SGX-LISTED Vibro-Power Corp Ltd (VibroPower), a leading specialist in power needs, has signed an agreement with Volvo Penta to take over the Swedish multinational's generator set (genset) assembly and distribution business in Malaysia.
The two companies said in a joint statement on Tuesday that Volvo Penta, which recorded about RM25mil in turnover in 2002, would transfer its entire existing genset operation in Shah Alam to VP Power Sdn Bhd (VP Power), a wholly-owned Malaysian subsidiary of VibroPower.
VP Power was established in October 2002 and has a paid-up capital of RM1mil.
VibroPower executive chairman and joint managing director Benedict Chen said that under the terms of the agreement VibroPower was committed to continue using Volvo Penta's engines in the 80 to 500 kVA range for gensets, which VP Power would assemble in its own facilities in Shah Alam and export to other countries.
This agreement with Volvo Penta is a quantum leap for our expansion efforts in Malaysia and a crucial pillar to our expansion strategy,'' he said.
The company now exports to over 20 countries and has offices in Britain, China, Malaysia and Singapore.
Chen said VibroPower had been on an aggressive expansion plan to develop markets in the Middle East, India and the rest of South- East Asia.
He also said VibroPower would build upon the infrastructure established by Volvo Penta and grow its subsidiary VP Power into the company's 2nd assembly base after Singapore,
We have so far invested RM1mil in the factory in Shah Alam to show our commitment,'' Chen said, adding that VP Power hoped to achieve Volvo Pentas turnover of RM25miI for its financial year ending Dec 31, 2003.
He also said a three-pronged approach had been formulated for VP Power to provide manufacturing support to the group, securing local projects with value-added services such as installations, commissioning and acoustics noise package solutions, and widening the existing sales and distribution outlets to include markets such as Thailand and Laos.
On the disposal of the business to VibroPower, Volvo Penta Asia president Anders Bevreus said this was in line with the groups global strategy to focus on the manufacture, sale and servicing of engines in support of genset original equipment manufacturers such as VibroPower.
We now can focus on our core activity, which is the engine component of gen- sets, he said.
For the financial year ended Dec 31, 2002, VibroPower recorded a revenue of S$22.3mil. Chen also said that from the start of 2003, the group had an order book of S$22mil, equal to the entire revenue in 2002.
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