Ideas sharing on machinery and parts manufacturing sector

Ideas sharing on machinery and parts manufacturing sector

winsenlim68
Publish date: Fri, 28 Jan 2022, 06:42 PM
winsenlim68
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Digging sectors with sustainable potentials – definitely machinery and parts manufacturing worth a look.

 

You would have heard of Malaysia’s prominent position in the global semiconductor supply chain, especially during critical chip shortage times amid COVID-19. Being one of the worldwide largest electrical and electronics (E&E) exporters, Malaysia has attracted attention from MNCs to set up its production base or outsource resources in the country as we can offer competitive supplies and services in machinery and equipment (M&E) engineering, product design and technology development as well as business operations.

 

So tracing across the value chain, today we would like to take a look at the starting point of all these manufacturing processes and automation solutions.

 

Why?

 

According to MATRADE (Malaysia External Trade Development Corporation), the machinery and parts manufacturing sector remains strong in Malaysia and has evolved from general fabrication and machining works to the assembly of more high-end machinery modules and components, including heavy machinery and precision components manufacturing – underpinned by the availability of highly skilled manpower, research and development, engineering design activities, and government incentives in terms of investment fund or tax exemption.

 

Malaysia’s machinery and equipment (M&E) capabilities are mainly in:

  • Specialised process machinery or equipment for specific industries
  • Power generating machinery and equipment
  • General industrial machinery and equipment, components, and parts
  • Metalworking machinery
  • Machine tools and parts for metalworking

 

A broad range of product application:

  • Heating and cooling equipment, factory automation, pumps, compressors, air conditioning plants, cold room equipment, elevators, cranes, conveyor systems, welding machines, laser-cutting machine, machining centres, Electro-Discharge Machines (EDM), milling and forging machines, deep water production equipment for O&G industry, robotic automation solutions production for F&B industry, precision moulding equipment, power generation, generating sets for power plants, refinery, exploration platforms, petrochemical plants, and commercial buildings

 

Data from MATRADE also showed that the M&E industry ranked the 7th largest export sector for our nation, representing 4% or US$9.41 billion in value of total exports in 2020. Top 10 export destinations are Singapore, US, China, Indonesia, Vietnam, Thailand, Japan, Australia, Germany, and Taiwan.

 

As Bursa Malaysia Technology Index down around 16% year-to-date, no doubt you and me will be wondering if we should stay invested or sell all. Nonetheless, we still believe that technology is the future that we are moving towards. And you already know the big boys, who else can we explore?

 

We found some interesting and potential M&As in the sector that may give some ideas:

 

AT + Dnonce

 

AT

Principally involved in gloves manufacturing, fabrication of customised parts and servicing, automation comprised of sheet metal fabrication, design and assemble

 

Dnonce

Supply of packaging and polymer engineering solutions, integrated supply chain services and contract manufacturing

 

Rationale/ Synergy
  • To generate additional incomes
  • To complement knowledge and resources to develop new products and markets
  • To improve distribution networks and customer reach

 

 

RGT + Keenness

 

RGT

One of the leading integrated solution providers of hygiene care and air care in the region

 

Keenness

Precision machining and tooling for moulds, metal parts and components through Wire Cutting EDM Machine and Computerised Numerical Control (“CNC”) milling machines

 

Rationale/ Synergy
  • To further venture into Electronic Manufacturing Service
  • To complement offerings by providing precision metal parts and components to its existing and new customers to various industries such as hard disk drive, semiconductor and medical industry
  • To leverage on Keenness' current and prospective customer base and network – cross selling opportunities
  • To potentially scale higher business and revenue growth from the product offerings and enlarged customer base
  • To establish reputation and industry position to current and new target markets
  • To achieve the strategic vision of becoming a more integrated “One Stop Manufacturing Solution” provider to global customers

 

 

Luster + Aimflex

 

Luster

Principally involved in manufacturing of plastic parts and components and machining of metal parts

 

Aimflex

Principally involved in manufacturing and modification of specialised automation machines, provision of maintenance and technical support services and supply of spare parts, marketing and supply of industrial automation test equipment and related parts, design and fabrication of metal panels, frames and precision parts, distribution of statistical analysis software, wireless communication devices and robotic arms and sales of  specialised automation machines

 

Rationale/ Synergy
  • To leverage on Aimflex's expertise and experience in the manufacturing and modification of automation machines and fabrication of precision parts and metal panels, to create business opportunities to promote and embrace the digital revolution in accordance to the introduction of Industry 4.0
  • To tap into Aimflex’ automation and engineering solutions to help streamline Luster and its subsidiaries’ manufacturing and business processes
  • To share customer bases, provide a platform for Luster to penetrate the automation industry
  • To provide opportunity to expand its current market to Johor where a significant number of MNCs are located
  • To contribute positively to the future earnings

 

 

Feel free to share with us your views!

 

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