Renewable Energy is part of Sime Darby Plantation diversification strategy. The idea is to leverage on internal asset and various by-products along the palm oil value chain to further produce high value-added goods. With our ability to generate sustainable feedstock, the Group is well positioned to stimulate new growth and innovation in the renewables industry, unlocking greater value for our business as well as our stakeholders.
Over the years, the Group has shifted from our strategy to invest in early-stage start-ups in this promising sector. Instead, we now subscribe to an asset-light strategy of partnering with established players, and focus on renewable energy sector, instead of renewable chemicals. The objective is to acquire new capacities and capabilities from local and international players to unlock untapped values from our assets and by-products.
During the year under review, we accelerated our efforts to develop the Renewable Energy business, particularly in the energy space, mainly to reduce our fossil fuel dependence and methane emissions. Our current exploration and involvement are in solar, biogas, biodiesel and biomass.
In the mid-to-long term, we see significant potential for Renewable Energy to create value for our business, mainly in two ways: First, there will be an opportunity for cost reduction as well as cost advantage through biogas or solar energy; and second, we will be able to generate new revenue from our land and valorizing our oil palm biomass.
In FY2019, Sime Darby Plantation Renewable Energy Sdn Bhd (SDPRE) was restructured to champion the Group’s renewable energy businesses. Meanwhile, we achieved a good momentum with positive earnings from large-scale solar business.