Vitrox plans to invest up to RM300mil on Batu Kawan facility

Group chief executive officer Chu Jenn Weng(pic) told StarBiz that the facility would be ready for operation in 2022 or 2023.

BATU KAWAN: Vitrox Corp Bhd plans to invest RM200mil to RM300mil to start the construction of a new design and production facility in Batu Kawan in two years.

Group chief executive officer Chu Jenn Weng told StarBiz that the facility would be ready for operation in 2022 or 2023.

“In two years we believe the utilisation of the production floor of the existing facility will reach 70% to 80% due to the surging demand for our products.

“This is when we will start investing for the new building.

“Currently the utilisation of the production floor of the existing facility is about 50%,” Chu said.

He said about RM200 to RM300mil would be spent for the building and equipment.

“The build-up area is planned to be 900,000 sq ft, double the size of the present facility that has a 450,000 sq ft, located in a 22-acre site.

“We are getting ready for expansion as we can see the demand from the automotive sector, smart factories, 5G telecommunication roll out, hybrid electrical vehicles, artificial intelligence and data centres growing,” Chu said.

In 2018, the growth of the group’s three-dimensional advanced x-ray inspection (AXI) and advanced optical inspection (AOI) equipment used for checking printed circuit board assembly products grew respectively by more than 30% and 100%.

“We expect the growth trend to continue this year,” he added.

Chu said the group would spend between RM50mil and RM60mil this year to design new equipment, compared to RM40mil and RM50mil utilised in 2018.

“We are developing new three-dimensional AXI and AOI equipment, and tray and wafer inspection handlers to be released in the second half of 2019.

“The AXI and AOI equipment contribute about 65% to the group’s revenue,” he added.

On the performance for the 2018 financial year, Chu said the group expected double-digit percentage growth for the revenue and net profit.

“It will be another record breaking year for us,” he said.

Chu added that the group expected the business environment to improve further in the second half of 2019.

“So far the first quarter has been good, and we see the same business trend for the second quarter,” he added.

According to Netscribes Research report, the global 5G market is forecast to grow at a compounded annual growth rate (CAGR) of around 97% over a five-year period and will reach a value of US$251bil by 2025.

“5G is expected to meet the rising need for bandwidth, advanced application services, and the rising inculcations of the Internet of Things (IoT).

“5G networks are expected to not only drive us towards a more connected society, but also bring about socio-economic transformation in many ways – increasing productivity, sustainability, and well-being.

“The fifth-generation mobile technology (5G) is on its way to becoming the next big thing in the global digital connected ecosystem,” the Netscribes report says.

According to a Mckinsey & Company report, globally, the automotive industry has recovered from the economic crisis.

“By 2020, global profits could increase by another 25 billion euros, to 79 billion euros.

“That is good news, but the benefits will not be distributed equally across all geographies or all types of cars.

“Instead, some regions and segments will do much better than others,” the reports said.


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