KUALA LUMPUR -- Sime Darby, the world's largest plantation and palm oil producer, plans to split into three separate listed entities to promote future growth. The listing of plantation division, the core business of the Malaysian state-owned conglomerate, comes as demand weakens for crude palm oil. With the move, Sime Darby aims to free the group from an equity discount normally associated with conglomerates.
Sime Darby will spin off the plantation business, which accounts for 27% of the group's revenue and 34% of its profit before tax in 2016, as well as its property unit which contributes to 35% of profit before tax on 7% of revenue. Existing Sime Darby will continue to directly manage the industrial division, which markets heavy machinery for the mining and marine sectors as well as being involved in vehicle distribution and logistics.
