PPB GROUP BERHAD INVESTOR HANDBOOK 2005

Transcription

1 PPB GROUP BERHAD INVESTOR HANDBOOK 2005

2 CONTENTS 4 introduction 5 corporate profile 6 mission statement 7 corporate history 9 corporate objectives 10 corporate structure 12 board of directors 17 group management team 21 activities 22 amusement centre operations 24 animal feed milling 26 chemicals manufacturing 28 cinema operations 30 commodity trading 32 consumer products distribution 34 contract manufacturing 36 edible oils refining 38 engineering services 40 environmental engineering, waste management & utilities 42 flour milling 44 glove manufacturing 46 livestock farming 48 oil palm plantations 50 packaging 52 property development 54 sugar refining 56 group financial highlights 58 5-year group statistics 60 financial performance 62 movements in share capital 64 dividend record 65 investor relations schedule for 2006 ACTIVITIES

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4 INTRODUCTION As part of PPB s investor relations programme, we are publishing our fifth Investor Handbook to keep shareholders and the investing public informed of PPB Group s diversified activities. The Investor Handbook is updated yearly and distributed with the Annual Report. We trust it will serve as a convenient reference guide for the reader to better understand PPB, to interpret its results and to appraise its future growth and direction. Through this better understanding, both the corporation and its shareholders are able to work together to build and grow PPB to enable it to provide increasing returns to its shareholders. PPB Group is constantly seeking to expand its core businesses and to invest in businesses which are synergistic to its existing operations in order to maintain its competitive edge in the market and to provide sustainable shareholder value growth. Datuk Oh Siew Nam Executive Chairman 4

5 CORPORATE PROFILE PPB Group Berhad was incorporated in Malaysia in November 1968 and was subsequently listed on the then Stock Exchange of Kuala Lumpur and Singapore with an issued and paid capital of RM15 million in May The Company has grown from its initial business of cane cultivation and sugar milling to become a major conglomerate engaged in diverse businesses. The Group s operations now include sugar refining; grains trading, flour and feed milling; edible oils processing; oil palm plantations; environmental engineering and waste management; film exhibition and distribution; property ownership and development; and commodity trading. PPB Group has positioned itself to be a market leader in all its core businesses. Its core businesses are operated by the following :- Malayan Sugar Manufacturing Company Berhad, operator of the region s largest sugar refinery in Prai which supplies about 50% of the local market requirements. FFM Group, a major producer of flour and animal feed owning a total of four flour mills and five feed mills located throughout the country. The FFM Group supplies more than 40% of the country s flour requirements. PGEO Group which processes more than 3.0 million mt of edible oils per year is one of the largest palm oil refiners in the country with six refineries in Peninsular and East Malaysia. PPB Oil Palms Group is one of the more efficient producers of crude palm oil in the country. It has a total land bank of 363,238 hectares in East Malaysia and Indonesia of which 86,627 hectares have been planted and owns nine crude palm oil mills with a total milling capacity of 2 million mt of fresh fruit bunches per annum. Chemquest Group is engaged principally in environmental engineering, infrastructure and waste management and has successfully commissioned 20 water projects and 50 wastewater treatment plants for various types of industries throughout Malaysia. As one of the more diversified conglomerates in Southeast Asia, PPB s success over the years has shown that its strategic acquisitions and joint ventures were in the right direction. Today, PPB ranks among the top companies listed on the Bursa Malaysia Securities Berhad with a market capitalisation of RM4.9 billion. Its total assets and turnover for the last financial year ended 31 December 2005 amounted to RM6.4 billion and RM11.0 billion respectively. The Group currently employs more than 20,000 employees for its domestic and overseas operations. 5

6 MISSION STATEMENT Striving continually to strengthen our position as a market leader in our core businesses & to expand into other related activities to increase shareholder value.

7 CORPORATE HISTORY PPB s involvement in the sugar industry began as early as 1968 with the cultivation and milling of sugar cane in Chuping, Perlis. In 1976, PPB acquired Malayan Sugar Manufacturing Company Berhad (MSM) and through MSM, PPB became indirectly involved in the hotel industry, polybags manufacturing and bulking operations. PPB s investment in oil palm cultivation began in 1986 through the establishment of Saremas Sdn Bhd to develop an oil palm plantation in Sarawak and in the following year, PPB acquired a 60% equity interest in Sapi Plantations Sdn Bhd to operate an oil palm project in Sabah. In 1995, PPB expanded its oil palm operations to Indonesia with a 70% equity interest in PT Tidar Sungkai Sawit (PTSS). In 1997, PPB s oil palm plantations in East Malaysia were merged under PPB Oil Palms Berhad (PPBOP) which was subsequently listed on the KLSE (now known as Bursa Malaysia) on 5 August In 1987, PPB made a takeover offer for FFM Berhad (formerly known as Federal Flour Mills Berhad), enabling PPB to further diversify into flour and animal feed milling, edible oils processing and commodity trading. In the same year, PPB finalized an agreement with Golden Harvest (International) Ltd of Hong Kong to establish Golden Screen Cinemas Sdn Bhd (GSC) then known as Golden Communications (M) Sdn Bhd. In 1990, PPB acquired Borneo Filem Organization (M) Sdn Bhd (now known as PPB Leisure Holdings Sdn Bhd) and merged its cinema operations under GSC. In a concerted effort to diversify the Group s revenue base and to reduce its dependency on food operations, PPB in 1993 subscribed for 40% equity interest in Chemquest Sdn Bhd (Chemquest) which is involved in environmental engineering, infrastructure, waste management, trading of chemicals and contract manufacturing. PPB s stake in Chemquest increased to 55% in

8 CORPORATE HISTORY In 2000, PPB undertook a series of corporate restructuring exercises to streamline its operations which included the transfer of PTSS to PPBOP; injection of PT Healthcare Glovindo and Minsec Engineering Services to Chemquest; and the establishment of PGEO Group to consolidate the edible oils refining operations held under FFM and PPBOP. To better reflect its activities, the name of the Company was changed from Perlis Plantations Berhad to PPB Group Berhad. In 2004, PPB successfully privatized FFM Berhad under a members scheme of arrangement under Section 176 of the Companies Act 1965, making it a wholly-owned subsidiary from a 54.23% subsidiary. As PPB continues to expand in its core businesses and improve on efficiency and productivity, it is ready to capitalize on any new investment opportunities especially in businesses which are strategic to its current operations to enable the Group to achieve further success. 8

9 CORPORATE OBJECTIVES CREATE WEALTH FOR SHAREHOLDERS To reward its shareholders through attractive dividends or capital issues. PRACTISE GOOD CORPORATE GOVERNANCE To observe the highest standard of transparency, accountability and integrity in all its business practices and corporate performance. FOCUS ON CORE BUSINESSES To focus on expanding its core businesses which include sugar refining; grains trading, flour and animal feed milling; edible oils refining; oil palm plantations and environmental engineering, infrastructure and waste management services. STRENGTHEN MARKET POSITION To further strengthen its leadership position in all its core businesses. MAINTAIN SUSTAINABLE GROWTH To focus on sustainable growth in the NTA and earnings of the Group. UTILISE SYNERGIES To leverage on the strong and committed management team from the various operations and to ensure integration of group activities to maximize synergies. EXPAND TO OVERSEAS MARKET To expand its activities to China and other ASEAN countries to provide earnings growth. STAY COMMITTED AS A RESPONSIBLE CORPORATE CITIZEN To be a responsible corporate citizen focused on improving the quality of life of others through financial grants, corporate sponsorships and in-kind donations. IMPROVE EFFICIENCY & PRODUCTIVITY To further develop its standards in design, production, distribution and marketing in order to meet market requirements. SECURE FUTURE GROWTH To seek and capitalize on investment opportunities as well as explore new market segments both domestically and regionally for business and revenue growth in the years ahead. 9

10 CORPORATE STRUCTURE AS AT 31 MARCH 2006 SUGAR Malayan Sugar 100% Manufacturing Co Bhd (Sugar refining) Kilang Gula Felda 50% Perlis S/B (Sugar milling & refining) GRAIN, FLOUR & FEED MILLING FFM Bhd 100% (Investment holding & flour milling) Johor Bahru Flour Mill S/B 100% FFM Flour Mills (S'wak) S/B 100% Vietnam Flour Mills Ltd 100% Kerry Flour Mills Ltd 43.4% (Flour milling) FFM Marketing S/B 100% (Consumer products distribution) JBFM Feedmill S/B 100% FFM Feedmills (Sabah) S/B 100% FFM Feedmills (S wak) S/B 100% (Animal feed processing) FFM Farms S/B 100% (Livestock farming) Kuok Oils & Grains Pte Ltd 28% (Commodity trading) EDIBLE OILS REFINING & TRADING PGEO Group S/B 100% (Investment holding) PGEO Edible Oils S/B 100% Sandakan Edible Oils S/B 100% Bintulu Edible Oils S/B 100% Lahad Datu Edible Oils S/B 45% KOG Edible Oils BV 35% (Edible oils processing) PGEO Energy S/B 100% (Renewable energy production) PLANTATIONS PPB Oil Palms Berhad 55.7% -Listed on Bursa Malaysia (Investment holding) Sapi Plantations S/B 100% Reka Halus S/B 70% Kiabau Plantations S/B 100% Sabahmas Plantations S/B 100% Sri Kamusan S/B 100% Sekar Imej S/B 100% Ribubonus S/B 100% Ceramilek S/B 89.8% Saremas S/B 100% Suai Plantations S/B 100% Segarmas Plantations S/B 100% Suburmas Plantations S/B 70% Suburmas Palm Oil Mill S/B 53% Clonal Palms S/B 70% PT Mustika Sembuluh 90% PT Kerry Sawit Indonesia 90% PT Tidar Sungkai Sawit 100% Saratok Palm Oil Mill S/B 30% (Oil palm cultivation) 10

11 MANUFACTURING & SERVICES Chemquest S/B 55% (Investment holding) Chemical Waste Management S/B 99% (Waste management & environmental engineering) Asia Pacific Microspheres S/B 100% (Microspheres manufacturing) Malayan Adhesives & Chemicals S/B 96.9% (Adhesives manufacturing) PROPERTIES PPB Hartabina S/B 100% (Property development) Cathay Screen 66.2% Cinemas S/B (Property owners) ENTERTAINMENT PPB Leisure Holdings S/B 100% (Investment holding) Golden Screen Cinemas S/B 54.2% (Cinema operations) Kerry Leisure Concepts S/B 50% (Amusement centre operations) JER Envirotech S/B 50% (Wood-plastic composites manufacturing) Products Manufacturing S/B 70% (Contract manufacturing) Sitamas Environmental Systems S/B 70% (Refuse disposal services) PT Healthcare Glovindo 100% (Glove manufacturing) Minsec Engineering Services S/B 100% (Engineering services) Tego S/B 79.9% (Polybag manufacturing) Note: The above chart features only the main operating companies and percentages indicate the Group s equity interest held. 11

12 BOARD OF DIRECTORS DATUK OH SIEW NAM Executive Chairman Member of Remuneration Committee DATE OF APPOINTMENT Director - 2 March 1988 Executive Chairman - 1 July 2004 AGE - 67 DATO' LIM CHEE WAH Deputy Chairman DATE OF APPOINTMENT Director - 2 March 1988 Deputy Chairman - 1 July 2004 AGE - 66 QUALIFICATIONS AND EXPERIENCE Bachelor of Engineering (Honours) degree in Electrical Engineering from the University of Canterbury, New Zealand Assistant Controller of Telecom Malaysia for 5 years before joining FFM Berhad Group in 1968 Managing Director of FFM Berhad from 1982 to 2002 and appointed as Executive Chairman in 2002 Board member of Bank Negara Malaysia since 1989 Served as a member of the Capital Issues Committee and the National Economic Consultative Council II (MAPEN II) OTHER DIRECTORSHIPS FFM Berhad (Executive Chairman) Kuok Foundation Berhad Penerbangan Malaysia Berhad PPB Oil Palms Berhad (Chairman) QUALIFICATIONS AND EXPERIENCE Bachelor of Arts (Honours) degree in Economics from the University of Malaya Joined Malayan Sugar Manufacturing Company Berhad in 1965 and held several senior managerial positions before being appointed as Director in 1989 and Executive Chairman in 2000 OTHER DIRECTORSHIPS Jerneh Asia Berhad (Chairman) Jerneh Insurance Berhad (Chairman) Kuok Foundation Berhad Malayan Sugar Manufacturing Co. Bhd (Executive Chairman) Malaysian Bulk Carriers Berhad Tradewinds (M) Berhad 12

13 BOARD OF DIRECTORS DATO SRI LIANG KIM BANG Chairman of Audit and Remuneration Committees Member of Nomination Committee DATE OF APPOINTMENT 4 January 1995 AGE - 69 ANG GUAN SENG Chairman of Nomination Committee Member of Audit and Remuneration Committees DATE OF APPOINTMENT 8 July 1998 AGE - 67 QUALIFICATIONS AND EXPERIENCE Bachelor of Arts and Bachelor of Arts (Honours) degrees from the University of Malaya, Singapore Post Graduate Course in Public Administration at Cambridge University, England Former Sarawak State Financial Secretary OTHER DIRECTORSHIPS Cahya Mata Sarawak Berhad CMS Steel Berhad (Chairman) CMS Trust Management Berhad MISC Berhad PPB Oil Palms Berhad Rashid Hussain Berhad QUALIFICATIONS AND EXPERIENCE Extensive experience and knowledge in commerce, industry, building as well as trading and has been the Managing Director of Petaling Garden Berhad since 1963 OTHER DIRECTORSHIPS Petaling Garden Berhad Malayan United Industries Berhad 13

14 BOARD OF DIRECTORS TAN YEW JIN Executive Director Chairman of Risk Advisory Committee DATE OF APPOINTMENT Director - 12 May 2001 Executive Director - 25 August 2004 AGE - 64 QUALIFICATIONS AND EXPERIENCE Member of Malaysian Institute of Accountants Member of Malaysian Institute of Certified Public Accountants Member of Certified Public Accountants, Australia Fellow of the Institute of Certified Public Accountants, Singapore Was actively involved in FFM Group operations and was Deputy Managing Director of FFM from 1998 to 2000 Executive Chairman of PPB Oil Palms Berhad from 2000 to 2004 OTHER DIRECTORSHIPS Jerneh Asia Berhad Jerneh Insurance Berhad Tradewinds (M) Berhad YM RAJA DATO' SERI ABDUL AZIZ BIN RAJA SALIM Member of Audit and Nomination Committees DATE OF APPOINTMENT 12 May 2003 AGE - 67 QUALIFICATIONS AND EXPERIENCE Fellow of the Chartered Association of Certified Accountants, United Kingdom Fellow of the Chartered Institute of Management Accountants, United Kingdom Member of the Malaysian Institute of Accountants Honorary Fellow of the Malaysian Institute of Taxation Former Director-General of Inland Revenue, Malaysia Former Accountant-General of Malaysia OTHER DIRECTORSHIPS Amanah Saham Mara Berhad Camerlin Group Berhad Gamuda Berhad Gran Asia Corporation Berhad Jerneh Asia Berhad Jerneh Insurance Berhad K&N Kenanga Berhad K&N Kenanga Holdings Berhad Kenanga Unit Trust Berhad Panasonic Manufacturing Malaysia Berhad PPB Oil Palms Berhad Southern Steel Berhad Tasek Corporation Berhad 14

15 BOARD OF DIRECTORS TAN GEE SOOI DATE OF APPOINTMENT 28 July 2004 AGE - 61 DATUK HARUN BIN DIN Member of Audit Committee DATE OF APPOINTMENT 12 May 2005 AGE - 71 QUALIFICATIONS AND EXPERIENCE Bachelor of Engineering (Honours) in Electrical Engineering from the University of Malaya Held several senior managerial positions in the FFM Berhad Group and is presently the Managing Director of FFM Berhad OTHER DIRECTORSHIPS FFM Berhad QUALIFICATIONS AND EXPERIENCE Bachelor of Arts (Honours) degree from the University of Malaya, Singapore Joined the Malaysian Civil Service as Assistant Secretary in the Prime Minister's Department in 1959 and held the position of Deputy Secretary-General before retiring in 1990 Former Secretary-General of the Ministry of Housing & Local Government Former Secretary-General of the Ministry of National & Rural Development Chairman of Malaysian Election Commission from 1990 to 1999 Independent Non-Executive Director of FFM Berhad from 1999 to 2004 Former General Manager of Klang Port Authority OTHER DIRECTORSHIPS Nil 15

16 BOARD OF DIRECTORS DATUK RAJASINGAM A/L MAYILVAGANAM Member of Audit Committee DATE OF APPOINTMENT 16 May 2005 AGE - 63 QUALIFICATIONS AND EXPERIENCE Fellow of the Chartered Institute of Logistics and Transport Associate Member of the Institute of Industrial Engineers, Australia Served the Lembaga Pelabuhan Klang for 33 years and was the General Manager prior to his retirement in November 1997 Independent Non-executive Director of FFM Berhad from 1997 to 2004 OTHER DIRECTORSHIPS Nil 16

17 GROUP MANAGEMENT TEAM DATUK OH SIEW NAM (refer to page 12) CHUA SAY SIN Managing Director of Malayan Sugar Manufacturing Co. Berhad (MSM) YEAR OF JOINING PPB GROUP TAN GEE SOOI (refer to page 15) AGE - 59 QUALIFICATIONS AND EXPERIENCE Bachelor of Engineering (Honours) degree in Electrical Engineering from the New South Wales University, Australia Masters in Engineering Science from Sydney University, Australia Registered Professional Engineer (PE) Member of the Institution of Engineers Joined MSM in 1974 as an Instrument Engineer involving mainly in the implementation of automatic/computer control and mechanization of sugar refinery operations before becoming the Factory Manager in 1988 Managing Director of Chemquest Group from 1993 to

18 GROUP MANAGEMENT TEAM KHOO ENG MIN Managing Director of PPB Oil Palms Berhad Group LEONG YEW WENG Managing Director of Chemquest Sdn Bhd YEAR OF JOINING PPB GROUP AGE - 64 YEAR OF JOINING PPB GROUP AGE - 46 QUALIFICATIONS AND EXPERIENCE National Certificate in Agriculture from Monmouthshire Institute of Agriculture Higher National Diploma in Business Management from Oxford College of Technology (now known as Oxford Brokes University) Member of Royal Agriculture College in Rural Estate Management, United Kingdom Joined Dunlop Estates Berhad upon his graduation and served for about 21 years where he held the post of Plantations Controller QUALIFICATIONS AND EXPERIENCE Bachelor of Engineering (Honours) degree in Electrical Engineering from the University of Liverpool Masters of Business Administration from Brunel, University of London Registered Professional Engineer (PE) with the Board of Engineers Member of the Malaysian Institute of Engineers 25 years of experience in general management, project management, procurement and management information systems in the Power, Oil & Gas, Water and Environmental Engineering Industries 18

19 GROUP MANAGEMENT TEAM EAPEN THOMAS Executive Director of PPB Hartabina Sdn Bhd YEAR OF JOINING PPB GROUP AGE - 58 KOH MEI LEE Chief Executive of Golden Screen Cinemas Group & Senior Manager (Corporate Affairs) of PPB Group Berhad YEAR OF JOINING PPB GROUP AGE - 41 QUALIFICATIONS AND EXPERIENCE Member of the Malaysian Institute of Accountants Member of the Malaysian Institute of Certified Public Accountants Currently the General Manager of Hillcrest Garden Sdn Bhd QUALIFICATIONS AND EXPERIENCE Bachelor of Business Administration degree (Summa Cum Laude) from the University of Montevallo, USA Oversees the corporate affairs and investor relations of PPB Group as well as the Group s leisure operations. 19

20 GROUP MANAGEMENT TEAM TAN TEONG BOON Company Secretary of PPB Group Berhad YEAR OF JOINING PPB GROUP AGE - 59 LEONG CHOY YING Chief Financial Officer of PPB Group Berhad & Director of FFM Berhad YEAR OF JOINING PPB GROUP AGE - 40 QUALIFICATIONS AND EXPERIENCE Bachelor of Economics (Honours) degree in Business Administration from the University of Malaya Oversees the secretarial matters and general administrative functions of PPB Group QUALIFICATIONS AND EXPERIENCE Fellow of Institute of Chartered Accountants in England and Wales Member of the Malaysian Institute of Accountants Member of the Malaysian Institute of Taxation Bachelor of Arts (Honours) degree in Business Studies from the University of West of England, Bristol Worked in auditing, merchant banking and stockbroking and a public listed company prior to joining PPB Group Bhd 20

21 ACTIVITIES amusement centre operations 24 animal feed milling 26 chemicals manufacturing 28 cinema operations 30 commodity trading 32 consumer products distribution 34 contract manufacturing 36 edible oils refining 38 engineering services 40 environmental engineering, waste management & utilities 42 flour milling 44 glove manufacturing 46 livestock farming 48 oil palm plantations 50 packaging 52 property development 54 sugar refining

22 AMUSEMENT CENTRE OPERATIONS BACKGROUND INFORMATION Established in 1993, Kerry Leisure Concepts Sdn Bhd (KLC) is an equal joint venture between PPB Leisure Holdings Sdn Bhd and Kerry Leisure Concepts Pte Ltd, Singapore. KLC operates one of the largest chains of family entertainment centres in Malaysia known as Fireworks Fun Centre and has a total of six centres located in Klang Valley (2), Johor Bahru (3) and Sungei Petani (1) with sizes ranging from 4,500 sf to 10,000 sf. KLC also operates a children playland and 40 kiddie rides located in various shopping complexes, supermarkets and hypermarkets in Klang Valley, Johor Bahru, Sungei Petani and Penang. Amongst the rides and games available at all Fireworks Fun Centres and Children Playlands in the country are:- Simulator games Dance / Music games Redemption games Carnival games Children interactive games Touch screen games Video simulator games Kiddie rides Ballpools and Playports Bumper cars 22

23 MAJOR ACTIVITIES IN 2005 In 2005, KLC upgraded the video simulators, redemption and carnival games at its various centres to offer customers the latest games. In the same year, KLC ceased its children playland operation at Tesco, Klang. EXPANSION/FUTURE PLANS KLC will be opening two new Fireworks Fun Centres located in Shah Alam and Johor Bahru by mid KLC is constantly looking for viable locations specifically in the Klang Valley and Penang for new centres and plans to expand its playland and kiddie ride operations in new hypermarkets. 23

24 ANIMAL FEED MILLING BACKGROUND INFORMATION FFM Group in which PPB has 100% equity interest, ranks as one of the biggest feed millers in Malaysia and currently operates six feed mills in Peninsular and East Malaysia. The mills are strategically located in Prai, Port Klang, Pasir Gudang, Kota Kinabalu and Kuching with a combined production capacity of 125 mt per hour. The Group manufactures over 300,000 mt of animal feeds annually which accounts for approximately 10% of the local market requirement. FFM s animal feed is marketed under its own brand name Friendship and is available in mash, crumble and pellet expanded form. The products are categorized into:- Broiler feeds Domestic broiler feeds Poultry feeds Duck feeds Ruminant feeds Quail feeds Rabbit feeds 24

25 FFM s subsidiaries which are involved in the animal feed business are :- JBFM Feedmill Sdn Bhd FFM Feedmills (Sabah) Sdn Bhd FFM Feedmills (Sarawak) Sdn Bhd Johor Bahru Flour Mill Sdn Bhd MAJOR ACTIVITIES IN 2005 In December 2005, a new feed mill with a mixing and pelletising line at Pulau Indah, Port Klang was completed. EXPANSION / FUTURE PLANS FFM plans to complete the relocation of its feed pelletising lines from South Port to Pulau Indah by the 2nd Quarter of

26 CHEMICALS MANUFACTURING BACKGROUND INFORMATION Asia Pacific Microspheres Sdn Bhd [APM], a wholly-owned subsidiary of Chemquest Sdn Bhd, is the only producer of phenolic thermoset microspheres in the world. These products are used for specialty applications in the aerospace, automobile, marine, defense, electronic, coating and adhesive sectors. APM also produces contact adhesive resins for the local market as well as for export to North America, South America, Europe and the Asia Pacific region. Malayan Adhesives & Chemicals Sdn Bhd (MAC), a 96.86% subsidiary of Chemquest, manufactures adhesives, resins, additives and formaldehyde, which are marketed to the local wood-based and paper industries. The manufacturing plants of both APM and MAC are located in Shah Alam, Selangor. Both companies received the ISO 9002 certification which was upgraded to the ISO

27 MAJOR ACTIVITIES IN 2005 A new joint venture company, JER Envirotech Sdn Bhd (JESB), in which APM has 50% equity interest was established in April 2005 to manufacture wood-plastic composites for re-export to North America. The products from JESB are used in the housing, transportation, automotive parts and household appliance industries. During the year, MAC expanded its resin production capacity by 56% with the addition of a production kettle to produce resins for the MDF and chipboard industries. In December 2005, APM acquired an additional 45% equity interest in MAC bringing its total equity interest to 96.86% in MAC. It is anticipated that the balance of 3.14% will be acquired in 2006 to make MAC a wholly-owned subsidiary of APM. EXPANSION / FUTURE PLANS To meet with expanded demand for wood-plastic composites, JESB will double its production capacity in mid-2006 with the installation of a second line and has plans to install a third line towards the end of

28 CINEMA OPERATIONS BACKGROUND INFORMATION Golden Screen Cinemas [GSC], a 54.2% subsidiary of PPB Leisure Holdings Sdn Bhd, currently operates the largest cinema chain in Malaysia with a total of 108 screens at 18 locations, all of which are located in prime sites in major cities nationwide. GSC is also the top distributor of Chinese and independent English films in the country. 28 Locations No. of Screens No. of Seats Mid Valley Megamall, Kuala Lumpur One Utama New Wing, Petaling Jaya ,899 2, Gurney Plaza, Penang 12 1, Berjaya Times Square, Kuala Lumpur 9 1, The Summit, USJ 7 1, Pelangi Leisuremall, Johor Bahru 5 2, IOI Mall, Puchong 5 1, Kuantan Megamall, Kuantan Terminal 1, Seremban 4 1, Cheras Leisuremall, Kuala Lumpur 4 1, Shaw Centrepoint, Klang 4 1, Mahkota Parade, Malacca GSC, Kota Kinabalu 3 1, Ipoh Parade, Ipoh Capitol Cinema, Selayang Plaza, Bukit Mertajam Central Square, Sungei Petani Summit Parade, Batu Pahat Total ,923

29 MAJOR ACTIVITIES IN 2005 GSC together with its equal joint venture partner, Berjaya Times Square Sdn Bhd, opened a 9-screen cineplex at Berjaya Times Square, Kuala Lumpur on 27 January The cineplex has a total seating capacity of 1,570 and is the first to introduce a 48-seater Premiere Class Hall in Klang Valley. The Premiere Hall features wide-backed twin seats with generous leg room to provide viewing comfort to customers. On 23 June 2005, GSC opened its 18th cineplex at 1 Utama (New Wing) in Petaling Jaya. The 13-screen cineplex is furnished with 2,168 seats, a 30-seater Gold Class, International Screens, THX halls and special facilities for wheelchair bound patrons. GSC 1 Utama seats have been custom designed with comfortable high-back seats and generous leg room for maximum comfort. EXPANSION / FUTURE PLANS GSC targets to open three new cineplexes in Klang Valley and Kota Kinabalu in the next 2 years which will further reinforce its long-term commitment in the film industry in Malaysia. In its aim to enhance the cinema going experience for its patrons, GSC continually upgrades its cinema facilities and introduces innovative products. 29

30 COMMODITY TRADING BACKGROUND INFORMATION Kuok Oils & Grains Pte Ltd (KOG), a 28% associate of PPB Group, is a commodity trading cum investment holding company which has interest in edible oils and grains processing plants in China, Vietnam, Indonesia, Germany, the Netherlands and Bangladesh. KOG actively trades in palm oil, soyabean oil, rapeseed oil, coconut and palm kernel oil as well as grains namely, soyabeans, canola and maize. KOG Group is involved in the processing of edible oils and the distribution and marketing of these oils in bulk and in consumer packed oil products. 30

31 MAJOR ACTIVITIES IN 2005 During the year, KOG Group built its presence in Europe through the establishment of an edible oils processing facility in the Netherlands and the improvement of an existing refinery cum specialty fats plant in Germany. EXPANSION / FUTURE PLANS KOG Group plans to expand its existing operations in China, Vietnam and Europe. 31

32 CONSUMER PRODUCTS DISTRIBUTION BACKGROUND INFORMATION FFM Marketing Sdn Bhd (FMSB), a wholly-owned subsidiary of FFM Group, was set up in 1993 to market a wide range of fast-moving consumer products under its own brand names as well as other local and international brands. In addition, FMSB is also responsible for marketing products produced by the FFM Group such as flour, feed, day-old-chicks and table eggs. FMSB owns eleven (11) warehouses located in Prai, Ipoh, Sg. Buloh, Melaka, Kuantan, Johor Bahru, Kota Bharu, Kuching, Sibu, Kota Kinabalu and Sandakan covering a total warehousing area of 288,000 sq. ft. FFM Group's own brands/products are as follows : - Fast-moving consumer goods (consumer packs) Anchor - packaged flour Blue Key - packaged flour Muhibah - packaged flour Blue Team - shortening and margarine Neptune - blended cooking oil Seri Murni - double fractionated 100% palm based vegetable oil Krystal - 100% pure corn oil / sun flower oil / canola oil Marina - canned sardines / mackerels / tuna / baked beans / peas Marina - frozen food Seri Murni - premium / standard eggs Seri Murni curry pastes Shamu - canned nata-de-coco in syrup, pineapple juice & jelly cups Others Flour (in 25kg bag and in bulk) Feed (in bags and in bulk) Day-old-chicks Table eggs (in 30 s) 32

33 FMSB s external agency product portfolio consists of : Johnson & Johnson - baby care / personal care Clorox - liquid bleach Bluebell - household care and floor care Guard - shoe care Glads - wraps / bags Spin - detergents Blacktop - insecticide/mosquito coils Star Brand - culinary essence and colourings Lingham - chilli sauces V-Soy - soyabean milk Nekta - concentrated / ready to drink Kiwi Fruit Juice Orang Kampung - herbal energy drinks MAJOR ACTIVITIES IN 2005 In April 2005, FMSB took over the distribution of a new energy drink and launched a range of Orang Kampung herbal energy drinks with two major selling variants, Orang Kampung Tongkat Ali and Orang Kampung Kacip Fatimah drinks targeted to the Malay market. EXPANSION / FUTURE PLANS Whilst the implementation of the new RM4.0 million Movex Java business solutions is still in progress, FMSB had successfully introduced the hand-held PDA s for the van sales team in Johor Bahru, Malacca and Kuala Lumpur to further improve their efficiency and ensure better monitoring and control. FMSB will continue to improve its process flow and supply chain management to enhance its position in the marketing and distribution of fast moving consumer goods. FMSB is also exploring opportunities to expand its frozen / fresh food business which is growing rapidly. 33

34 CONTRACT MANUFACTURING BACKGROUND INFORMATION Products Manufacturing Sdn Bhd (PM), a 70% subsidiary of Chemquest Sdn Bhd, was acquired by PPB Group in 1993 to provide contract manufacturing services for cosmetics, toiletries and household products industries. PM s factory located at Jalan Kepong, Kuala Lumpur is equipped with high-tech machineries and a qualified workforce. PM produces a variety of products such as creams, cold and hot mix liquids, lotions, gels, powders and pastes for the hair care, skin care, baby care, body care, household and car care market. PM has been accredited with the Good Manufacturing Practice status since 1995 by Malaysia s Ministry of Health as its factory complies with the requirements of the Drug and Cosmetics Regulations Act,

35 MAJOR ACTIVITIES IN 2005 There were no major activities during the year. EXPANSION / FUTURE PLANS PM is constantly seeking business opportunities to expand its operations and to venture into other related markets. 35

36 EDIBLE OILS REFINING BACKGROUND INFORMATION PGEO Group Sdn Bhd [PGSB] is a major edible oils refiner and exporter in Malaysia, processing more than 3 million mt of edible oils per year. PGSB and its associate operate six refineries in Malaysia with a combined production capacity of about 12,780 mt per day. About 90% of the Group s production is exported to India, China, Middle East, Pakistan, EU countries, USA and Russia whilst the balance is sold locally. PGSB Group s activities are vertically integrated from the conversion of crude oils into refined oil products to production of shortening and hydrogenated products, cocoa butter replacers and other specialty fats which are marketed in bulk, drums and consumer packs. The location of PGSB s operations are set out below:- 36 Edible Oils Refining Dry Fractionation Palm Kernel Crushing Hydrogenation Texturising Palm Kernel Oil Fractionation Calcium Salts Manufacturing Biomass-fired Steam Generator Plant - Prai, Lumut, Pasir Gudang, Bintulu, Sandakan and Lahad Datu - Prai, Lumut, Pasir Gudang, Bintulu, Sandakan and Lahad Datu - Bintulu, Sandakan and Lahad Datu - Pasir Gudang - Pasir Gudang - Pasir Gudang - Pasir Gudang - Lumut

37 The Group s equity interest in PGSB s subsidiaries and associates are as follows :- Group s Equity Interest PGEO Edible Oils Sdn Bhd (PGEO) 100% Sandakan Edible Oils Sdn Bhd (SEO) 100% Bintulu Edible Oils Sdn Bhd (BEO) 100% PGEO Energy Sdn Bhd (PESB) 100% SEO Energy Sdn Bhd 100% Green Universe Sdn Bhd 100% Volac Ingredients Sdn Bhd 51% Lahad Datu Edible Oils Sdn Bhd 45% KOG Edible Oils BV, Netherlands 35% MAJOR ACTIVITIES IN 2005 In February 2005, PESB completed the construction of a Biomass-fired Steam Generator Plant in Lumut. The biomass renewable energy production reduces the use of mineral fuel oil and production cost. BEO expanded the production capacity of its kernel crushing plant in Bintulu in April 2005 and acquired a 10-acre land also in Bintulu in June 2005 for expansion purposes. In the year, PGEO expanded the production capacity of its hydrogenation plant and constructed the 3rd dry fractionation plant for the production of specialty fats. Both plants are located in Pasir Gudang. SEO acquired 12 acres of industrial land in Sandakan in June 2005 for the expansion of its manufacturing facilities. EXPANSION / FUTURE PLANS For 2006, PGEO Group will be carrying out several upgrading works to ensure that its production technology is ahead or at least in tandem with global standards and its products are in compliance with current and future customer requirements. PGEO Group s second renewable energy production project in Sandakan will be completed in mid The Group is constantly exploring new opportunities in the oleochemical and biodiesel industries and will continue to emphasize on research and development to identify other downstream or value added products that will create new markets for the Group. 37

38 ENGINEERING SERVICES BACKGROUND INFORMATION Minsec Engineering Services Sdn Bhd (MES), a 100% subsidiary of Chemquest Group, provides services in engineering design, equipment fabrication, installation, plant operation, training and maintenance to clients in Malaysia and Asia Pacific. MES is also involved in turnkey construction of palm oil and sugar mills, bulking and storage facilities, factory buildings and ethanol and formalin plants in Malaysia and Indonesia. MES core business lies in the construction of palm oil mills. Todate, MES has constructed numerous mills in East Malaysia and successfully completed several large expansion and refurbishing works in the agricultural sector. 38

39 MAJOR ACTIVITIES IN 2005 The major projects undertaken by MES during the year with a total contract value of RM103 million are as follows :- Construction of a warehouse building and upgrading and expansion works of a flour mill for FFM Berhad at Pulau Indah; Upgrading and expansion works at Central Sugar Refinery; Civil works for a new kernel crushing plant for Sandakan Edible Oils Sdn Bhd in Sandakan, Sabah; Construction of a 60 tph expandable to 120 tph palm oil mill for RH Selangau Palm Oil Mill, Sarawak; Construction of a 60 tph expandable to 120 tph palm oil mill for PT Mustika Sembuluh in Sampit, Kalimantan; Supply sugar refinery equipment to PT Permata Dunia Sukses Utama, Indonesia; and Various upgrading and expansion works for oil palm plantations in Sabah and Sarawak EXPANSION / FUTURE PLANS MES plans to supply co-generation and composting plants for palm biomass projects. 39

40 ENVIRONMENTAL ENGINEERING, WASTE MANAGEMENT & UTILITIES BACKGROUND INFORMATION Chemical Waste Management Sdn Bhd [CWM], a 99% subsidiary of Chemquest Group is a leading service provider for water resource engineering, wastewater / sewage treatment and solid waste management. CWM provides the following services :- Build, commission and manage various water treatment facilities for household and industrial consumption. Construct wastewater treatment plants for various types of industries. Construct sewage treatment plants for municipal authorities. Infrastructure development. Collect and dispose industrial and residential solid waste on large scale for various municipalities in Malaysia. To date, CWM has successfully commissioned more than 20 water projects throughout Malaysia and 50 wastewater treatment plants for various types of industries. 40

41 MAJOR ACTIVITIES IN 2005 For 2005, CWM completed four projects with a total contract value of RM109.0 million as follows :- Construction of a pumping station for the Bukit Badong Distribution and Supply System; Replacement and upgrading of transformers for the Raw and Treated Water Pumping Stations at the Sungai Semenyih Water Treatment Plant; Upgrading and rehabilitation of the Chemical Plant at the Sungei Semenyih Treatment Plant; and Desludging system at the Sungai Semenyih Water Treatment Plant. CWM currently has five on-going projects with a total contract value of RM150.0 million and has secured two Design and Build projects in Penang with a total contract value of RM114.0 million during the year as follows :- Potable ultra-filtration treatment plant in Bukit Pancor which will be the first municipal plant in Malaysia using membrane technology; and Sewage treatment plant in Jelutong, reputed to be the largest sewage treatment plant in Malaysia and the largest sequencing batch reactors (SBR) plant in Asia. EXPANSION / FUTURE PLANS CWM will continue its efforts to seek opportunities to expand its range of services, explore new markets locally and overseas, harness new technologies as well as leverage on strategic partnerships for sustainable growth. 41

42 FLOUR MILLING BACKGROUND INFORMATION FFM Berhad (FFM) commenced its wheat milling operations in 1966 with a single 150 mt per day wheat flour mill in South Port, Klang. Today, FFM Group has grown to become the largest flour miller in Malaysia supplying more than 40% of the country s wheat flour requirements. Its milling complexes are strategically located in South Port, Port Klang; Pasir Gudang, Johor Bahru; Pulau Indah, Port Klang; Kuching, Sarawak; and Vietnam with a total milling capacity of 2,430 mt per day. FFM expanded its operations overseas to Vietnam through its 100% subsidiary, Vietnam Flour Mills Ltd, which operates a 400- mt flour mill in My Xuan, Vung Tau Province in The flour produced by the plant is presently marketed under the brand names of Red Key, Blue Key and Twin Globe. In 2004, FFM Group acquired 43.35% equity interest in Kerry Flour Mills Limited which enabled FFM Group to expand its wheat flour milling activity to Thailand. Products produced for the domestic market include:- Wheat Flour Bread, Noodles, Biscuits, Cakes, All-Purpose Specialty Wheat Flour Products Semolina, Special Wholemeal Other Wheat Specialty Products Wheat, Food Bran, Wheat Germ Bread Improvers & Premixers Cake Donut, Yeast-Raised Donut 42

43 FFM s subsidiaries and associate which are engaged in flour milling are as follows :- Johor Bahru Flour Mill Sdn Bhd FFM Flour Mills (Sarawak) Sdn Bhd Vietnam Flour Mills Limited Kerry Flour Mills Limited MAJOR ACTIVITIES IN 2005 In November 2005, FFM commenced operations of its 2nd flour mill with a daily wheat milling capacity of 500 mt at Pulau Indah bringing the total milling capacity at Pulau Indah to 1,000 mt. EXPANSION / FUTURE PLANS FFM plans to expand its flour milling operations and intends to construct a 360 tpd wheat flour mill in Prai, Province Wellesley. 43

44 GLOVE MANUFACTURING BACKGROUND INFORMATION PT Healthcare Glovindo [Glovindo], a 100% subsidiary of Chemquest Group, operates a latex examination glove factory in Medan, Sumatra with seventeen dipping lines and an annual production capacity of 900 million pieces. Glovindo produces pre-powdered and powder-free latex examination gloves for medical and industrial use. All products are exported mainly to the United States, Europe and Latin America. Glovindo s own brand known as MEDIQUEST is sold to Portugal and Greece. In 1997, Glovindo received the ISO 9002 certification for its products. PRODUCTION RESULTS NO. OF GLOVES Total Production 1,165 million 686 million 44

45 MAJOR ACTIVITIES IN 2005 There were no major activities during the year. EXPANSION / FUTURE PLANS Glovindo is studying the possibility of installing a biomass boiler at its factory to augment the supply of fuel oil. An additional three production lines will be constructed once the supply of fuel and electricity power have been stabilized. 45

46 LIVESTOCK FARMING BACKGROUND INFORMATION Established in 1993, FFM Farms Sdn Bhd (FFM Farms), a whollyowned subsidiary of FFM Berhad, currently operates a table egg layer farm in Trong, Perak and two broiler breeder farms located at Sua Betong, Negeri Sembilan and Gurun, Kedah. The two breeder farms have a total production capacity of 3 million broiler day-old-chicks per month. Quality day-old-chicks are produced through a combination of good farming practices, hatchery management and usage of good breeds. Its layer farm is located on a 550-acre site and is capable of producing 20 million table eggs per month. Some of these are marketed under the Seri Murni premium eggs label. FFM Farms also produces an organic fertilizer using pure chicken manure that has been completely composted. The fertilizer is sold under the Origanic brand name. 46

47 MAJOR ACTIVITIES IN 2005 Both of FFM Farms in Gurun and Trong received accreditation from the Department of Veterinary Services, Ministry of Agriculture under the Skim Amalan Ladang Ternakan (SALT) for good animal husbandry practice, bio-security and infrastructure, flock health management and disease control in FFM Farms also launched the sale of Seri Murni Vitamin E Enriched premium eggs in April EXPANSION / FUTURE PLANS FFM Farms will continue to source for suitable lands for the expansion of its farming operations. Plans are underway to increase the capacity of its organic fertilizer production in Trong Layer Farm. FFM Farms will be introducing smaller 2 kg pack Origanic organic fertilizer to nurseries and home gardens. In line with the Group s strategy to invest in downstream activities for synergistic growth, FFM is planning for a meat processing plant in Pulau Indah for which approval for building plans is being processed by the various departments of Majlis Perbandaran Klang. 47

48 OIL PALM PLANTATIONS BACKGROUND INFORMATION Oil palm plantation operations represent one of the core businesses of the Group and they are held through its 55.6% subsidiary, PPB Oil Palms Bhd (PPBOP). PPBOP produces FFB in its plantations and also purchases outside FFB which are processed at its nine mills located in Sabah (5), Sarawak (3) and Indonesia (1) with a total milling capacity of 2.0 million mt of FFB per annum. AREA STATEMENT (All figures in ha) East Malaysia Indonesia Total Total Area 80,017 80, , , , ,987 Total Plantable Area 68,152 67, ,716 89, , ,233 Mature 54,456 53,829 9,160 7,948 63,616 61,777 Immature 8,152 7,221 14,859 10,113 23,011 17,334 PRODUCTION East Malaysia Indonesia Total Estates FFB ( 000 mt) 1, , , ,268.4 Yield per mature ha (mt) Mills CPO ( 000 mt) OER (%) KER (%) AVERAGE SELLING PRICES Crude Palm Oil (RM/tonne) Nett 1,349 1,610 Palm Kernel Oil (RM/tonne) Nett Fresh Fruit Bunches (RM/tonne, ex-estate)

49 AGE PROFILE OF PALMS AS AT 31 DECEMBER 2005 Age of Palms East Malaysia Indonesia Total ha ha ha % Immature - Up to 3 years 8,152 14,859 23, Young - 4 to 6 years 8,889 3,925 12, Prime ] 7 to 10 years 18,150 4,451 22, ] 11 to 14 years 16, , ] 15 to 20 years 9,267-9, Old Above 20 1,279-1, Total 62,608 24,019 86, MAJOR ACTIVITIES IN 2005 In 2005, PPBOP acquired Izin Lokasi for 169,251 ha of land in Central Kalimantan for oil palm cultivation increasing its total land bank in Central Kalimantan to 273,005 ha. The total area is subject to issue of final Hak Guna Usaha from the authorities. During the first half of 2005, PPBOP commissioned its ninth CPO mill of 40 tph at Sri Kamusan, Sabah and it is the first PPBOP mill to incorporate a composting plant which eliminates the discharge of treated mill effluent into waterways like conventional mills. PPBOP commenced the construction of two CPO mills during the year at Ribubonus estate in Sabah and Mustika Sembuloh estate in Central Kalimantan. Both mills are expected to be operational before end EXPANSION / FUTURE PLANS For the next five years, PPBOP will focus on its expansion programme in Central Kalimantan where about 20,000 to 25,000 ha of oil palm per annum will be developed to provide better economy of scale for its operations in Central Kalimantan. 49

50 PACKAGING BACKGROUND INFORMATION CONSUMER PACKAGING PGEO Edible Oils Sdn Bhd [PGEO] ventured into consumer packaging in 1986 with the packing of edible oils into tin cans and PVC bottles. Today, PGEO owns filling lines to pack bottles and containers of various sizes ranging from 250 ml of PET bottles to 25 kg HDPE containers. The packed products are either exported to overseas markets or distributed locally under Neptune and Seri Murni brands. STEEL DRUM MANUFACTURING PGEO manufactures 210-litre steel drums for local and export markets. It operates two drum assembly lines with a combined capacity of 800 drums per hour. The drums are internally unlined or coated with epoxy and externally sprayed with stoving paint. POLYBAG MANUFACTURING Tego Sdn Bhd (Tego), a 79.9% subsidiary of FFM Bhd, is the leading producer of commercial polypropylene (PP) and polyethylene (PE) bags. Its manufacturing facilities occupy a total of 16 acres of industrial land in the Senawang Industrial Estate and Senawang Industrial Park in Negeri Sembilan. Its subsidiary, Tefel Packaging Industries Co Ltd is located on a 4-acre site in Yangon, Myanmar. 50

51 Tego manufactures the following products for the local and export market:- Woven polypropylene (PP) and polyethylene (PE) bags PP and PE fabrics Technical fabrics Kraft paper bags with PP/PE lamination PP rope and sewing yarn FIBC bulker bags Geotextiles Weedtex Webbing PE blown film products High tenacity PP/PE multifilament yarn In 1995, Tego received the ISO 9002:1994 Quality Management Systems certification which was upgraded to ISO 9001:2000 in year MAJOR ACTIVITIES IN 2005 There were no major activities during the year. EXPANSION / FUTURE PLANS In April 2006, Tego is expected to complete the expansion works of its Myanmar plant which will increase production capacity of FIBC bags to meet customers demand. 51

52 PROPERTY DEVELOPMENT BACKGROUND INFORMATION PPB Hartabina Sdn Bhd (PPBH), a wholly-owned subsidiary of PPB is principally involved in residential and commercial development as well as property management. Currently, PPBH is developing 52.6 acres of prime hill land in Taman Segar, Cheras and manages its own shopping complex Cheras LeisureMall. Other active property companies under PPB Group include Seletar Sdn Bhd (Seletar), Cathay Screen Cinemas Group (CSC) and Shaw Brothers (M) Sdn Bhd (SBM) in which PPB has 100%, 66.2% and 34% equity interest respectively. CSC and SBM are owners of several prime commercial properties in the country. PPB Group s major commercial properties are as follows: Lettable Average Monthly Owners Area(sf) Rental (RM/sf) Occupancy (%) Cheras Leisuremall PPBH 260, Cheras Plaza PPBH 101, Damansara Jaya shophouses CSC 50, Shaw Centrepoint SBM 230, Shaw Parade SBM 156,

53 MAJOR ACTIVITIES IN 2005 During the year, PPBH completed the construction of 78 units of apartments known as Segar Courts in Taman Segar, Cheras which will be handed over to the purchasers by May Seletar launched its Phase 2 residential development in Bedong, Kedah comprising 30 units of single-storey terrace Type A1 in April EXPANSION / FUTURE PLANS PPBH will be launching a high-end residential development in Bukit Tengah, Seberang Prai in In the same year, PPBH will also be launching its 38 units of bungalows located on a 20-acre prime land in Bukit Segar, Cheras. Besides actively developing its current land bank and looking for new land banks, PPBH provides project management services to the Group for their development projects. 53

54 SUGAR REFINING BACKGROUND INFORMATION Malayan Sugar Manufacturing Company Bhd (MSM), a whollyowned subsidiary of PPB, operates the region s largest sugar refinery which is located at Prai, Province Wellesley with a melting capacity of 2,000 mt of raw sugar per day. The mill produces various types of sugar for industrial and household consumption for the domestic and overseas markets as follows :- Industrial products P1, P1M, PIS, PXX, IG, Caster, PF, P2, P3, P3H, P4, PB, Icing Household products Coarse granulated sugar, fine granulated sugar, caster sugar, cube sugar, sachet sugar, icing sugar, soft brown sugar Kilang Gula Felda Perlis Sdn Bhd (KGFP), a 50:50 joint venture between PPB and FELDA, operates an integrated sugar mill to process sugar cane from the combined plantations of approximately 9,000 hectares in Chuping, Perlis. The mill has a milling capacity of 5,500 mt of cane per day and a melting capacity of 650 mt of raw sugar per day. At present, both MSM and KGFP produce more than 650,000 mt of refined sugar per annum and supply about 60% of the domestic sugar requirements. 54

55 MAJOR ACTIVITIES IN 2005 MSM continuously upgrades its operations to increase production efficiency and during the year invested RM12.5 million to increase its refined sugar storage capacity, improve its filtration capacity and upgrade other plant and machineries. EXPANSION / FUTURE PLANS For 2006, MSM plans to spend RM19.8 million to increase its melting capacity and improve its packing operations. 55