IN January little-known PC Suria Nascom Group Sdn Bhd (Nascom), a local computer manufacturer, an- nounced that it would take over 11 Practice Note 4 (PN4) classified companies with diversified business interests for RM800mil.
Why 11 companies?
According to Nascom director and deputy chief executive officer Norashikin Shahrom, the company has identified through extensive studies that the 11 different businesses can survive for a long time.
Among the identified businesses are education, infrastructure, tele-communications, information technology, oil and gas, construction and plantation.
“That is not all. The beautiful part is we have the money. Our investors want to be involved in these 11 business areas and our investment funds are enough for 11 types of businesses. If we were to just invest in one kind of business, it may not survive. We need to diversify. If we park all resources in one basket, we will be trapped. We are building up the company now. We have the expertise, the funds and capacity to go forward with it. If we do it right this time, things will fall in nicely,” she said.
Norashikin told StarBiz this during a recent interview in Shah Alam.
She clarified that the RM2bil fund managed by Nascom came from Switzerland but despite earlier press reports the investors might not be Swiss nationals. However, she de- clined to reveal who these investors were.
Following the takeover of the 11 PN4 companies, Nascom will use the remaining funds for the group’s overseas expansion.
Nascom, said to be government-linked, will finalise the takeover of three PN4 companies by the end of this month. The three companies are mainly involved in plantation, telecommunication and infrastructure businesses. The takeover for the remaining eight PN4 companies will be finalised by the end of August.
“We are still negotiating with these companies on the types of schemes for the shareholders. We are thinking of going for rights issues or share swaps,” Nora said. “If everything goes well with the takeover, the plantation company will start its operations first because there is a project already available in this sector. It would make it easier for us to park in the project and have the company running as soon as possible.
The three-year plantation project is valued at RM300mil. The company has also secured two infrastructure projects and is awaiting the green light to start work.
“We will continue to source and secure new projects for these companies. Securing one project after another will enable us to reap the returns as soon as possible. We are currently bidding for projects for our other businesses as well,” she said.
Nora said that Nascom had been very careful in planning so as not to be “dragged down” by the financially troubled companies.
“We had done a lot of studies and due diligence about one year ago. It is not something that we did overnight,” she said.
Nora expects these companies to start contributing to the group’s profits after the first year of investment.
On which PN4 companies would contribute significantly to its profits, Nora foresees the fast contributing sectors to be infrastructure, plantation, telecommunication and transportation.
“You can get fast returns but it must be managed properly. The challenge is to move and execute fast before others grab the opportunities first,” she said.
After the takeover is completed, the names of these companies will be changed, with all of them starting with PC Suria.
Nascom is currently the manufacturer of computers under the brand name PC Suria.
It will be finalising details of a joint venture with C.M.S. SpA, which owns Olivetti, by the end of this month to manufacture and assemble computer parts and computers in Italy. These computers will be sold within Europe. It will be a 60:40 joint venture, with Nascom having the bigger share.
Nora said the joint venture planned might be aborted. Instead Nascom may look into buying up Olivetti’s manufacturing plant, provided the selling price is right.
“If the price is a bombshell, we will team with them. Maybe a few years later, when we have sufficient returns, we will buy over the manufacturing plant,” she said.
The computers, named PC Suria Olivetti, will be manufactured at the Olivetti Village, 200km away from Milan, Italy, and marketed at 12,000 Olivetti outlets across Europe.
Olivetti’s manufacturing plant has production capacity of over 200,000 computer units per month.
Seen as a two-pronged strategy, the big capacity plant will also allow Nascom to become an original equipment manufacturer (OEM).
“When we participated in CeBIT (an annual IT exhibition in Han- nover, Germany) last year, we re- ceived plenty of genuine enquiries to produce OEM products but we had to turn them down because we didn’t have the capacity. Now, I’m looking forward to CeBIT this month. At least I know who wants to OEM with us and I can tell them that we have the capacity to produce,” Nora said.
She said: “By assembling components in Italy, we are not tied up with a lot of stocks. We build and assemble as and when we need it. Once we put a foot there, things will flow in easily. We just do what we are good at. The important thing is to get returns within six to seven months after our initial investment.”
Nora said the joint venture in manufacturing computer parts would contribute significantly to profits.
“One thing for sure?selling computers overseas posed better returns because of the currency exchange. I foresee we wouldn’t face pricing problems because the margins are higher in Europe and America,” she said.
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