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Perak MB urges factories to boost productivity to capitalise on rising demand for rubber gloves

Latexx Manufacturing Sdn Bhd’s decision to implement the construction of an additional factory coincides with the demand for rubber gloves which is expected to be higher than pre-Covid-19 pandemic.

Perak Mentri Besar Datuk Seri Saarani Mohamad said with the trend showing rising demand for rubber-based products such as gloves, it was time for local industry players to boost their production capacity.

“In the first quarter of 2021, the country’s rubber exports rose 169.6 per cent to RM21.84 billion compared to RM8.1 billion recorded in the same period two years ago, the majority of it contributed by strong growth in the latex-based products sector,” he said in a speech when officiating a ceremony of Latexx Manufacturing’s RM100 million additional plant (Plant 7 Plus) in Kamunting today.

Saarani said the development of the additional plant will definitely have a positive impact on the socio-economic development around Kamunting and nearby areas.

“I understand it has opened up more than 200 job opportunities in the Larut, Matang and Selama districts.

“This coincides with the state government’s plan to work with the private sector to create more employment opportunities in order for us to rebuild the state economy and the people in the transition to the endemic phase (of Covid-19),” he added.

Saarani expressed hope that the public, especially those who have the opportunity to work there, would make the most of it to improve their living standards and absorb as much knowledge while building a career at the plant.

Source: Bernama

Perak MB urges factories to boost productivity to capitalise on rising demand for rubber gloves


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Fraser & Neave Holdings Bhd (F&N) anticipates the challenging environment to continue into the second half of the year amid high input prices, rising freight costs, geopolitical uncertainties, and rising inflationary pressures.

However, F&N finance director Tiong Yean Yau said the group sees positive trend in the market in terms of demand.

“And with the relaxation of Covid restrictions in both Malaysia and Thailand, we are positive market demand will help us mitigate the impact on business performance in the second half,” he said at F&N’s half-year financial results virtual briefing yesterday.

For the first six months ended March 31, 2022 (H1’22), F&N’s net profit dropped 22.3% to RM186.8 million from RM240.3 million in H1’21 due to higher commodity prices, flood impact and foreign exchange translation loss from a weaker Thai baht.

The group said it has prepared short-term measures to withstand flood risks and is working on sustainable measures to floodproof its factories.

“At the exits we have got things that can better stop rain from coming in, and we are looking at our electrical items on the floor to be raised (to higher level). We’ll be doing more in consultation with our advisers and definitely we want to be ready should there be any flood.”

Group CEO Lim Yew Hoe said it may increase the prices of its products if commodity prices go up further.

“Definitely we will need to increase prices if commodity prices move up again. But when, how much, and how frequent depend on the movement of commodity prices. Since nobody can tell me what will be the commodity prices movement, I can’t really tell you in certainty how many per cent and when we are going to increase, but one thing that we can promise is that price increases will lag behind cost increases,” Lim explained.

F&N will complete several large capital expenditure projects this year in order to save costs and grab opportunities in new markets, he said.

The projects include the RM128 million liquid milk and plant-based factory in Wangmuang, Thailand, the automatic storage and retrieval system warehouse at Shah Alam, installation of solar photovoltaic systems at the Shah Alam, Pulau Indah and Bentong plants, RM20 million drinking water plant in Kota Kinabalu, and RM52 million regional distribution centre in Rojana, Thailand.

Lim said the liquid milk and plant-based plant in Thailand is in the final stage of commissioning. The project represents a shift for F&N to reduce reliance on condensed milk and grow the brand in the liquid milk segment.

Concurrently, the group will also be equipping its Pulau Indah facility with plant-based beverage capability by the end of 2022.

“The plant in Thailand is a combination of pasteurised format as well as UHT format products. Then we are investing in plant-based. So in total, this capability will be more than 50 million litres with space for expansion.

“We want to capture not only product categories that we are doing today, which is evaporated milk, we also want to look at liquid fresh milk as well as going into plant-based slightly later,” he added.

Commenting on its proposal to acquire Ladang Permai Damai Sdn Bhd, Lim said the intention is for the group to embark on the upstream fresh milk business for downstream production and distribution of fresh milk. However, the project is still subject to the terms and conditions of the share sale agreement as well as government approvals to be obtained.

Source: The Sun Daily

F&N sees market demand as bright spot amid challenging environment


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The first processing plant in Perak to process silica into glass will commence operations in the Silver Valley Technology Park (SVTP) in the Kanthan Industrial Area next year.

Perak Menteri Besar Datuk Seri Saarani Mohamad said the collaboration between the Perak State Development Corporation (PKNPk) and Jinjing Silicon Technology Sdn Bhd for the construction of the built-to-suit and lease (BTSL) mineral processing plant on over four hectares would be a catalyst for the development of SVTP.

“It has the potential to attract more investments from silica or quartz-related enterprises. It will be the first plant to spearhead the development of the Kanthan Industrial Area and is expected to create about 500 new job opportunities for the local community,” he said.

He said this after witnessing the signing ceremony of the  early  agreement between PKNPk and Jinjing Silicon, for the state’s mineral industry  development initiative by empowering downstream and manufacturing activities.

Based on the BTSL business model, PKNPk will construct the building for Jinjing Silicon with a 30-year lease, and an initial investment of RM100 million is expected to be invested in the state for the production and processing of quartz or silica-based minerals.

Saarani said the mineral development initiative implemented by PKNPk was in line with the National Mineral Industry Transformation Plan Framework 2021-2023 and also coincides with the decree of Perak ruler  Sultan Nazrin Muizzuddin Shah on Aug  25, 2021, where  PKNPk is identified for its role as a leader in the intermediate and downstream activities for the mineral industry in the state.

“This agreement is expected to invigorate the mineral industry in Perak and generate business and job opportunities as well as higher revenue  for the state government,” he said.

Source: Bernama

First silica glass plant in Perak to begin operations next year


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With billions of vaccines required around the world, the prospect of Malaysia becoming a global vaccine manufacturing hub appears promising as the country aims to continue contributing to the global vaccine production effort.

According to Arham Abdul Rahman, chief executive officer of the Malaysian Investment Development Authority (MIDA), the government announced a new tax incentive in Budget 2021 to attract further investments in the manufacturing of pharmaceutical products, namely a preferential tax rate of 0% to 10% for ten years, followed by 10% for the subsequent ten years.”

He said, as part of the National Economic Recovery Plan (PENJANA) initiative, Malaysia is offering a special Relocation Incentive until December 2022 for new investments in the manufacturing sector, including the pharmaceutical industry.

“Recognising the lack of vaccine production for humans, the government mandated the commissioning of the National Vaccine Development Roadmap (NVDR) with a target to make Malaysia a human vaccine producer within the next ten years, equipped with a complete ecosystem ready for research and development (R&D) and local manufacturing of vaccines,” said Arham.

Presently, nine companies in Malaysia were given approval for manufacturing licences, with plenty of room for more companies to fill in the various areas of the vaccine supply chain, particularly in local vaccine production and R&D.

“Malaysia has seen significant growth in the areas of R&D, as evidenced by the use of the latest revolutionary mRNA technology. Malaysia is the first country outside China to conduct clinical trials for an inactivated Covid-19 vaccine,” Arham said.

The pharmaceutical manufacturers in Malaysia are closely monitored and set to a high standard in compliance with Good Manufacturing Practice (GMP) and Good Clinical Practice (GCP) certifications.

Malaysia is also a member of the Pharmaceutical Inspection Co-operation Scheme (PIC/S), a non-binding, informal cooperative arrangement between Regulatory Authorities in the field of GMP of medicinal products for human or veterinary use.

The Institute for Medical Research (IMR) of the National Institutes of Health (NIH), MOH is currently developing Covid-19 vaccines based on Inactivated Viruses and mRNA, representing the pinnacle of local vaccine research capabilities.

Malaysian Vaccines and Pharmaceuticals (MVP) is also actively producing vaccines for animals, while Pharmaniaga LifeScience is conducting the fill-and-finish of Sinovac’s Covid-19 vaccines and Solution Biologics is planning to formulate CanSinoBIO’s Covid-19 vaccines.

Arham also said there has been a surge in demand for halal pharmaceuticals globally, which Malaysia can certainly capitalise on.

“Malaysia is a forerunner in the global halal drug market, and as a leader in the halal pharmaceutical sector, is leveraging on existing advantages. Helmed by the government, the standards on halal pharmaceuticals were recently revised while halal standards for medical devices have also been issued.”

Source: Free Malaysia Today

Malaysia aspires to be a global vaccine manufacturing hub


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Shin Yang Shipping Corporation has proposed to acquire 100% of Piasau Gas Sdn Bhd for RM22.8 million cash in an acquisition it said would strengthen and complement the shipbuilding activities of the group.

In a Bursa Malaysia filing on Wednesday (April 27), the group said it is acquiring the stake from various parties including Geo Sepadu Sdn Bhd, Pui Voon Poh, Hong Ken Choon, Ling Chiong Sing and Tan Sri Ling Chiong Ho.

Piasau Gas is principally engaged in the business of manufacturing, distribution and marketing of industrial gases, provision of services and maintenance and trading in welding equipment and machinery.

“The acquisition will enable Shin Yang to vertically integrate the production of industrial gases into the group’s existing business in shipbuilding and ship repair.

“The group is expected to benefit from, among others, the consolidation of earnings of Piasau Gas, ability to better control its supply of liquefied nitrogen and oxygen, as well as reduced cost of purchases of liquefied nitrogen and oxygen,” it said.

Upon the acquisition which is slated to be completed by the third quarter of the year, the group intends to expand Piasau Gas’s liquefied petroleum gas (LPG) within the Sarawak region under Shin Yang Group’s existing operating office and warehouse in Kuching, Sibu, Bintulu, Miri and various reachable quarry and reforestation depots.

The proposed acquisition is expected to be funded by internally generated funds.

Shares in Shin Yang closed five sen or 1.35% lower to 36.5 sen on Wednesday, valuing the group at RM438 million.

Source: The Edge Markets

Shin Yang Shipping proposes to acquire Piasau Gas for RM22.8m


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The furniture parks in Kuching and Tanjung Manis, which will be set up soon, will help Sarawak to double its timber export revenue from almost RM4 billion now to RM8 billion by 2030.

Deputy Minister of Plantation Industries and Commodities Datuk Willie Mongin said the parks are part of the state government’s policy under its post-COVID-19 Development Strategy 2030 which places a specific focus on producing more timber-based products.

“Apart from furniture, other value-added products that have been identified to contribute to this export target are engineered wood products, plywood-based and bamboo-based products.

“The parks will facilitate efficient horizontal and vertical integration with sustainably sourced raw materials,” he said in a statement here, today.

Willie said the timber industry has been and will continue to be an important economic sector for Sarawak in terms of employment opportunities, business creation, and export earnings.

On April 22, Sarawak Deputy Premier Datuk Amar Awang Tengah Ali Hasan reportedly said that Sarawak planned to set up furniture parks in Kuching and Tanjung Manis as part of its efforts to strengthen downstream timber operations through value-added wooden-based products.

The parks will be developed by Sarawak Timber Industry Development Corporation (STIDC) and it is expected to generate RM500 million in investment.

Sarawak recorded timber products exports worth RM3.9 billion in 2021.

Source: Bernama

Furniture parks to double Sarawak timber export revenue – Willie


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Integrated electronics manufacturing services (EMS) specialist, Escatec Sdn Bhd, has announced a new partnership with Zagreb-based electronics design house, Byte Lab, representing its ongoing strategic plan to grow into a major player in the global EMS industry.

In a statement, the Swiss-owned and Penang-headquartered Escatec said the move would enable it to offer cost-effective product development, design  and prototyping services in Europe.

It would also enable Byte Lab to offer customers that need mass manufacturing services with access to Escatec’s portfolio of highly competitive manufacturing locations in Malaysia, Switzerland, the United Kingdom, the Czech Republic and the United States.

Escatec strategic development director, Charles-Alexandre Albin said the  partnership would likely produce concrete results quickly as  customers have been indicating their desire to further control costs by shifting some product requirements closer to them in Europe.

“We see this as a very significant development as Byte Lab, in essence, has become an extension of Escatec’s workbench, while Escatec becomes the exclusive mass manufacturing partner for Byte Lab,” he added.

Established in 1974, Escatec offers a fully integrated A-to-Z electronics and box build manufacturing services – from design and  development, prototyping and product certification, to mass volume production and after-sales services – to a global customer base of major OEM brands. 

The group’s revenue in 2021 exceeded US$300 million (US$1=RM4.35), and it is projected to grow strongly again this year.

Source: Bernama

Escatec partners Byte Lab to boost design services offering in Europe


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Smart glass manufacturer Chiefway Malaysia today launched its new plant here that will develop and manufacture smart glass locally as the popularity of smart homes and eco-friendly developments continue to grow.

Smart glass or switchable glass, is glass that uses advanced technologies to block light and insulate. Smart glass can change from translucent to transparent, blocking some, all or certain wavelengths of light. This is a useful piece of technology that has a wide range of applications, simultaneously catering to privacy, health and environmental concerns.

Chiefway Malaysia CEO and founder Jeffrey Chong said the current local and regional smart glass markets are largely dominated by China and other North Asian countries. Hence this new plant is an important step in establishing Malaysia in this new and booming smart glass market.

“The price of smart glass is (largely) unaffordable to Malaysians. That’s the reason we are here. We have the technology and we manufacture (smart glass) ourselves to make it more affordable for Malaysians. We’re moving towards bigger volume (production), which can reduce the costs,“ Chong told the media at the launch of the plant.

The plant allows Chiefway Malaysia to further expand its manufacturing capabilities and meet the growing needs of Malaysia and regional markets. The facility is 8,000 sq ft in size, with high tech manufacturing devices and patented tools to help develop Chiefway’s smart glass formulation.

For its first phase, Chong said it invested RM1.2 million for the plant, which is able to produce 2,000 meters2 of smart glass every month. This allows Chiefway Malaysia’s production to cater to both the local (70%) and export (30%) markets. This year, Chong expects RM8 million sales from the Malaysian market. It is also exporting smart glass to Europe and the Middle East.

For Malaysia, the presence of a local manufacturer presents several benefits for local developers and construction companies as it enables them to procure smart glass at reasonable prices with a quick turnaround between orders and deliveries. A local option also ensures developers that they will receive their delicate and high-tech smart glass in safe and secure condition.

To help amplify the rollout of smart glass products and projects, Chiefway Malaysia also signed a memorandum of understanding with security group Dormakaba Malaysia and awning specialist Datsen Malaysia. The collaboration looks to enhance its services within the Malaysian market while also creating pathways for Chiefway to further penetrate global markets.

Chiefway offers a wide range of smart glass products to meet a variety of users’ purposes. Some of the product ranges include hollow glass, brilliant colour glass, fire-rated glass, one-way glass, double-glazed glass and pattern blinds smart glass.

Source: The Sun Daily

Chiefway Malaysia unveils smart glass manufacturing facility


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Frontken Corp Bhd’s Taiwan plant capacity expansion will drive the group’s future growth, according to Hong Leong Investment Bank (HLIB) Research.

In a note on Tuesday (April 26), HLIB analyst Tan J Young said Frontken’s Plant 2 Phase 1 expansion is expected to be completed by the first half ending June 30, 2022 (1HFY22), slightly ahead of its initially scheduled 2HFY22.

“Phase 2 and 3 extensions are expected to be completed by next year. Although Plant 2’s land size is almost the same as Plant 1, the former’s production capacity can be more than double as new technology requires less floor space,” he added.

The HLIB analyst said that based on the latest corporate update, the research house opined that contributions from the Taiwan Plant 2’s Phase 1 expansion will lift Frontken’s FY23 core net profit by 22%, while that of FY22 will remain unchanged.

Elsewhere, Tan said that Frontken is in negotiations with an original equipment manufacturer — an existing client in Taiwan — on a large volume-based project to support local foundries. He added that if the project materialises, further expansion will be required, for which it plans to repurpose idle space in its oil and gas (O&G) site.

“Capex (capital expenditure) for this project is estimated to be RM3.5 million to RM4 million, including the purchase of testing and measuring equipment. Labour issues have improved after Chinese New Year and it managed to hire some from China.

“The O&G business has improved a lot with more works and enquiries to the extent of insufficient space to put equipment while customers are very demanding. It has yet to observe any impact due to China’s Covid-19 lockdown and customers from Dalian continue to send parts to Singapore for cleaning,” the analyst added.

Tan maintained his “buy” call on Frontken but lowered his target price for the stock to RM3.20 (from RM4.36 previously) based on a price-earnings (P/E) multiple of 30 times (previously 50 times) FY23 earnings per share.

“Considering the US Fed’s hawkish stance to tame inflationary economy, we lower Frontken’s P/E valuation to 30 times, which is 0.5 standard deviation above its five-year P/E mean of 24 times. We like Frontken for its multi-year growth ahead on the back of: i) a sustainable global semiconductor market outlook; ii) robust fab investment; iii) leading-edge technology (7nm and below); and iv) a strong balance sheet (net cash of RM315 million or 20 sen per share) to support its Taiwan expansion,” he added. 

The analyst also said demand projections remain strong without order reduction thus far. 

“Frontken shared that it continued to experience the price pressure norm despite foundries increasing their average selling prices. 

“The earnings before interest, taxes, depreciation and amortisation (EBITDA) margin should increase thanks to the improvement in O&G and expecting O&G to achieve double-digit growth at the profit after tax level,” he added.

At the time of writing on Tuesday, Frontken shares had gained six sen or 2.33% to RM2.63, giving the group a market capitalisation of RM4.16 billion.

Source: The Edge Markets

Capacity expansion to drive Frontken’s future growth, says HLIB Research


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Iconic Worldwide Bhd (IWB) will be doubling the production capacity of its new RM200mil Batu Kawan plant by the middle of the year.

Group executive director James Tan said the plant will be able to produce 300 million pieces of nitrile gloves per month compared to 150 million per month presently.

“In June, the six new production lines installed earlier this year will start operations,” he told StarBiz.

At the moment, Tan said the company had bookings for 200 million pieces per month for its nitrile gloves, which will be gradually exported to the United States, Africa, Hong Kong and Europe every month.

“This year, we will ship out about 3.6 billion pieces of nitrile gloves with a value of over RM400mil,” he said.

The group will produce Covid-19 test kits in the fourth quarter, serving as an original equipment manufacturer for a US brand name.

“The target is to manufacture one million test kits monthly for the local market.

“The value of the output is about RM7mil,” said Tan.

He said the group’s face masks, gloves and test kit business would generate about 50% of the group’s revenue in 2022.

“We have been getting solid inquiries for these products from Europe and the US.

“We expect the healthcare sector to restock in the second half.

“Currently, the monthly face mask output is about 20 million pieces and it is expected to increase at a 20% rate monthly,” he said.

Tan said the face mask, glove and test kit business would contribute 80% of the group’s revenue next year.

“We are currently producing 220 million pieces of face masks per annum with a value of RM100mil for the local market,” he added.

Tan said analysts predict the global nitrile glove market to reach US$20bil (RM84bil) by 2030.

“The food and beverage and healthcare sectors are the main drivers of the demand,” he said.

Tan said the price of nitrile, an essential raw material for gloves, dropped from US$4,000 (RM16,838) per tonne a year ago to about US$1,100 (RM4,630) per tonne currently.

The group’s RM130mil Iconic Point commercial project in Juru will generate the remaining 50% of its 2022 revenue.

“The RM130mil gross development value (GDV) will materialise in the first half of 2022.

“We have achieved about 80% of the GDV in the 2022 financial year accounts,” Tan said.

IWB owns 50 acres of land in Johor, Melaka, Port Dickson and Penang.

“We plan to build residential and commercial projects for the land bank,” said Tan.

The group plans to launch 700 units of affordable housing and commercial shop lots with a RM250mil GDV in Bukit Mertajam in 2022.

“We will build high-rise units priced between RM200,000 and RM400,000.

“In 2023, the property division’s contribution will drop to 20%,” Tan said.

He said the group wants to acquire more land bank in Seberang Prai and on Penang island for its property business.

For its third quarter ended Dec 31, 2021, IWB’s net profit rose to RM4.68mil from RM3.28mil in the previous corresponding period, while revenue improved to RM20.88mil from RM16.97mil a year earlier.

For the nine-month period ended Dec 31, 2021, IWB’s net profit grew to RM11.81mil from RM7.58mil in the previous corresponding period, while revenue increased to RM58.46mil from RM33.43mil previously.

The group’s earnings were bolstered by higher contributions from its property development and manufacturing segments.

Source: The Star

Iconic’s new plant to double glove production


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Nasdaq-listed printed circuit boards (PCBs), radio frequency (RF) components and RF microwave/microelectronic assemblies manufacturer TTM Technologies Inc is investing US$130 million (about RM550 million) to set up a plant in Penang.

In a joint statement on Monday (April 25) in conjunction with the plant’s ground-breaking ceremony, Malaysian Investment Development Authority (MIDA), InvestPenang and TTM said the latter’s expansion to Penang is in direct response to customer requirements for advanced technology PCB supply chain resiliency and diversification in regions beyond China.

They said TTM selected Penang as the location for this new plant after an extensive review of multiple countries with careful consideration of investment and operating costs, customer proximity and supply chain support.

Penang is also attractive due to its well-established electrical and electronics (E&E) industry ecosystem.

The new plant will serve TTM’s global commercial markets including networking communications, data center computing, and medical, industrial, and instrumentation.

Penang Chief Minister Chow Kon Yeow said Penang is recognised as one of the major players in the global semiconductor industry, particularly in the areas of assembly and test as well as equipment manufacturing.

“The state, via InvestPenang, strives to bolster our efforts to outpace investors’ expectations by providing continuous facilitation and utmost support along the journey,” he said.

This state-of-the-art, highly automated plant will be built upon approximately 27 acres of industrial land at Penang Science Park.

Construction is expected to take 12 to 15 months followed by equipment installations in mid-2023.

Pilot production is targeted to begin in the second half of 2023, with volume production commencing in 2024 and gradually ramping up to full Phase 1 capacity in 2025.

TTM expects the new plant to achieve full run rate revenue of approximately US$180 million (approximately RM761.5 million) in 2025.

The factory has also been planned to support a 25% upside Phase 2 expansion.

TTM president and chief executive officer Thomas Edman said the plant marks the start of an important new chapter to support customers with differentiated high value-add engineering and PCB product solutions on a global basis.

“As an early-mover into Southeast Asia for the production of advanced technology PCBs, TTM is responding to our customers’ needs for supply chain resiliency, regional diversification and growth capacity,” he said.

Source: The Edge Markets

Nasdaq-listed TTM Technologies to set up US$130 million plant in Penang


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Selangor-based Medison PPE Sdn Bhd is spreading its wings to Sarawak with the setting up of a surgical face mask manufacturing plant at Vista Industrial Park here.

Medison PPE’s expansion to Sarawak is via Borneo Medison Sdn Bhd, a 50:50 joint venture with Sarawakian investors.

Under the brand name Medison, the parent company also manufactures disinfectant products like sanitiser, medical and non-medical gloves, personal body care and other healthcare products as well as personal protective equipment (PPE).

Medison PPE director David Quah Khuon Huat said Borneo Medison would invest about RM5mil in the surgical face mask manufacturing plant – the first of its kind in Sarawak.

The investment includes the acquisition of a double-storey semi-detached industrial building at Vista Industrial Park, installation of machinery and purchase of raw materials locally.

“The plant is expected to commence operations in three to six months. It will start with three production lines with a production capacity of 200,000 pieces of surgical face masks per day,” he told reporters.

He said that depending on demand, the plant could increase its production lines to 10 to beef up output.

After face masks, Borneo Medison plans to go into the manufacturing of sanitisers and other healthcare products.

Quah said Borneo Medison expects to sell at least two million pieces of surgical face masks per month in Sarawak, which has an estimated monthly demand of 10 million pieces.

Currently, Medison face masks are marketed and sold in Sarawak by distributors and dealers. Medison surgical face masks are sold for RM28 per box (50 pieces).

He said Medison PPE decided to set up a manufacturing plant here to cater for local demand and address the logistical problems to ship them from Peninsular Malaysia to ensure constant supply at all times.

Borneo Medison director Datuk Ismail Suut said the Kuching plant will be on par with international standard, given its state-of-the-art production machinery.

Ismail said to provide certified face masks of surgical grade, only medically graded materials will be sourced during the pre-manufacturing phase.

Source: The Star

Medison to set up face mask plant in Sarawak


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Can maker Can-One Bhd is partnering a local private developer to build factories and hostel on two freehold plots of land it owns via a subsidiary in Mukim Kapar, Klang, Selangor, that will have an estimated gross development value of RM478.8 million.

Can-One’s wholly-owned TOGO Greenland Sdn Bhd (TGSB) inked a development agreement with WorldKlang Group Property Development Sdn Bhd (WKGPD) for the proposed project — dubbed Excellent Technology Park — on the lands, which measure a total of 2.96 million sq ft, its bourse filing showed.

Can-One said the plots were acquired in 2020 at RM103.55 million, and that the development represents an opportunity for the group to unlock the land’s potential and realise its investment in the lands without incurring additional borrowings, as WKGPD shall carry out the development at its own costs and expenses.

The project’s estimated gross development and costs — including building costs and TGSB’s share of profits — are estimated at RM339.3 million. Under the deal, TGSB is entitled to an estimated share of profit of over RM120 million over the five-year development period, subject to completion of the development and the sale of developed units.

“The board is of the view that the prospects of the development is favourable, as the Lands are strategically located within Klang.

“Furthermore, the development is expected to be transformed into a new future one-stop industrial park in Klang, Selangor, complete with the necessary infrastructure, amenities and public utilities,” it said, adding that the project is expected to be completed by 2027.

Shares in Can-One settled one sen or 0.32% higher at RM3.16 on Friday (April 22), giving the group a market capitalisation of RM608.99 million.

Source: The Edge Markets

Can-One partners private developer for RM478.8 mil GDV commercial project on its freehold plots in Kapar


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QES Group Bhd is expected to ride on the semiconductor industry growth and has attractive growth prospects, a strong presence in the ASEAN region and stable recurring income.

Mercury Securities Sdn Bhd said QES Group has a diversified base of more than 3,800 customers across the ASEAN region, primarily from the semiconductor, electrical and electronics (E&E), metal and automotive sectors.

The company’s revenue stream is also well-diversified, where each customer does not contribute more than 10 per cent of total revenue.

Moving forward, the company plans to expand its regional presence in China via QES Hong Kong.

Mercury Securities noted that QES Group had completed the renovation of its Hicom-Glenmarie’s new factory at Shah Alam, running at a 50 per cent utilisation rate.

“We expect the factory to be fully utilised by the end of the financial year (FY) 2022,” the research firm said in a recent note.

The new factory has an overall space of 81,000 sq ft, an increase from 39,000 sq ft, where 35,000 sq ft is allocated for manufacturing.

With the increased space, the company can increase its capacity from 50-80 machines to approximately 80-100 machines a year.

The company is also building another new factory in Batu Kawan, Penang, to leverage Penang’s existing matured supply chain.

The factory will have a manufacturing space of approximately 100,000 sq ft to house a combined QES Mechatronics, QES Vision, AETM (a joint venture between US-based Applied Engineering Inc, which holds 70 per cent and QES Group 30 per cent), and QES Distribution Penang operations.

Construction of the factory is expected to begin in the second half (2H) of 2022 onwards.

Mercury Securities also noted that QES Group has a consistent annual recurring income of approximately RM40 million via the maintenance and service of large equipment installed base, which contributes approximately 25 per cent of group revenue.

“The cash balance remains strong above RM79.4 million as of 31 December 2021, consistent net cash since FY20,” the research firm said.

QES Group is currently managed by its managing director Chew Ne Weng who has more than 30 years of experience in the engineering industry and is responsible for its success.

Mercury Securities noted that the company has a long-standing management team with more than ten years of experience in key operational and technical functions.

“We recommend a Buy call on QES Group with a target price of RM0.66 based on FY23 earnings per share (EPS) of 3.3 sen and peers’ average price-to-earnings (PE) of 20.0x,” the research firm noted.

Key risks include material supply chain disruption and slower-than-expected contract flows.

Source: NST

QES Group to ride on the semiconductor industry growth, says Mercury Securities


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Convenience food manufacturer Kawan Food Bhd is buying five parcels of land measuring 7.08 acres in Shah Alam, Selangor for a total of RM50.46 million, as part of its expansion plans.

Kawan Food said it intends to build a second manufacturing facility for its operations on the proposed site. It plans to expand its cold room facility to include a warehouse and cold chain distribution for in-house and external products, equipped with new technology such as robotic automated warehouse to cater for frozen, chilled and ambient food products.

“This would enable Kawan Food to explore new ideas and growing product diversity for new markets. Also, with the strategic location in Shah Alam, there is potential reduction in logistic cost for deliveries in local market,” it said in a bourse filing on Thursday (April 21).

Kawan Food’s wholly-owned subsidiary Kawan Food Manufacturing Sdn Bhd (KFMSB) has entered into a sale and purchase agreement with RGP Warehouse Solutions Sdn Bhd to buy three parcels of land totalling 4.07 acres for RM28.94 million or RM163.199 per sq ft. KFMSB is also in the process of acquiring another two parcels of land totalling 3.01 acres from Perbadanan Kemajuan Negeri Selangor (PKNS) for RM21.52 million.

The group said it will finance the land acquisition through internal funds and/or external borrowings.

“The acquisition is in line with Kawan Food’s corporate strategy of expanding and growing its operations, and diversification, as well as exploring and developing new segments of the industry, manufacturing a variety of products including plant-based products, etc, in chilled ambience, aside from frozen food. This business strategy will provide an opportunity for Kawan Food to create greater economic value and increase the earnings potential of the group,” it added.

Barring any unforeseen circumstances, the land acquisition is expected to be completed by the last quarter of 2022. The acquisition is not expected to have any material effect on the group’s gearing for the financial year ending Dec 31, 2022.

Kawan Food shares closed up 3 sen or 1.83% at RM1.67 on Thursday, bringing it a market capitalisation of RM600.4 million.

Source: The Edge Markets

Kawan Food buys land in Selangor to build second manufacturing facility


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The Agriculture and Food Industries Ministry (MAFI) is optimistic that Malaysia can potentially transform into a leading biodegradable hub in Southeast Asia through the partnership between local biotechnology firm Free The Seed Sdn Bhd and Hotpack Packaging Industries LLC (Hotpack) of the United Arab Emirates (UAE).

Minister Datuk Seri Ronald Kiandee said the collaboration involves the setting up of up to 10 new biodegradable packaging factories in Gurun, Kedah, worth RM400 million in the next 10 years.

“The investment will be RM100 million for the first three to five years, and Hotpack plans to increase its investment to RM400 million within 10 years.

“The construction of the first 3,200-square metre plant will begin next month (May) and is expected to be completed in August 2022,” he said during the groundbreaking ceremony at Free The Seed’s facility here today.

Free The Seed, which makes biodegradable products from rice straws, will be Hotpack’s technology and operational partner, providing raw materials, expertise, workforce and technical know-how to the UAE company.

Hotpack will then manufacture and provide a new line of biodegradable products for its markets globally, including the Gulf Cooperation Council countries.

The first facility—also Hotpack’s first-ever factory in Southeast Asia—is expected to produce 70 million units of fast-moving consumer goods packaging products annually.

The partnership between Free The Seed and Hotpack came about through business matching initiated by the Malaysian Bioeconomy Development Corporation at the Expo 2022 Dubai in February this year.

Ronald said Hotpack’s investment is expected to create 300 direct job opportunities in the next three to five years, and the number will rise to 1,200 job opportunities among the skilled and semi-skilled workforce over 10 years.

According to him, the partnership will also see biodegradable packaging produced using more diverse agricultural wastes such as pineapple leaves and other agro-biomass materials.

“Such a sustainable and circular model will lead to better incomes for more farming communities in Malaysia, while attracting foreign investors, protecting the environment and adding value to sustainable agriculture in Malaysia and UAE,” he said.

The partnership between Hotpack and BioNexus-status firm Free The Seed will further strengthen economic relations between the two countries, the minister said, adding that the trust and confidence shown by the UAE company towards local firms like Free The Seed is a testament to the innovativeness and high value offered by Malaysian agriculture.

Source: Bernama

Malaysia can become leading regional biodegradable hub through RM400m UAE investment, says Agriculture and Food Industries Ministry


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A continued spike in natural gas prices is likely to fuel stronger exports for Malaysia this month, after the country’s exports hit an all-time high last month.

While natural gas contributes only 4% of Malaysia’s exports, the global search for alternative fuels due to the Russian-Ukraine conflict is expected to push the demand for natural gas higher.

The conflict in Europe has sparked concerns over crude oil supply as major economies are imposing sanctions on Russia, which is the world’s third largest oil exporter.

It is noteworthy that the United States has banned purchases of Russian oil and natural gas, while the United Kingdom said it would phase out Russian oil imports by end-2022.

The European Union, on the other hand, said it would make Europe independent from Russian energy “well before 2030.” The continent gets a quarter of its oil and 40% of its gas from Russia.

In a note issued yesterday, CGS-CIMB Research said the natural gas price index jumped 316.3% year-on-year (y-o-y) in March.

“We see an upside surprise to April’s exports and trade balance if the rate of increase in natural gas prices continues into the second half of the month, eclipsing the softer price growth in crude and palm oil,” it said.

CGS-CIMB Research added that while natural gas prices may spike further, crude and palm oil prices are likely to moderate.

“Daily data from April 1 to April 14 pointed to a likelihood of softer prices for both crude oil and palm oil which will likely see lower contribution to nominal export growth this month,” it said.

In March, higher commodity prices had led Malaysia’s exports to expand for the second straight month, surpassing market expectations.

Exports grew by 25.4% y-o-y to a record level of RM131.64bil. The market had predicted a growth of 10.4%.

Meanwhile, Malaysia’s imports also grew by 29.9% y-o-y to an all-time high of RM104.93bil.

Following the higher exports value than imports, Malaysia’s trade surplus widened to RM26.7bil, 10.3% higher than a year ago.

TA Research described Malaysia’s trade performance in March as impressive.

Looking ahead, the research house said Malaysia’s trade sector would continue to grow this year.

However, the pace of growth will normalise after the country’s strong exports growth of 26% in 2021.

“While the moderation in the external trade has been in line with our expectations, the pace of growth for both exports and imports has been stronger than our projections.

“As a result, we have revised our growth projection higher for both exports and imports to 9.2% y-o-y and 9.9% y-o-y, respectively,” it said.

TA Research had previously forecast an exports growth of 5.2% y-o-y and an imports growth of 4.5% y-o-y in 2022.

“Overall, we expect growing foreign demand for electrical and electronics and commodities to support expansion in exports in the coming months,” it said in a note.

Meanwhile, Hong Leong Investment Bank (HLIB) Research said Malaysia would continue to benefit from the current environment of high commodity prices.

This is considering the country’s status as a net exporter of commodities.

“Nevertheless, the prolonged supply chain disruptions as a result of lockdowns in China and the ongoing military conflict in Ukraine pose downside risks to the production and trade activity, which could have adverse impacts on the global and domestic economy.

“Hence, we maintain our expectation for Bank Negara to be patient and increase the overnight policy rate by 25 basis points in the fourth quarter of 2022,” it said.

CGS-CIMB Research also said China’s lockdowns as a result of its zero-Covid policy might prolong the global supply chain problems.

“Various reports point to an increase in the number of shipment delays following the Hong Kong lockdown which is likely to spread into other major ports near Shanghai.

“So far, Malaysian trade data had shown some impact following the lockdowns, as imports from Hong Kong fell in February by 22.7% y-o-y (the lockdowns began in late January) before rebounding to 19.7% in March,” it said.

It is noteworthy that China accounts for 14% of Malaysia’s export share.

Amid the challenges, the country’s overall outlook for trade balance will remain positive in the near term, according to CGS-CIMB Research.

Nevertheless, the brokerage also noted that sharply rising export prices could weaken demand and affect export volume if demand for such goods is elastic to changes in prices.

This would in turn weaken the country’s current account.

“However, export volume up to February has continued to increase, negating this assumption,” stated CGS-CIMB Research.

Source: The Star

Natural gas to fuel exports this month


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Plastic material and resin manufacturer Luxchem Corp Bhd has proposed to acquire a leasehold property in Petaling Jaya, Selangor, for a total consideration of RM19.88 million.

The company said it intends to shift its head office to the newly acquired property, amid space constraints at its existing head office situated in Damansara Utama.

According to Luxchem’s bourse filing, Luxchem Trading Sdn Bhd (LTSB), a wholly-owned subsidiary of the company, has entered into a sale and purchase agreement (SPA) with Worldwide Emergency Assistance (Malaysia) Sdn Bhd to purchase the whole of Block N at Jaya One, Petaling Jaya.

The property has a built up area of 28,578.2 sq ft, with a 99 years leasehold tenure due to expire on May 28, 2105. It is also free from all encumbrances and not subject to any restriction in interest.

Luxchem said the purchase price was arrived at on a willing buyer-willing seller basis after taking into consideration the assessment on the location, accessibility, suitability of the site, availability of public services and development of the surrounding area.

“The settlement of the purchase price will be funded by cash via internally-generated funds and bank borrowings,” it said, adding that the proposed acquisition is expected to be completed within three months from the date of the SPA.

Luxchem’s share price finished 2.14% or one and a half sen lower at 68.5 sen on Wednesday (April 20), bringing it a market capitalisation of RM732.86 million.

Source: The Edge Markets

Luxchem to acquire Block N at Jaya One for RM19.88 mil


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A delegation from the Port of Rotterdam, Netherlands, alongside other parties for the proposed Biohub Project, paid a visit to Bintulu Port Holdings Berhad (BPHB) from April 16-17.

The other parties were Malaysia Investment Development Agency (MIDA), Sarawak Economic Development Corporation (SEDC) and Regal Lands Sdn Bhd (RLSB).

The corporate visit was conducted pursuant to the signing of the second Memorandum of Understanding (MoU) between the parties on June 10 last year, covering the second phase of the project feasibility study.

The two-day visit included a meeting between BPHB’s management team led by the Group’s Chief Executive Officer, Datuk Mohammad Medan Abdullah, with the Port of Rotterdam’s team led by its Adviser Andre Gijsbert.

BPHB said it is looking forward to seriously exploring the potential cooperation and business growth opportunities coming from this Biohub Project.

This project is also in line with the Group’s sustainable goals as have been outlined in the Bintulu Port Group Smart Digital Green Port (SDGP) Blueprint.

PHB is a port operator, namely for Bintulu Port and Samalaju Industrial Port, which combined are the main import and export gateways to the nation and Sarawak.

Bintulu Port is globally recognised as one of the largest Liquefied Natural Gas (LNG) export terminals in the world in a single location.

“Samalaju Port is a special purpose port dedicated to serve all the industries located at the Samalaju Industrial Park.

“Therefore, both ports have the potential to play a vital role in the global supply and logistics chains and would be well positioned in contributing to the success of the Biohub Project,” it said in a statement.

Source: New Sarawak Tribune

BPHB explores cooperation and growth from biohub project


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Sarawak Cable Bhd (SCable) has teamed up with privately-held Hercules Engineering (Sea) Sdn Bhd to jointly revitalise the business of SCable’s wholly-owned steel fabricating subsidiary Sarwaja Timur Sdn Bhd and to develop synergies between SCable and and Hercules in order to bring Sarwaja Timur to the next level of success for the mutual benefit of both groups.

The principal activities of Sarwaja Timur are manufacturing, fabrication, galvanising and sale of steel structures.

“Sarwaja Timur is in need of funding and management and technical expertise to revitalise its business and Hercules agrees to use its best endeavours to provide the management and technical expertise to Sarwaja Timur and to assist it in procuring vendor financing for its business in Malaysia and overseas,” said SCable in a bourse filing on Monday (April 18).

SCable has on Monday entered into a memorandum of agreement (MoA) with Hercules for the purpose.

Founded in 1972, Hercules specialises in manufacturing steel and rubber engineering devices, construction equipment, construction cementitious grout, bitumen & waterproofing.

SCable said the group and Hercules are desirous of cooperating with each other to revitalise Sarwaja Timur’s business.

“The MoA will not have any effect on the earnings per share, net assets per share, gearing, share capital and substantial shareholdings’ structure of the company for the financial period ending May 31, 2022. However, it is expected to contribute positively to the future earnings of SCable Group,” it added.

SCable shares closed down 0.5 sen or 2.86% at 17 sen on Monday, bringing a market capitalisation of RM65.94 million.

Source: The Edge Markets

Sarawak Cable teams up with local firm to revitalise steel fabricating arm


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The survey sample involved 174 Japanese companies in Malaysia and was conducted online from Jan 19 to Feb 18 this year

About 56.3% of Japanese manufacturing companies in Malaysia have recovered operational activities to above pre-Covid levels, according to the Japan External Trade Organisation (Jetro) Kuala Lumpur and the Japanese Chamber of Trade and Industry Malaysia (Jactim) survey.

Some 43.7% of Japanese non-manufacturing companies in the country stated their business performance at present is at the same levels as the pre-Covid-19 period.

“Operation at roughly half of the nonmanufacturing companies still had not recovered to pre-Covid-19 levels,” Jetro and Jactim said in a report on Tuesday.

The survey sample involved 174 Japanese companies in Malaysia and was conducted online from Jan 19 to Feb 18, 2022.

It saw a clear difference between manufacturing and non-manufacturing on operational issues.

“For manufacturing, worker shortage stood out at 66.3%, followed by logistics disruption issues such as late delivery of products or parts or raw materials, sea and air freight issues including space, higher fees and delay.

“For non-manufacturing, the hindrance was the restriction on in-person activities such as restriction on sales activities in Malaysia like visiting clients,” the statement noted.

The impact of the floods in parts of Malaysia at the end of 2021 continues with some respondents stating their suppliers are still suffering from some damage.

“As a countermeasure to avoid supply chain issues, some had changed their domestic raw materials or parts suppliers,” it noted. The survey found that investments continue to be on an expansion trend for both manufacturing and non-manufacturing companies at roughly 20%.

The respondents stated they continue to expand due to the companies’ shifting to the high-value product, changing needs on the back of the growing middle class, higher English proficiency and education level as well as lower costs here compared to Singapore.

According to the respondents, Malaysia’s main attraction as a mediumto long-term investment destination was due to the level of English proficiency of its workers and citizens, the country’s safety and security as well as a good living environment.

The companies, however, had issues with the complicated visa application process, political uncertainty and frequent changes in its regulation.

On labour matters, the main issues with the sample surveyed were the rise in wages, various expatriate employment and foreign worker policy matters.

“Duration and complexity of employment pass application process for expatriates continued to be an issue,” the release revealed.

Regarding the foreign worker policy, the survey saw about 60% of manufacturing companies wanted to hire new workers.

“In particular, the manufacturing sector wants hiring of new workers to resume in light of the serious foreign worker shortage,” it further said.

The respondents also requested a standardised government announcement method and provision of releases in English.

Source: The Malaysian Reserve

Some 56.3% of Japanese manufacturers recovered to above pre-Covid level


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NASDAQ-listed Lattice Semiconductor, the low power programmable leader, has expanded its operations in Malaysia by setting up a new engineering and operations hub in Penang to support the company’s accelerated growth.

In a joint statement, Lattice Semiconductor and InvestPenang said the company would occupy a 6,000 sq ft office space in Bayan Baru, Penang and would focus on applications and research and development (R&D) engineering, as well as operations, with the aim to have a headcount of over 30 by the end of 2022.

Site lead for Lattice Malaysia, Friiscor Ho said Penang is a well-known home to top tech talent, making it an ideal choice for it to expand its global presence here.

“We have an exciting growth plan in this market with an active hiring strategy. We are well positioned to work closely with our partners in the region to accelerate our strategic execution.

“We look forward to building on the company’s continued strong growth in the field-programmable gate array (FPGA) market,” Ho added.

Meanwhile, Chief Minister Chow Kon Yeow said Lattice Semiconductor would be a great addition to the state’s emerging technology industry and well-developed ecosystem.

He said Penang is making significant progress in positioning itself as a global innovation hub and there is a growing presence of global semiconductor leaders that opted for Penang to conduct their research, design and development activities.

Source: Bernama

Lattice Semiconductor sets up engineering, operations hub in Penang


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The local rubber industry has the potential to expand after the country recorded rubber exports worth RM71 billion last year, said Minister of Plantation Industries and Commodities Datuk Zuraida Kamaruddin.

She said out of that value, rubber gloves remained the main export earner, contributing RM54.81 billion, which was 55.4 per cent higher than 2020.

“Various programmes have been implemented by the Malaysian Rubber Board (MRB) to help rubber industry players, including providing incentive packages aimed at supporting rubber products manufacturers,” she said during a plant visit to Meditech Gloves Sdn Bhd here, today.

Zuraida said MRB had also introduced the Industry Linkage Fund to encourage industry-academia cooperation through research and development projects that have the potential to contribute to the development of the rubber industry.

She said the ministry is also striving to raise the floor price of scrap rubber from RM2.50 to RM3.50 per kilogramme to increase smallholders’ income.

Meanwhile, MRB director-general Datuk Dr Zairossani Mohd Nor said the East Coast Latex Corridor programme was among the efforts to encourage national latex production.

He said there were also government allocations to develop the infrastructures for latex collection centres and the use of technology to encourage smallholders to produce latex in large quantities.

“The country needs 400,000 tonnes of latex a year but the local supply can only produce 40,000 tonnes. Almost 90 per cent is imported from Vietnam and Thailand.

“So local latex production needs to be increased. Actually, the domestic rubber production is sufficient, only that it is produced in scrap form,” he said.

Zairossani said the country’s rubber plantation acreage totalled 1.04 million hectares, with about 400,000 hectares in the East Coast states.

He added that the government planned to make Sarawak a latex production hub. The state’s rubber acreage is close to 50,000 hectares.

An MRB source has clarified that latex and rubber are different products. Although last year’s domestic rubber production was about 500,000 tonnes, less than 10 per cent were in latex form, the bulk being scrap rubber.

If this 500,000 tonnes were in latex form, there is no necessity to import latex from other countries, the source said.

Source: Bernama

Minister: Rubber sector has potential to grow, exports worth RM71b recorded in 2021


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DRB-Hicom Bhd said Wednesday it has inked a memorandum of understanding (MOU) with China’s Zhejiang Geely Holding Group Co Ltd (Geely) for the purpose of developing and promoting the Automotive HiTech Valley (AHTV) in Tanjong Malim, Perak.

AHTV aims to be the next generation vehicle hub in Tanjong Malim, covering extensive automotive and mobility solutions value chain from a full-fledged high technology research and development (R&D) centre to a manufacturing cluster as well as supporting services and associated ecosystem including logistics, research university, training and learning institutions within a smart city, DRB-Hicom said in a bourse filing.

DRB-Hicom said the MOU will add value to the company as it will become a strategic platform for both parties to explore means of collaborating towards the establishment of this comprehensive “Automotive City”, the development of which is intended to bring extended multiplier effects through the set-up of an automotive industry cluster in Tanjong Malim, attracting investors and vendors from China and from other parts of the world.

The MOU will be effective on the date of the MOU and will expire after a period of six months.

Geely is a global mobility technology group headquartered in the city of Hangzhou in southeast China’s Zhejiang province. It owns and manages a number of brands including Geely Auto, Lynk & Co, ZEEKR, Geometry, Volvo Cars and Polestar. 

The group also holds a 49.9% stake in national carmaker Proton Holdings Bhd.

DRB-Hicom shares were unchanged at RM1.48 on Wednesday, valuing the group at RM2.86 billion.

Over the past one year, the counter has declined 23.32%.

Source: The Edge Markets

DRB-Hicom inks MOU with China’s Zhejiang Geely to develop, promote Automotive HiTech Valley in Perak


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Malaysia’s industrial production has been projected to continue to grow this year as businesses increase production activity to cope with growing demand.

To recap, in line with the research arm of MIDF Amanah Investment Bank Bhd’s (MIDF Research) expectation, Malaysia’s industrial production index (IPI) growth moderated further to 3.9 per cent year on year (y-o-y) in February 2022, the slowest annual growth in five months.

“Overall, we think demand outlook will be better this year in view of stronger economic growth, further reopening of the economy, growing domestic spending and still robust external demand,” MIDF Research said.

“Nevertheless, the near-term production outlook will be subject to downside risks from external developments, particularly the Russia-Ukraine conflict and extended lockdown in China.

“In other words, business activities may be impacted by the challenges from prolonged disruptions in the global supply chain and rising production costs due to high commodity prices.

“Based on the latest Malaysia’s manufacturing PMI which fell to 49.6 in March 2022 (50.9 in February 2022), Malaysia’s manufacturing growth moderated as businesses were impacted by the supply disruptions such as delayed shipments, and shortages of materials and containers.”

For the full year 2022, MIDF Research maintained its forecast for IPI growth at 4.3 per cent, compared to a growth of 7.2 per cent in 2021.

As for the research arm of Kenanga Investment Bank Bhd (Kenanga Research), its 2022 manufacturing index forecast has been retained at seven per cent (9.5 per cent in 2021).

“Manufacturing output will likely remain pressured in the near-term, especially amid heightened external risks coming from prolonged global supply chain issues, China’s Covid-19 lockdown measures, and the ongoing Russia-Ukraine conflict; this is evident from Malaysia’s PMI falling into contraction in March (49.6; February: 50.9),” Kenanga Research said.

“On the other hand, domestic demand should continue recovering as local Covid-19 cases decline and following the recent reopening of international borders.”

Source: Borneo Post Online

Malaysia’s industrial production will continue to grow this year


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