BUTTERWORTH: The Federal Land Development Authority will negotiate with Penang authorities to extend the land lease for Malaysia’s largest sugar refinery beyond its 2029 expiration.
FELDA chairman Datuk Seri Ahmad Shabery Cheek confirmed discussions will involve both the Penang state government and Railway Assets Corporation regarding MSM Malaysia Holdings Berhad’s Perai facility.
He emphasised the refinery’s strategic importance due to its proximity to port facilities and railway infrastructure that streamline imported raw sugar transportation.
“We understand the land is leased from RAC, which comes under the Ministry of Transport, and we appreciate the state government’s development plans for this area,“ Ahmad Shabery stated.
“However, any closure of the refinery will have a major impact on the nation’s sugar supply chain,“ he told reporters after visiting the facility and launching commemorative sugar packaging.
The chairman revealed plans to formally request a 30-year lease extension during upcoming meetings with Chief Minister Chow Kon Yeow and transport ministry officials.
Preliminary discussions have already occurred with state leadership, with detailed negotiations scheduled to address the refinery’s future on its seven-hectare railway-owned site.
Ahmad Shabery warned that relocation alternatives would involve massive financial investments exceeding RM4 billion for a new facility or over RM1 billion for Johor capacity expansion.
No alternative locations have been identified for potential relocation, as any new site must meet stringent logistical requirements matching the current strategic advantages.
MSM currently operates only two national refineries in Perai and Johor, with the Penang facility serving as a primary production centre for domestic sugar requirements.
The company maintains critical national food security responsibilities including monthly supply of 24,000 tonnes and buffer stock management of 32,000 tonnes of raw and refined sugar. – Bernama
