By Mei Mei Chu
KUALA LUMPUR (Reuters) – Sime Darby Plantation Bhd warned on Thursday that labour shortages at palm oil plantations in Malaysia because of coronavirus border closures will worsen in early 2022 compared to the last six months until workers are allowed to return.
Mohamad Helmy Othman Basha, managing director at Sime Darby Plantation, also told a conference that there was a shortage of more than 75,000 workers resulting in a potential 20%-30% hit to production.
Sime Darby Plantation is the world’s biggest palm oil planter by land size and said last year that foreign workers made up 75% of its employees.
Mohamad Helmy urged the industry to advance automation and mechanisation efforts, as well as search for “out of the box ideas” to hire more locals.
“The industry should take this opportunity to reset,” he said.
Malaysia’s border remains closed in a bid to curb the spread of COVID-19 and restrictions on the hiring of foreign labour have been in place since the pandemic started.
Last year, Malaysia approved the entry of 32,000 plantation workers to ease the acute labour shortage.
Minister of Plantation Industries and Commodities Zuraida Kamaruddin told reporters on the sidelines of the conference that talks were still ongoing between Indonesia and Malaysia, with Indonesian migrant workers only expected to enter around mid-February.
Malaysia is also discussing labour supply agreements with India, Bangladesh and Thailand to provide workers for the plantation sector, she said.
“This is to ensure that our labour supply is stable to make sure that our plantations are being harvested so that our production will be consistent,” she said, adding that this would be a short-term strategy as the industry ramps up research to mechanise operations at plantations.
(Reporting by Mei Mei Chu; Writing by Ed Davies; Editing by Christian Schmollinger and Martin Petty)
