Felda Seeks 30-year Lease Extension For MSM Prai Sugar Refinery

BUTTERWORTH, Sept 17 (Bernama) -- 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 Malaysia Holdings Berhad’s (MSM) sugar refinery in Perai.

FELDA chairman Datuk Seri Ahmad Shabery Cheek said the lease for the refinery, established in 1964, will expire in five years, and it is understood that the state government plans 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 Ministry of Transport (MoT), 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 chain,” he told reporters after visiting the sugar refinery, Malaysia’s largest, and launching the FELDA Special Edition Perai Sugar in honour of FELDA settlers.

Ahmad Shabery said he would hold further discussions with Chief Minister Chow Kon Yeow and the MoT to seek an extension of the land lease by another 30 years, allowing MSM to make long-term plans, including the possibility of relocating operations in the future.

He said preliminary talks had already been held with Chow, and an official meeting would be arranged soon to discuss the matter in detail and reach the best possible decision regarding the refinery, which sits on seven hectares (19.7 acres) 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 constructing a new refinery would require an estimated capital investment of RM4 billion, while boosting production capacity at the Johor refinery would cost more than RM1 billion.

Asked whether any alternative locations had been identified for relocating the refinery, Ahmad Shabery said none had been considered so far, and any new site would need to meet strict logistical requirements.

Currently, MSM operates only two refineries in the country — in Perai and Johor — with the Perai facility being one of the main producers of sugar and playing a key role in meeting domestic market needs.

MSM is tasked with ensuring a monthly supply of 24,000 tonnes and maintaining the nation’s buffer stock of 32,000 tonnes of raw and refined sugar to guarantee consistent and reliable availability in the local market.

-- BERNAMA