KUALA LUMPUR: Kumpulan Jetson Bhd’s venture to develop an integrated autoparts industrial plant in China will help free up its local capacity here to be utilised for its future export market expansion which may include countries such as India, Iran and Indonesia.
According to Jetson managing director Datuk Teh Kian An, its plants in Sungei Buloh and Port Klang are running at 90% capacity currently.
Jetson is venturing into the China market with the development of an integrated autoparts industrial park worth RM174.4 million in Yangzhou city. The local property development and autoparts manufacturing company will occupy three blocks of the industrial park to tap into China’s autoparts market.
Teh said the company’s move to enter the Chinese autoparts manufacturing industry is also because the country offers tremendous opportunity in the automotive sector and has an annual production output of more than 18 million vehicles compared with Malaysia’s 600,000 units.
The gross development cost of the project is estimated at RM124.6 million, according to Jetson’s chief financial officer Raymond Lee. To date, three factories have been built, with the entire project expected to be completed in the first quarter of 2014.
Jetson expects the project to have positive impact on the earnings of its construction and property development division for the financial years ending Dec 31, 2012 to 2014 while maiden earnings contribution from its manufacturing operation within the park is expected in FY14.
“We are not doing this because we are shifting away our production facilities from Malaysia to China, but more to localise the production of autoparts in China to tap the local market. We have been exporting our anti-vibration system to China previously from our plants here but by localising production there, we get to leverage the economies of scale,” said Teh after the company EGM yesterday.
Jetson’s China project is undertaken through its acquisition of 100% of Asian Corp Ltd (ACL) for RM11 million. The purchase price works out to a 22.5% discount to ACL’s net assets of RM14.2 million.
ACL’s main asset is a 57,737 sq m industrial land in Weiyang Industrial Park in Yangzhou.
The integrated industrial park will house 10 detached factories, four blocks of four-storey commercial blocks, a six-storey hostel for the workers’ accommodation as well as a six-storey production centre, which will likely house the research and development activities of the tenants. Teh added that there will be an auto parts exchange centre, which will be the showroom to showcase the products and technologies built at the site.
“We are developing JIIP (Jetson Integrated Industrial Park) as an integrated automotive parts manufacturing park. Facilities are available for companies to carry out a complete chain of their operations, from research and development, manufacturing, staff accommodation to supporting services. We believe such approach is paramount for Jetson’s manufacturing operation to thrive in China,” said Teh.
He said the group will focus on its two geographical presence, namely Malaysia and China, to cater to the other markets in the region. The integrated park in Yangzhou will be developed as the group’s manufacturing base to cater to China’s domestic market, as well as other Asian countries which enjoy free trade agreements with China.
Jetson closed unchanged yesterday at RM1.24 on a thin volume of just 67,000 shares. Since a year ago, its share price has increased 12.9% from its RM1.08 close on Feb 9, 2011.
This article appeared in The Edge Financial Daily, February 10, 2012.
According to Jetson managing director Datuk Teh Kian An, its plants in Sungei Buloh and Port Klang are running at 90% capacity currently.
Jetson is venturing into the China market with the development of an integrated autoparts industrial park worth RM174.4 million in Yangzhou city. The local property development and autoparts manufacturing company will occupy three blocks of the industrial park to tap into China’s autoparts market.
Teh said the company’s move to enter the Chinese autoparts manufacturing industry is also because the country offers tremendous opportunity in the automotive sector and has an annual production output of more than 18 million vehicles compared with Malaysia’s 600,000 units.
The gross development cost of the project is estimated at RM124.6 million, according to Jetson’s chief financial officer Raymond Lee. To date, three factories have been built, with the entire project expected to be completed in the first quarter of 2014.
Jetson expects the project to have positive impact on the earnings of its construction and property development division for the financial years ending Dec 31, 2012 to 2014 while maiden earnings contribution from its manufacturing operation within the park is expected in FY14.
Teh says the move to localise the production of autoparts in China is to tap the local market.
“We are not doing this because we are shifting away our production facilities from Malaysia to China, but more to localise the production of autoparts in China to tap the local market. We have been exporting our anti-vibration system to China previously from our plants here but by localising production there, we get to leverage the economies of scale,” said Teh after the company EGM yesterday.
Jetson’s China project is undertaken through its acquisition of 100% of Asian Corp Ltd (ACL) for RM11 million. The purchase price works out to a 22.5% discount to ACL’s net assets of RM14.2 million.
ACL’s main asset is a 57,737 sq m industrial land in Weiyang Industrial Park in Yangzhou.
The integrated industrial park will house 10 detached factories, four blocks of four-storey commercial blocks, a six-storey hostel for the workers’ accommodation as well as a six-storey production centre, which will likely house the research and development activities of the tenants. Teh added that there will be an auto parts exchange centre, which will be the showroom to showcase the products and technologies built at the site.
“We are developing JIIP (Jetson Integrated Industrial Park) as an integrated automotive parts manufacturing park. Facilities are available for companies to carry out a complete chain of their operations, from research and development, manufacturing, staff accommodation to supporting services. We believe such approach is paramount for Jetson’s manufacturing operation to thrive in China,” said Teh.
He said the group will focus on its two geographical presence, namely Malaysia and China, to cater to the other markets in the region. The integrated park in Yangzhou will be developed as the group’s manufacturing base to cater to China’s domestic market, as well as other Asian countries which enjoy free trade agreements with China.
Jetson closed unchanged yesterday at RM1.24 on a thin volume of just 67,000 shares. Since a year ago, its share price has increased 12.9% from its RM1.08 close on Feb 9, 2011.
This article appeared in The Edge Financial Daily, February 10, 2012.
