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Categories
| PPB to invest RM149m in mills, expansion |
| Business & Market 2009 | |||
| Written by Siti Shakinah | |||
| Thursday, 27 August 2009 11:15 | |||
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Its chief financial officer Leong Choy Ying said yesterday the amount was the remainder from the RM230 million allocated for capital expenditure in the last financial year ended Dec 31, 2008. “The balance (RM149 million) will be spent as and when the projects require development spending, some of the projects may actually spread beyond 2010 in terms of timing,” she said after the company’s first-half financial results briefing. Of the RM230 million, PPB had invested up to RM81 million from January to June this year to build and expand flour mills, its sugar refinery business, and construct warehouses in Sabah and Indonesia. Of the RM81 million, it invested RM27.5 million in the first half of this year in flour mills and built new warehouses in Sabah and Indonesia, which is operated by its subsidiary, FFM Marketing Sdn. Bhd. PPB managing director Tan Gee Sooi said the flour mills in Indonesia would start operations by the end of this month. On the sugar refining business, Leong said PPB invested RM28.7 million in its sugar refinery business, operated by subsidiary, Malayan Sugar Manufacturing (MSM), to upgrade storage, packing and melting facilities. The sugar business contributes 36.4% to PPB’s top line, the biggest contributor in the first half this year. Revenue from this segment rose on the back of higher sales volume which rose by 2.4% from 333,230 tonnes to 341,217 tonnes due to higher domestic sales. MSM managing director Chua Say Sin said that the company “had sold 4% more than the norm for the January-June period”. Chua said due to the higher price of sugar globally, there had been cases of smuggling to a neighbouring country as the local sugar price was lower. He said there was enough supply of sugar domestically. In Malaysia, sugar is a controlled item and the government is spending RM720 million in 2009 as subsidy, or 60 sen per kg, to maintain its price at RM1.45 per kg. MSM only exports 10% of its sugar products while the rest is for domestic consumption. MSM makes up 50% of the domestic sugar market. This article appeared in The Edge Financial Daily, August 27, 2009.
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