Demak Keen To Expand Into Southeast Asia, West Asia & Africa

BANTING (Selangor, Malaysia), July 27 (Bernama) -- Demak, one of the fastest growing motorcycle brands in Malaysia, is keen to expand its market to Southeast Asia, South Asia, West Asia and Africa in the coming years, said DNC Asiatic Holdings Sdn Bhd Chairperson, Feona Wan Junaidi. She said Demak would use its new US$10.56 million (RM43 million) manufacturing plant in Olak Lempit near here as its distribution hub for market expansion into emerging economies in Southeast Asia. "Demak is targeting developing markets in South Asia, West Asia and Africa through its operations in Colombo, Sri Lanka. "Malaysia and Sri Lanka will serve as two important regional distribution hubs for our market expansion into the emerging markets," she said in her speech at the official opening of Demak Malaysia's new corporate building and manufacturing plant here Tuesday. The ceremony was officiated by the International Trade and Industry Minister Mustapa Mohamed. Demak's manufacturing plant on a 3.15-hectare site with a built-up area of 260,000 sq ft houses two production lines, warehousing, training and research and development facilities. The fully integrated plant also has manufacturing facilities for motorcycle chassis, metal-based parts and plastic parts and components. The Demak motorcycle brand name made its sales debut in east Malaysian state of Sarawak in 2003 after its holding company, DNC Asiatic Holdings, obtained the licence from the Ministry of International Trade and Industry to assemble and manufacture motorcycles in December 2002. Feona said despite the less encouraging consumer sentiment, Demak had enjoyed incremental increase in sales in the first half of this year, allowing the company to maintain a market share of over 10 per cent in Malaysia. Meanwhile, Mustapa, when talking to reporters later, urged local motorcycle manufacturers to increase local content in their production and expand their market at the global level to remain competitive. However, by increasing local content, the manufacturers must ensure that the price of their motorcyle did not escalate and incur losses to the companies, he said. "Demak is using 40-45 per cent local content in its production and there are some companies which has 90-95 per cent local content," he said. On another note, the minister said there was no restriction imposed on local car manufacturers to produce sedan cars with bigger engine capacity in view of the free market economy practiced in Malaysia. Hence, any local car manufacturer was allowed to produce cars that meet customer expectations, he added. "We have a free market in this country...whoever can offer better products and better pricing. At the end of the day, it is a question of personal choice," he said. Mustapa said this when asked to comment on whether Malaysia's largest automobile manufacturer Perodua's first sedan, the Bezza, introduced to the market recently, would have an impact on sales of Proton Holdings Bhd's sedan cars. Perodua aims to sell 7,600 units of the Bezza, priced from US$9,161 (RM37,300) to US$12,477 (RM50,800), per month this year. (US$1 = RM4.07) Prior to this, there were allegations that the Perodua sedan would affect the sale of Malaysian car manufacturer Proton's sedan cars and among the models said to be affected were the Saga, Iriz and Persona. Mustapa said the government would not interfere on Proton's move to formally identify a strategic foreign partner to forge a deeper collaboration in the near future. The government, he said, had approved Proton's application for a soft loan of US$368.27 million (RM1.5 billion), subject to several conditions which must be met by the national carmaker. "Among the conditions for them (Proton) is to find a foreign strategic partner but it is up to them, not our choice. They (Proton) have to choose right partner," he said. -- BERNAMA