KUALA LUMPUR: MSM Malaysia Holdings Bhd (MSMH) will be consolidating its refined sugar production by relocating its factory operations in MSM Perlis Sdn Bhd (MSMP) in Chuping, Perlis, to MSM Sugar Refinery (Johor) Sdn Bhd (MSMJ) in Tanjung Langsat, Pasir Gudang, Johor.
In a filing to Bursa Malaysia today, MSMH said the cessation of MSMP’s production is set for June 30, with the mobilisation of manpower and certain equipment from MSMP to MSMJ and MSM Prai Bhd to be conducted in stages.
The whole process is expected to be completed by year-end. Both MSMP and MSMJ are wholly-owned subsidiaries of MSMH.
“The consolidation of the two factories will allow the company to optimise the capacity of its new refinery, MSMJ.
“Following this optimisation, the cost of refining raw sugar will improve significantly and thus will generate higher margins, and ultimately have an overall positive financial impact on MSMH and its group of companies,” it said.
The consolidation exercise had resulted in a provision of RM137.35 mil for the impairment of MSMP’s plant and machinery in the 2019 financial year.
However, by consolidating the company’s refining capacity, the company would be able to reduce its unit production cost, which in turn would improve its profitability and provide better shareholder value.
The factory land in Chuping will be sold, MSMH said.
Meanwhile, for the first quarter ended March 31, 2020, MSMH has reported a bigger net loss of RM34.7 mil compared with RM7.06 mil in the same period last year.
Revenue however increased to RM510.84 mil from RM485.43 mil in the same quarter last year.
“MSMH will continue its focus on sustainable growth strategies which include product diversification to penetrate into export markets and increase margins. MSMH expects the business environment to remain challenging for the rest of 2020,” the company said. – May 27, 2020, Bernama
