KUALA LUMPUR (Aug 15): The Malaysian Investment Development Authority (MIDA) and Perusahaan Otomobil Kedua Sdn Bhd (Perodua) have identified five vendors for the MIDA-Perodua Digital Transformation Ecosystem Programme launched on Monday (Aug 15) at MIDA's headquarters.

These vendors are Armstrong Auto Parts Sdn Bhd, Ingress Aoi Technologies Sdn Bhd, Namicoh Suria Sdn Bhd, PD Kawamura Kako Manufacturing Sdn Bhd (PDKM) and Kumpulan Jebco (M) Sdn Bhd.

Notably, Perodua Auto Corp Sdn Bhd owns 51% of PDKM and 15% of Ingress.

The programme aims to upgrade local automotive suppliers to the next level by using cutting-edge technologies and machinery and to digitalise their manufacturing processes through adoption of Industry 4.0.

The first phase of the programme, formerly known as Malaysia Lighthouse project, had its pilot project begun in 2020 with three vendors, namely LSF Technology Sdn Bhd, JK Wire Harness Sdn Bhd and Autoliv Hirotako Safety Sdn Bhd.

When asked how the programme has helped spur Perodua's manufacturing volume, Perodua president and chief executive officer Datuk Seri Zainal Abidin Ahmad highlighted that volume is not the programme's focus.

"We don't focus on that. What we focus on is what we call process KPI (key performance indicator), meaning culture development, people's development, discipline and process improvement," he said during a press conference.

Zainal explained that the main factors assessed for companies selected for the programme are their human capital, complexity of the (operational) process, as well as the eagerness of the management and partners' attitude.

Nonetheless, he declined to disclose the amount of funding assistance given to the vendors.

"I would say some support was received from the government. Perodua also has its own vendor development fund but these numbers are not fixed, it [will only be decided] when we figure out what is necessary to support them," he said.

He further clarified that the internal vendor development fund is not specifically for the digital transformation programme.

"We use that fund basically to support the vendors. For example, last year because of the flood, they needed to restart the production early. Hence, we used this money to support them. We are always concerned and put on some budget allocation so that our vendors can continue [producing].

"The support we give to vendors is actually not necessarily only to provide to Perodua, but also for other companies (automotive or non-automotive clients). We are very open because these vendors must survive," he said.

MIDA CEO Datuk Arham Abdul Rahman, during his speech at the launch, said that the three initial vendors have also been granted Domestic Investment Strategic Fund (DISF) as part of the government's initiative to assist the local companies to embark on the global supply chain. Each company can apply for up to RM10 million under DISF.

"This RM10 million can be divided [by the company] into, maybe, 50% for automation and modernisation. It can also go into international certification, research and development and training," he noted.