Pasir Gudang: MSM Malaysia Holdings Bhd, in which FGV Holdings Bhd maintains a 51% stake, is contemplating entry into upstream sugar cane cultivation to ensure the country’s raw sugar security, reported The Edge Malaysia.
Expressing concern over countries such as Thailand and India restricting raw sugar exports, MSM group chief operating officer Hasni Ahmad emphasized the need for a strategic approach from a food security perspective. “If Brazil were to also prohibit its exports, the question arises: Where would we obtain raw sugar?” Hasni stated during a media visit to MSM Sugar Refinery (Johor) Sdn Bhd on Tuesday.
Highlighting MSM’s pivotal role as the nation’s primary sugar producer, Hasni referred to the company as the “kilang gula negara” or national sugar factory. He underscored the significance of addressing the matter not merely as an industry concern but as a crucial aspect of ensuring food security, asserting, “We will collaborate closely with the government on this venture.”
In March of the previous year, Economy Minister Rafizi Ramli announced plans to develop Malaysia’s sugar cane industry to meet domestic sugar demand. The decision stemmed from the country’s complete reliance on imported raw sugar from Brazil following the closure of the local sugar cane plantation in Chuping, Perlis, in 2011.
MSM had previously operated the sugar cane plantation business in Chuping under its wholly-owned unit, MSM Perlis Sdn Bhd. However, the venture was discontinued in 2011 due to low yield and a lack of competitiveness. Subsequently, MSM Perlis shifted its focus to managing agricultural land, concentrating on rubber, oil palm, and mango plantations. In June 2019, due to unsustainable performance and the high operating costs associated with plantation activities, the company ceased its plantation sector.
In 2021, MSM divested its entire equity interest in MSM Perlis to FGV’s subsidiary, FGV Integrated Farming Holdings Bhd, for RM181 million.
Responding to inquiries about the potential impact of the sugar cane plantation on MSM’s financial challenges, given the group’s eight consecutive quarters of losses, Hasni asserted, “For us, this year (financial year ending Dec 31, 2024) is going to be a turnaround; we will be profitable. You can’t look into short-term plans. This is the long-term plan, I would say.”
