More electric vehicle (EV)-related incentives are in store in the revised Budget 2023, said Natural Resources, Environment and Climate Change Minister Nik Nazmi Nik Ahmad.

Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim will table the revised Budget 2023 in the Dewan Rakyat on Feb 24.

“The Government is looking forward to announcing more EV-related incentives in the revised Budget 2023,” said Nik Nazmi at the memorandum of understanding signing ceremony between Cyberview Sdn Bhd and Roda Emas Industries Sdn Bhd on the development of a smart mobility ecosystem in Cyberjaya here on Thursday (Jan 5).

Then finance minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz tabled a RM372.3 billion Budget 2023, the largest allocation in Malaysia’s history, on Oct 7, 2022.

Three days later, Parliament was dissolved to make way for the 15th general election on Nov 19.

After the Unity Government was formed, the Dewan Rakyat on Dec 20 unanimously approved a RM107.72 billion operating expenditure, and the Consolidated Fund (Accountable Expenditure) Bill 2022.

Nik Nazmi said that through incentives provided by the Government for EVs in 2022, the number of registered EVs had increased to over 2,000.

He said Malaysia, through the Low Carbon Mobility Blueprint 2021-2030, aims to install 10,000 EV charging points by 2025.

“Currently, more than 900 public EV chargers are installed by various charge point operators in Malaysia.

“To support the current and future growth of EVs in terms of charging infrastructure, regulations and standards are being updated to ensure the safety of these premises,” he said.

Nik Nazmi added that the Energy Commission had developed the EV charging system licence, and recommended the charge point operators involved in developing such infrastructure in the country to immediately obtain a valid licence for installation no later than March 31 this year.

In a separate statement, Cyberview and REISB said that their collaboration would leverage each other’s strengths, knowledge, networks, and capabilities in developing a smart mobility ecosystem that is centred on creating and fortifying the EV infrastructure, adoption of electromobility, and improving energy management in Cyberjaya.

“The partnership will also see Cyberview and REISB explore potential collaboration for the expansion of EV charging stations and management systems to other strategic locations in Malaysia,” they said.

Source: Bernama

More EV-related incentives in revised Budget 2023 — minister

The Coca-Cola Bottlers Malaysia (CCBM), the bottling arm of The Coca-Cola Company, remains positive about the long-term outlook of its business and the broader Malaysian economy, reinforcing its commitment to the communities it serves here.

From recycling initiatives through many partnerships and providing access to clean water for more than 22,000 villagers in rural Sabah to programme on empowering women economically, the company is dedicated to building sustainable communities in Malaysia, said chief executive officer of Bottling Investments Group for Singapore, Malaysia, and Brunei, Louis Balat.

“We intend to continue investing in this country, in the local talent pool, in innovation and technology, realising our World Without Waste vision, and in local communities,” he said in a statement.

Balat noted that the company would also continue to make significant infrastructure investments in order to build a stronger brand presence and to underpin its commitment to Malaysia.

To date, CCBM has invested RM1.3 billion cumulatively in building its world-class distribution hub at Halal Park in Bandar Enstek, Negeri Sembilan, and supporting the Malaysian economy.

As part of its growth, RM500 million from the investment was allocated to the plant’s expansion and a state-of-the-art automated storage retrieval system (ASRS) warehouse, tripling its plant’s site storage capacity and paving the path to sustainable manufacturing.

“The ASRS warehouse is a significant investment in sustainable manufacturing for CCBM to support volume growth, increase our operational efficiency across the supply chain, (and) reducing environmental impact by cutting energy consumption through automation, and is an important step in helping to future-proof our operations,” he said.

Source: Bernama

Coca-Cola positive on long-term outlook of business in Malaysia

The automotive sector’s total industry volume (TIV) is expected to increase by two per cent or 690,000 units in 2023 from an estimated 680,000 units in 2022, driven by the continued delivery of order backlogs, said Kenanga Research.

In a note, it said its projection is more upbeat than the forecast of 636,000 units by the Malaysian Automotive Association (MAA).

“We believe the odds are in favour of MAA raising its number along the way. The vehicle sales in 2023 will be driven by the continued delivery of order backlogs to the tune of 350,000 units (as at end-October 2022), which was unchanged compared to three months ago, indicating that deliveries had been replenished with strong new bookings especially for attractive new models even in the absence the Sales and Service Tax (SST) exemption.

“Additionally, the vehicle sales will be supported by launches of new battery electric vehicles which will enjoy SST exemption and other electric vehicle facilities incentives up to 2023 for completely built-up (CBU) and 2025 for completely knocked-down (CKD),” it said.

Kenanga Research said vehicle sales would remain robust in 2023 supported by the reopening of the economy; financial assistance to the low-income group and subsidies on fuels, electricity and selected food items to keep the cost of living in check; a relatively stable job market; and healthy household balance sheets of the M40 (middle 40 per cent income) group.

The research house also said it was unperturbed by the impact of the rising interest rates on vehicle sales.

“Assuming that the Bank Negara Malaysia raised the Overnight Policy Rate (OPR) by another 25 basis points (bps) to 3.00 per cent in January 2023, taking the total OPR hike for 2022 and 2023 to a total of 125 bps (from 1.75 per cent to 3.00 per cent), this would only raise the monthly instalment for, say a Perodua Myvi AV priced at RM60,000 (90 per cent financing margin, five-year tenure), by about six per cent from RM978 to RM1,035,” it said.

Kenanga Research also noted that the actual interest rates charged vary based on terms, financiers, car models, and the individual’s credit score, and newer popular models are most likely to be charged a lower effective interest rate range.

On its sector top picks, it selected MBM Resources Bhd and Bermaz Auto Bhd.

Source: Bernama

Auto sector’s TIV set to rise by 2% to 690,000 in 2023

Nasdaq-bound Graphjet Technology Sdn Bhd, the world’s leading graphite and single-layer graphene producer, has signed a letter of offer to build its RM400 million production facility in Phase 3 of the Malaysia-China Kuantan Industrial Park.

The company, which is heading for a US$1.5 billion (RM6.64 billion) listing, is the first and only one in the world to transform palm industry waste materials, palm kernels, into graphite and single-layer graphene.

Graphene is known as a super material and was attributed the Nobel Prize in Physics in 2010.

“The revolutionary patented technology will transform palm kernel shell, a waste from palm kernel production, into single-layer graphene, at a significantly lower cost than the current production of single-layer graphene.

“The production plant is expected to produce 10,000 tonnes of graphite and 60 tonnes of single-layer graphene annually. It is expected to generate revenue of RM3.6 billion per year for Graphjet Technology,” the company said in a statement on Thursday (Dec 29).

Its founder and chairman Lim Hooi Beng said the new 8.09ha (20-acre) integrated plant (upstream and downstream) is expected to be completed within 18 to 20 months after the initial public offering and generate up to 700 jobs over the next four years.

“We have great growth ambitions for Graphjet Technology and will not only stop with one plant.

“We expect the first products to come online in the first quarter of 2025 and serve customers across Asia, Europe, and the United States in the automotive and renewable energy businesses,” he said.

Meanwhile, chief executive officer Aiden Lee Ping Wei expressed optimism that the development of the production plant in the East Coast Economic Region (ECER) would create a greater economic effect on the local community.

“Our project will lead and drive innovation and investment in the downstream new energy industry. This will play a vital role in advancing the development of new technology, future materials, and energy industry in Malaysia.

“We believe that the impact of our investment will have a far-reaching and positive spill-over effect in the country,” said Lee.

Source: Bernama

Nasdaq-bound Graphjet Technology to build RM400m production plant in Kuantan

NCT Group’s NCT Smart Industrial Park (NSIP) is on track to attract investors from China to invest in the company’s properties and developments under the project.

Endorsed by the Selangor government, NSIP’s unique positioning as “The First” Managed Industrial Park (MIP) aims to boost investment opportunities from local and international investors.

NCT said NSIP’s positioning as the global hub for the semiconductor, electronic and electrical (E&E), and pharmaceutical industry was set to create a multiplier effect in Malaysia.

The project was also supported by the Hainan government of China.

NCT general manager and NSIP project lead Eddy Lim Swee Shien said sustainability was at the core of the project and it truly embodies environmental, social and governance (ESG) values.

“It was designed with this very objective and we have seen great interest in the development. 

“Creating an efficient and effective development, NSIP is designed in line with the GreenRE rating criteria and is on track to being a solar-equipped, Managed Industrial Park (MIP), among other components. 

“This will be further supported by various partners, such as Telekom Malaysia Bhd, Solarvest Holdings Bhd and Samaiden Group Bhd, and other players, which are aligned with NCT’s vision to contribute towards reducing industrial carbon footprint,” he said during the 12th Malaysia-China Entrepreneurs Conference (MCEC 2022) recently.

During the conference, NCT presented the project to more than 350 delegates that include representatives from the Hainan government who joined virtually.

Located at the Integrated Development Region in South Selangor (IDRISS), NSIP is led as a Fourth Industrial Revolution (4IR) inspired development that integrates smart innovations and sustainable solutions to cater to the current and future needs of entrepreneurs. 

Upon completion, the project is targeted to create 50,000 job opportunities, addressing the shortage of jobs in the state while contributing to the

local economy.

NCT is working closely with the Selangor state government’s investment arm, Invest Selangor, the Malaysian Investment Development Authority and the Ministry of International Trade and Industry to strengthen the exposure of NSIP by tapping into their pool of investors and network. 

The project, which has started with site clearing earlier this month, has received an overwhelming response, with 100 per cent of Phase 1A fully booked.

Source: NST

NCT Group’s smart industrial park in Selangor ready to attract investors from China

Duopharma Biotech Bhd has become the first pharmaceutical company to receive halal certification for an oncology product.

In a statement today, the company said the certification was awarded by the Department of Islamic Development Malaysia (JAKIM).

The product is currently approved as an adjuvant treatment for postmenopausal women with early breast cancer as well as a first-line treatment for postmenopausal women with advanced breast cancer.

Produced at Duopharma Biotech’s Highly Potent Active Pharmaceutical Ingredients (HAPI) facility in Glenmarie, Shah Alam, the halal oncology product is supplied to both government and private healthcare hospitals in Malaysia.

It has recently been approved for export to Brunei and Singapore.

Duopharma Biotech group managing director Leonard Ariff Abdul Shatar said the milestone halal certification for an oncology product manufactured at its HAPI facility was in line with the company’s ESG commitment.

“We are making continuous efforts to provide consumers and patients with access to much-needed medicines and therapies – assured safe for use and effective, high in quality, hygienic and halal from the start.

“Our state-of-the-art HAPI facility plays a vital role in the fight against many diseases, enabling us to embrace innovation and technology to serve patient needs and expand access to specialised therapies,” he said.

Duopharma Biotech’s HAPI facility is the first cancer medicine manufacturing facility in Malaysia, kickstarting the company’s foray into the oncology segment in 2019.

Currently, the facility produces generic treatments for breast cancer, lung cancer, colorectal cancer, cervical cancer and blood cancer.

Since 1999, Duopharma Biotech has pioneered a range of Halal-certified health supplements, including CHAMPS, Flavettes, Proviton and Naturalle products, in compliance with MS 1500:2009 standards.

Source: NST

Duopharma is first in Malaysia to receive halal certification for oncology product

Malaysia, Thailand and Indonesia will transform the two-wheeler electric motorbike and electric scooter industry in a big way from 2023 onwards.

Sersol Bhd and Thai energy giant Takuni Group PCL have signed a joint-venture agreement to manufacture, assemble and distribute electric two-wheeler (2W) motorbikes and scooters across the three countries in anticipation of surging demand for greener mobility solutions.

The announcement follows their heads of agreement signing in late October this year indicating a commitment to invest in technology transfer in the electric vehicle segment for 2W motorbikes and scooters by incorporating a joint-venture company, Sersol-Takuni.

As post-Covid-19 pandemic market conditions across Malaysia, Thailand and Indonesia are buoyant, Sersol-Takuni plans to sell about 100,000 electric 2W motorbikes and scooters annually.

“We are elated to have Takuni Group as a strong partner for this initiative, as they are energy kings in Thailand with expertise in building renewable energy infrastructure, in addition to driving expansion of Thailand’s charging network for the EV industry,” said Sersol Bhd managing director Datuk Wira Justin Lim.

Lim said Sersol-Takuni will use its capabilities in battery technology to build a plant to manufacture lithium-ion batteries.

“In Malaysia, our government strongly supports the battery electric vehicles agenda and has the right incentives in place for producers to enjoy tax exemptions for imports, excise duty and sales for locally assembled models,” said Lim.

Malaysia has launched a Green Technologies and Application for National Low Carbon Cities 2030 Masterplan for the establishment of 200 low carbon zones across the country. This will push higher demand for green vehicle adoption on the back of the nation’s flourishing B2B landscape to use 2W electric motorbikes and scooters.

Lim said Sersol-Takuni anticipates strong demand for their 2W electric motorbikes and scooters in Indonesia which according to Businesswire is predicted to grow by about 21% to reach US$816 million (RM3.6 billion) by 2025. As adoption of electric motorbike and scooters has been burgeoning within the e-hailing and e-sharing sectors, the Indonesian government has placed generous incentives related to climate mitigation programmes to reduce greenhouse gas emissions.

“Our market potential is enormous as Indonesia and Thailand, which are two of Asia’s four largest 2W electric motorcycle and scooter markets anticipating exponential growth outside India and China,” Lim added.

McKinsey predicts a surging demand for batteries to grow by 30%, and the battery value chain to grow 10 times, with global revenue expected to rise to US$410 billion by 2030.

Source: The Sun Daily

Sersol, Takuni seal electric motorbike, scooter joint venture

THE first half of 2023 could be a challenging period for semiconductor equipment players, including automated test equipment (ATE) makers such as ViTrox Corp Bhd.

ViTrox co-founder, president and CEO Chu Jenn Weng acknowledges that the group will experience a slowdown. But Chu remains optimistic that it is unlikely to be a long, cold winter. He believes the recovery will come within six to nine months, therefore, the group needs good strategies in place to prepare for the rebound.

“In a best-case scenario, we are hopeful that the decline will bottom up in 1QFY2023 or 2QFY2023, and to rebound in [2H2023]. In a worst-case situation, however, the downturn could be prolonged up to 12 to 18 months. Nonetheless, if you look at our past financial results, we have never experienced two consecutive years of decline,” he tells The Edge in an interview at the company’s headquarters in Batu Kawan, Penang.

“For 2023, we will put more emphasis on long-term growth strategies while preparing for a mild downturn. It is time to serve more rather than to take,” says Chu, a former Hewlett-Packard (HP) Malaysia engineer.

Nonetheless, ViTrox’s earnings remained on the growth path in the first nine months of the year. For the nine months ended Sept 30, 2022 (9MFY2022), the company generated revenue of RM560.3 million, which grew by RM65.9 million, or 13%, year on year from RM494.4 million. Net profit in 9MFY2022 expanded 23% y-o-y to RM152.21 million from RM123.54 million. The strong financial performance was due to the strong US dollar and favourable product mix.

ViTrox has more than 600 installed bases by products in more than 40 countries, including Malaysia, China, Taiwan, the US and Mexico. The group has two main business segments — machine vision system (MVS), which provides component-level inspection solutions; and automated board inspection (ABI), which offers board-level inspection solutions.

Its MVS target market is semiconductor manufacturers, including integrated device manufacturers (IDMs) and outsourced semiconductor assembly and test (OSAT) players, whereas its ABI business unit serves electronics manufacturing service (EMS) providers and contract manufacturers.

In layman’s terms, ViTrox makes machine vision inspection systems that scan for defects in semiconductors and other hi-tech gear.

Product-wise, research analysts believe the delivery for ViTrox’s ABI machinery is likely to decelerate from the record high of 3QFY2022, owing to the uncertainty in general business outlook. The shift in preference towards local brands among Chinese firms and price wars waged by competitors may also limit the segment’s near-term upside.

ViTrox’s MVS segment faces a similar threat, as competition from Chinese machine makers intensified, particularly in the lower-end and cost-sensitive space. Moreover, the already soft demand from the mobile and PC segments could worsen as demand for the end-products remains sluggish, following the expectations of a global economic slowdown.

Fortunately, the well-diversified revenue base and exposure to high-growth industries remain ViTrox’s bright spots. Chu says the trade war between the US and China — the two biggest powers in the world — will continue for many years to come.

“If this turns out to be a competition, I believe it is good for Malaysian companies and we will continue to be the beneficiary. If this becomes a conflict, however, we may have to choose a side [between the US and China], and it might be a big issue. This is something that nobody can predict,” he says.

Nevertheless, Chu highlights that, this year, ViTrox continued to do well, as the group’s products experienced strong demand from many regions, including the US, China, India and Asean.

“That’s a very good sign to show that the trade tension between the US and China has [had a positive impact on us] so far,” says Chu, the company’s single-largest shareholder, with a direct stake of 26.89%.

ViTrox co-founders Steven Siaw Kok Tong and Yeoh Shih Hoong — both of whom sit on the board as executive directors and executive vice-presidents — own 19.05% and 10.24% equity interest respectively.

Chu was ranked 47th in Forbes Malaysia’s 50 Richest list, with a net worth of US$280 million in 2020, before climbing to 35th, with a net worth of US$460 million in 2021.

Despite seeing his net worth drop to US$430 million (RM1.88 billion) this year, the 52-year-old remains the 35th richest man in the country.

Expansion and diversification

ViTrox’s headquarters is located at its 450,000-sq-ft Campus 2.0 in Batu Kawan Industrial Park (BKIP), Bandar Cassia.

Notably, the group had in August 2021 kicked off the new expansion phase of its existing land to build ViTrox Campus 3.0, which is an extension of Campus 2.0, consisting of three blocks of multi-storey buildings and is slated for completion by 2H2023.

Campus 3.0 will add 442,000 sq ft of floor space for production, business development, design and development, and shared services activities at the plant.

In May 2021, ViTrox had also acquired a 21.04-acre land adjacent to Campus 2.0 for RM48.33 million as part of its 10-year expansion master plan (2021 to 2030).

The land acquisition is expected to further strengthen ViTrox’s technology and product research and development (R&D). The group is also enhancing its global business expansion, worldwide service and support, supply chain development as well as smart and lean manufacturing.

Chu points out that ViTrox’s 10-year master plan is still a work in progress.

“For the next two years, our biggest capital expenditure (capex) investment will be for our new facility — Campus 3.0, for which we have allocated RM150 million for building and interior design. We have allocated RM110 million for capex next year, followed by RM40 million in 2024.”

He says Campus 3.0 will double ViTrox’s manufacturing floor, R&D and warehouse space, as well as shared services.

“On top of that, there will be new elements such as an accelerator programme for growing tech start-ups here,” he adds.

Asked about what comes after Campus 3.0, Chu says ViTrox still has 10 acres, its last remaining tract in Batu Kawan.

“That will very likely be used for the business expansion of our manufacturing and R&D facilities. We have no issue of growing three to five times here before the end of our 10-year master plan, which is scheduled to be fully completed by 2030,” he discloses.

Amid concerns of a chip shortage-turned-chip glut and fears over a recession, many global semiconductor stocks, including semiconductor-related counters in Malaysia, have been battered since the beginning of this year. Most of them are down 30% to 40% so far this year.

Year to date, ViTrox had declined 21% to close at RM7.80 last Thursday (Dec 15), giving it a market capitalisation of RM7.37 billion. The counter is trading at a historical price-earnings ratio of 39 times.

In a report dated Nov 11, AmInvestment Bank research analyst Muhammad Afif ­Zulkaplly downgraded his recommendation on ViTrox to a “hold” from a “buy”, with a lower fair value of RM7.10, from RM8.96 previously.

“Given slower earnings growth prospects over the upcoming years, the stock’s risk/reward profile looks less compelling at this juncture, in our view. We cut our FY2023 and FY2024 earnings by 11% to 13% after imputing a more conservative sales assumption, owing to softer global economic growth expectations in the coming months amid uncertainties in the China market,” he wrote.

Of the 10 analysts who track ViTrox, Macquarie’s target price of RM9.35 is the highest and that of CLSA, which advises investors to reduce investments in ViTrox, is the lowest at RM7.05.

Doing its part for food security

Before ESG (environmental, social and governance) became the buzzword, ViTrox Corp Bhd had already jumped on the bandwagon long before others followed suit.

ViTrox invested in making sure that its headquarters — the 450,000-sq-ft Campus 2.0 in Batu Kawan Industrial Park, Bandar Cassia — was a green working place. The bricks of the building can breathe, and the roof features solar panels that can generate renewable energy. Rainwater is recycled to water the plants at ViTrox’s organic farms.

Chu Jenn Weng, the company’s managing director, believes vegetarianism is an ideal way to reduce global warming. In a recent interview with The Edge, Chu emphasises that ViTrox will continue to embark on new initiatives for smart farming technologies to do its part for food security.

Early this year, the group, via ViTrox Agritech Sdn Bhd, started a smart farming cluster development in Ara Kuda, where almost one-third of the farmland has been used for prototyping, in the form of either farming technologies or farming automation.

“The land that we leased from the government is about 15 acres, and 30% of the land, or four acres, has been used for the purpose. The aim is to improve the yield of leafy vegetables sustainably and cost effectively,” he notes.

While Chu realises that ViTrox Agritech will not contribute significantly to ViTrox’s earnings in the next three to five years, that will not deter the company from putting in more effort to ensure it is sustainable and profitable.

“Our focus right now is to be able to come up with solutions that are cost effective enough to help farmers to significantly reduce the dependency on foreign workers, overcome extreme weather disruption and eliminate use of pesticides,” he says.

ViTrox has allocated RM25 million over three years, starting from 2022, for this venture.

“Food security will be a big issue in the next 10 to 20 years, owing to climate change. We are working hard to develop workable and cost-effective solutions for our farmers, especially for the micro, small and medium farmer clusters in the country. We also hope to offer our agritech solution to neighbouring countries that face similar problems,” says Chu.

“With innovation and new technology such as semi-autonomous farming equipment, Internet of Things and machine learning, we believe we can attract more young people, especially fresh graduates, to venture into this industry.”

Source: The Edge Markets

ViTrox prepares for mild slowdown while continuing to invest