,000 additional foreign workers who will return to their respective countries once their contracts end, Sime Darby Plantation CFO Renaka Ramachandran said.

“We try to employ anyone we can who would be appropriate to take on the local role. We have employed 300 local workers right now,” she said during a webinar organised by Bursa Malaysia and AmInvestment Bank Bhd yesterday.

The group started trying to hire more locals three years ago, but the effort was “a failure” as not many Malaysians are attracted to working in the plantation sector, Renaka said.

“We are focusing a lot on how to make the job more palatable. Plantation is just not the No 1 choice of work for the Malaysian community.

“I would not say it (the number of applicants) is humongous at all. It is a constant search for them and we are down to visiting prisons,” she said.

The group is at risk of losing more harvesters, who are the essential component in the plantation sector.

To mitigate the losses of harvesters on the ground, the company is re-training its general workers to ensure they possess the necessary skill sets to become harvesters.

Labour shortage has led to an extension of the group’s harvesting intervals. The produce, which is usually harvested once in between 10 and 12 days, is now harvested once in 15 days.

Although fruits are still being harvested, Renaka said the quality of fruits in some areas is affected, especially in Sarawak.

“We do not think this would affect our earnings drastically on a direct basis, but the quality of production will definitely drop,” she said.

Sime Darby Plantation has also offered incentives to retain their workers, Renaka said. While many have agreed to extend their contracts, a large number have also chosen to return to their countries.

The government had in June halted all foreign worker recruitment in an effort to protect job opportunities for locals as unemployment rates rise amid the pandemic. The ruling was then revised to exempt the construction, agriculture and plantation sectors.

Last month, the government withdrew the hiring freeze, citing requests from employers who said they still needed foreign labour. It, however, urged employers to prioritise locals when filling job openings, before rehiring foreign workers who have been laid off.

There are over two million registered foreign workers in Malaysia, Deputy Human Resources Minister Awang Hashim said in July.

Moving forward, Sime Darby Plantation aims to increase its fresh fruit bunches production to 23 metric tonnes (MT) per hectare by the financial year ending Dec 31, 2023, from 20MT per hectare in 2019.

It also aims to reduce its gearing and cashflow to 30% within the next three years, from 49% in 2019.

As at end-2019, the group’s downstream operations include 11 refineries in Malaysia, Thailand, Indonesia, Papua New Guinea, South Africa, the UK and the Netherlands. It has a refining capacity of 3.8 million MT per annum.

The group also has upstream operations in Malaysia, Indonesia, Papua New Guinea and the Solomon Islands, where it operates and manages 240 plantation estates and 69 palm oil mills.