Friday July 30, 2010

Kontron plans RM20m upgrade

By DAVID TAN
davidtan@thestar.com.my

Firm seeks better technology to focus on original design manufacturing activities

GEORGE TOWN: Kontron Design Manufacturing Service (M) Sdn Bhd (KDMS) is investing US$20mil over the next five years to upgrade its surface mount technology production lines.

Chief executive officer Michael Riegert told a press conference that the upgrading exercise was to position the group to focus more on the original design manufacturing (ODM) business.

“We are negotiating with two multinational corporations in Malaysia to provide them ODM services,” he said.

“The ODM market has special requirements on the product lifecycle, the longevity and the time to market. This requires the use of technologies, design approaches and a cost efficient flexible production.”

Riegert said the present plant in Butterworth was now about 70% utilised.

“We are looking to expand which includes the possibility of acquiring a bigger facility,” he said.

KDMS provides ODM and original equipment manufacturing services for single computer boards and box-built products such as car amplifiers, industrial switches, controllers for industrial automation equipment.

Its German parent company Kontron AG was strong financially and posted revenue of 116.1mil euros in the second quarter of 2010, Riegert said, adding that year to date, orders for Kontron had risen to 398.1 million euros.

After writing off receivables amounting to 34mil euros recently, Kontron still had cash and cash equivalents of 44.4mil euros.

On the alleged fraud at KDMS, Riegert said investigations were still being carried out.

“The investigations should be wrapped up in the next several weeks,” he said, declining further comment.