Malaysia’s leading sugar supplier, MSM Malaysia Holdings Bhd has identified new market penetration strategies to overcome the risk of excess supply of refined sugar.
The group’s Chairman Datuk Wira Azhar Abdul Hamid highlighted that the issuance of new approved permits (AP) and the liberalisation of the local market has resulted in stiff competition, which took a toll on MSM’s financial performance in 2019. MSM reported a net loss of RM299.77 million (US$68.7 million) for 2019 compared to a profit of RM35.66 million (US$8.16 million) in 2018.
He pointed out that the nation’s sugar players experienced overcapacity in production levels as a result of new entrants flooding the local market. In the 2nd half of 2019, MSM Johor was involved in the development of value-added products such as premix and liquid sugar, and such development extends the group’s capabilities, increases its product offerings and opens up new markets for growth.
“To this end, the sales team is aggressively working on penetrating new markets, optimising product segmentation and at the same time focusing on serving the existing market better,” said Azhar.
For the year ahead, the group’s strategic direction revolves around the implementation of its transformation plans through diversification into downstream segments, potential greenfield investments or mergers and acquisitions in food based businesses.
Azhar stated that these strategic initiatives are expected to gradually bear fruit from 2020 onwards.
Additionally, the group is also working on new products which are expected to be launched in the 2nd quarter of 2020.
“On the operational front, as growth opportunities in the near future are primarily linked to MSM Johor’s capacity for expansion of value added products, the intention moving ahead is to rationalise group-wide capacity through consolidation of production in MSM Johor,” added Azhar.
MSM identifies new markets to overcome oversupply issue
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