MSM thriving amid industry headwinds

Its profitability contrasts with the industry’s high raw sugar costs and volatile freight rates, exacerbated by the Red Sea crisis 

by RUPINDER SINGH 

SUGAR producer, MSM (M) Holdings Bhd, said it has shown strong financial performance in the fourth quarter of 2023 (4Q23) and 1Q24, despite high input costs, thanks to government incentives stabilising the local sugar industry. 

In a statement on June 6, MSM said its profitability over the past two quarters contrasts with the industry’s high raw sugar costs and volatile freight rates, exacerbated by the Red Sea crisis. 

Additionally, natural gas costs remain elevated, further increasing production expenses. 

MSM group CEO Syed Feizal Syed Mohammad highlighted a 15% rise in production costs due to higher raw sugar prices and the ringgit’s depreciation. 

“Comparing 2023 to 2022, we recorded a 15% increase in production costs due to higher raw sugar prices and the depreciation of the ringgit. “Additionally, the cost of natural gas, essential for generating steam in the refining process — accounting for approximately 40% of our refining expenses, surged by 15%.

“As previously highlighted, the spike in natural gas prices in 2023 has propelled refining costs upwards, resulting in a significant overall cost escalation for the group,” Syed Feizal said. 

The company has focused on operational efficiency, particularly at MSM Sugar Refinery (Johor) Sdn Bhd (MSM Johor), where the utilisation factor has improved significantly. 

“In 2023, we produced over 992,000 metric tonnes with a capacity utilisation of 48% for the group. Breaking that down by refinery, MSM Johor refinery’s capacity utilisation of 22%, an improvement from 17% in 2022. While at MSM Prai Bhd, the capacity utilisation was 73% in 2023,” Syed Feizal said during MSM AGM press conference on June 6. 

MSM successfully exported to key markets, including the Philippines, China, Singapore, Indonesia and Vietnam, and maintained relationships with other countries like South Korea, Hong Kong and Pakistan. 

The company aims to expand its market reach into Africa, aligning with its vision of global market penetration and diversification. 

Looking forward, MSM plans to explore upstream integration to secure raw sugar sustainably and focus on downstream value-added products like liquid sugar and premix to enhance revenue streams. 

As of June 2024, MSM’s market capitalisation and share price have seen significant growth, reflecting strong investor confidence. 

For financial year 2023 (FY23), MSM reported a narrowed loss before tax (LBT) of RM28 million, compared to an LBT of RM179 million for FY22. 

Revenue for FY23 increased by 20% to RM3.09 billion. 

In 1Q24, MSM recorded a profit before tax of RM66 million, a significant turnaround from a loss of RM33 million in 1Q23. 

Revenue for 1Q24 rose by 54% to RM907 million, driven by higher sales volume, increased average selling prices and domestic market incentives. 

MSM is listed on the FTSE4Good Bursa Malaysia Index and FTSE4Good Bursa Malaysia Shariah Index, recognising its strong environmental, social and governance (ESG) initiatives. 

Since 1964, MSM has been a leading national sugar refinery and ranks among the top 10 refiners globally, driven by a robust ESG framework and a commitment to long-term stakeholder value and sustainable economic development. 


  • This article first appeared in The Malaysian Reserve weekly print edition