MSM To Build RM1 Billion Sugar Refinery

• Sugar refiner MSM Malaysia Holdings has plans to expand its business with deals to build a RM1.1 billion refinery in Tanjung Langsat, Johor, as well as acquire mills and a plantation from a state-owned Indonesian sugar producer.

• Despite there being our other parties bidding for the Indonesian mill development project, the group said it was confident of winning the tender, which would help build up the firm’s upstream business.

• Entry into Indonesia’s sugar sector was a sound investment and strategic fit to grow MSM’s sugar operations internationally, according to chief executive officer Datuk Dr Sheikh Awab Sheikh.

• Awab pointed out that Indonesia’s total consumption now stood at 5.8 million tonnes, but the country’s production capacity only stood at 2.6 million tonnes. As such the group plans to produce for domestic consumption as the margins are higher compared to the export market.

Significance: The new refinery in Johor will see MSM expand its annual production capacity to 3.3 million tonnes from the present 1.1 million tonnes and could possibly reduce costs by 50 percent, making the firm more competitive in the export market. The group has also ambitious plans to get full control of the Singapore market, in which it currently has a 20 percent market share, by 2018.

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