Syarikat Prasarana Negara Bhd (Prasarana) has commissioned a contract for manufacturing 400 buses at an estimated cost of RM240 million as part of the government’s move to enhance the public land transportation system under the 10th Malaysia Plan (10MP), sources say.
DRB-Hicom Bhd’s unit DRB-Hicom Defence Technologies Sdn Bhd (Deftech) is said to be among those given a slice of the pie.
Deftech and its partner MAN Truck & Bus (M) Sdn Bhd (MTBM) have secured a contract for 150 buses worth about RM90 million, the sources said.
MTBM is a joint venture between Germany-based MAN Nutzfahrzeuge Aktiengesellschaft (MAN) and MBF Holdings Bhd to operate MAN bus and truck business. MAN holds 70% in MTBM while MBF holds the remaining 30%.
Deftech, on the other hand, is better known for supplying defence, security and commercial vehicles to the Malaysian armed forces and other government agencies. DRB-Hicom had sold its bus-related assets to Prasarana in May 2004.
According to its annual report, Deftech currently has orders for Metro City Buses for RapidPenang.
Deftech has a plant in Pekan and is also supported by Malaysia Truck & Bus Sdn Bhd, DRB-Hicom’s assembly plant and Master Builders Malaysia Sdn Bhd, a coach-builder and truck body fabricator.
While the details of the Deftech and MTBM JV and the timeframe for the contract are not known, the contract from Prasarana, said to be worth about RM90 million, would boost DRB-Hicom’s automotive revenue considering its automotive segment showed paltry performance last year.
For FY10 ended March 31, DRB-Hicom posted a net profit of RM472.3 million on the back of RM6.31 billion in revenue. For FY09, net profit was RM660.51 million on a turnover of RM6.1 billion.
Its automotive arm had posted a net profit of RM703,000 in FY10, an improvement over the net loss of RM17.2 million in FY09.
Additionally, the company could see potential earnings from after-sales maintenance as well.
The sources add that another 150 buses for Prasarana will be supplied by Master Defence Sdn Bhd and Scania (Malaysia) Sdn Bhd while the remaining 100 buses will be supplied by Intercoach Sdn Bhd in a tie-up with Chinese bus maker Xiamen King Long United Automotive Industry Co Ltd.
While the other companies have experience in the bus making and marketing industry, little is known of Intercoach. Depending on the nature of its tie-up with King Long, Intercoach has the potential to generate about RM60 million from the deal.
Scania is a unit of Sweden’s Scania CV AB and handles the assembly, distribution, sales and after-sales of Scania vehicles in Malaysia.
According to its website, it invested RM50 million in its operations in Malaysia, and in 2004 had formed its Southeast Asian hub comprising Thailand, Singapore and Malaysia to develop its truck and bus business in the region.
Master Defence is another assembler and manufacturer of defence and commercial vehicles.
This article appeared in The Edge Financial Daily, June 28, 2010.
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