PETALING JAYA: DRB-Hicom Bhd’s sub-subsidiary Hicom-Teck See Manufacturing Malaysia Sdn Bhd (HTS) today entered into a shareholders agreement with China’s Jiangsu Xinquan Automotive Trim Co Ltd (XQ) to form a joint venture company (JVC) in Malaysia to design, develop and manufacture instrument panel, floor consoles and door trims and related components for vehicles.
The proposed name for the JVC is Xinquan-Hicom Malaysia Sdn Bhd, in which HTS will have a 49% stake, while XQ HK will own the remaining 51%.
HTS’s principal activity is manufacturing and sales of thermo plastic and thermo setting products.
XQ is listed on the Shanghai Stock Exchange. Its principal activity is the manufacture and sales of automotive body parts. Its major shareholders are Jiangsu Xin Quan Zhi and Investment Co Ltd and Tang Zhihua, which own 33.04% and 17.83% equity interest in XQ respectively.
The proposed JV will be for a tenure of 10 years and will be renewed automatically for an additional 10 years unless both shareholders agree to non-renewal within one year prior to the date of the 10th anniversary of the establishment date of the JVC.
“Via the participation of HTS in the JVC, the DRB-Hicom Group will be able to continue supporting Proton’s business which includes expansion into the Asean market. JVC is also targeting to penetrate the Asean market with products manufactured using new technology,“ DRB-Hicom said in a stock exchange filing.
HTS proposes to fund its initial capital contribution for the JVC from its internally generated funds and bank borrowings.
Barring any unforeseen circumstances, the proposed JV is expected to contribute positively to the future earnings of the group.
