MONROVIA, Liberia (May 5, 2009)—Sime Darby Plantation Sdn. Bhd. has signed a 63-year concession agreement with the Liberian government to establish natural rubber and oil palm plantations in Liberia, according to Sime Darby.
The deal calls for Sime Darby eventually to establish plantations on 543,000 acres of land in Bomi, Grand Cape Mount, Gbarpolu and Bong counties, the company said.
Initially, the firm will invest $19.9 million to begin operations on 24,700 acres.
There was no immediate word on when Sime Darby expected to begin shipping rubber and palm oil from its Liberian plantations. Kumpulan Guthrie Bhd., Sime Darby's predecessor company, signed a concession agreement with Liberia in 1985, but was forced to abandon plantation operations there in 2001 because of civil unrest, the company said.
In addition to the plantations, Sime Darby agreed to establish a cooperative smallholders' development program in which small rubber farmers would own stakes. This plan will go a long way toward establishing entrepreneurship in Liberia and improving the impoverished country's economy, the company said.
Currently, Sime Darby's only African operation is a South African non-plantation subsidiary, Sime Darby Hudson & Knight (Proprietary) Ltd., which manufactures oils and fats. The Liberian plantation agreement will act as a springboard for further African expansion, the company said, although it did not specify what the further expansion would be.
The Liberian legislature is scheduled to vote Aug. 1 on ratification of the concession agreement, Sime Darby said.