Company also plans to manufacture below 150cc motorcycles
NIBONG TEBAL: Boon Koon Group Bhd will use a portion of the RM22mil raised from the disposal of its stake in Hitachi Capital Malaysia Sdn Bhd to assemble new light commercial vehicles and motorcycles.
Group executive chairman Datuk Goh Boon Koon told StarBizWeek that the group already had the commercial and energy-efficiency vehicle licences to produce the light commercial vehicles and motorcycles at its plant in Nibong Tebal.
“We are now waiting for the economic environment to improve before launching the new products, which could be later this year or in 2018.
“The rest of the proceeds is for existing business and other new business, if any, and to defray expenses for the disposal of the stake,” he added.
Goh said the plan was to manufacture below 150cc motorcycles for the local market.
“The motorcycles will bear the brand name “BKM” (Boon Koon Motors).
“About 70% of the 500,000 bikes sold annually in the country are lower-cc motorcycles,” he said.
Goh said the group wanted to produce a new range of 1.5 litre light commercial vehicles because its current commercial vehicles, sold under the Viflex brandname, had become a popular brandname in the market since its launch in 2015.
“The new 1.5 litre light commercial vehicles will be marketed under the Boon Koon brandname.
“The new light commercial vehicle and lower-cc motorcycle business would be a significant contributor to the group’s revenue in the future,” Goh said.
He added that the group made the decision to sell its 25% stake in Hitachi Capital Malaysia because it did not fit into Boon Koon’s long term strategy.
“The proceeds can be invested in strategic businesses that complement the group’s long term business plan,” he said.
Boon Koon obtained the approval from its shareholders to dispose the stake at an EGM held on March 31.
Presently, Boon Koon generates over 80% of its revenue from its rebuilt commercial vehicle business, while its fork-lift rental and commercial vehicle segment contribute the remaining.