Decolonization and challenges
The challenges were partly economic as natural rubber faced increasing competition from synthetics. However, the greatest challenges came from the post-war decolonization and the gradual desire of the newly independent countries to control their own raw materials. This was exacerbated by insurgency in both Malaysia and Indonesia. Despite this, and the earlier determination not to be too reliant on one region, Harrisons continued to find opportunities for growth in south east Asia.[3]
One of the undoubted successes was North Borneo Timber, later Sabah Timber. Despite losing its monopoly in 1950, improved mechanical logging took timber production from around 2m cubic feet to 19m in 1969. By the time that logging ended in 1982, Sabah had established a thriving timber business in the U.K. Another growth market developed after the war was oil palms, often planted on old rubber estates but Harrisons also acquired virgin land in Sabah and formed a new venture in Papua New Guinea, New Britain Palm Oil.[22] In India, Harrisons had 32 estates, mainly tea but some rubber, by 1960. From then there were further acquisitions but a focus on amalgamations created the larger entity of Malayalam Plantations.[3]
Despite the disruption caused by the Malayan Emergency, Harrisons' agency companies continued to acquire additional estates. As with India, there was a consolidation of estates into what became known as "the three sisters": Golden Hope, Pataling and London Asiatic. After a fierce takeover battle with outsiders, these three companies were merged in 1977 into Harrisons Malaysian Estates. In Indonesia, Harrisons struggled with changing nationalist demands, losing control of its agencies at times. Around 1960 the London Sumatra Group was established to merge its 16 agency companies; others were added and it became one of the world's largest plantation companies. By 1983 Harrisons had acquired complete control.[3]
Harrisons gradually faced increased demands from its host governments, variously in the form of higher royalties, increased taxation, and a desire to see greater local ownership. The plantations in Sri Lanka were the first to go, being nationalized in 1975. In 1982, the local entity Harrisons Malaysian Plantations Berhad was formed to acquire HME; Harrisons retained 30% and received £130m cash. After some poor plantation results, and pressure from outside shareholders, Harrisons decided to reduce further its dependence on plantations by divesting its minority holdings in Harrisons Malayalam and Harrisons Malaysian Plantations Berhad but retaining London Sumatra Plantations and Papua New Guinea. In 1983, 34% of Malayalam Plantations were sold to Indian nationals, leaving Harrisons with 40%. At the same time Malayalam Plantations merged with Harrison & Crossfield's other interests to form Harrisons Malayalam.[23] London Sumatra was sold in 1994 and the Papua New Guinea company followed in 1996.[14]
