KUALA LUMPUR (Oct 4): EG Industries Bhd (KL:EG) said it is acquiring a 24.08% stake in Thai-based ND Rubber Public Company Ltd (NDR) for 198 million baht (RM26.05 million) as part of its expansion into the 5G photonics and embedded electric vehicle (EV) market in that country.

NDR manufactures rubber components for automotive and electronic equipment, and also makes motorcycle tyres, inner tubes, and airlocks, serving both original equipment manufacturers and replacement equipment manufacturers in domestic and international markets.

In a bourse filing on Friday, EG Industries said it plans to establish a testing centre for EV 5G photonics modules in Thailand. This facility will be set up by NDR’s newly formed subsidiary, Xtronic Co Ltd.

Xtronic will collaborate with EG Industries' Thai-based subsidiary, SMT Industries Co Ltd, to inspect and test electronic components that support 5G network systems and wireless internet devices.

“In addition to expanding into the high-growth 5G photonics embedded EV industry, EG Industries stands to benefit from NDR’s extensive experience in manufacturing rubber-related parts for renowned automotive brands in Thailand and abroad. As NDR is listed on the approved vendor lists for major automotive and EV manufacturers, this investment offers EG Industries an opportunity to integrate into the global EV supply chain and accelerate its growth in this sector.

“Furthermore, the investment paves the way for EG Industries to establish a 5G test service centre in Thailand, tapping into the rapidly growing 5G photonics market. This strategic acquisition is expected to bolster technological capabilities of EG Industries and its subsidiaries and diversify its business into key growth areas for the future,” the company added.

For the half-year ended June 30, 2024, NDR reported a profit of RM9.12 million on sales revenue of RM455.72 million. In comparison, for the full-year ended Dec 31, 2023, the company posted a loss of RM65.05 million — amid impairment loss in an associated company — on sales revenue of RM836.28 million.

EG Industries said the transaction, which will be fully settled in cash, is expected to be completed by Oct 8, following the listing of the share subscription on the Stock Exchange of Thailand.

Shares of EG Industries closed down seven sen or 3.47% at RM1.95 on Friday, giving the electronic manufacturing services provider a market capitalisation of RM918.2 million.