Brahim's gets nod for Sarawak sugar refinery

by **Cals** Tue 15 Oct 2013, 09:15

Posted on 15 October 2013 - 05:40am

Presenna Nambiar
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PETALING JAYA (Oct 15, 2013): Inflight caterer Brahim's Holdings Bhd has received the green light to start its sugar refinery in Demak Laut Industrial Park, Kuching, Sarawak, with a higher production capacity.

The plant, which was initially to produce 100,000 tonnes per year of refined sugar and start operations this year, will now have a production capacity of 180,000 tonnes per year and operational by 2015.

In a filing with Bursa Malaysia yesterday, Brahim's said the facility will have a revised rated production capacity of 180,000 tonnes per year of refined sugar for supply in Sabah and Sarawak.

Brahim's interest in the refinery is through a purchase of a 60% stake in Admuda Sdn Bhd, the sole licensed manufacturer of refined sugar and molasses for Sarawak, for RM20 million. The Ministry of International Trade and Industry awarded the licence to Admuda in 2009.

The licence was one of two given for Sarawak and Sabah. Admuda received the licence for Sarawak, while Gula Sabah Sdn Bhd received the licence for Sabah.

HLIB Research, in its initiation of coverage on Brahim's in July 2013, had said that Brahim's had an advantage over sugar players' such as MSM Malaysia Holdings Bhd's in terms of margins and efficiency.

"Brahim's have better costs structure as raw sugar will be supplied by Thai Ruong Ruang (Thailand's second largest sugar manufacturer and exporter) based on market price of US16.3 cent per pound against long-term contract (LTC) price of US26 cent a pound," the research firm said.

The LTC is a three-year enngagement between the Malaysian government, local sugar refiners and foreign raw sugar suppliers to ensure consistent supply of raw sugar at stable prices for the market. The LTC will expire at the end of next year.