MSM Malaysia Holdings Berhad Annual Report 2020

3-YEAR STRATEGIC PLAN 2020-2022 Strategic Plan 2020-2022 Priorities 3-Year Plans 2020 Business Perseverance 1. Discontinue non-strategic operations 2. Balance production capacity within MSM Group’s operation – MSM Prai and MSM Johor 3. Rationalise investments 4. Just-In-Time mechanism 5. Reduce stock levels • Minimise losses and improve the overall Group performance. • Management’s efforts to streamline profitability and consolidate Group production resulted in the discontinuation of MSM Perlis operations on 30 th June 2020. • Expansion of the liquid sugar and fine syrup facilities, enabledMSM to tap into the new segment improving yield and profitability. • New investments and expansions were further rationalised and regulated to prioritise profitability and focus on business continuity and sustainability. • Practicing Just-In-Time mechanism to reduce working capital requirements, as well as having arrangements with suppliers to ensure sustainable raw sugar supply is secured. 2021 Turnaround Through Asset Optimisation 1. Optimise production levels 2. Reduce refining cost 3. Improve distribution cost 4. Monetise non-core assets 5. Increase sales of value-added sugar products 6. Capital restructuring • Complete of expansion plans for the value-added facilities in MSM Johor. • Improve MSM Johor’s SKUs to meet domestic demand especially for Coarse Grain Sugar (CGS-P1). • Improve MSM Johor’s production capabilities and efficiency. • Penetrate new markets via direct engagements with reputable players having regional distribution networks, towards increasing sales and utilisation factor of our refineries. • Strategic capital management to improve liquidity. • Continue to improve the overall yield in all our refineries. • Streamline the logistics and supply chain operation for smooth delivery at lower cost. • Further explore downstream into sugar related business unlocking value-added income stream. • Monetise all the non-strategic and non-productive assets. 2022 Resilient with a Strengthened Income Stream 1. Increase production efficiency 2. Lower refining cost via commissioning of energy cost saving projects 3. Focus on product diversification and integration 4. R&D on food and non-food sugar related products 5. Increase export of value-added sugar products (new SKU) • Continue to explore initiatives to lower refining cost at each refinery via installation of biomass boilers and solar photovoltaic systems. • Obtain a healthy sales margin by lowering cost per unit production. • Further diversify income stream from new sugar-related businesses with better margins. • Explore product integration to improve consumer experience. • Strengthen our refined sugar export footprint regionally to be an established distributor in destination markets. • Value accretive via vertical integration with downstream M&A in synergistic business. MSM MALAYSIA HOLDINGS BERHAD Annual Repor t 2020 29 SUSTAINABILITY REPORT EFFECTIVE LEADERSHIP CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION DETAILS OF THE ANNUAL GENERAL MEETING