BUILDING VALUE AT OUR CORE SEC 5 62 SUGAR FGV’s Sugar Division primarily operates through its subsidiary, MSM Malaysia Holdings Berhad (MSM), in which FGV holds a 51% stake. MSM stands as the nation’s leading sugar producer and is one of the world’s largest sugar refineries. With refineries situated in Penang and Johor, MSM possesses a total annual refining capacity of 2.05 million MT. Given the significance of sugar as a vital commodity across food sectors, we remain steadfast in our efforts to expand market presence and pursue diversification opportunities, all while enhancing operational efficiencies. The Sugar Division has demonstrated significant improvement in its operational performance, despite grappling with high production costs due to elevated raw sugar prices, freight charges, energy costs, and the depreciation of Ringgit Malaysia (RM) against the US Dollar (USD). In 2023, the influence of El Nino and constrained global supplies led to fluctuations in the benchmark NY11 sugar price, fluctuating between USD 19.0 cents to USD 28.0 cents per pound. As a result, the refined sugar average selling prices increased compared to previous years, with raw sugar comprising approximately 80% of our production costs. Our refineries have attained enhanced reliability and implemented process enhancements, which are expected to substantially enhance performance and stimulate higher commercial sales through the implementation of the ramp-up programme. This progress can be credited to improved operational efficiency, resulting in targeted cost efficiencies. MSM is committed to expanding its market presence and exploring diversification opportunities. GROUP BUSINESS REVIEW
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