SD Guthrie plans industrial park in Malaysia’s data centre hub

[KUALA LUMPUR] SD Guthrie, the world’s biggest oil palm planter by acreage, is positioning itself to tap into the data-centre boom as it looks to develop a green-energy powered industrial park in Malaysia’s southern state of Johor.

The plantation giant, which owns 340,000 hectares across Malaysia, is expanding into industrial parks and renewable energy to reduce its reliance on palm oil. Its landbank in Johor will enable the group to become a key landlord and green power supplier in South-east Asia’s fastest-growing data centre hub.

Discussions are ongoing with other parties for the project in Kulai and an announcement is expected to be made “in the next four to six months”, group managing director Mohamad Helmy Othman Basha said on Tuesday (Aug 26). He did not provide further details.

“Data centres require land and it has to be strategic, and this is where we can play a role because now we are in the business of providing the land for industrial parks,” he said.

The company had signed a memorandum of understanding with AME Elite Consortium in November to jointly develop a green industrial park within the Johor-Singapore Special Economic Zone. It said at the time that the park will be built on 641 acres of land belonging to SD Guthrie.

The company will allocate about 10,000 hectares over the next decade to develop industrial parks that will be fuelled by electricity from solar farms built on its remote lands, Helmy said. The new businesses are expected to make up about 30 per cent of SD Guthrie’s bottom line by 2030.

SD Guthrie last week announced a tie-up with infrastructure firm Gamuda to develop, own and operate solar power assets with an accumulated target capacity of 1.2 gigawatts. Its first solar plant in Kedah is targeted to begin operations in the fourth quarter.

An industrial park in Johor will have plenty of potential due to demand for industrial land that outstrips supply, said Ivy Ng, head of Malaysia research and agribusiness at CIMB Securities. The move could help increase the value of SD Guthrie’s land and reduce earnings volatility which are heavily dependent on crude palm oil prices, she said.

Johor, the Malaysian state that borders Singapore, has attracted over RM164 billion (S$50 billion) in data centre investments, including from hyperscalers to meet artificial intelligence demand, in a short span of four years. This include funds from Microsoft, Nvidia, and DayOne Data Centers Singapore.

“If they can get this industrial land development revenue stream to become more recurrent, it can boost their earnings space over time,” Ng said.

The plantation firm has also signed pacts to co-develop industrial parks in Perak and Negeri Sembilan.

SD Guthrie shares have outperformed the benchmark stock index this year, gaining nearly 2 per cent against a 3.7 per cent decline in the index. It has a market capitalisation of RM34.9 billion. BLOOMBERG