MSM Malaysia Holdings Berhad Annual Report 2021

SOCIAL INITIATIVES Supplier Management process Supplier Selection Process Market Survey Screening Evaluation Criteria (including ESG data) Manpower Experience Price Contracting Process Supplier Selection Specification Design Tender Evaluation and Negotiation Contract Award Supplier Performance Assessment In December 2021, MSM concluded an agreement with Wilmar, a Singapore-based agrobusiness company for MSM to participate in a Sustainable Sugar Programme, based on a No Deforestation, No Peat and No Exploitation (NDPE) Policy. Under the Sustainable Sugar Programme, we aim to collaborate with Wilmar to establish a sustainable sugar supply chain and to participate in sourcing raw sugar that meet sustainability requirements as we continuously strive towards ethical sourcing practices and a supply chain free of deforestation and conflict. This collaboration demonstrates MSM’s and Wilmar’s commitment to protect the environment, labour and communities while promoting progress in operational efficiencies and best practices. We expect to actively roll out this programme in FY2022. OPERATIONAL PERFORMANCE Plant Efficiencies The Utilisation Factor (UF) of our plants measure the efficiencies achieved during the year under review. This is impacted by scheduled maintenance to upgrade operational efficiencies as well as unexpected disruptions due to equipment breakdowns or plant closures. For higher plant reliability and efficiency, we strive to ensure our scheduled maintenance and plant upgrades, where required, are on track during the year. However, in FY2021, MSM Johor’s UF was hampered when it lost 65 days of operations in the first half of 2021 due to a breakdown of boilers. Though MSM Prai’s plant also experienced a shutdown in June due to detected COVID-19 cases, the period was much shorter and the plant still delivered on yield expectations. The Group took the opportunity to conduct annual shutdown maintenance and extensive production and reliability improvement programme for MSM Johor during its extended shutdown period. To improve yield performance in MSM Johor, we consulted an external consultant to propose process optimisation improvements. Yield performance is important to determine how much raw sugar is used to generate the final product as well how much raw sugar is lost during production. 2020 2021 2019 MSM Group Utilisation Factor (%) 48 47 44 WHO WE ARE STATEMENT & DISCUSSION BY OUR LEADERS HOWWE OPERATE MSM Malaysia Holdings Berhad ANNUAL INTEGRATED REPORT 2021 146