KUALA LUMPUR: Leading electronics manufacturing services (EMS) provider V.S. Industry Bhd’s (VIB) wholly-owned subsidiary, VS Industry Philippines Inc (VSIP), secured new orders from a key customer to manufacture selected consumer electronics products on a box-build assembly basis.
A box-build assembly refers to providing end-to-end processes from production to assembly, testing, packaging, labelling, and logistics arrangement.
Based on the recurring nature of the orders, the key customer’s expected revenue contribution to VIB is RM0.3 billion for FY25 and RM1.2 billion for FY26.
This is derived from anticipated sales volume and pricing, bringing the aggregate expected revenue over the next 2 financial years to RM1.5 billion.
VIB managing director Datuk S.Y. Gan, this deal underscores the group’s manufacturing capabilities and further cements the company’s position as a top 5 EMS provider in Asean and a top 50 EMS player globally.
“We want to hit the ground running at our facility in the Philippines and target to commence mass production by the first quarter of 2025,“ he said.
VSIP has also entered into a lease agreement with ALogis Artico Inc (AAI) for the lease of 52,782 sqm in a factory building located at ALogis Sto. Tomas, Light Industry and Science Park III, Barangay San Rafael, in the Philippines.
“We have strategically chosen an asset-light model for our venture in the Philippines as a core element of our risk management strategy.
“Hence, the group’s facility in the Philippines is rented, which significantly lowers our financial commitment. The group has allocated around RM100.0 million for capital expenditure, which would be funded through internally generated funds. Installation of machines will commence soon, with trial runs to proceed thereafter,“ Gan said.
He said the expected aggregate revenue contribution of RM1.5 billion over the next 2 financial years will strengthen the group’s earnings and broaden geographical exposure.
“All in all, this is an exciting development for the group as we embark on a new chapter of growth.
“We are confident in our plans in the Philippines by leveraging on our strong technical expertise and lean balance sheet,“ Gan said.
The key customer is an existing customer of the group in Malaysia. However, the customer’s identity and further information will remain confidential as VSIP has signed a non-disclosure agreement with the key customer.
The lease will be for 5 years commencing from September 2, 2024, with an option to renew for a further 5 years upon terms to be mutually agreed upon.
AAI is a wholly owned subsidiary of AyalaLand Logistics Holdings Corp, a publicly listed real estate company in the Philippines.
The company’s principal activities are industrial real estate, leasing standard factory buildings, and operating cold storage facilities.
