Plantation conglomerate Sime Darby said today it will invest RM3 billion to expand its operations in the region over the next three years.

Chief executive Ahmad Zubir Murshid said the company would invest around one billion ringgit to buy a controlling stake in Hyundai Berjaya Corp, Hyumal Motor and Inokom Corp, three companies involved in auto distribution and parts manufacturing.

Sime Darby plans to double its plantation acreage, raise its power division capacity to 2,000 megawatts from 800 currently and strengthen its presence in oil and gas services, he said.

"We will probably spend another two billion ringgit to expand and strengthen the company's operations. We are expanding in Singapore and Thailand, and will look at opportunities in Malaysia," he told reporters after the company's shareholders' meeting.

Major auto player

Sime Darby has a debt gearing of about 30 percent currently and expects to gear up to about 50 percent of shareholders' funds to finance the expansion, he said.

"On the auto area, we have made some inroads with the acquisition of Hyundai-Berjaya and we feel that this will allow us to be a major player with the advent of Afta (the Association of Southeast Asian Nations Free Trade Area)," he added.

Sime Darby, one of the country's top plantation companies, also has a large motor arm involved in the import, assembly and distribution of marques including BMW, Land Rover and Ford.

Hyundai-Berjaya is the distributor for South Korea's Hyundai vehicles, including spare parts and accessories. Hyumal distributes certain Hyundai passenger cars and related spare parts, and provides workshop services. Inokom assembles light commercial vehicles.

Under Afta, import tariffs for most products in the Southeast Asian region were cut to below five percent from last year. Malaysia obtained a two-year reprieve for its auto industry until 2005 but it has said it would further defer reducing duties to the required level until 2008.

Ahmad Zubir said the company hoped to realise at least RM200 million from the sale of non-core operations by next year.

"We should be able to see better growth in financial year 2007," he added.