Friday 01 Dec 2023
By /
main news image

SHAH ALAM (July 3): Proton Holdings Bhd is divesting a 60% stake in an auto part producing subsidiary to Thailand-listed Aapico Hitech PCL for RM41 million, paving the way for both parties to inject as much as RM140 million fresh capital through 2024 to expand the business.

The subsidiary — Advanced Vehicle Engineering Global Sdn Bhd — will change its name to Aapico Avee Sdn Bhd, and is poised to receive some RM40 million in fresh capital from Aapico Hitech for further expansion to an existing 20-acre plant that produces dies, jigs, hot stamping parts, body assembled parts and chassis components.

Aapico's founder, president and chief executive officer Yeap Swee Chuan said Proton and Aapico will bear the other RM100 million investment for plant extensions and new machinery acquisition on a 60:40 basis, planned for 2024.

“For the expansion, we have a very aggressive expansion plan as demanded by Proton, we share 60:40, if we put 60%, Proton has to put 40%, that will be the way forward,” Yeap told reporters at a press conference on Monday (July 3).

Under the partnership, Aapico will be managing the operations of Aapico Avee, while introducing new technology applications to produce better quality parts and improve cost efficiency.

Proton CEO Li Chunrong said the joint venture (JV) with Aapico will benefit the national car maker from better cost optimisation, efficiency and production quality.

“As our volume increases in tandem with our model introduction plans, we will continue to work to ensure our products are on par with the competition in terms of features and quality while continuing to offer outstanding safety from the use of technologies such as hot press forming,” Li said.

Also present at the partnership announcement on Monday were Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz, Proton chairman Tan Sri Syed Faisal Albar, and former economy minister Datuk Seri Mustapa Mohamed in his capacity as Aapico adviser.

Proton is 50.1%-owned by DRB-Hicom Bhd, with the remaining 49.9% stake held by Zhejiang Geely Holding Group Co Ltd.

DRB-Hicom closed three sen or 2.2% higher at RM1.37 on Monday, giving it a market capitalisation of RM2.65 billion.

Edited ByIsabelle Francis
      Text Size