Brahim Holding, an in-flight catering services provider in Malaysia, is spending MYR130m ($41.7m) to construct a new integrated sugar refinery facility in East Malaysia.

Situated in Demak Laut Industrial Park, Sarawak, the new plant is expected to be completed by the end of 2013, with an initial production of nearly 100,000 metric tonnes per annum (mtpa) growing to 330,000mtpa .

The company said that its new investment will also include machinery and equipment.

Brahim Holding, which generates over 90% of its income from in-flight catering services, expects the sugar segment to contribute nearly MYR250m ($80.17m) to the group’s revenue in the first year of the new refinery’s operations, along with nearly 10-15% earnings contribution.

The investment to build the new sugar refinery plant will be financed via bank borrowings initially,the company said.

In the beginning of 2012, the company purchased a 60% stake in refined sugar and molasses manufacturer, Admuda, as part of its plans to foray into the sugar refinery business.

Admuda holds a license from the International Trade and Industry Ministry to run as a licensed manufacturer of refined sugar and molasses in East Malaysia.

Brahim Holding executive chairman Datuk Ibrahim Ahmad told reporters that in line with its food portfolio, the company has ventured into the sugar refinery sector, and is building its plant on a 12ha piece of land in Demak Laut, to cater to the East Malaysian market.

"Upon the completion of our Sarawak plant, we will be the first sugar producer in East Malaysia and our study shows that the demand capacity for sugar there stood at 330,000 tonnes and 1.6 million tonnes for nationwide demand," Ahmad said.

The Malaysian company believes that there are good prospects in the sugar refinery sector, particularly in East Malaysia.