Sugar ops to sweeten Brahim's earnings (9474)

BRAHIM'S Holdings Bhd says its current dependence on airline catering,
and food and beverage (F&B) businesses will be reduced by 2015,
once its sugar business kicks off.

The company expects earnings to surge significantly from 2014 as it
starts to sell refined sugar, commercially marketed under the Borneo
Sugar brand.

For fiscal 2011, Brahim's posted net profit growth
of 42.4 per cent to RM9.37 million on higher revenue of RM184.46
million. Some 75 per cent of the earnings were driven by in-flight
catering services at the Kuala Lumpur International Airport. The rest
was from its F&B operation.

Brahim's aims to dominate the
sugar market in Sabah and Sarawak via its 60 per cent unit, Admuda Sdn
Bhd. Admuda has a licence from the Ministry of International Trade and
Industry (Miti) to manufacture refined sugar and molasses for the two
states.


Currently, the sugar market in Malaysia is controlled
by Felda Global Ventures Holdings Bhd's unit MSM Malaysia Holdings Bhd
and Tan Sri Syed Mokthar Al-Bukhary's Central Refinery Sdn Bhd, with
two sugar refineries each in Peninsular Malaysia.

As sugar is a regulated commodity, the licence awarded to Admuda was the third by Miti in 37 years.

"This is a very valuable licence and we are honoured to be in this
business. Once in full swing, we expect equal contribution from airline
catering, F&B and food manufacturing, which includes sugar
processing," Brahim's director Datuk Howard Choo told Business Times
recently.

Choo said Brahim's has finalised the design for the
RM130 million sugar refinery in Kuching, Sarawak, and will be starting
construction soon.

"We have completed soil test and will start
landfill this month. We target to finish building the refinery by
December 2013 so it could began operation by early 2014," Choo said.

Brahim's initial target is to control 30 per cent of the sugar market
in Sabah and Sarawak. There is annual demand of about 350,000 tonnes of
sugar there, met via imports from the peninsula.

The company is
able to meet part of that as its sugar refinery will have initial
production of 100,000 tonnes a year. The facility is designed to have a
maximum capacity of 400,000 tonnes per annum.

Brahim's
executive chairman Datuk Ibrahim Ahmad Badawi has said it expects 10 to
15 per cent in earnings contribution, and some RM250 million in revenue
from the refinery in its first year of operation.