MSM sugar refinery in Prai to continue operating under 15-year lease

Railway Asset Corporation (RAC) chief executive officer Datuk Azhar Ahmad said the refinery is not involved in the Kampung Manis development project and will continue to operate on land owned by RAC. — Picture via Facebook

First Published: Monday, 19 Oct 2026 9:35 AM MYT

BUTTERWORTH, Oct 19 — The lease of the land that houses MSM Malaysia Holdings Berhad’s (MSM) sugar refinery in Prai will continue for another 15 years, following the development of Kampung Manis there.

Railway Asset Corporation (RAC) chief executive officer Datuk Azhar Ahmad said the refinery is not involved in the Kampung Manis development project and will continue to operate on land owned by RAC.

“The sugar refinery is not involved [in the Kampung Manis development project] and remains operational; we will be entering into a lease agreement with the refinery (in the near future).

“The lease agreement for the refinery will be formalised between the relevant parties, with a tenure set for 15 years,” he told reporters following a signing ceremony and the presentation of Letters of Intent to recipients of the ‘Rumah MutiaraKu’ (RMKu) housing units — a measure facilitating site clearance and the relocation of Kampung Manis residents — held here today.

The ceremony was officiated by Penang Chief Minister Chow Kon Yeow. The event was also attended by State Housing and Environment Committee chairman Datuk Seri S. Sundarajoo.

Azhar made these remarks when asked about the operational status of the sugar refinery, following the implementation of the Kampung Manis redevelopment project. The project, which involves land owned by the RAC — specifically portions of Lot 286, Lot 65, and Lot 67 in Bandar Prai — covers a total area of 1.61 hectares and includes the relocation of the area’s residents.

Previously, the Ministry of Transport (MOT) indicated that it would submit an application from MSM to the Cabinet to extend the land lease for the refinery, in light of the Kampung Manis development project.

This follows a request by the Federal Land Development Authority (FELDA) for the Penang state government and the RAC to consider extending the refinery’s land lease by another 30 years.

The then-FELDA chairman Datuk Seri Ahmad Shabery Cheek, was reported as saying that the refinery’s strategic location was vital to the operations of the nation’s sugar industry.

The MSM sugar refinery in Prai, which has been in operation since 1964, serves as a key facility within the national sugar industry due to its strategic location … near the port as well as railway tracks that supports the company’s logistics operations. — Bernama