SD Guthrie sees proposed wage rise adding nine per cent to costs
About 36,600 workers at the group’s Malaysian operations are expected to be affected by the proposed RM2,000 minimum wage.
A proposed increase in Malaysia’s minimum wage could raise SD Guthrie Bhd’s overall costs by about nine per cent, the plantation company said. Its initial assessment assumes the additional expense would take effect during 2027’s second half.
The government’s 2027 Budget proposal would lift the wage floor to RM2,000 from RM1,700. Malaysian Palm Oil Association (MPOA) chief executive Roslin Azmy Hassan said producers would bear most of the added expense, as global market conditions largely set crude palm oil (CPO) prices.
Roslin said smaller operators would face greater difficulty because their margins were tighter. The impact on individual companies would depend on workforce arrangements, productivity, operating efficiency and CPO prices.
SD Guthrie put the sustainable range for CPO at RM2,500 to RM4,500 per tonne. Below RM2,500 per tonne, producers could face substantial cost pressure, it said. Above RM5,000 per tonne, weaker competitiveness against other vegetable oils could hurt demand. The company said it could not yet identify a price that would compensate for higher wages.
The group said it would pursue productivity gains through improved tools, skills and estate operations. Planned mechanisation covers upkeep tasks including pesticide application, manuring, pruning and clearing.
Roslin said harvesting remained heavily reliant on manual workers, while commercially viable harvesting machinery was still under development. MPOA and SD Guthrie said potential savings could not yet be measured, citing variation in estate conditions, productivity and technology uptake.
