PETALING JAYA: Sime Darby Bhd plans to spend RM1bil to RM2bilin capital expenditure (capex) to expand its ventures in China in the next five years.
“The capex is for the expansion of all our five core businesses, namely industrial, plantation, property, motor as well as energy and utilities,” president and group chief executive Datuk Seri Ahmad Zubir Murshid told reporters after the company AGM yesterday.
All five divisions are already operating in China where they have charted good performance and prospects are bright.
Its wholly-owned subsidiary The China Engineers Ltd (CEL), the exclusive dealer for Caterpillar products for major provinces in the country, achieved another record sales for the financial year ended June 30 (FY09).
For its motor division, Sime Darby forecast that China would likely emerge as the world’s largest motor vehicle market this year following the declining sales in the United States.
Its BMW dealership there performed well in FY09 and the automotive division will add three new dealerships in FY10 to bring the total number of BMW outlets to 12.
It was reported that Sime Darby is also looking into property development in Shandong where it has invested in cargo port and water treatment business.
An analyst from a local brokerage said that in terms of oil palm business, Sime Darby might be looking at the expansion of its downstream activities in China, especially in refineries. Sime Darby is the world’s largest public-listed palm oil producer and China is the world’s biggest buyer of the edible oil.
Its net profit for the first quarter ended Sept 30 plunged by 21% to RM684.64mil against the previous corresponding period due to lower contribution from the group’s plantation division.
Source : Business Times