DRB-HICOM plans RM1b capex

The bulk of the capital expenditure will be used to expand its automobile assembly plant in Pekan, Pahang

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Shah Alam: DRB-HICOM Bhd, a conglomerate, plans to spend up to RM1 billion in its current financial year mainly to grow its automotive business. According to group managing director Datuk Seri Mohd Khamil Jamil, the bulk of the capital expenditure will be used to expand its automobile assembly plant in Pekan, Pahang, for the assembly of Volkswagen Passat as well as the manufacture of 8x8 armoured wheeled vehicles. The rest of the money will be used to set up an International College of Automotive Manufacturing, its flagship campus, as well as for property development projects. It also plans to raise as much as RM1.7 billion over the next five years. The funds will be used to finance the group's expansion in its automotive business as well as to part-finance its recent acquisition of Pos Malaysia Bhd. "We are looking into the (fund-raising) programme now, within this year or next year (to start the programme)," Mohd Khamil said after the company's annual general meeting yesterday. Mohd Khamil added that the company is looking at several funding options, including sukuk. On its automotive business, Mohd Khamil said the company is in talks with Audi to assemble Audi cars in the country. "We are the franchise holder (of Audi) here ... that is one of the things in my Key Performance Indicator (KPI)," he said. DRB-HICOM has been the local sole importer and distributor of Audi vehicles since 2003 through wholly-owned Euromobil Sdn Bhd, achieving a total sales of 745 units in the financial year to March 31 2011, an improvement of 55 per cent against 2010's sales of 480 units. On its property business, Mohd Khamil said several property launches have been lined up for the current financial year, with an estimated gross development value of RM500 million. These property launches include the subsequent phase of Glenmarie Gardens bungalows, Laman Glenmarie residential units, semi-detached houses and commercial developments in Proton City and bungalows in Glenmarie Cove in Carey Island.