MSM Malaysia unfazed by influx of sugar imported from Thailand
KUALA LUMPUR: Local sugar producer MSM Malaysia Holdings Bhd remains confident in its competitive position despite the influx of imported sugar from Thailand.
The group is well positioned to compete with imported products, leveraging its established domestic scale and operational capabilities and will continue to maintain its market presence and deliver value to customers in the face of increased competition.
Group CEO Syed Feizal Syed Mohammad said the company has a total scale of two million tons and is adopting a strategy of competing with imported sugar for a certain given volume.
'We still retain a good number of market share, and we have a specific price strategy to counter Thai imports, while the government considers other mitigating factors.
'Our refineries got good efficiencies, and we see significant improvement in Johor, so it's not a matter of economics,' he said after the company's 14th annual general meeting today.
Syed Feizal said that special actions must be taken to mitigate dumping practices and that the joint industry has taken measures in that direction.
MSM marked 2024 with a turnaround for the group, continuing its positive momentum to produce a year-on-year improvement, which was made all the more significant by a return to profitability.
This progress was underpinned by stronger operational performance at MSM Sugar Refinery (Johor) Sdn Bhd and the continued optimisation of steady operations at MSM Prai Bhd.
In FY24, MSM Malaysia recorded a profit before tax of RM75 million, a significant reversal from the loss before tax of RM28 million in FY23.
Revenue grew 15% year-on-year to RM3.54 billion in FY24 compared to RM3.09 billion in FY23, supported by an 8% increase in sales volume and a 6% higher average selling price.
The positive growth was underpinned by the execution of transformation and turnaround strategy, focusing on cost optimisation, efficiency enhancements and market expansion.
Despite market challenges, including volatile raw sugar prices and rising freight costs, MSM Malaysia effectively managed risks through proactive hedging strategies and improved cost structures.
'FY24 marked a pivotal year for MSM Malaysia as we successfully delivered a significant turnaround, returning to profitability and achieving notable financial and operational improvements.
'One of the most significant contributors to our improved performance was stronger production efficiency. In 2024, the group recorded a capacity utilisation factor of 54%, up from 48% in 2023, while our yield improved to 96% from 95%,' Syed Feizal said.
He noted that these gains were supported by operational discipline at both MSM Prai and MSM Johor, where they streamlined processes, enhanced preventive maintenance and improved energy efficiency.
'MSM will continue to mitigate input costs such as raw sugar, forex and freight with gradual hedging as part of risk management to ensure margin sustainability while optimising cost management through production and supply chain efficiencies,' Syed Feizal said.
For 2025, MSM aims to expand market presence, particularly in China and the Asean region, including Vietnam, Indonesia, Singapore and the Philippines.
The goal is to increase total export volumes to 360,000 metric tons in 2025, with an emphasis on value-added products, such as liquid sugar and premixes, from MSM Johor.
Looking ahead, MSM Malaysia approaches 2025 with cautious optimism, supported by the progress achieved over the past year and the solid foundation established through its ongoing transformation.
The company's priority will be to unlock greater operational efficiency while driving strategic growth initiatives to strengthen long-term sustainability. A key focus will be on boosting overall sales through enhanced domestic and export strategies, including targeted collaborations and partnerships.
Separately, in a Bursa Malaysia filing yesterday, MSM Malaysia noted that the company aims to sustain growth amidst geopolitical challenges and market volatility.
MSM Malaysia said it is closely monitoring market dynamics as the sugar industry continues to face challenges driven by persistently high input costs and volatile raw sugar prices, which are influenced by fluctuating global production.
This is particularly heightened by the increased geopolitical tensions and ongoing trade wars, which may further disrupt global supply chains and foreign exchange rates.
To address these risks, MSM Malaysia is reinforcing its domestic market position while managing export pricing pressures.
The group is also leveraging steady domestic demand and actively pursuing opportunities in value-added products to diversify revenue streams.
MSM Malaysia said engagement with government stakeholders remains a priority.
The company is working to finalise a sustainable pricing mechanism for the domestic retail segment and advocating for effective controls on imported refined sugar. These measures are essential to support national food security and ensure the long-term sustainability of Malaysia's sugar industry.
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