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Wednesday, 15 January 2014 | MYT 12:00 AM

DRB-Hicom to go big in education, plans to upgrade college to varsity status

DRB-Hicom’s Automotive Complex in Pekan with the ICAM campus (inset)

DRB-Hicom’s Automotive Complex in Pekan with the ICAM campus (inset)

KOTA KINABALU: Education is slated to be the next big thing for conglomerate DRB-Hicom Bhd which has pumped about RM350mil into its International College of Automotive (ICAM) in Pahang.

“The ICAM management is already presenting our proposals to the Higher Education Ministry to grant us university status. I am very bullish about this, and am looking at an enrolment of 7,000 students within the next five years,” DRB-Hicom group managing director Tan Sri Mohd Khamil Jamil told reporters on Monday at a media excursion to Sabah.

Currently, the college has about 700 students enrolled in eight of its diploma courses, along with a degree programme in collaboration with United Kingdom’s Liverpool John Moores University. The college would have its first convocation by the end of this month with 135 graduates.

Khamil said the education sector is already a huge industry by itself, and this could be the company’s next core business, after it obtained its university status in the next 12 months. The group also received a RM28mil grant from the Public-Private Partnership Unit (UKAS) to set up the college.

“With the status as an international university, we can enrol foreign students into our automotive courses, and we have received numerous requests and queries from neighbouring countries like Thailand, Indonesia, even as far as Bangladesh, Pakistan and India,” he said.

This is the only centre of education for automotive in the region, and is build by the industry for the industry, according to Khamil.

“Malaysia’s automotive workforce is estimated at 400,000 which represent 4% of the total employment, and we are in the middle of two automotive powerhouses – Thailand and Indonesia. There’s tremendous potential for the Asean automotive industry, which is forecast to produce 7.1 million vehicles and sales of 4.7 million units by 2019,” he said.

The college is also now finalising course modules with UK’s Loughborough University and Italy’s Politenico di Torino. It all started in 2010, when DRB-Hicom wanted a specialised education centre to train the talent in its workforce at a makeshift warehouse turned college in Pekan.

“The unique thing about ICAM is the clout DRB-Hicom has with our business partners and subsidiaries. Students are almost guaranteed employement upon graduation.” he said.

DRB-Hicom currently assembles and distributes major international marques like Mercedes Benz, Volkswagen, Audi, Honda, Suzuki, Isuzu, Mitsubishi Motors and Tata.

The group’s net profit for its first half ended Sept 30, 2013 rose by 30.8% to RM148.2mil on the back of lower revenue of RM6.7bil.

Its gearing ratio stood at 0.8 time with borrowings amounting to RM6.2bil.

“At the corporate level, we have about RM3bil in borrowings from the acquisition of Proton Holdings Bhd and Pos Malaysia Bhd, and another RM400mil statutory loan in Bank Muamalat. At the moment, we are quite comfortable as the borrowings are distributed evenly within the group, and the units have their own schedule to repay. We are monitoring this closely so that it is well managed,” he said.

The company has a self-imposed limit of 1.25 times to its gearing. DRB-Hicom Bhd’s new chief financial officer Ahmad Fuaad Kenali said the group would only consider investments that offered a minimum of 12%-15% internal rate of return.

Tags / Keywords: Stocks , Investing , Automotive , ICAM

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