MSM looking for new export markets
Company prepares for removal of sugar monopoly
KUALA LUMPUR: MSM Malaysia Holdings Bhd plans to enter new export markets, including Africa, as it seeks to shield itself from potential policies to remove monopoly in the sugar industry.
MSM and Central Sugars Refinery Sdn Bhd are the two players dominating the local sugar market, with MSM commanding 58% of the domestic market share.
The government announced the setting up of a special task committee last week to curb monopolies across industries in the country.
MSM chairman Datuk Wira Azhar Abdul Hamid said that while it had not been approached by the committee, Felda Global Ventures Holdings Bhd (FGV) has been in communication with the council on the issue. FGV holds a 51% stake in MSM.
Azhar said the group was already “feeling the pressure” as the government had recently also issued sugar import licences to new players.
“Of course, we are not happy. We are constantly telling the government that there is enough capacity for the domestic market, and there is no need for the importation of sugar,” he told a press conference after the group’s AGM here yesterday.
Due to these pressures, he said the group could no longer afford to operate mainly as a domestic player, and needed to “move out”.
“One of our initiatives is to focus on identifying a profitable export market. We are looking at the African region, where demand is growing.
“China has now become a net importer, so we are looking there as well,” he said.
However, he said the company would not be careless and rush into any decision.
“We can either serve an export market from here or from outside the country.
“We need to study this not just from a production perspective, but also from a financial and taxation perspective,” he said.
He added that the group was also open to the possibility of acquiring a local company in the chosen export markets.
However, he noted that the group was “not financially strong at the moment” after investing in its new sugar-refining facility.
“We don’t want MSM to be burdened financially,“he said.
The group’s new refinery in Johor, with a million-tonne capacity, is expected to begin production next month.
On the group’s vacant CEO position, he said an announcement would be made after July.
Moving forward, Azhar expected the group to perform better this year after a challenging financial year 2017, on the back of lower raw sugar prices.