Oil palm conglomerate Felda aims for a 30-year extension of lease for the MSM Perai refinery land
In a series of discussions between key figures, plans are underway to extend the operation lifespan of two crucial sugar refineries in Malaysia, operated by Felda and MSM, and potentially boost their production capacities.
Currently, MSM operates only two refineries in the country, one in Perai, Penang, and another in Johor. The Perai refinery, a significant player in the domestic sugar market, supplies an impressive 24,000 tonnes of sugar monthly, making it the country's largest sugar producer.
Felda's refinery, strategically located near a port and railway lines, plays a vital role in the nation's sugar supply chain as well. The refinery, built on land leased from the Road Development Corporation (RAC), which falls under the transport ministry, is located in Johor.
Ahmad Shabery Cheek, Felda's chairman, has initiated discussions with Chief Minister Chow Kon Yeow and the transport ministry to seek a 30-year extension for the Felda refinery, whose lease, granted in 1964, is set to expire in five years.
The state government has plans to redevelop the areas where both Felda's and MSM's refineries are located. This development could potentially impact the refineries' operations, leading to discussions about possible relocation. However, no potential relocation sites for MSM's operations have been considered as of yet.
Ahmad Shabery Cheek has also mentioned the possibility of relocating Felda's operations in the long-term. If the Felda refinery were to close, constructing a new refinery would require an estimated capital investment of RM1 billion for the Johor refinery and RM4 billion for a potential new site for the Perai refinery.
The MSM Perai refinery, built on 7ha of RAC-owned land, maintains a buffer stock of 32,000 tonnes of raw and refined sugar for a stable local market supply. Boosting production capacity at the Johor refinery would also help ensure a consistent supply of sugar to the nation.
An official meeting between Ahmad Shabery Cheek, Chief Minister Chow Kon Yeow, and the transport ministry is planned soon to discuss these matters further. Ahmad Shabery Cheek recently visited the Felda refinery and launched the Felda Special Edition Perai Sugar in honor of Felda settlers, demonstrating his commitment to the refinery's success.
The closure of either refinery could have a major impact on the nation's sugar supply, highlighting the importance of these discussions and potential decisions. Any new site for MSM's operations would need to meet strict logistical requirements to ensure smooth operation and continuity of supply.
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