Background on Central Sugar Refineries Sdn. Bhd.

The origin of Central Sugars Refinery Sdn. Bhd. (CSR) goes back to 1965, when it was known as United Malay State Sugar Industries, began refining and packaging raw sugars situated in Shah Alam. Central Sugars Refinery has improved on its raw sugar melting capacity from initially 100 over metric tonnes to 2,000 metric tonnes per day. In 2010 itself, Central Sugars Refinery outstripped the RM1 billion mark in their sales revenue, where 60% contributed by retail and wholesale customers while the remaining 40% from industrial users (Central Sugars Refinery, 2008) and today, Central Sugars Refinery has not only become one of the prominent producers of quality refined sugar, but also the largest exporter of refined sugar to China, Hong Kong, New Zealand and so forth (Federation of Malaysian Manufacturers, 2013).

Sugar is commonly used by Malaysian in almost every cuisine that can be found in this country and it is perceived as a necessity by the local consumers. Hence, the demand curve for sugar is inelastic. Diagram 1(a) shows an inelastic demand curve and when the price increases from P₁ to P₂, quantity demanded decreases from Q₁ to Q₂. Note that the size of change in price is larger than the change in quantity demanded which means for inelastic demand, price changes proportionately more than the quantity demanded (Sloman, Wride, Garratt, 2012).