SD Guthrie expects about 10% fall in Indonesian output after dry spell
Water shortages have disrupted nurseries and mills, while the group says the production impact could be larger in 2028 if dry conditions persist.
SD Guthrie Bhd has forecast a decline of about 10% in Indonesian production following an El Niño-related dry spell. A larger reduction could follow in 2028 should the conditions continue, according to Adrianudin Raj Azman, chief executive officer of the group's upstream Indonesia.
At the group's earnings briefing, Adrianudin said the forecast drew on historical trends, but increased rainfall could soften the decline. He said the effects on production could appear after five months or take 15 to 18 months to emerge.
Indonesia went without rain for around four months from July, against a normal dry spell of two months, he said. The water shortage left the group's nurseries struggling with irrigation and forced it to obtain water externally. Mills also suspended operations on some days because water was insufficient.
Rain had brought some relief, although reservoir levels had yet to recover sufficiently, Adrianudin said. Weather forecasts indicated that November could bring good rainfall, he added.
Indonesia represented 31.3% of SD Guthrie's planted area at end-2025. Malaysia accounted for more than half, with Papua New Guinea and the Solomon Islands making up 16.2%.
SD Guthrie shares traded at RM6.01, a gain of eight sen or 1.35%, giving the group a market value of RM41.56 billion.
