MSM Malaysia Holdings Berhad Annual Report 2019

CHAIRMAN’S STATEMENT The Board is aware, that if this situation is not managed well, MSM would have to implement alternative measures to safeguard the interests of our stakeholders, without taking into account national interests or Malaysian consumer interests. This will be a difficult decision to make, especially given MSM’s history as Malaysia’s first sugar refiner, one which has grown as part of the nation’s economic fabric since 1964. Meanwhile, we have been actively engaging with fund managers, institutional shareholders and lenders to explain the change in the Group’s focus and to present our strategies moving forward. We also actively engaged our customers to understand better how we could meet their needs and help with their challenges, and to improve service levels. As we enter new markets, we are also forging new relationships with different target segments to understand niche product requirements better. LOOKING AHEAD At the time of writing, the coronavirus (COVID-19) pandemic has taken its toll on global and domestic economy, has reached unprecedented heights. Many industries have been negatively impacted, particularly the travel and hospitality. The prolonged impact is yet to be determined, however, timely fiscal measures by the government, and the banking industry have been unleashed to help mitigate impact to the livelihoods going forward. As MSM is a recognised producer of an essential item, impact on our refineries have been minimal at this stage. Trade remains unaffected and we have an ample stock at hand to tide over any disruptions to the supply chain. Going forward, MSM’s first priorities are profitability and returning value to shareholders which we expect to achieve by optimising the expanded capacity we now have at hand with MSM Johor. If our traditional domestic market continues to present operating challenges, we must shift our focus towards the strategic optimisation of our resources to new markets and market segments. We are already working on healthy sweetener products in line with the change in consumer demand. That gives us a broader platform to enhance MSM’s business position. Some of these new products are expected to be launched in the second 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. ACKNOWLEDGEMENTS We have heard it said often enough that adversity offers us the opportunity to become more competitive and to prioritise differently. Over the last couple of years, that is exactly what you have seen the people in MSM do – they have reassessed the situation and recalibrated their objectives. While creating and providing value to all stakeholders will always be our main goal, the course we have set to reach these goals is now different. Our capacity to deliver will rest on the commitment and dedication of our people. They are the drivers of the turnaround as MSM responds to new market opportunities. Onthe 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. MSM Malaysia Holdings Berhad | Annual Report 2019 6