Commodities

Malaysia's Sime Darby Plantation looks for ways to ease labour crunch

Credit: REUTERS/LIM HUEY TENG

Malaysia's Sime Darby Plantation said on Thursday it was "exploring all avenues available" to ease a coronavirus-driven labour shortage, including recruiting locals, as it also turned in a sharply higher profit for the second quarter.

By Mei Mei Chu

KUALA LUMPUR, Aug 27 (Reuters) - Malaysia's Sime Darby Plantation SIPL.KL said on Thursday it was "exploring all avenues available" to ease a coronavirus-driven labour shortage, including recruiting locals, as it also turned in a sharply higher profit for the second quarter.

Travel and movement curbs have left Malaysia's foreign labour-reliant palm plantations grappling with a shortage of 37,000 workers, nearly 10% of the total workforce.

The world's largest palm oil planter by land size said the worsening labour shortage is expected to impact production.

Sime said again that its full-year financial performance will be impacted by the economic uncertainties from a potential second wave of COVID-19 infections.

For the April-June period, Sime posted a net profit of 378 million ringgit ($91 million), versus 27 million ringgit a year earlier, as stronger palm oil prices offset a slump in demand, particularly in Europe, due to the virus pandemic.

Revenue rose 12% to 3.22 billion ringgit.

Sime expects its palm fruit production this year to remain relatively unchanged barring inclement weather.

"We expect demand to improve in the second half of this year as countries ease lockdown restrictions allowing businesses to replenish stocks," group Managing Director Mohamad Helmy Othman Basha said.

"We anticipate prices to remain stable in the second half of the year given concerns about edible oil supplies due to a potential La Nina," he said.

($1 = 4.1690 ringgit)

(Reporting by Mei Mei Chu; Editing by Muralikumar Anantharaman and Himani Sarkar)

((meifong.chu@thomsonreuters.com; +603-2333-8035; Reuters Messaging: @meixchu on Twitter))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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