(From left) MSM Malaysia Holdings Bhd group chief operating officer Hasni Ahmad, group chief executive officer Syed Feizal Syed Mohammad, chairman Datuk Syed Hisham Syed Wazir, and chief financial officer Dr Aini Shahar. (Photo by Shahrin Yahya/The Edge)

KUALA LUMPUR (June 8): MSM Malaysia Holdings Bhd said it is more optimistic about returning to profitability in 2023 by growing its export footprint, but emphasised the need for more structural changes in how refined and coarse sugar prices are determined.

At a press conference after its annual general meeting on Thursday (June 8), MSM group chief executive officer Syed Feizal Syed Mohammad said the optimism is back, thanks to the group’s bulk shipping plans beginning in July this year for large-volume deals with China, Bangladesh and Indonesia.

“MSM Johor is ramping up, and will also largely serve the export market. With demand in Asia-Pacific, and if we can close the deals with China and Bangladesh — the big hitters — soon enough, that will allow us to accelerate in terms of our market share in [expanding our] export footprint in Asia, at least in the immediate region,” Syed Feizal said.

The producer of national refined sugar brand "Gula Prai" has just recently completed its technical turnaround programme at MSM Sugar Refinery (Johor) Sdn Bhd (MSM Johor), which is now ready for higher production and more product varieties.

Syed Feizal foresees that there is a lot of room to grow its sugar exports, as MSM Johor has a geo-strategic advantage.

Thus, he said the group “believes that we have a better chance of getting back into the black, possibly this year. But it requires still a lot of hard work on our side”.

Further structural changes from the government's sugar pricing are also needed, he said.

“With a combination of all that, I believe that we can at least do our best [to return to the black in 2023],” he said.

MSM reported a higher net loss of RM35.88 million for the first quarter ended March 31, 2023 (1QFY2023), from RM27.68 million for the same quarter last year, due to lower margins and higher operating costs.

Revenue for the quarter decreased by 1.26% to RM588.39 million for 1QFY2023, from RM595.92 million previously, amid lower export sales volume to prioritise local sales demand.

When asked about MSM's mitigation strategy, group chief operating officer Hasni Ahmad said the company is looking at increasing optimisation and efficiency of its plants to 50% in order to lower operational costs.

“I think for us, it is more about optimisation. For exports — for MSM Johor basically — we need to drive the volume, because that will help in reducing our [operational] costs,” said Hasni.

On the sugar shortage in selected states, Syed Feizal pointed to distribution issues compounded with higher demand, adding that it relates to replenishment at smaller retail shops, and not hypermarkets and supermarkets.

“When you go to the micro end of the distribution channel, this is where I think replenishment needs to be better from all [of the] wholesalers' ecosystems.

“We are working closely with the Ministry of Domestic Trade and Costs of Living in ensuring that there are no more shortages. So we now proactively do surveys and engage in certain areas, towns and retail shops to ensure that there are enough supplies,” he added.

MSM closed unchanged at 90.5 sen on Thursday (June 8), valuing the group at RM632.68 million.

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