Kuala Lumpur, 6 June 2011 - Sime Darby Plantation (SDP) announced today an overall plan to improve the quality of life of workers and staff of its estates and mills in Malaysia. The improvements include an increase in earnings and the progressive upgrade of housing and amenities. With respect to earnings, Sime Darby Plantation has decided to increase the remuneration of all workers and non-executive staff at its estates and mills by RM200 a month, subject to the company’s internal guidelines. The increased remuneration will be effective July 2011. Further details of the earnings increment will be announced at a later date.

Sime Darby Plantation also announced the upgrading of homes and amenities provided to their estate and mill workers in Malaysia. The initiative, called the Central Housing Complex (CHC), will see all housing and amenities for each operating unit centralised.

Sime Darby’s President & Group Chief Executive Dato’ Mohd Bakke Salleh said the situation of plantation workers has been a concern for some time and the improvements are a move in the right direction.

"Sime Darby has decided to take the lead in improving the quality of life of this group of workers, to recognise their contributions, especially in this environment of high CPO prices," Mohd Bakke said.

He added that the current RM350 basic wage structure was set in 2005, when profit margins were lower and CPO price averaged RM1,400 a tonne. "Today, prices are comfortably above the RM3,000 mark."

Sime Darby Plantation also provides other benefits to its employees, such as free housing, rice and cooking oil, as well as subsidised utilities.

Mohd Bakke acknowledged however, that when implemented, the new wage structure will have an impact on the Group’s production cost per tonne of CPO.

"Still, we believe it will be a manageable impact, and the benefits it brings to us will outweigh this impact. If the extra remuneration is productivity linked, it will even itself out," explains Mohd Bakke.

Sime Darby Plantation’s Managing Director, Mr Franki Anthony Dass noted that the new remuneration could make the industry more attractive to Malaysians.

"Currently Malaysians are shying away from working in the plantation industry due to a number of reasons, most notably, the perceived inequity of the pay in relation to the laborious work involved. The new pay should, to some extent, address this perceived inequity, especially if you consider the other benefits we have on the table," said Anthony.

"With various other incentive scheme and benefits, the aggregate effect of these could see potential earnings value for a productive general worker increase significantly. We hope, apart from attracting Malaysians to work in plantations, we will also encourage those already working with us to stay on," Anthony added.

Estate work is also deemed unattractive due to the geographical distance of plantations to urban areas.

"When we upgrade the housing and amenities in the estates under the CHC plan, it will help alleviate this concern. Facilities will be best-in-class, and workers will have a lifestyle that is akin to that of a mini-township," explains Anthony.

Also present at the announcement was Human Resources Minister, YB Datuk Dr. S Subramaniam, YB Dato’ SK Devamany, Deputy Minister in the Prime Minister’s Department, and other government officials.

The new remuneration and other incentives announced are exclusive to Sime Darby Plantation’s Malaysian estate and mill operations, and will benefit some 37,000 workers and staff. These include general workers, estate and mill office staff and auxiliary police personnel.