KUALA LUMPUR: MSM Malaysia Holdings Bhd expects sugar gross sales quantity to enhance in monetary 2024 (FY24) as the corporate goals to broaden into international locations within the area with increased promoting costs.
As demand developments upwards for home and export markets, MSM Malaysia focuses on increasing to the areas to export about 300,000 tonnes.
MSM Malaysia group CEO Syed Feizal Syed Mohammad stated the export technique for this has modified considerably.
“The primary markets for this yr shall be Indonesia and China because of the anticipation of deficit markets in these areas. We additionally foresee a optimistic progress for different locations corresponding to Singapore and South Korea,“ he advised SunBiz.
When requested in regards to the firm’s leveraging decrease trending uncooked sugar costs in Brazil, presently pushed by higher manufacturing forecasts, Syed Feizal stated the NY11 value is projected to be round US$18.50–US$21.00 (RM86.60-RM98.30) cups per pound.
“All eyes will now be on the climate sample in Centre-South Brazil, the world’s largest cane-growing area.
“To mitigate any vital influence to value and margin, we have now hedged 94% of our uncooked sugar necessities for the wholesale phase at a price beneath market common for FY24. The pricing for our business and export segments is back-to-back. Due to this fact, any improve in NY11 shall be handed to clients with out impacting the margin,“ he stated.
To notice, MSM Malaysia operates its personal sugar refinery facility in Chuping, Perlis, by way of subsidiary MSM Perlis Sdn Bhd. It purchases uncooked sugar from Brazil, Australia, Thailand and India.
Syed Feizal stated MSM Malaysia continues to handle the chance posed by prolonged durations of excessive enter bills resulting from will increase in uncooked sugar costs, elevated freight and pure fuel prices, and fluctuations within the ringgit by using cautious hedging ways and pass-through pricing mechanisms.
Concerning sugar costs, Syed Feizal stated the sugar business anticipates a normalisation this yr, with enhancements anticipated in total revenue margins.
He stated MSM Malaysia has engaged with the federal government on the ceiling value overview for the wholesale phase, given the business’s rising enter prices.
“On the similar time, MSM Malaysia has additionally engaged our key suppliers on mechanisms to mitigate the influence.
“Whereas awaiting the announcement of a brand new value mechanism, the business will proceed to obtain an RM1 a kg incentive, with MSM Malaysia entitled to 24,000 tonnes a month.
“Concurrently, MSM Malaysia can also be adjusting its common promoting costs to business and export clients, passing on elevated prices to keep up normalised margins,“ Syed Feizal stated.
MSM Malaysia’s flagship product, Gula Prai, maintained a home market share of over 60%, he stated..
Gula Prai model has a penetration price of 67.2% of the general households in Malaysia.
Nielsen’s experiences for hypermarkets, supermarkets and chain shops for 2021 and 2022 present that Gula Prai is the main white refined sugar retail model in Malaysia.