PETALING JAYA: Sime Darby Bhd is acquiring a substantial stake in United States-based industrial biotechnology company Verdezyne Inc to pursue strategic growth areas for its plantation business.
Sime Darby president and group chief executive officer Tan Sri Mohd Bakke Salleh said in a statement that “Sime Darby is taking strategically measured steps to build and nurture a sustainable portfolio of palm-related industrial biotechnology companies.
“There are exciting opportunities, which can leverage on our substantial plantation assets, and we are keen to capitalise these for future growth.”
A newly established unit under its subsidiary, Sime Darby Plantation Sdn Bhd - Sime Darby Renewables - would spearhead the initiative that would focus on converting traditional and non-traditional palm-based commodities into products of higher value.
Sime Darby has plans to emerge as the single largest investor in Verdezyne, together with existing investors such as BP Alternative Energy; global life sciences group Royal DSM; and OVP Venture Partners and Monitor Ventures, subject to definitive documentation.
Sime Darby’s investment in Verdezyne is expected to accelerate technology development in the US and create various job opportunities in Southern California. In addition, Verdezyne would be able to receive multiple feedstocks, which would benefit the US vegetable oil market.
Sime Darby Plantations managing director Datuk Franki Anthony Dass said Sime Darby Renewables would be a new chapter in Sime Darby Plantation’s sustainable evolution.
“It will not only build a portfolio of palm-related industrial biotechnology companies but also strategically integrate these with our business activities. Our competitive edge is the availability of sustainable palm-based feedstocks in our plantation value chain,” he added.
Verdezyne has proprietary technologies to competitively produce chemicals derived from sustainable materials, which can be found in the oil palm value chain. These chemicals are used to make everyday items like clothing, footwear and adhesives, as well as industrial products such as automobile parts. Currently, these chemicals are mainly derived from petroleum-based feedstocks such as benzene and butadiene.
Verdezyne’s current products targeted for commercialisation have a potential combined market size of about RM37bil with laboratory, pilot and demonstration-scale validation already carried out.
Results so far have attracted favourable interest from the market.
Meanwhile, Bernama reports that a memorandum of understanding (MoU) has been signed for Sime Darby to take a 30% stake worth US$30mil (RM97.7mil) in Verdezyne.
The MoU was signed yesterday in conjunction with US President Barack Obama’s visit to Malaysia.
The ceremony was witnessed by Obama and Malaysian Prime Minister Datuk Seri Najib Tun Razak.