Malaysia’s Sime Darby to divest oil and gas business

Sime Darby Bhd of Malaysia, the world’s largest palm oil producer by acreage, announced that it will be divesting its oil and natural gas business and other non-core assets, to focus on its core business. The oil and gas divisions of the company had posted losses for two consecutive quarters due to cost overruns in key projects. Sime Darby recently signed two agreements with Petronas and Malaysia Marine & Heavy Engineering Holdings Bhd, a Petronas unit, to sell two fabrication yards for a combined 695 million ringgit (US$233.44 million). Mohd Bakke Salleh, president of Sime Darby, said the company needs to focus on areas where it can achieve sector leadership. The strong demand for palm oil leads the company to feel confident about surpassing its financial targets for the fiscal year. (May 27,2011)