MSM Malaysia Holdings Berhad Annual Report 2019

• Use biomass as fuel in 2021 – focus on big ticket item i.e. energy cost which contributes about 30% - 40% of refining cost • Increase production yield and utilisation • Continuous initiatives to lower Refining Cost at each refinery • Expand production of value added products i.e. liquid sugar and premix for export market • Expand production of value added products i.e. liquid sugar and premix for export market • Increase production yield and utilisation by producing value added sugar products e.g. liquid sugar and premix • Implement measures to reduce refining cost i.e. reduce re-melting process • Continuous initiatives to lower refining cost • Implement “Just-In-Time” mechanism to optimise the raw sugar stocks level from January 2020. This will improve cash flow and lower external warehouse cost • Monetise non-core asset (plantation land) to assist in paring down debts MSM STRATEGY 3-YEAR STRATEGIC PLAN 2019 – 2021 SEGMENTS PRIORITIES • Ensure refineries operate at optimal level with quality sales from the production • Rationalise groupwide capacity through consolidation of production in MSM Johor, beginning 2020 • Focus on expanding MSM’s production portfolio in the non-refined sugar segment in 2020 • Expand production of value added products i.e. liquid sugar and premix for export market • Increase MSM Johor plant’s utilisation • Move from Gas to Biomass Boiler • Reduce fuel cost up to 50% upon successful commissioning of Biomass Project in December 2021 • Pursue transformation plans through diversification in downstream segment i.e. condensed milk production • Continue R&D effort on food and non-food sugar related products i.e. low calorie sucralose, mudcake and molasses • Focus on quick win initiatives i.e. low calorie sucralose blend with sugar and target to launch in the 2H 2020 KEY STRATEGIES 1. Export value-added sugar products (new SKU) 2. Reduce refining cost 3. Initiate energy cost savings project 4. Increase efficiency 5. Reduce stock holding 6. Dispose non-core assets KEY STRATEGIES 1. Lower refining cost – commissioning of energy cost savings 2. Increase export of value added sugar products 2019 CASH FLOW DRIVEN 2021 STABILISE &TURNAROUND KEY STRATEGIES 1. Balancing production capacity within MSM Group’s operation – MSM Prai, MSM Johor and MSM Perlis 2. Focus on product diversification 3. Installation of energy cost savings project 4. R&D on food and non-food sugar related products 2020 RESTRUCTURE BUSINESS MSM Malaysia Holdings Berhad | Annual Report 2019 24