By EUGENE MAHALINGAM | Feb 9, 2010
Sime Darby will consider good tie-ups
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Tun Musa Hitam ... ‘Business doesn’t recognise race.’
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eugenicz@thestar.com.my
KUALA LUMPUR: Sime Darby Bhd will consider potential partnerships if they make good business sense, said chairman Tun Musa Hitam.
The company would look into “all aspects” carefully, especially the potential profitability, he said.
“There are a number of companies in talks with Sime Darby, but there has to be a due diligence (done on the partnership),” he said during a question-and-answer session after his presentation at the 1Malaysia Economic Conference yesterday.
A participant from the floor cited a recent article in The Star that questioned Sime Darby’s joint venture with Sunrise Bhd to develop a RM1bil commercial development in Bukit Jelutong.
“Sime Darby has a huge land bank. There are a thousand and one things to be implemented (and) we welcome partnerships,” Musa said.
A StarBizWeek commentary on Saturday questioned whether Sime Darby, a developer with a long and varied track record, needed Sunrise, an established condominium developer with limited experience in commercial development, to set up the commercial centre.
“I am aware of the criticisms. It (potential partnerships) is looked into carefully from all aspects, especially profitability. The joint ventures have to be of a business consideration,” Musa said.
On Sime Darby’s potential earnings for its current financial year ending June 30, he said: “It’s simple logic. Palm oil prices are very high, beyond our original budget. So you can look forward to much higher profits than last year.”
“We have not seen the last of the fluctuations of such a commodity as palm oil. I’ve lived through it from the day when palm oil was RM400 (per tonne). Now it has touched well over RM2,000,” Musa added.
For its previous financial year, the company recorded a net profit of RM2.28bil on revenue of RM31.01bil.
“It makes us happy obviously (that palm oil prices are high. The important thing is to use that profit for diversification and expansion as well as improvement of the quality of our crops,” said Musa, without elaborating further.
On another note, Musa neither confirmed nor denied the rumours that group may sell a stake in the company to Chinese investors.
“I agree that they are just rumours,” he said.
Meanwhile, in his presentation “Entrepreneurship and Joint Venture Promotion in the New Economic Model,” Musa said Malaysian companies were very prejudiced in the way they did their business.
“Perception and prejudice is so ingrained in ourselves that we might not be able to get out of it. Business doesn’t recognise race. It is hard work and competitiveness that will decide whether Malaysia will win or lose.”
He also said there was a pre-conceived notion that there was a reluctance to work with the Malay race because they were deemed “unqualified.”
“If you don’t want to be in a joint venture with a Malay just because you think they’re not qualified, you’re wrong. Today, there are hundreds and thousands of Malays that are qualified. Most of them have arrived.”
He also said that there was a perception that government-linked companies (like Sime Darby) “had it easy.”
“Sime Darby is present in many countries, like Vietnam, Holland and Australia. Do you think the Australian government is going to take you just because you know the (Malaysian) prime minister? No way!”
The 1Malaysia Economic Conference, titled “1Malaysia – New Economic Model,” ends today and is organised by the Associated Chinese Chambers of Commerce and Industry of Malaysia.
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