FGV Annual Report 2018

42 REMAINED FOCUSED ON VALUE CREATION FGV HOLDINGS BERHAD MANAGEMENT DISCUSSION & ANALYSIS Our Sugar Sector is operated by MSM, Malaysia’s leading sugar producer with a domestic market share of 59%. With the completion of its new sugar refinery in Johor at the end of 2018, MSM registered an annual production capacity of 2.25 million MT against 1.25 million MT in 2017. Its other two refineries are located in Perlis and Penang, with a production capacity of 0.20 million MT and 1.05 million MT, respectively. Through MSM, we recorded full-year refined sugar production of 0.96 million MT in 2018, a 6% decline from 1.02 million MT in previous year. The lower production was attributed to the reduction of 6% volume in all segments and a 21% decrease in export volume. This was further compounded by the lower average selling price of 15% due to the new Approved Permits and market price distortion. Despite a challenging year experienced in 2018, we remain committed in ensuring national sugar security and implement a two-and-a-half-month requirement of raw and refined sugar to secure optimum sugar availability in the market. The Johor refinery commenced testing of sugar production with ICUMSA 100 specification followed by ICUMSA 45 specifications which will be supplied to various industries, wholesalers, and major international food and beverage customers. The refinery also conformed to Halal, Malaysian Standard (MS), QMS ISO 9001:2015, Kosher, FSSC22000, ISO22000, Hazard Analysis and Critical Control Points (HACCP) and Good Manufacturing Practice (GMP) certifications, ensuring the safety and quality of its sugar products. SUGAR SECTOR RAW SUGAR IMPORT VOLUME (MILLION MT) 0.4 1.0 0.8 0.6 0.2 1.2 2016 2017 2018 0.97 1.06 1.14 REFINED SUGAR PRODUCTION VOLUME (MILLION MT) 0.4 0.6 1.0 0.8 0.2 1.2 2016 2017 2018 1.12* 1.02 0.96 EXPORT SALES VOLUME (MILLION MT) 0.03 0.09 0.12 0.06 0.15 2016 2017 2018 0.13* 0.14* 0.11 * restated * restated DOMESTIC SALES VOLUME** (MILLION MT) 0.2 0.8 0.6 0.4 1.0 2016 2017 2018 0.89 0.86 0.83 ** excluding molasses MANUFACTURED CAPITAL