MSM Malaysia Holdings Berhad Annual Report 2020

CHAIRMAN’S STATEMENT PERSEVERINGTHROUGH ADVERSITY 2020 has been an unprecedented challenging year for the global and domestic economy at large. The COVID-19 pandemic impacted retail sugar demand and consumption patterns of hotels and recreational outlets, due to the drastic drop in social events, tourism related activities, and activities such as conferences and seminars. For MSM, this was exacerbated by the increasingly competitive domestic market, lower volume of Johor plant’s operation and the removal of barriers for refined sugar imports into Malaysia. Perseverance is the keyword for our operations during this period as a high level of persistence and tenacity is required to maintain resilient performance while laying the foundation for future growth. Staying focused with a positive mindset, MSM has resiliently weathered the year’s setbacks through tough decision making, intensified marketing efforts, efficient refining operation, aggressive business development work, as well as strong conviction to deliver performance. • In managing the COVID-19 situation, MSM has built supportive customer service relationships with retail players by offering price incentives and product bundling offers that are helpful in maintaining business continuity. • In improving the balance of our Johor operations, among other measures, we had initiated a change in plant’s leadership team, conducted a total review of energy balances, strengthened the production recording system and enhanced process efficiency. • In response to increasing competition for domestic market share, we have established sale incentives, better market demarcation for smooth delivery, stronger customer relationship management and closer NY11 raw sugar purchase management to enhance product margins. • Amidst a volatile export market, we are robustly pursuing export opportunities, capitalising on anti-dumping policies by certain countries and initiating market collaborations with established players like Wilmar and Maxwill. DEAR VALUED STAKEHOLDERS, Through economic challenges and disruptions of 2020, MSM Malaysia Holdings Berhad (MSM) continued to persevere, displaying good reliability and uninterrupted delivery to our customers. It was a year to focus on the health and safety of our people and foster stronger team spirit as we redefined our vision and mission and charted a new three-year strategic roadmap (BP21) towards increasing growth momentum. The Group’s ultimate targets are to achieve downstream integration and cost optimisation by 2023 with effective implementation of the proposed action items outlined within BP21. RM 2.18 REVENUE billion OUR MAIN PRIORITY IN IMPROVING RETURNS FOR OUR SHAREHOLDERS IS TO CONTINUE PURSUING OPPORTUNITIES THAT WILL IMPROVE THE UTILISATION OF MSM JOHOR. TO THIS END WE HAVE COMPLETED THE ESTABLISHMENT OF MSM’S LIQUID SUGAR AND FINE SYRUP FACILITY IN READINESS TO PENETRATE NEW MARKETS. “ “ MSM MALAYSIA HOLDINGS BERHAD Annual Repor t 2020 4 CHAIRMAN’S STATEMENT DELIVERING VALUE MSM OVERVIEW MANAGEMENT DISCUSSION & ANALYSIS GROUP FINANCIAL REPORT