Penang's name comes from Malaysia. It is not only the country's oldest mill, it is also the smallest. It is the only mill producing sugar solely for local consumption.

The mill was founded by the Chalmers brothers in 1881. It began manufacturing sugar with a rather humble rate of five tonnes of sugar a day. The mill changed hands twice before the Colonial Sugar Refinery Company took over in 1926. Penang sugar is used by local confectionary companies such as Maganlal Jiwa, Bhika Bhai, Fiji Foods and some soft drinks companies.

Sugar produced in Penang is different from the other mills. It is washed more than export sugar to make it whiter for local consumption.

In Rakiraki, 6305 hectares of land is under cane production - covering Ellington, Nanuku and Malau.

By all mill standards, Penang's technological development has been undramatic. Because of low production, it may not have seemed necessary to put in more modern machines. Penang does not have much of the latest technology that other mills have. However, some modern machines were installed in the Penang mill in the early 1980's. A new boiler, evaporators, power generation plants and turbines were added to improve efficiency. The installation of the Yoshimine boilers is one of the dramatic changes to have occurred in the sugar industry at that time.

The installation of evaporators in the early 1980's also helped improve efficiency and sugar quality. Before that sugar juice was judged ready or sweet enough for crystallization by "feel". Now it is done by brix controllers which determine the density of juice before it is crystallized.

Unlike other mills, almost three-quarters of Penang's cane arrive by lorry. Only 28 percent arrives by rail. During the CSR days, much of the crop was moved by rail because the company kept its cane growing areas within the network of its tram lines.