Value Creation Is The Bedrock Of Our Business ANNUAL INTEGRATED REPORT 2022 65 Group Business Review From left • Ahmad Fer-Rouse Ahmad Khairuddin - Head, Corporate Governance & Risk Management • Cheah Poh Lye - Head of Operations, MSM Prai Berhad • Abdul Hadi Karim - Head, Corporate Strategy & Investor Relations • Hasni Ahmad - Group Chief Operating Officer • Syed Feizal Syed Mohammad - Group Chief Executive Officer • Dr Mazatul ‘Aini Shahar Abdul Malek Shahar - Chief Financial Officer • Mohd Bakthiar Mohd Pahroraji - Head, Group People & Culture • Sanuri Saari - Head of Operations, Sungai Buloh Warehouse • Wan Anniza S.M. Jamaluddin - Head, Legal Affairs • Mohd Amir Redzuan - Head of Operations, MSM Sugar Refinery (Johor) Sdn Bhd OPERATIONAL PERFORMANCE During the year under review, the volume of raw sugar imports increased by 4%, to 1.01 million MT from 0.97 million MT last year, following the ramp up plan at our sugar refineries in MSM Prai Berhad (MSM Prai) and MSM Johor Sdn Bhd (MSM Johor). However, export sales volume reduced by 12% to 0.22 million MT as we focused on the delivery of local orders to prevent domestic sugar shortages. Despite the lower sales volume in the export segment, we increased our domestic sales volume to 0.75 million MT as the domestic market started recovering from the impact of the COVID-19 pandemic in 2021. This increase was also due to higher purchases from our wholesale and industry customers. To ensure that MSM Johor achieves better output, we have accelerated our boiler rectification progress to prepare for higher utilisation and long-term sustainability, while MSM Prai commenced a rejuvenation programme which would enable the plant to operate for another 30 years. Overall, the total Utilisation Factor (UF) for the year increased to 46% from 44%. We continue to make improvements in our refinery at MSM Johor with the rectification of Boiler 2 and we expect Boiler 1 to be recommissioned in 2023 following its breakdown in January 2022. We are working on getting a new boiler for redundancy and flexibility to suit changing production levels. Throughout the MSM Group, we have implemented cost savings, cash flow conservation and revenue generation (C2R) initiatives such as lowering procurement and financing costs, as well as savings in operational and capital expenditure. These have led the Group to maximise cost savings and increase revenue in 2022. In terms of sales expansion, in 2022 we commenced a two-year contract with The Coca-Cola Company worth about RM300 million. We also expanded our sales channels through the Last Mile initiative by onboarding the largest retail outlets in Malaysia, totalling around 2,293 stores nationwide. In addition, we are in talks with other retail chain outlets and expanding into Singapore with negotiations currently taking place. We also relaunched small SKU packaging via Cuppack, which is suitable for cafes and restaurants, and secured our first Food & Beverage (F&B) customer in Johor recently. Raw Sugar Import Volume (Million MT) 2021 0.97 1.01 2022 2020 1.06 Utilisation Factor (%) 2021 44 46 2022 2020 47 Domestic Sales Volume (Million MT) 2021 0.69 0.75 2022 2020 0.75 Export Sales Volume (Million MT) 2021 0.25 0.22 2022 2020 0.27
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