DNC Asiatic picks up steam
Joint venture to make metal chasis in Kuala Langat plant
DNC Asiatic Holdings Sdn Bhd will venture into metal chassis fabrication when its new RM40mil plant in Kuala Langat, Selangor is commissioned next year.
KUCHING: DNC Asiatic Holdings Sdn Bhd, a 51:49 Malaysia-China joint venture in motorcycle manufacturing, will venture into metal chassis fabrication when its new RM40mil plant in Kuala Langat, Selangor is commissioned next year.
Executive director Hu Ying said the company also planned to assemble motorbike engines and mass-produce certain components which were now contracted out to local vendors.
“We hope to increase the local contents of our motorcycles under the Demak brand to between 50% and 55% from the current 40%,” she told StarBiz.
Demak motorcycle components produced locally include exhaust pipes, absorbers, batteries, tyres, sprockets and seats.
Hu said the company awarded the main contract for the construction of the new plant last week.
The new plant complex, expected to be ready in a year, would be located on 3.2ha bought for RM3mil. With a built-up of 17,500 sq m, the plant would have two production lines with annual production capacity of 100,000 motorbikes. The complex will house a comprehensive research and development (R&D) centre.
She said the company spent about RM3mil last year in the development of new designs and testing of the new models.
DNC Asiatic would relocate its present factory in Batu Caves to the new complex. The company’s first plant in Demak Laut Industrial Park here was commissioned in 2003.
“The company plans to invest another RM10mil in new machinery and equipment in stages,” added Hu.
DNC Asiatic produces and markets a dozen Demak models,with engine capacity ranging from 90cc to 200cc. Demak scrambler is the Malaysian market leader.
Last year,the company sold some 30,000 units of various Demak models, an increase of about 25% over 2010 figure. About 60% of the motorcycles were sold in Peninsular Malaysia and the rest in Sarawak and Sabah.
“Our target is to sell 40,000 units this year and maintain our double-digit growth,” said Hu.
DNC Asiatic commands a 12% market share in Sarawak and Sabah and 6% in Peninsular Malaysia.
“We hope to increase our market share in the peninsula to 10% when the Kuala Langat plant is operational.”
Last year, DNC Asiatic ventured into Sri Lanka with an initial investment of about US$5mil (RM16mil) in setting up an assembly plant in leased premises and a showroom.
Commercial production of Demak motorbikes commenced early this year, with seven models marketed. The company would closely monitor the response to its models from feedbacks of its 30 dealers before going into mass production of the models that appeal to the locals.
According to Hu, Demak scooters were well accepted, with plans to launch two sporty and trendy street bike models this year. Street bikes are dominant models in Sri Lanka.
“Sri Lankans are very conscious about motorcycle fuel consumption. their main concern is fuel efficiency as petrol price there is almost doubled that of Malaysia.
“We have to modify some of the Malaysian models to suit the preferences of Sri Lankans,” she said, adding that Sri Lanka’s top selling brands were mostly from India.
“As it is a new market, we are happy if we can sell 5,000 units in Sri Lanka in the first year.”
Hu said DNC Asiatic was committed to build up the Sri Lankan market as its second hub for future expansion in view of the huge development potential.
“It is a long-term investment and we are confident our efforts will pay off.”
Based on market statistics, she said the number of motorcycles sold in Sri Lanka shot up from some 135,000 units in 2009 to 205,000 in 2010 and 253,000 units last year.
Hu hoped that Demak motorcycles, like Malaysia-made Proton and Perodua cars, would be well accepted in Sri Lanka.
DNC Asiatic group general manager Lim Boo Hiong said Demak motorcycles had also penetrated Nepal and Laos where a second container (of Demak bikes) had been sent to both countries.
“Dealers in Nepal are selling our scramblers and street bikes with good profits.We have sent our technical team there to provide market support.
“We are setting up our representative office in Laos,” added Lim.