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CHAIRMAN’S DELIVERING MSM MANAGEMENT DISCUSSION GROUP FINANCIAL
STATEMENT VALUE OVERVIEW & ANALYSIS REPORT

buSINESS REVIEW

MAINTAINING MARKET LEADERSHIP To buffer Wholesale demand, we are seeking a consolidation
of wholesalers for efficient fulfilment of demand. This will
Maintaining leadership on the domestic front proved be facilitated by flexible price mechanism through rebates,
challenging in FY2020 as intense competition from imported bundling and ‘door to door’ offers. Strategic partnerships
refined sugars pressured margins and reduced average selling and OEM arrangements with major wholesalers will also
price. be our way forward as these allow us to maximise margins
by leveraging on their strengths and logistic assets. On the
Wholesale volume dropped by 34% due to low demand and
reduced operating hours in food and beverage outlets as well Industry front, we target to capture more small medium
as less social and public gatherings, following movement industries (SMI) with better price offerings and an assured
restriction orders and travel bans to curb the COVID-19 supply of premium quality sugar.
42 pandemic. However, Industry volume increased by 10% as our Towards export growth, the key priorities for 2021 is to
customers were mostly essential services with uninterrupted maintain resilient in the existing market especially SEA
MSM MALAYSIA HOLDINGS BERHAD Annual Report 2020
operations. Sales and marketing activities centered on country with main focus in Vietnam, Singapore, Philippines
increasing demand from this sector by minimising service and Indonesia. In addition, MSM is planning for the new
failures, delivering with reliability to all of our customers, market explorations not only for refined sugar but other sugar
and enhanced engagements to build customer loyalty. related product such as Liquid Sugar and Fine Syrup.

To take on the additional production from MSM Johor, export
was a core strategy that took off in 2020. Committed focus ACHIEVING OPERATIONAL ExCELLENCE
and sustained efforts were directed towards securing regional
market opportunities. This proved to be an equally competitive During the year, in achieving operational excellence, sales
arena in which MSM had to contend with low market prices and marketing teams are working closer with customers to
of integrated sugar producers such as India and Thailand. realise further improvements in service levels. Sales teams
MSM’s strategy in winning export market share was to have buckled down to assure “On Time In Full” services
package the market price with sustainable product quality, for every order. Greater engagement has also been forged
various types of packaging selections and enhanced after-sales to communicate raw sugar price movements via regular
service. customer updates on NY11 terminal tagging.

As a result, the Group’s export achievements were the In securing more opportunities for value added products,
highlight of the year as the total volume for export sales ongoing investments are being made to increase MSM Johor’s
increased over 225% in FY2020. In addition, the export production capacity. For refined sugar exports, the strategy
premium increased as well from an average of USD124/tonnes is to enhance operational efficiency in order to compete
in 2019 to USD134/tonnes in 2020. with Thailand’s leading position as the export leader. Close
monitoring and fast response to Thailand premium prices is
key as any major hike in Thailand’s production will make our
ENSURING CONTINUOUS GROWTH pricing uncompetitive.
The current highly price sensitive market calls for delicate We are also engaging in a multi-pronged penetration strategy
strategies going forward which requires MSM to address the to make new in-roads and develop potential markets in Asia
constrained supply of premium sugar and stockholding units to mitigate the risk of dependence on just one country.
(SKUs) limitation from MSM Johor which currently restricts These include direct negotiations with state owned
our capabilities to support domestic requirements. More time enterprises and companies, as well as collaborations with
and capital investments are required in forging our strengths local agents in targeted markets and international trade
on these fronts. houses.