MBM to ramp up alloy wheel production

SHAH ALAM: Automotive group MBM Resources Bhd expects to ramp up its alloy wheel production to 200,000 units per month by end of 2015 from 34,000 units last year, driven by the completion of third phase capacity expansion of its alloy wheel facility in Rawang.
"We hope this (facility) to be commissioned by fourth quarter this year and be ready by early 2016 to have us install a capacity of 750,000 units per annum in the beginning of next year," its group managing director Looi Kok Loon told reporters after the group's AGM yesterday.
He said at the moment its alloy wheel production capacity per annum is 500,000 units.
Looi said its alloy wheel production is growing due to rising demand for alloy wheels in the country and new orders from vehicle manufacturers.
"The demand for alloy wheel is the shift from steel wheel to alloy wheels, which has continued to gain momentum. Last year, almost 2 million units of alloy wheels were installed into the market, of which we supply only a very small number to the industry," he added.
He said the firm's joint-venture company Oriental Metal Industries (M) Sdn Bhd (OMI), which manufactures steel and alloy wheels recently secured the supply of wheels for a few Perusahaan Otomobil Kedua Sdn Bhd's (Perodua) models.
MBM Resources has allocated a capital expenditure (capex) of RM45.9 million this year compared with RM44.7 million last year.
Looi said of the RM45.9 million capex, RM16 million will be used for the third phase of capacity expansion of OMI, RM4 million to set up a showroom centre in Shah Alam for Iveco, an Italian commercial vehicle brand and the remaining for progressive expansion of its sales and services network.
"Our decision to add capacity by upgrading existing services centres also helped us to diversify our income stream by lessening dependence on vehicle sales," he added.
For the first quarter ended March 31, 2015, its net profit increased to RM35.14 million from RM23.42 million in the previous corresponding quarter, mainly attributable to recognition of revenues from its property development and better results from motor trading division and from associates.
Revenue was also up to RM591.74 million against RM447.36 million previously.
Going forward, he said the group will continue to focus on its after sales business, noting in the last five years this segment has grown about 50%."Last year, the after sales were up by 11%. This is the sort of business that we like because regardless of whether the economy is slowing down, the after sales business is very resilient.
Meaning that although car sales are down, after sales are still growing," he added.