KUALA LUMPUR: VS Industry Bhd has secured a US$82 million (RM326 million) contract to design and manufacture a new model of coffee brewer for an existing major customer.

In a filing with Bursa Malaysia yesterday, the electronics manufacturing service provider said its wholly-owned subsidiary, VS Plus Sdn Bhd, on Aug 10 entered into an addendum to contract a manufacturing agreement with the customer.

Under the deal, VS Industry will design and manufacture a new model of coffee brewer, while the customer undertakes to purchase a certain minimum quantity over the next three years amounting to US$82 million.

This is the first full original design manufacturing (ODM) model of coffee brewer by VS Industry for the customer and the customer has granted exclusive manufacturing rights to the group for the first 18 months.

The group expects to begin mass production of the new coffee brewer in January 2017, and the contribution should kick in starting from the current financial year ending July 31, 2017.

VS Industry managing director Datuk Gan Sem Yam said this is a significant milestone for the group. “To have us fully design a coffee brewer for them demonstrates the level of confidence and trust they have in our capability and quality.”

Gan said the client is a well-known brand of a personal beverage system company in North America, with annual turnover of several billion US dollars.

He also shared that VS Industry is increasingly moving up the value chain to be the ODM producer instead of just being an original equipment manufacturing producer.

“This helps to forge a stronger bond with our customers. In fact, our highly capable research and development team now undertakes designing, prototyping and testing work for a number of our customers,” he said.

Shares in VS Industry closed down one sen or 0.69% at RM1.43 yesterday, with a market value of RM1.67 billion.