MSM Malaysia Holdings Berhad Annual Report 2019

Highlights for the year included an increase in penetration to high traffic outlets such as Speedmart 99, and introducing a smaller pack size to meet consumer demands for a more convenient packaging. Moving towards 2020, MSM is embarking on product diversification on food and non-food sugar related products. With the sugar industry exposed to more threats especially from the health-concern community/organisation and therefore there is a need for us to diversify our business accordingly. We have already embarking on product diversification with continuous R&D effort on food and non-food sugar related products such as low calorie sucralose, mudcake and molasses. We are also exploring on potential to venture into downstream segment such as condensed milk and chocolate. To-date, we have started exporting molasses to Asia-Pacific countries, targeting dairy farms and livestock companies in various packaging to get better margins. Ensuring Continuous Growth In ensuring continuous growth, MSM is focusing on current strategies to enhance service levels, increase penetration into high traffic outlets, introduce new packing sizes as well as new products such as the premix and liquid sugar launched during the year. More product opportunities are being explored as we move into 2020. With the emergence of new lifestyle trends on healthy eating and more conscious nutrition, MSM is mindful that a growing number of groups are advocating drastic reduction in sugar from their diet. As Malaysia’s leading sugar producer, MSM has begun a venture to introduce a new healthy range of sugar products in-line with emerging aspirations of most Malaysians to lead a healthy lifestyle. These healthier sugar variants are targeted to be launched in 2020. Building on current strengths, the sales team also continues to leverage on MSM refined sugar’s repute as a high quality premium sugar and the preferred type of sugar for industries. Achieving Operational Excellence During the year, operational efficiency continued to be enhanced through better demarcation of customer to warehouse, whereby customers from the Northern region drew stocks from our Prai refinery, whilst customers from the Central region were served from the Sungai Buloh warehouse. This demarcation has proven its worth in achieving cost efficiency as well. Moving forward, in achieving operational excellence, the sales and marketing team will continuously engage with customers to realise further improvements in service level. 37 MANAGEMENT DISCUSSION & ANALYSIS 03