Sugary Start

Chua Say Sin, CEO of MSM Malaysia Holdings, explains the upside and plans of the company. It made an impressive debut on its listing day where the share price rose 40%, and it is now trading above target price.

Key points:

1) MSM is the largest sugar refiner in Malaysia, accounting for 57% of output. The other licensed player is Tradewinds. Analysts are projecting slower growth due to higher sugar prices and some F&B manufacturers are reducing their purchase as they are not entitled to subsidised sugar starting this year. 

2) We would know for certain after harvest time in September when the government will raise sugar prices again to cut its subsidy of RM0.20/kg. The decision is dependent on raw sugar prices which Chua expects will moderate after the rally this year on the back of poor weather conditions and infrastructure issues. 

3) MSM's long-term contracts to buy raw sugar are up for renewal this year and there is a possibility that MSM may have to pay up to 90% of the market price. 

4) MSM plans to build its export business by focusing on niche areas like the pharmaceutical industry in Pakistan, and also in the Middle East.

5) It will also acquire a sugar refiner and some landbank in stable markets, likely to be in the region. 

 

In line with MSM Malaysia Holdings Bhd's IPO and strategic expansion plans, CEO Chua Say Sin reels in mechanisation and greening of the organisation's operations in his post LIVE Breakfast Grille interview, considering practical and cost-effective options - gas turbines vs solar panels.