Deftech To Spend Over RM100 Million For Plant Expansion
By Nor Baizura Basri
KUALA LUMPUR, April 19 (Bernama) -- DRB-Hicom Defence Technologies Sdn Bhd (Deftech) is spending more than RM100 million to expand its plants in Pekan, Pahang and Nilai, Negri Sembilan to cater for the production of 8x8 Armoured Wheeled Vehicle (AV8) for the Malaysian military, slated at end-2013.
Its chief executive officer Abdul Harith Abdullah said the construction of new facilities will start after the 13th Defence Services Asia 2012 (DSA 2012) and it should be ready on time for the first unit of sealed pattern (prototype) to arrive in Malaysia by September.
"We have to make a proper preparation for the arrival of the sealed pattern. We have to be prepared in terms of manufacturing works, quality testing as well as certification...all these have to be ready," he told Bernama in an interview on the sidelines of DSA 2012 here today.
The upgrading of facilities includes improving the security system, larger storage space complete with racking system, maintenance, repair and overhaul (MRO) and administrative block.
Abdul Harith said after the expansion, the Pekan plant will manufacture the AV8's hull (platform) while the Nilai plant will manufacture its turret.
Deftech, a wholly-owned subsidiary of DRB-Hicom, has been supplying the military with Hicom Handalan General Cargo Truck 4x4 as well as Adnan Armoured Combat Vehicle.
Last year, it bagged a RM7.2 billion contract to supply 257 units of AV8 with 12 variants for a duration of seven years.
To prepare for the sealed pattern, Abdul Harith said 60 engineers have been deployed in three locations namely Turkey, South Africa and France with its technical partners since last year.
"We are procuring the system from various original equipment manufacturer (OEM) but these are the three main stations where our people are based for further research and development.
"On top of that, there are seven or more project army teams that are stationed in Turkey, working together to develop the sealed pattern. This is beyond prototype, the first sample before we go into actual production," he added.
The AV8, to be delivered in phases until 2018, would likely see two types of sealed pattern -- AV8's 25mm one-man turret and 30mm two-men turret, being developed before the actual production next year.
Deftech, which focuses on three core divisions -- defence, commercial and MRO, currently saw defence as a major contributor to revenue with 70 per cent, MRO accounted for 20 per cent and the remaining from commercial.
Abdul Harith also said the company planned to embark strongly into the commercial sector by pushing its specialised vehicles, with heavy industries sector as its target market.
Apart from that, he said MRO, which currently contributed an average revenue of RM60 million a year, can also be further strengthened as military vehicles in particular will require special care with immediate and regular maintenance.
These strategies are important for the company to ensure that it is less dependent on defence segment, taking stock of reduced government's budget for defence to focus more on social economic development.
Abdul Harith said the AV8 contract however would provide financial sustainability for Deftech in the next seven years and would start to reflect in its 2013 financial year.
"We expect a 50-60 per cent jump in revenue," he said, but declined to reveal the company's last financial results.