SIME DARBY GROUP`s EXPERIENCE

SIME DARBY GROUP’s EXPERIENCE
INSURANCE EFFECTIVENESS “IN CLIMATE CHANCE
ADAPTATION AND DISASTER RISKS RECDUCTION”
Osman Ahmad
Principal Office
Sime Darby Insurance Pte Ltd
05th July 2014 (Bangi,Selangor)
Sime Darby Plantation - Contents
Sime Darby Group Core Business
Sime Darby Plantation (Up and Downstream)
Sime Darby Plantation Upstream
Sime Darby Plantation Achievement
Climate Change/Disaster Risk
Insurance Is The Answer
Claims / Losses
Moving Forward
Question and Answer
Sime Darby Group Core Business
SIME DARBY GROUP
PLANTATION
PROPERTY
Business Activities
MOTORS
INDUSTRIAL
ENERGY &
UTILITIES
NON-CORE
Sime Darby Plantation (Up & Downstream)
Sime Darby Plantation (SDP)- Downstream
SDP Downstream Operation – Food and Non-Food Based Segments.
 Food based, cooking oil, margarine, shortening and cooking fats.
•
8 Refineries
o Malaysia, Singapore. Thailand, Vietnam, Netherlands and South Africa.
 Non Food Based
•
Biodiesel and Oleochemicals.
•
Biodiesel and Plant in Malaysia
•
Oleochemicals Plant in Malaysia, Germany, USA and Canada.
Sime Darby Plantation (Upstream)
Sime Darby Plantation - Location
Sime Darby Plantation (SDP)- Upstream
SDP Upstream Operation – Agriculture Based Segments.
 SDP one of the largest Palm Oil producer in the world.
 About 2.47 million tons or 5.00% of the world’s crude palm oil (CPO) annually.
 Total of 205 Estates (Oil Palm Plantation) Worldwide.
 Sime Darby Operations Include:
• Development of Oil Palm Plantation
• Cultivation of Oil Palms
• Management of Estates
• Milling of Fresh Fruit Bunches (FFB) of CPO and Crude Palm Kernel Oil (CPKO)
 Total Land Bank More Than 860,000 Hectares
• Malaysia
- 350,000 Hectares (320,000 Hectares Planted)
• Indonesia - 290,000 Hectares (200,000 Hectares Planted)
• Liberia
- 220,000 Hectares (10,00 Hectares Planted)
Sime Darby Plantation – Historical Achievements
1. Zero Burning
• Introduced in 1989 by Sime Darby
• Adopted as National standard in 1997
• Adopted by ASEAN in 2003
• Innovative, pollution free, recycles nutrients and no fallow period
• Awarded the Global 500 Roll of Honour at Rio de Janerio in 1992 by
the United Nation Environment Programme (UNEP)
Sime Darby Plantation – Historical Achievements
Sime Darby Plantation – Historical Achievements
Sime Darby Plantation – Historical Achievements
Sime Darby Plantation – Historical Achievements
2. High Quality Planting Materials

Seed producer for oil palm & rubber since 1924 and 1921 respectively.

Fresh fruit bunch (FFB) potential yield has risen from15 mt/ha to 30
mt/ha for oil palm and oil extraction rate (OER) of 16% has risen to 22%.

Holds 30% of market share of oil palm seeds sales in Malaysia.

Ranked first in Malaysian Palm Oil Board (MPOB) trials in 1992 and 1999.

Produced rubber PB260 planting material which is widely found in rubber
plantation nowadays.

Leader in high quality oil palm and rubber planting materials.
Sime Darby Plantation – Historical Achievements
3. Integrated Pest Management

Leader in oil palm estate pests and disease management.

To date, over 500,000 ha of oil palm in Sime Darby has been managed
under this regime for Oryctes rhinoceros, leaf pests (bagworms and
nettle caterpillars), rats and Ganoderma.

Promotes the usage of beneficial plants for control of leaf pests.

Verified pathogenicity of Ganoderma through Koch’s Postulates in oil
palm and provide better understanding of effective disease management.
Sime Darby Plantation – Historical Achievements
4. Water Management System

Leader in oil palm estate water management.

Water management system was introduced for acid sulphate oil palm
soils in 6,600 Ha (Carey Island) and 12,500 Ha, peat soils (Lavang Estate,
Sarawak).

Improvement in yield by more than 10% has been recorded.
Sime Darby Plantation – Historical Achievements
5. Utilisation of POME, EFB and Compost

Empty fruit bunch (EFB) and palm oil mill effluent (POME) are used as
organic fertilisers/manure in plantations.

Conversion of EFB and POME into compost.

Developed and registered as Clean Development Mechanism (CDM) for
compost with Danish Development Cooperation (DANIDA).
Sime Darby Plantation – Historical Achievements
6. Red Palm Olien

A fully refined palm oil rich in natural carotenoids and tocopherol/
tocotrienols.

Used as a natural food colorant, frying and baking.

The frying time is shortened, producing a more desirable french fries
colour with decreased acryl amide levels.

Customers: Britannia (United Kingdom), Sumitomo (Japan) and Hudson &
Knight (South Africa)
Sime Darby Plantation – R&D
Climate Change/Disaster Risk
Managed/Reduction
Insurance Is The Answer
Interest Insured
ESTATE
•
Growing Trees
MILLS
•
•
•
Building
Plant & Machinery
Equipment
HUMAN
•
•
Staffs
Support Staff
Insurance Coverage
A.
Growing Trees
1. Material Damage
Fire and Lightning
BASIC COVERAGE
Animal Damage
Flood, Windstorm
RSMD, Aircraft Damage
Earthquake, Volcanic Eruption or other convulsion and nature
Plants & Planting cost (less than 1 year old)
Up Keeping Cost
Insurance Coverage
A.
Growing Trees
2. Business Interruption
Loss of Revenue
Insurance Coverage
B)
MILLS
1. Material Damage
Building
• Fire & Perils
• Business Interruption
Plant, Machinery, Equipment & Boiler
•
•
•
•
•
Fire & Perils
Accidental
Theft
Machinery Breakdown / Loss of Profit
Boiler
Insurance Coverage
C)
HUMAN
Group Term Life / Group Personal Accident/Others
Group Medical
D)
TRANSPORTATION
Motor / Equipment Used In Public / Private
Marine Cargo – Land/Sea Transit
Insurance Coverage
E)
LIABILITY
Public Liability & Others
Product Liability
Rating
Insurance Coverage
Sum
Insured
As per
agreed
values
basis per
hectare
Rating
As per
Tariff
GROWING TREES
Basic Rates As Per Attachment
Sime Darby Plantation – Section 14 (RFT)
Insurance of Growing Trees
1. SUM INSURED
AGE
OIL PALM
(Value In RM Per Hectare)
0 – 1 Year
2,220
1 – 2 Years
3,290
2 – 3 Years
4,510
3 – 4 Years
5,255
4 – 5 Years
5,255
Over 5 Years
5,255
Average no. of trees per hectare
140
Sime Darby Plantation – Insurance of Growing Trees
2. RATING
Code
(for statistical purpose)
5004
Perils Covered
Oil Palm
1. Fire & Lightning
0.45%
2. Animal damage:
a) Plants less than 2 years old
b) Plants over 2 years old
0.05%
0.025%
3. Flood
0.10%
4. Windstorm
0.10%
5. Riot, Strike, Malicious Damage
0.03%
6. Aircraft Damage
0.01%
Sime Darby Plantation – Oil Palm
VALUE OF TREES PER HECTARE (Breakdown) / RM
Particular
0 – 1 Year
1 – 2 Years
2 – 3 Years
3 – 4 Years
Felling, Clearing ploughing
600
-
-
-
Plants & Planting
800
-
-
-
Cover Crop
400
Unkeep
-
Manuring
-
Overheads
420
420
420
420
2,220
(2,020)
1,070
1,220
745
Value brought forward
2,220
3,290
4,510
-
T.S.I
2,220
3,290
4,510
5,255
Note:
1. Mature trees S.I per ha
RM5,2255
2. Number of trees per ha
140
3. Average value per mature tree
RM37.5
4. Big plantation companies normally plant pure cover crops
Claims/Losses
Sime Darby Plantation – Contingency Strategy
Participate on Risk Exposure
Partly Self Retention
Captive / Saving [Sime Darby Insurance (Labuan) Pte Ltd]
Sime Darby Plantation – Captive Arrangement
SD Plantation
Insurers
Sime Darby Insurance (Labuan) Pte Ltd
Insurance Co. 70%
Captive 30%
1. Reinsurance Retro Cover To Protect SDIPL Balance Sheet
2. Average Saving Annually USD2 Million