Add rice, water and salt to a saucepan and bring to a boil over medium high. Cover and reduce heat to a low simmer. Simmer for 45-50 minutes, stirring occasionally.
Remove lid, add sugar and coconut milk. Stir well. Continue to heat, uncovered, over medium heat, stirring occasionally until all liquid is absorbed and rice begins to thicken and get sticky.
Remove from heat and let stand to cool, this will help it thicken even more. Serve topped with shredded coconut.