FGV Annual Report 2014

FGV's sugar business is operated by MSM Malaysia Holdings Berhad (MSM), via MSM Prai Berhad (formerly known as Malayan Sugar Manufacturing Company Berhad) and MSM Perlis Sdn Bhd (formerly known as Kilang Gula Felda Perlis Sdn Bhd). MSM, incorporated on 10 March 2011, is Malaysia’s leading sugar producer. It was listed on the Main Market of Bursa Malaysia Securities Berhad on 28 June 2011. It is one of Bursa Malaysia’s top 60 companies with a market capitalisation of RM3.5 billion (as at 2014). Financial Performance and Industry Outlook During the year under review, our growth was mainly attributed by strong consumption from the industries market. Although there was a slight decrease in export sales in 2014 as compared to 2013, we are confident that this will improve in the coming years. Profits continued to stay on a healthy uptrend, from RM202.0 million in 2012, to RM254.7 million in 2013 and reached a record high of RM257.0 million in 2014. MSM had earlier declared an interim dividend of RM70.3 million for 2014. Operational Review MSM produces, markets and sells refined sugar products. It also operates its own logistics company, MSM Logistics Sdn Bhd (formerly known as Astakonas Sdn Bhd). Through its subsidiaries, MSM has a combined annual production capacity of 1.1 million tonnes of refined sugar products. In the year under review, MSM produced its 986,115 tonnes of refined sugar and enhanced its market share to 64 percent (as at December 2014). The Group offers a variety of products ranging from white refined sugar (of various grain sizes) to soft brown sugar. These are marketed and sold in a variety of packaging options under the brand – Gula Prai. The Group also sells molasses, a by-product of the refining process, to distilleries and producers of ethanol, animal feed and yeast. MSM sells to a wide range of customers in Malaysia and other countries directly and indirectly through traders, wholesalers and distributors. Its customers include major companies in the beverage and confectionery industries, hotels, restaurants, food outlets and household consumers. 2014 was a brilliant year for MSM. We achieved a record high revenue of RM2.28 billion, of which the domestic market contributed 54 percent or RM1.22 billion; 32 percent or RM735 million was contributed by industries; and the final 14 percent came from exports amounting to RM322 million. We also saw a significant increase in industry sales from RM494 million in 2013 to RM735 million in 2014. Domestic Industries Export MSM‘s Revenue for 2014 54% 14% 32% million 202.0 254.7 257.0 2012 2013 2014 MSM’s Profit per annum 0 52 104 156 208 260 Felda Global Ventures Holdings Berhad pg 82 BUSINESS OPERATIONS REVIEW SUGAR