SHAH ALAM: EITA-Schneider (Mfg) Sdn Bhd, a subsidiary of listed EITA Resources, has tied-up with Shanghai firm STEP Electric Corporation in a bid to expand its manufacturing division.

The joint venture, sealed today between the two companies, will see a new company, Sigriner Automation (Mfg) Sdn Bhd, formed between EITA-Schneider and STEP with each holding a 50% stake in the entity.

Sigriner Automation will have an initial authorised share capital of RM5 million and an initial issued and paid-up share capital of RM1 million.

EITA Resources Bhd group managing director Fu Wing Hoong expected the joint venture to contribute positively to the manufacturing division beginning October this year.

"We have already seen some demand and volume from the joint venture," he said, declining to reveal further.

"Our partnership brings forth each organisation's strong commitment with synergies in market expansion, research and development, product innovation and cost efficiency to tap into burgeoning regional markets," he added.

He said the manufacturing division was expected to yield a higher contribution to earnings over the next two years due to the company clinching two contracts to provide elevators and escalators for the Mass Rapid Transit (MRT) project, with a value of RM95 million in total.

"Our long-term target is for the manufacturing sector to contribute 70% to earnings by 2020," he added.

Fu also said the company planned to spend more than RM13 million in capital expenditure (capex) over the next two years, with RM12 million being allocated for its new factory in Bukit Raja, Klang.

The company's core elevator segment has an orderbook of RM200 million, Fu said.