MSM Malaysia eyes another JV,M&A deal this year

by **Cals** Thu 08 May 2014, 19:25

Business & Markets 2014

Written by Bernama

Thursday, 08 May 2014 16:32

KUALA LUMPUR (May 8): MSM Malaysia Holdings is eyeing another joint-venture (JV) and merger and acquisition (M&A) deal this year.

This follows the signing a memorandum of understanding (MoU) to form a JV company with UAE-based Al-Khaleej International Ltd here today.

MSM Malaysia Chief Executive Officer Datuk Sheikh Awab Abod declined to elaborate further on the deal but said if it goes through, the sugar producer would be able to concentrate more on the export market.

"India and China are among the new markets that we are focusing on. In the next 10 years, India will be the largest sugar consumer in the world.

"Currently, India consumes about 26 million metric tonnes (MT) and China 15 million MT.

"By 2020, India's consumption will increase to 40 million MT and that of China to 26 million MT," he told reporters after the MoU signing here today.

The JV company by MSM Malaysia and Al-Khaleej International Ltd will develop a new state-of-the-art sugar refinery, inclusive of a logistics complex and vessel terminal, at the Port of Tanjung Pelepas, Johor.

It comes at a joint investment of between US$250 million and US$270 million.

Upon the expected completion of the refinery in 2016, MSM Malaysia's production capacity will be boosted to 3.25 million MT per annum from the current 1.25 million MT.

MSM Malaysia will hold a 51 per cent stake in the JV company and Al-Khaleej International the remaining 49 per cent.

Sheikh Awab said the company's domestic market share was currently at 57 percent, but, this could be increased through the production of cheaper sugar, made achievable with Al-Khaleej International's technology.

"Our aspiration is for Malaysia to be the sugar production hub in the Asia Pacific and we are working very hard towards this. To do so, a player needs to have the complete chain of downstream, upstream and midstream capabilities, as well as its own terminal and charters.

"We are looking at all these areas and good progress is being made in our negotiations with Al-Khaleej International," he added.

Sheikh Awab noted that Thailand, the current hub for sugar production, produces about 11 million MT per annum. -- BERNAMA