DRB-Hicom, Geely form JV to develop Automotive Hi-Tech Valley project
11 Dec 2023
DRB-Hicom Bhd has entered into an agreement to form a joint-venture (JV) company with China’s auto giant Zhejiang Geely Holding Group Co Ltd for the overall operation and management of the development and construction of the Automotive Hi-Tech Valley (AHTV) project in Tanjung Malim, Perak.
In a statement on Monday (Dec 11), DRB-Hicom said it will hold a 50.1% stake in the JV company, while its Chinese partner Geely Holding will hold the remaining stake.
According to DRB-Hicom, the JV agreement outlines the key principles of the strategic collaboration, alignment on objectives, and terms of the partnership.
“A JV company will leverage on the respective strengths and expertise of DRB-Hicom and Geely Holding in establishing AHTV as the international next generation vehicle hub in Malaysia.
AHTV will encompass extensive automotive and mobility solutions across the value chain, from a full-fledged high technology global research and development centre, to world-class automotive original equipment manufacturers and manufacturing clusters,” it said.
The diversified group added that it would support services within an associated ecosystem, such as logistics, training and learning institutions within a smart city for the automotive industry.
Prime Minister Datuk Seri Anwar Ibrahim, who witnessed the exchange of documents earlier on Monday, said the government is committed to providing the relevant and required support for the AHTV development that is being actively carried out by Geely Holding and DRB-Hicom.
In a post on social media platform X (formerly Twitter), Anwar, who also had at a discussion in the morning with Geely Holding chairman Eric Li, said he emphasised that investments made in Malaysia must bring benefits to local talents and businesses.
“Geely shared that among the draws that drove them to invest in this country is the benefits from Malaysia’s trade relations with countries such as the US and European Union, in addition to its shareholding in Proton,” the prime minister said.
DRB-Hicom group managing director Tan Sri Syed Faisal Albar signed the JV agreement on behalf of DRB-Hicom while Geely Holding was represented by its chief executive officer Daniel Li.
Also present were Eric Li and Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Aziz.
To recap, DRB-Hicom and Geely Holding had in April signed a heads of agreement to develop the AHTV as the next-generation vehicle hub in Malaysia, during the Malaysia-China Business Forum in Beijing.
The 1,000-acre AHTV is estimated to receive a massive US$10 billion (RM46.8 billion) investment from Geely, as it aims to turn Tanjung Malim into the largest auto city in the region.
According to media reports, the AHTV is expected to attract some RM32 billion worth of investments over the next 10 years, along with direct and indirect benefits from national car company Proton Holdings Bhd’s plan to fully relocate its manufacturing facilities to Tanjung Malim by 2026.
Proton, in which Geely owns a 49.9% stake while DRB-Hicom holds the remaining 50.1%, currently produces five models in the AHTV and another two models in Shah Alam, Selangor.
Shares in DRB-Hicom finished unchanged at RM1.37, giving it a market capitalisation of RM2.65 billion. Year to date, the stock has fallen by 17.5%.
Source: The Edge Malaysia
