UMW plans to spend RM607m this year
UMW Holdings Bhd is allocating RM607 million in capital expenditure (capex) for the financial year ending December 31.
President and group chief executive officer Badrul Feisal Abdul Rahim said part of the capex would be used for heavy equipment rental (RM262 million), equipment purchases for the aerospace business (RM93 million) and modernisation of its car manufacturing plant (RM174 million) here.
“We will also spend about RM52 million for other investments and RM1.6 million for land development in Serendah, Selangor. We believe it is going to be a good year despite the challenges and the negative side of the United States-China trade war, which may affect consumer spending,” he said after UMW’s annual general meeting, here, yesterday.
The conglomerate is hopeful of achieving higher car sales this year, backed by the lower Overnight Policy Rate.
“Hopefully, there will be more demand for cars, be it Toyota or Perodua. We had initially projected sales of 75,000 units for Toyota and 231,000 units for Perodua this year,” he added.
UMW owns a 38 per cent stake in second national carmaker Perusahaan Otomobil Kedua Sdn Bhd (Perodua).
Badrul Fiesal said UMW was keen to offer more locally-assembled Toyotas.
“We have a two-year strategy to introduce locally-assembled sport utility and hybrid vehicles.
“We will also launch the new Avanza and Innova in the fourth quarter of this year.”
UMW has two Toyota assembly plants, here, and a 51 per centowned facility in Bukit Raja, Klang.
The company has spent about RM2 billion on the Bukit Raja plant, which is capable of producing 50,000 vehicles a year.
The plant is running at 70 per cent capacity, producing mainly Toyota Vios and Yaris models.
Badrul Fiesal also said UMW had no immediate plan to increase its stake in Perodua after a deal lapsed last year.
He said the conglomerate expected a triple-digit volume growth for its aerospace unit, driven by orders from British engine manufacturer Rolls-Royce.
UMW Aerospace Sdn Bhd produced more than 50 fan cases last year.
“We are looking at optimising our (aerospace) manufacturing facility. It involves precision engineering and the same skills can be applied to other high-value manufacturing, such as health and medical devices.”
Badrul Fiesal said UMW did not foresee any impact on its aerospace business from the USChina trade war as the fan cases were shipped to Roll-Royce’s final assembly plant in Seletar, Singapore, before proceeding to the United Kingdom.
“We are also in talks with aerospace manufacturers to produce other parts and components.”
On the company’s manufacturing and engineering sector in China, Badrul Fiesal said the Chinese domestic market would continue to deliver profit to the group regardless of the trade war.