Thursday 28 Mar 2024
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GEORGE TOWN (July 31): SAM Engineering and Equipment (M) Bhd (SAM Malaysia) is expected to see a re-investment of US$50 million (RM191.5 million) for new machines, according to its parent company Singapore Aerospace Manufacturing Pte Ltd (SAM).

SAM holds a 5.91% direct and 62.6% indirect stake in SAM Malaysia via its subsidiary Singapore Precision Engineering Ltd.

“Over the last few years, SAM Malaysia has secured new engine programmes and this will require additional investments of at least US$50 million (RM191.5 million). SAM Malaysia's cumulative investments to-date in Penang is US$120 million (RM460 million) and the workforce employed is 760," said SAM chairman Philip Yeo.

Speaking to reporters after witnessing the signing ceremony between Temasek Holdings (Private) Ltd and Penang Development Corp (PDC) today, Yeo said SAM Malaysia, which makes plane engine parts for Boeing and Airbus, will also increase its workforce to 1,000 including engineers and machinists in the next two years.

Earlier, Temasek and PDC signed a joint venture to set up BPO Premier Sdn Bhd (BPSB), with PDC holding a 51% stake and Temasek the remainder 49%, to establish its RM11.3 billion Business Process Outsourcing (BPO) Prime project in Bayan Baru on the island, and the Penang International Technology Park in Batu Kawan.

BPSB also signed two agreements with Symbiosis Ventures Management Sdn Bhd, a special purpose vehicle set up by Singapore’s city development management company Economic Development Innovations Singapore (Edis), to handle management and investment promotion services.

Yeo, who is also Edis chairman, said the collaboration with BPSB requires the former to plan, develop and market BPO Prime, which will take off by next year.

“Penang aims to address the opportunity for SSO (shared services and outsourcing). There is a lot of demand but not enough supply. We form the management company to oversee the overall execution of this project.

“Our team will work closely with InvestPenang Bhd to attract the right profile of BPO companies to Penang. We (Edis) aim to bring 3,000 to 4,000 high value SSO jobs in the coming years,” Yeo said.

Chief Minister Lim Guan Eng said the BPO Prime project to be sited on a 6.8 acre land in Bayan Baru will be built between 2016 and 2019, pending planning and building permissions from the local authorities.

Lim told reporters that the BPO Prime is expected to provide the catalyst for a new cluster of economic development from knowledge process outsourcing and information technology outsourcing.

“It will provide the catalyst for Penang’s industrial transformation by giving a home to multinational companies, especially Fortune Global 500 companies and local tech companies.

“The hub could give rise to an estimated job creation of 4,000 high income and quality jobs,” he said.

BPO Prime is part of Penang government’s vision to become one of 31 global BPO hubs and tap into the estimated US$458 billion (RM1.4 trillion) SSO industry.

Lim said the SSO sector has achieved rapid growth with revenue doubling from RM6.39 billion in 2009 to RM12.79 billion in 2013.

SAM Malaysia (fundamental: 2.5; valuation: 2) dropped 11 sen or 2.08% to close at RM5.19, giving it a market capitalisation of RM447.74 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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