KUALA LUMPUR: MSM Malaysia Holdings Bhd (MSM) will see earnings impacted by the government’s recent
issuance of approved permits (APs) to import sugar cheaply from producing countries, particularly Thailand.
Chairman Datuk Wira Azhar Abdul Hamid said the sugar refinery company had appealed to the government to review the APs that have been issued to industrial players in the country.
“We are concern about the sudden increase in sugar import APs which has a direct impact on our bottomline.
“The issuance of the APs disrupt the market and does not take into consideration the billions of ringgit that have been invested locally by local sugar refiners in Malaysia,” he said at a press conference after attending the company’s shareholders meeting today.
Azhar said the government should also review the AP issuance, citing that MSM has provided thousands of jobs for Malaysians at its refinery plants.
“MSM and Central Sugars Refinery (CSR) have served as a buffer between Malaysian consumers and uncertain global market where prices and supplies constantly fluctuate.
“When raw sugar prices are high, we absorb the additional cost and keep prices stable for domestic consumers,” he added.
The issuance of sugar import APs serve as the benefit for industrial consumers, despite the oversupply of sugar in the global market, Azhar said.
However, he said when prices of raw sugar increases, customers would turn to Malaysian refiners to buy price-control refined sugar.
“If MSM performance continues to be impacted negatively by this short-term measures (AP issuance), we may be forced to review our position and take more commercial approach,” he said, adding that these measures may not beneficial to Malaysians in the longer time.
Although MSM can give feedback, Azhar said the decision (revision) will dependent on the government on how to handle the situation.
“If can, we wish not to allow sugar from outside the country to be brought into Malaysia. The country has got enough production capacity to fulfill domestic demand for sugar, currently stands at 1.6 million tonnes per year,” he said.
The domestic consumption of sugar is currently being serve by two players in Malaysia - MSM and CSR.
MSM group’s production capacity has reaches 2.25 million tonnes per year, ranking the company as the second largest sugar player in Southeast Asia and ranked eight in the world.
“We want the government to consider and understand us and the market situations.
“If you have enough capacity in the country, why not tell us to improve our products and make sure we are able to serve domestic market better.
“We have adequate capacity to take care of Malaysia’s domestic requirements,” he said.
It was reported that a food and beverage manufacturer in Sarawak had recently granted the government’s AP to import sugar directly from other countries.
Domestic Trade and Consumer Affairs Deputy Minister Chong Chieng Jen reportedly said the company could proceed to import refined sugar from overseas such as Thailand and Brazil, as are prices are lower.