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Bolstering Australia, China marts

Publish date: Mon, 29 May 2023, 10:22 AM

KUALA LUMPUR: Sime Darby Bhd will bolster its footprint in Australia and China, its largest markets in terms of revenue and profits, as it seeks opportunities to grow organically as well as through mergers and acquisitions (M&As).

Group chief executive officer Datuk Jeffri Salim Davidson said Sime Darby - Malaysia's oldest conglomerate - had been very active in the acquisition front over the last five years.

"We have made several acquisitions that not only contributed to the jump in revenue but also served to diversify our earnings base and strategically repositioned the group along adjacent value chains.

"As a multinational corporation operating across the Asia Pacific region, which is the fastest growing economic block in the world, we are able to leverage on our deep regional expertise and decades long experience in both core sectors.

"This has continued to assure our long-term partners and attract new collaborators," Jeffri told the New Straits Times recently.

The acquisitions included the Caterpillar business in New Zealand, three car dealerships in Paramatta in Sydney and Salmon Earthmoving - a leading provider of heavy equipment rental services in Australia.

The group's most recent acquisition was Onsite Rental Group Ltd, a leading provider of business-to-business equipment rental solutions to customers across a range of industries in the Australian market.

With mining activities booming, Jeffri is confident that the Onsite acquisition will be a net positive for Sime Darby, and deliver long-term value to its shareholders.

"Onsite Rental Group itself is a huge entity, and with our combined resources and the strong team that we retained, we believe that we can unlock significant potential, contributing to increased earnings and diversification of our industrial rental equipment offerings across Australia."

He added that the acquisition represented an opportunity for the group's industrial division to enter the B2B rental services market through an established, sizeable and reputable provider with an established platform for future growth.

"The acquisition complements industrial division's existing mixed rental offering through Salmon Earthmoving and Hastings Deering by providing products across access, power, site accommodation, tooling and small-scale earthmoving that strengthens our participation across the industrial equipment rental spectrum in Australasia," he said.

For its motors operations, Sime Darby is currently operating in 19 countries in Asia Pacific.

In 2022, Sime Darby set up 16 auto dealerships and service centres in China.

"Looking back over the last few years, our growth has been concentrated on both the Australian and Chinese markets, which are also our largest markets in terms of revenue and profits. Certainly, we always look forward to strengthening our footprint in these markets while also assessing potential in other markets as well," he said.

On whether the group expected new automotive marques to be added to its stable in Malaysia or other markets this year, Jeffri said: "We are very happy and proud to have long and fruitful partnerships with some of our most admired brands in automotive, such as BMW, Porsche and Ford.

"But as mentioned, we are always looking to grow, both organically and through M&As. One of our growth strategies is to expand our presence in key markets, including Malaysia."

The group recently announced a partnership with Chery Automobile, for the assembly of Chery vehicles at our motor vehicle production and assembly facility, Inokom in Kulim, Kedah.

"This collaboration is part of our efforts to grow our assembly portfolio," he said.

BYD, the newest marque in Sime Darby's motors division in Malaysia, has been well-received in the market, which is a positive step towards the group's goal of becoming an EV leader.

Following the launch of BYD in Malaysia last December, the group received a whopping 1,000 orders within just 10 days for the "Energy Awaken" Atto 3.

It recently launched BYD's new 3S centre in Ara Damansara via subsidiary Sime Darby Beyond Auto.

Jeffri said as the partner of choice for some of the world's most admired automotive brands, its regional EV ambitions were bolstered by an expanding EV line- up from its existing principals, complemented by partnerships with new EV brands such as Nio, Weltmeister and Li Auto.

"Our China operations provides us with a strategic platform to partner with China EVs to bring them into our other markets. Because of our China operations, we get that strategic 'front-row seat' to see how EVs are developing in China, and thus, bring them into Asean."

Sime Darby is also providing aftersales service for EV brands such as Polestar, smart and Tesla in its China operations.

Jeffri said to capitalise on the growing demand for EV charging infrastructure, it had launched Kineta to supply and install EV charging equipment for both commercial and individual customers.

"We have ambitions to be the preferred EV charging installer and operator for the region," he remarked.

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