YBS’ RM567mil plant in Penang to begin ops soon

GEORGE TOWN: YBS International Bhd’s RM567mil plant in Penang Science Park will start operations by year-end.

Group managing director Jackie Yong Chan Cheah told StarBiz that the plant would focus on producing lithium batteries for use in Internet-of-Things wearables, two-way radios, smartphones and laptops.

Besides batteries, the plant will also focus on surface-mounting technology, cable assembly, connector assembly, precision machining and packaging activities.

Yong said the group’s key customers comprised world-class multinational corporations with annual revenues of US$30bil in each segment.

“The customers are in expansion and growth mode and they have had stable relations with us for the past 12 to 25 years,” he said.

The plant sits on a 10-acre site and has a 320,000-sq-ft production floor. For 2024, the group will invest RM120mil to upgrade and expand the plant’s capacity, according to Yong.

On the new plant, Yong said the equipment installed cost US$100mil.

“YBS is forking out 70% of the investment while our partner, Enovix Corp, contributes the remaining 30%. The group paid RM24mil for the land and building,” he said.

Yong said the group’s positioning in lithium batteries was timely.

According to an Allied Market Research report, the global portable battery market size, valued at US$10.8bil in 2020, is projected to reach US$27.5bil by 2030, registering a 10.4% compounded annual growth rate from 2021 to 2030.

The report said portable battery finds its application in several end uses such as electrical industry and automotive industry.

It said the smartphone segment accounted for a significant share of the portable battery market in 2020, owing to the application of smartphones in modern society.

“Moreover, the increase in functions in smartphones puts a heavy burden on the hardware and battery capabilities, which leads to the investment of various battery and electrical giants to overcome several problems.

“In addition, the increase in usage and government policies to support cashless payment through mobile devices and their convergence with other devices is one of the most critical factors that propel the demand for smartphone devices.

“This, in turn, encourages manufacturers to develop more efficient batteries, providing ample opportunities for the growth of the market,” it added.

Yong said the group was fully aware of the persistent volatility in the global business environment, driven by economic uncertainties and geopolitical tensions.

“The ongoing US-China trade war and global financial market sentiment shifts are vital factors impacting the market dynamics.

“In response to these challenges, the group is steadfast in its commitment to enhancing efficiency, productivity and cost-effectiveness.

“These strategic endeavours aim to strengthen the group’s competitive position and ensure a consistent and sustainable income stream,” he said.

According to Yong, the group remains cautious and focused on its core business activities, given the prevailing circumstances.

“The group will exert efforts to grow sales and overcome obstacles, taking prudent measures to ensure financial stability and sustain performance.

“By safeguarding the long-term interests of shareholders, the group aims to maintain profitability and generate sustainable returns,” he added.

YBS’ financial position remained strong in the financial year 2023 (FY23), and its business generated a consistently positive operating cash flow.

The group reported total borrowings, including bank overdrafts, of RM57.52mil as at FY23 compared to RM44.52mil as at FY22.

The increase in borrowings was mainly due to financing the capital expenditure associated with the renovation and extension of the factory building project.

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