This article first appeared in The Edge Financial Daily on May 8, 2018 - May 14, 2018

KUALA LUMPUR: Tan Chong Motor Holdings Bhd is setting up an automotive hub in Bagan Datuk, Perak with an estimated long-term cost of RM500 million.

The Tan Chong Automotive & Commercial Vehicle Hub will be located on 338 acres (136.78ha) of freehold land, the group said in a filing with Bursa Malaysia.

It said the first phase of the project will require the group to spend about RM100 million on land acquisition and the construction of a bus and truck plant. Once completed, the new plant will cater to the production expansion needs of the local and export markets.

The group said it will continue to explore potential markets in the region, including Thailand, Sri Lanka, Vietnam and Indonesia, adding to its existing export markets. The group currently exports buses to Singapore, Hong Kong and Myanmar.

The group currently operates four automotive assembly plants located in Segambut (Kuala Lumpur), Serendah (Selangor), Vietnam and Myanmar.

Tan Chong said the Bagan Datuk hub is not just an automotive hub, but also a strategic business plan that demonstrates the group’s commitment to Malaysia’s industrialisation and economic growth.

“Spin-offs from this investment will include the creation of new jobs, the influx of new pertinent investments and the spurring of Bagan Datuk’s economic growth. It is also expected to strategically tap into the growth regions of the Northern Corridor Economic Region,” the group added.

Tan Chong’s share price closed unchanged at RM1.64 yesterday, with a market capitalisation of RM1.07 billion.