MSM executes Prai land lease agreement

PETALING JAYA: Malaysia's largest sugar refiner MSM Malaysia Holdings Bhd on Thursday, Sept 29 announced it has executed the lease agreement between the group and Perbadanan Aset Keretapi (PAK) over the lease of plots of freehold land in Bandar Prai, Seberang Prai Tengah, Penang.

The site is approximately 763,553 sq ft and has factory buildings, warehouses, railway lines and other structures that are used by MSM in its sugar refinery business operations.

Its sugar refinery facility is also located on the land and is the largest sugar refinery in Malaysia with an annual capacity of 960,000 tonnes, according to the group's announcement.

"It represents about 86% of MSM's total capacity and is strategically located near Penang Port and has a dedicated jetty on-site that enables barges to easily and cost-effectively offload raw sugar taken from sea vessels directly into storage for use in refining process," it stated.

MSM added that the railway tracks located within the Prai land connect to MSM's warehouses in Sungai Buloh, Selangor and Johor Bahru.

According to the announcement, the lease agreement is for a fixed term of 30 years, commencing Dec 1, 1994 to Nov 30, 2024, under which the group is required to pay rental rates of 18 sen per sq ft for the period between Dec 1, 1994 and Nov 30, 2009, and 27 sen per sq ft from Dec 1, 2009 until Nov 31, 2024, payable on a yearly basis.

The lease period may be extended by written notice by MSM to PAK within one year prior to the expiry of the lease agreement for a further term of 30 years from Dec 1, 2024 to Nov 30, 2054, at a rental rate to be determined based on the valuation made by the Valuation and Property Services Department, said the statement.