Special Report DRB-Hicom to focus on logistics sector

by **Cals** Wed 15 Jan 2014, 23:14

Special Report DRB-Hicom to focus on logistics sector

Business & Markets 2014

Written by Bernama

Wednesday, 15 January 2014 20:08

KUALA LUMPUR (Jan 15): DRB-Hicom Bhd wants to focus on the logistics sector, following the acquisition of 61.61 per cent stake in Konsortium Logistic Bhd, from Ekuiti Nasional Bhd in December last year, for RM241 million, says Group Managing Director Tan Sri Mohd Khamil Jamil.

He said, the group has to see what Konsortium Logistic has, so that whatever the company puts in, would not hamper the growth of the company, and vice-versa.

"Whatever plan that we put in, will create the synergy. Our aim is to turn Konsortium Logistic into a No. 1 logistics provider. Currently, it is in the second spot nationwide.

"However, it holds the pole position in the southern region," he told a media briefing, at the three-day of DRB-HICOM Ke Bawah Bayu (Under The Wind) programme.

Themed Jom Sabah, the trip is aimed at cultivating strategic bonding and enhancing good working relationship between the media and DRB-Hicom management.

Mohd Khamil said, as the owner of the national carmaker — Proton Holdings Bhd, and the distributor for other models — like Mercedes-Benz, Volkswagen, Audi and Honda, DRB-Hicom could also cut cost, by using its own logistics services to transport the vehicles.

He said, the company has a five-year plan for Konsortium Logistic and its other unit, Pos Malaysia Bhd, which could also benefit from the logistics services.

DRB-Hicom expects the national logistics segment to contribute RM174.8 billion this year, from RM146.5 billion in 2013, entailing services like warehousing, inventory management, land, air and sea transportation, he said.

Mohd Khamil said, the group would also leverage on the second biggest contributor to its revenue — services segment.

He said, the sector contributed 18 per cent in the first half of 2013, and is expected to increase to 19 per cent, in the same period this year, following the implementation of Pos Malaysia's five-year strategic plan.

"The unit is on track for its second wave, which is to find the new growth areas, to diversify the income streams beyond postal services.

"It is expanding its solutions, such as communications and distribution, being the one-stop centre for retail, payment services and supply chain for courier, express and parcel services," he said.

On education, he said that the group would upgrade its International College of Automotive to university status.

The group has bought a piece of land in Pekan for RM350 million, to build the new campus, he said.

"Currently, the college, established in April 2010, has 730 students. We plan to increase the enrolment to 7,000 students, in the next five years.

"We are confident of achieving the target, following the introduction of more courses — including engineering and technology, and business and management," he said.

Mohd Khamil said, all students would be assured of jobs, upon graduation.

DRB-Hicom Deputy Chief Executive Officer, Datuk Lukman Ibrahim, said that after acquiring Proton Holdings Bhd two years ago, the group was looking at exporting its vehicles to Asean countries and Australia this year.

He said, the company would focus on improving the quality and selling the cars at affordable prices.

"We are now working on the new Perdana model and hope to finalise in the next 24 months. Besides coming up with new models, Proton would also be maximising its current models, by adding more value and quality.

"We are also looking forward to introduce more affordable cars, in the first half of this year," he said.

Mohd Khamil said, following the acquisition of Composite Technology Research Malaysia Sdn Bhd (CTRM) in July last year, for RM298.26 million, DRB-Hicom, which has 96.87 per cent stake in the company, would also focus on the aerospace business.

"CTRM will supply the composite components to major original equipment manufacturer, Airbus and Boeing, including aircraft wing parts and composites aero structures," he said.

On the non-aerospace business, Mohd Khamil said that the company would supply unmanned aerial vehicles and transportation to Lotus and Scomi's monorail, in Mumbai.

He said, the company was optimistic that Pos Malaysia would double its revenue to RM2.4 billion by 2017, from RM1.2 billion last year.

Mohd Khamil said that the company aimed to increase its market share from 10 per cent now, to 30 per cent, as its courier and retail sectors are expected to see strong demand.

The company is expected to rake in RM17 billion revenue by financial year ending March 31, 2016.

DRB-Hicom is controlled by tycoon Tan Sri Syed Mokhtar Albukhary, with a 56 per cent share, and has over 80 active companies in the motor vehicle, logistics, financial services and property sectors. — A special report by Nurul Hanis Izmir of Bernama