MSM Malaysia Holdings Berhad Annual Report 2019

BUSINESS REVIEW Performance At a Glance Wholesale Sales 448,347 tonnes (2018: 434,336 tonnes) Industry Sales 415,602 tonnes (2018: 391,274 tonnes) Export Sales 83,341 tonnes (2018: 109,613 tonnes) Performance 2019 2018 2017 Sales Volume (tonnes) 947,290 935,223 997,941 Revenue (RM) 2.0 billion 2.2 billion 2.6 billion Debt Collection (days) 50 days 37 days 33 days Maintaining Market Leadership During the year, engagements with government authorities failed to gain collaborative solutions on the issuance of approved sugar permits (AP) to foreign producers. Competition was very high with margins being pressured and reduced average selling price but we remained steadfast. In October 2019, MSM’s management increased the selling price to wholesale segment and this resulted in lower volume for the wholesale segment and increased volume in the industry segment. MSM focused sales and marketing activities on delivering high service level to all of our customers. Our sales team continuously engaged with customers to increase sales by shifting sales focus and building customer loyalty. We also adopted a flexible supply chain process to be able to cope with the peaks and trough of changing sugar demand in Malaysia. Focus was directed towards minimising service failure, and ensuring sustainable supply to all customers. SALES & MARKETING Although it has been a very challenging year with global sugar surplus affecting domesticmarket as well, wemanaged to maintain domestic market share at 61%. Competition arising from AP sugar and competitors resulted in reduction of average selling price (ASP) during the year under review. Export continued to bleed with negative margin arising from low white sugar premium which reduced export volume by 24%. Focus for 2020 Revise domestic selling price to improve our margin, in line with the price adjustment in the global sugar price due to sugar deficit Revamp packaging design for retail market to refresh the Gula Prai brand among a younger market Optimise sales for new products in development MSM Malaysia Holdings Berhad | Annual Report 2019 36