The Federal Land Development Authority (Felda) will hold discussions with the Penang government and the Railway Assets Corporation (RAC) on extending the land lease for MSM Malaysia Holdings Berhad’s sugar refinery in Perai.
Felda chairman Ahmad Shabery Cheek said the lease, granted in 1964, would expire in five years and that it was understood that the state government planned to redevelop the site.
“As part of the FGV Group, MSM’s refinery is strategically located near the port and railway lines, which ease transportation and logistics, especially for raw sugar imported from several countries.
“We understand the land is leased from RAC, which comes under the transport ministry, and we appreciate the state government’s development plans for this area.
“However, any closure of the refinery will have a major impact on the nation’s sugar supply,” he told reporters after visiting the plant and launching the Felda Special Edition Perai Sugar in honour of Felda settlers.
Shabery said he would hold further discussions with chief minister Chow Kon Yeow and the transport ministry to seek a 30-year extension, allowing MSM to make plans for the long-term, including the option of relocating operations later.
He said preliminary discussions with Chow had been held, with an official meeting to be arranged soon.
The refinery, built in 1964, sits on 7ha of RAC-owned land.
“If the MSM Perai refinery were to close, we would need to consider either building a new refinery or upgrading existing facilities in Johor. However, both options would involve substantial costs,” he said.
He said a new refinery would cost an estimated capital investment of RM4 billion, while boosting production capacity at the Johor refinery would cost more than RM1 billion.
Asked about possible relocation sites, Shabery said none had been considered so far, and any new site would need to meet strict logistical requirements.
MSM currently operates only two refineries in Malaysia, one in Perai and another in Johor. The Perai facility is the country’s largest producer and plays a key role in meeting domestic needs.
The company supplies 24,000 tonnes of sugar monthly and maintains a buffer stock of 32,000 tonnes of raw and refined sugar to ensure a stable supply in the local market.
