DRB-HICOM To Reduce Dependency On Its Auto Segment
Conglomerate DRB-HICOM Bhd expects to reduce its dependency on the automotive sector following its restructuring exercise.
However, the sector will remain its core business, said Group Managing Director Datuk Mohd Khamil Jamil.
He said the group’s automotive segment will account for 45 percent of revenue after the completion of the group’s restructuring by 2010.
Currently, the automotive segment contributes 58 percent to revenue from 70 to 80 percent previously, he told Bernama following a breaking fast event with Bernama staff at Wisma Bernama recently.
The group’s other three core businesses are services (financial and non financial), property and infrastructure as well as defence.
Currently, 37 percent of the group’s revenue come from its services business, 14 percent from properties and infrastructure and two percent from its defence business.
Following the completion of its restructuring, Mohd Khamil said the breakdown in revenue contribution will be 45 percent from automotive, 35 percent from services and the remaining from the property and defence arm.
He also disclosed that the group was in the final stage of restructuring and was taking stock of its position in view of the current economic situation.
Among others, he said the services sector will be important to the group especially with the growing Islamic financial services. It had received shareholders nod for the acquisition of a 70 percent stake in Bank Muamalat.
In the non-financial services, the group is involved in cost generating concessions through the likes of Alam Flora Sdn Bhd, Puspakom Sdn Bhd and Kuala Lumpur Airport Services Sdn Bhd.
The latest addition is that of Rangkai Positif Sdn Bhd which has a 25-year concession with Tanjung Bin Sdn Bhd, to provide operation and maintenance services to the Tanjung Bin power plant.
As for properties, he said the group was involved in the niche market, developing even a waterfront project.
Nevertheless, with all its core businesses in place, Mohd Khamil believed DRB-HICOM could build a strong foundation at home before venturing overseas.