THE fate of the MSM Malaysia Holdings Berhad sugar refinery in Perai remains in limbo, with the Transport Ministry confirming that any extension of its land lease will depend on an upcoming decision by the federal Cabinet.
Transport Minister Anthony Loke said the factory, located on land owned by the Railway Assets Corporation (RAC), is currently still allowed to operate and has not received any directive to vacate immediately.
“The refinery sits within Kampung Manis. I’ve visited the area several times and have announced plans to redevelop Kampung Manis to assist the local squatter communities. This redevelopment will involve collaboration with the private sector,” said Loke.
“We already have an RFP process in place and have secured a developer to implement the project, which includes providing free housing to residents originally from the area.”
Loke emphasised that while the refinery’s current lease is set to expire on 30 November 2024, the government will ensure a phased redevelopment approach, allowing MSM time to relocate.
“The factory will not be asked to shut down immediately. The redevelopment will take place in stages, and the refinery will be given time. But it cannot stay indefinitely, or the area cannot be developed,” he said.
The comments come in response to ongoing negotiations led by the Federal Land Development Authority (FELDA), which has requested the Penang State Government and RAC to consider extending the refinery’s lease for another 30 years.
FELDA Chairman Datuk Seri Ahmad Shabery Cheek previously stressed the refinery’s strategic importance due to its proximity to both a seaport and a rail line, having supported the national sugar industry since 1964.
Loke acknowledged FELDA’s concerns and confirmed that the Transport Ministry will bring the matter before the Cabinet soon.
“Our hope is for MSM to cooperate in finding an alternative site, so the Kampung Manis redevelopment project — which is aimed at improving housing for the community — can move forward,” he added. - September 20, 2025
