13 June 2012
Felda Global Ventures (FGV)'s 51% owned subsidiary MSM Malaysia Holdings (MSM) to convert 5,000 hectares of sugar cane plantation in Perlis to rubber estates as the land is no longer suitable for sugar cane plantation due to climatic conditions- Executive Director Datuk Sabri Ahmad
MSM Malaysia Holdings Bhd, the leading sugar producer in Malaysia, is in the process converting its 5,000 hectares of sugar cane plantation in Perlis to rubber estates.
Its Executive Director Datuk Sabri Ahmad said the land is no longer suitable for sugar cane plantation due to climatic conditions.
"Because it's not very viable, we have stopped the sugar cane plantation in Perlis. The land is now being converted into rubber estate and the planting will take one to two years' time," he said after the company's annual general meeting here.
Hence, he said the Felda group's sugar-refining arm is now looking at regional expansion to further intensify its involvement in upstream activities.
"We are looking and examining in more detail to see whether we can expand our sugar cane plantation and milling in the Asian region, maybe in Cambodia, Indonesia or Myanmar, once the embargo is removed.
"Other than that, we are also looking at the possibility of doing it in Australia and as far as Brazil...So this is being studied by our management team," he said.
MSM Malaysia is currently in talks with several parties on the matter, Sabri said, adding that the company is also open for joint ventures for the purpose.
"Upstream investment is very big. So, we have look at either joint ventures or collaborations.
The group has allocated some RM100 million for merger and acquisition exercises, in addition to RM220 million in capital expenditure, he said.
MSM Malaysia, the largest sugar refiner in the country, produces 57 per cent of the country's total sugar output in 2011.
It currently owns and operates two sugar refineries, in Chuping, Perlis and Prai in Penang, producing about one million tonnes of refined sugar per annum.
Sabri said the estates in Perlis supplies only one per cent of the group's raw sugar requirements. -- Bernama