EP Manufacturing To Diversify Into Water Business
30th May 2007

EP Manufacturing Bhd (EPMB) is diversifying into the water business to reduce its heavy reliance on the automotive sector and lift its sagging revenue, executive chairman Hamidon Abdullah said today.

EPMB's automotive division incurred losses in the last two years due to the weak automotive industry and market changes after the National Automotive Policy was implemented.

"EPMB expects an equal contribution from water and automotive in terms of revenue in the next three years," he said.

EPMB had last April acquired Circle Ring Network Sdn Bhd (CRN), a manufacturer and assembler of electronic water meters, for RM38.5 million cash.

CRN is the Malaysian manufacturing partner of Severn Trent Metering Services Ltd (STMS), a unit of Severn Trent PLC, which is the second largest water group in Britain and a leading water operator in the United States.

"The acquisition gives EPMB the opportunity to expand into the local and regional water sector as well as use Severn Trent's global network to sell the electronic water meters in the world market," Hamidon told a media briefing on the company's Smart Water solutions venture in partnership with Severn Trent.

He said EPMB expects between 10 and 12 percent contribution from export sales and is confident of securing a large slice of the local market via its network and expertise.

STMS also has granted the exclusive rights to CRN to sell and distribute its products throughout Southeast Asia, Taiwan, Pakistan, Bangladesh, Papua New Guinea, Australia, New Zealand, Micronesia, Singapore, Japan and China.

Hamidon said that under the partnership, the company will manufacture a water meter called SmartMeter, which can monitor and reduce non-revenue water (NRW) losses as well as improve utility income.

NRW is unbilled water as a result of leakage, illegal use and undermeasurement of usage, he said, adding that Malaysia's NRW is currently at a whopping 39.3 percent.

He said in view of the government's objective to reduce NRW to 30 percent by 2010, it is expected that local market sales will contribute positively to EPMB's revenue.

On its automotive business, Hamidon said the company aims for a better performance driven by Perodua's Viva model.

"Our business will also be supported by our partnership with Bosch, when our air and fuel intake modules are used in Proton vehicles, possibly from September," he added.

Source:
BERNAMA