KUALA
LUMPUR (June 14, 2012): MSM Malaysia
Holdings Bhd plans to intensify its upstream business in the region to enhance
its refining operations in the long term as it strengthens its downstream
operations locally.
"In
the Asean region, Indonesia, Myanmar and Cambodia are suitable places (for
setting up plantations and refineries)," executive director Datuk Sabri
Ahmad told reporters after MSM's AGM yesterday.
The
move upstream will allow MSM to have better control of feedstock costs in the
event of unforeseen circumstances such as erratic and extreme weather
conditions that cause commodity prices to skyrocket.
"The
plan is to look at going on our own or through strategic collaborations. This
is still being evaluated," he said.
Sabri
said the plan to go upstream needs more detailed studies. "We're still
conservative on this as it's a big investment and also due to the fluctuation
of sugar prices."
Its
chief finance officer Raja Faridah Raja Ahmad said MSM has set aside RM100
million from the proceeds of its initial public offering last year for
strategic acquisitions. Securing partnerships will help it to expand sugar cane
planting into other countries in Southeast Asia.
"Currently
we still have RM220 million for our internal expansion of which we're
allocating RM85 million this year to expand our capacity and warehouse,"
she said.
MSM CEO
Chua Say Sin said the company is building its infrastructure, warehouse storage
and handling capacity in line with its plan to expand capacity.
As
sugar consumption is expected to grow in Malaysia and globally, MSM said its
immediate focus is to upgrade production facilities, expand export sales and
pursue strategic investments in new markets.
As the
country's biggest sugar refiner, MSM owns two refineries, with a total raw
sugar melting capacity of 3,600 tonnes per day. It produces 958,377 tonnes of
refined sugar products last year, accounting for 57% of total sugar production
in Malaysia.
Ee Ann
Nee
Business & Investment Opportunities
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