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SUSTAINABILITY EFFECTIVE CORPORATE FINANCIAL ADDITIONAL DETAILS OF THE ANNUAL
REPORT LEADERSHIP GOVERNANCE STATEMENTS INFORMATION GENERAL MEETING

Liabilities: 2021 FINANCIAL PRIORITIES

Payables increased by 20.87% compared to 2019 because of Management’s main focus for the year towards enhancing
the Just-In-Time arrangement with suppliers. financial resilience will be to:

Capital Resources: a) Optimise production levels and reduce refining cost
MSM’s gearing ratio stood lower at 33% in 2020 compared Initiatives towards this end entails a continued focus on
to 36% the previous year. The lower gearing was primarily improving the overall yield in all our refineries supported
due to overall repayment of bank borrowings and higher cash by additional capital investment. We aim to improve
balances within the year. MSM Johor’s production capabilities and efficiency with
introduction of new stockholding units (SKUs) to meet 35
domestic demand especially for coarse grain sugar.
FORTIFYING FINANCIAL SUSTAINABILITY
Concurrently, we target to penetrate new markets via
Raw sugar procurement through the Just-In-Time method direct engagements with reputable players abroad
was set towards improving the Group’s cash position having regional distribution networks, towards increasing
through savings from minimal paid raw sugar stockholding, sales and utilisation factor of our refineries.
lowering interest cost and reducing external warehouse
rental expenses. b) Increase sales of value-added sugar products
Work to complete expansion plans for the value-added
Agility in ensuring that the production volume from facilities in MSM Johor is on-going and steadfast.
MSM Perlis was swiftly and successfully consolidated In addition, the Group commits to further explore
to MSM Johor and MSM Prai, when MSM Perlis downstream into sugar related business to unlock more MSM MALAYSIA HOLDINGS BERHAD Annual Report 2020
refinery operations was discontinued on 30 June 2020, value-added income streams.
brought about improvements in refining cost. Group
wide, MSM’s yield has improved to 94.62% in 2020 c) Improve distribution cost
compared to 94.39% in 2019 primarily as a result of yield
improvements in MSM Johor. Further cost improvements are being sought by
streamlining the logistics and supply chain operations
Another breakthrough towards future sustainability is in for smooth delivery at lower cost. This is to be achieved
the expansion of the Group’s business into the export of via strategic delivery planning taking advantage of
value-added products. The growth of value-added sugar the location of MSM Johor and MSM Prai in order to
sales improves the overall profitability and utilisation factor optimise the last mile delivery savings on distance
of the refineries. traveled and cost of delivery.
In 2020, capacity expansion for fine syrup was completed d) Capital restructuring and fund raising
and MSM escalated its export of premix, liquid sugar and
fine syrup to China. Capacity expansion of liquid sugar and The Group is looking into strategic capital management
premix facilities in MSM Johor is set to be fully completed and fund-raising programmes to improve liquidity and
in 2021 to cater for the increasing demand from China and to meet strategic investment requirements.
other Asian markets.
e) Monetise non-core assets
Monetisation of all the non-strategic and non-productive
assets will continue to be identified in order to streamline
operations and improve overall profitability.