SHAH ALAM: Eita-Schneider (Mfg) Sdn Bhd, a subsidiary of listed Eita Resources Bhd, has tied up with Shanghai firm Step Electric Corp to expand its manufacturing division.

The joint venture (JV), sealed yesterday 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. 

Eita Resources (fundamental: 1.7; valuation: 1.2) group managing director Fu Wing Hoong expects the JV to contribute positively to the manufacturing division beginning October this year. 

“We have already seen some demand and volume from the JV,” he said.

“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 said.

Fu said the manufacturing division is 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 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.

This article first appeared in The Edge Financial Daily, on March 10, 2015.