094 DRB-HICOM • ANNUAL REPORT 2021

EVOLUTION IN MOTION • DRB-HICOM 095

CONTINUOUS
REFINEMENT
EQUALS PERFECTION

PERSPECTIVE
096 Chairman’s Message
098 Management Discussion and Analysis
(MD&A)
102 Operational Review
114 Business Review
114 • Automotive Sector
126 • Aerospace and Defence Sector
130 • Postal Sector
132 • Banking Sector
134 • Services Sector
140 • Properties Sector
096 DRB-HICOM • ANNUAL REPORT 2021
CHAIRMAN’S MESSAGE
Dear Shareholders
When I wrote last year’s message in the annual report, I had
only recently been appointed Chairman of DRB-HICOM Berhad
(“DRB-HICOM” or “the Group”). After having spent my first full
year with the Group, I now feel better qualified to provide a more
insightful, albeit brief, account of the Group’s performance. Things
were of course shadowed by the COVID-19 scourge that we are
still dealing with, especially in ensuring our many subsidiaries
were able to navigate the choppy seas.
While the focus was on the subsidiaries, at the parent company we
were also charting changes. Among them was the revamp of our
Purpose Statement and Cultural Beliefs. On the preceding pages,
you will see the new Purpose Statement and Cultural Beliefs of
DRB-HICOM, a result of several months of surveys, workshops
and hackathons that engaged all levels of our workforce. Why did
we undertake this? It is cliché, but we operate in a totally changed
environment, pandemic notwithstanding. We needed to change
the way we did things, the way we engaged and also the way
we compete. That was only ever going to take off if we changed
our inputs. The cultural change we are undertaking is aimed at
changing the way we face our business as usual challenges, to
ensure that the output is one that will result in another change:
better results. Over the next few years, these new values will be
taken across the Group in phases, as we engage all 46,000 of our
employees as well as the millions that we serve daily.
Bumpers at HICOM-Teck See Manufacturing Malaysia
Sdn. Bhd. being cured on the manufacturing line
As a diversified conglomerate, DRB-HICOM is perhaps better able
than other corporations to face economic downturns such as the
current pandemic. Indeed, this was borne out in 2021, with certain
companies still managing to pull together strong results despite
the circumstances.
PROTON is one such example. Overcoming the three-month
lockdown, microchip shortage and logistics bottlenecks, our
national carmaker increased its market share while the total
industry volume (“TIV”) contracted. The team at PROTON
has truly done DRB-HICOM proud, and not only because of its
financial performance. Thanks to conscientious efforts to adhere
to its localisation programme, PROTON’s on-going success story
is being shared by an increasing number of local vendors and
suppliers. Effectively, PROTON’s growth is nurturing an entire
automotive ecosystem, elevating technical knowledge and
capabilities of local vendors.
Other than PROTON, Bank Muamalat also achieved very positive
results including its highest profit before tax (“PBT”). Again, its
performance is something that we can feel proud of beyond
purely financial reasons. While enhancing its income, the Bank
continues to fulfil its values-based agenda by supporting
customers facing financial stress via various forms of repayment
assistance. At the same time, the Bank has introduced a new

financing product through which it will channel funds from
investors into businesses owned by B40 individuals and micro-
entrepreneurs. In this manner, it will help to create greater
inclusivity in wealth generation.
Overall, however, there was no escaping the impact of the
pandemic, which took its toll on most of our companies under the
Aerospace and Defence, Postal, Services and Properties sectors.
The result was a 5.9% decrease in revenue to RM12.38 billion
and a pre-tax loss of RM291.27 million. While it is admittedly
disheartening to see our bottom line erode, these results do not
reflect the Group’s fundamentals which essentially remain strong.
The Board is of the opinion that, as the economy truly recovers,
DRB-HICOM will once again be on track towards achieving the
transformation it had embarked on pre-pandemic, with results
that will create immense value for our various stakeholders.
Building Our ESG Platform
While overseeing the Group’s financial performance, the Board
has also continued to ensure a continuous strengthening of our
environmental, social and governance (ESG) platform, firm in the
belief that this is critical to DRB-HICOM’s long-term sustainability.
Environmental concerns such as climate change are becoming
increasingly urgent and we recognise the need for DRB-HICOM
to play our part in global efforts to mitigate these. The reality of
how climate change will impact not only the environment but
the sustainability of businesses themselves, is becoming more
apparent. In response, DRB-HICOM is intensifying all efforts to
transition into a low-carbon organisation. As of 2021, we have
also embarked on aligning our climate change mitigation and
adaptation measures with the Task Force on Climate-Related
Financial Disclosures (“TCFD”). As our TCFD journey is only
just beginning, we are still in the process of putting in place the
systems and frameworks required. I hope to be able to start
reporting on positive outcomes from next year’s annual report
onwards.
Socially, DRB-HICOM has always cared for our employees and
the community at large as part of our broader imperative to
create stakeholder value. Since the pandemic, our sense of duty
towards both stakeholder groups has become more evident. In the
workplace, we have adhered conscientiously to all the relevant
standard operating procedures (“SOPs”) to protect our people
from the virus. We also actively encouraged all employees to be
vaccinated and are proud to share that, by end 2021 almost the
entire workforce had been vaccinated. In addition, we distributed
care packages to all staff to demonstrate our concern for their
well-being and to maintain a sense of connection while most of
them were working from home. We also provided financial aid
to children of staff from the lower-income bracket to help them
during these difficult times.
Within the community, we extended pandemic-related support to
school children and the needy. Throughout the year, we donated
protective items to 20 schools in Selangor; while, partnering Sin
Chew Daily, we sponsored close to 100,000 face masks for 64
Chinese primary schools in Kedah, Pahang and Perak. To ensure
EVOLUTION IN MOTION • DRB-HICOM 097
sufficient food for everyone, we collaborated with Yayasan
Foodbank Malaysia to set up foodbanks in Selangor. We also
worked with HOPE Kitchen, a non-governmental organisation,
to distribute food packs to frontliners and underprivileged
communities.
Over and above these initiatives, governance continues to be our
main focus on the Board. As mentioned in last year’s message, we
are strengthening our governance structures in order to support
a culture of integrity across the Group. The Board has zero
tolerance for any form of bribery and corruption, and is ensuring
that this message permeates throughout all our companies via
continuous communication on different platforms.
Outlook
As we prepare this annual report, COVID-19 is still very much with
us; however, the current variant appears to be less virulent than
previous strains and hospitalisation rates are well under control.
This has given governments the confidence to once again switch
on the engines of economic growth, lending hope for a fuller
recovery in 2022.
At DRB-HICOM, we are preparing to enter the ‘new norm’ with
a refreshed Group identity and a new statement of purpose.
The idea is to rejuvenate our 112-year-old brand via changes
in our ‘software’ (namely our culture) and hardware (through
accelerated digitalisation). Much has been achieved to date, yet
more remains to be done as we establish the Group as a resilient
and sustainable organisation with the capacity to create long-
term value for our large and varied group of stakeholders.
Acknowledgements
The Group’s successes as one of the oldest conglomerates in
corporate Malaysia are the result of the contributions of various
parties with whom DRB-HICOM has created strong, trust-based
relationships. On behalf of the Board of Directors, I would like
to take this opportunity to acknowledge the many stakeholders
who have been with us over the years. Of note, I would like to
thank the government and its agencies, our partners, vendors and
customers for their steady and invaluable support. I would also
like to thank our shareholders for their trust in our ability to ride
out challenging times to emerge stronger and continue to deliver.
Most of all, I would like to express my gratitude to the entire
workforce at DRB-HICOM for their passion and loyalty to the
organisation. To my colleagues on the Board, thank you for your
time and wise counsel. To our management, and especially our
Group Managing Director Dato’ Sri Syed Faisal Albar, thank you
for your inspiring leadership. And, to our 46,000 employees, my
heartfelt appreciation for all your hard work not just in 2021 but
since you joined the DRB-HICOM family. With the continued
collaboration and support of everyone, we can achieve greater
things to come.
Wan Zul
098 DRB-HICOM • ANNUAL REPORT 2021

MANAGEMENT
DISCUSSION & ANALYSIS
GROUP MANAGING DIRECTOR’S FOREWORD

The year 2021 continued to be challenging across the board

in Malaysia as new and highly contagious variants of
COVID-19 emerged, bringing many industries to a halt for a
cumulatively longer period of time than in 2020. Yet,
having survived 2020 and put in place various systems to
safeguard operations, the Group was better prepared to
accommodate the onslaught of further movement
restrictions imposed to help curb the pandemic. Some of
the core businesses recorded positive growth year on year,
while the others managed to perform very commendably
given the circumstances.

If the year 2020 was about surviving the pandemic, the year 2021 was about stabilising operations as well as
to focus on the most critical aspect of the business: the well-being of the people. Within the Group, despite
the many obstacles faced, DRB-HICOM has continued to demonstrate agility to adapt to significant changes in
the operating landscape and an inbuilt resilience that comes from over more than 111 years of existence. These
positive qualities served us well in 2021 and have placed us on a firm footing to regain our position in corporate
Malaysia once the economy fully recovers.

OUR MACROENVIRONMENT

Economic Recovery

Countries with early access to COVID-19 vaccination were able to resume economic activity much earlier than those which did not.
After a sharp economic contraction in 2020, the global economy began on a path of recovery in 2021, though at an imbalanced
pace. Overall global expansion was forecast by the World Bank at 5.6% compared to a 2.6% contraction in 2020. In contrast, gross
domestic product (“GDP”) of ASEAN-5 was estimated at only 2.9%. Malaysia, meanwhile, registered 3.1% growth in 2021, supported
by increased economic activity as well as Government’s policy support.

The nation’s tentative steps towards full recovery in 2021 manifested in different ways across the different industries where
DRB-HICOM has a presence. It has to be remembered that the country’s 3.1% growth in 2021 was achieved from a very low base the
previous year. By all accounts, the country has yet to return to pre-COVID levels of economic activity.

According to IMF, https://www.imf.org/en/Publications/WEO/Issues/2021/10/12/world-economic-outlook-october-2021

1

According to Bank Negara Malaysia (BNM)

2
 EVOLUTION IN MOTION • DRB-HICOM 099

Automotive Industry

The automotive industry was impacted by the Total Industry Volume (“TIV”)
three-month enforced manufacturing shutdown
800,000
and closure of showrooms from June to August
2021. Added to this, there was a global shortage of
600,000
microchips, a key component in modern vehicles.
Expectedly, the relaxation of the enforced shutdown
400,000
from September onwards led to a revival of business
600,000
580,805
666,487

666,674

604,281
655,793

576,625
627,973

598,714

529,514

confidence and consumer sentiment, resulting in a

508,911

200,000
marked pick-up in sales in the last quarter of the year.
The consumer confidence was further supported
by Bank Negara Malaysia’s decision to retain 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
the overnight policy rate at 1.75% and extension (forecast)
of the sales tax exemption for the purchase of
Volume
passenger vehicles until December 2021 (this was
later extended to June 2022). Under the PENJANA
package, the incentive was first introduced from Total Production Volume in 2020 and 2021
June to December 2020.
Segment 2020 2021
Overall, the total industry volume (“TIV”) contracted
again, but at a far less dramatic rate of 4% against Passenger Vehicles 457,755 446,431
the steep 12% decline in the previous year. In absolute
Commercial Vehicles 27,431 35,220
numbers, 508,911 units of vehicles were registered in
2021 versus 529,514 units in 2020. Total Production Vehicles 485,185 481,651

Source: Malaysian Automotive Association

100 DRB-HICOM • ANNUAL REPORT 2021
MANAGEMENT DISCUSSION & ANALYSIS
GROUP MANAGING DIRECTOR’S FOREWORD
In terms of vehicle type, demand for commercial vehicles picked
up faster than passenger vehicles as business recovery fed the
need to increase corporate fleets.
An interesting development in the industry was an
announcement by the Government during its Budget 2022
presentation of an electric vehicle (“EV”) agenda to support
its Low Carbon Mobility Blueprint (“LCMB”). The EV agenda
complements the government’s earlier-announced plan to
enhance the competitiveness of the country’s automotive
industry through the development of next generation vehicles
(“NxGV”). Both EV and NxGV represent new growth areas with
exciting potential for automotive makers to tap into. Many
carmakers have already begun jumping into this space, while
the vital support service of charging stations too seems to
have picked up steam, with many now being developed across
market centres.
Aviation Industry
There has been a real recovery in air travel in the aviation
industry, especially short-haul travel in North America, Latin
America, Africa, Europe, and the Middle East. Increased travel
has led to increased demand for single-aisle aircraft, leading to
enhanced activity in various engineering-based manufacturing
sectors that supply key aviation players.
Property Industry
While overall demand for residential property continued to lag
during the year, there remained clusters of growth in specific
sectors, such as affordable housing and high-end housing,
the latter reflected in an 8.5% increase in median price for
transacted property from mid-2020 to mid-2021 despite
the number of purchases dropping sharply. In other words,
the economic slowdown created greater demand for lower-
priced property (as to be expected) while, unaffected by the
slowdown, high-income earners continue to have a strong
appetite for luxury accommodation. Demand was also strong
in the industrial sub-sector – depending on location – driven by
the need for logistics centres and warehouses.
FOCUS FOR THE YEAR
As outlined above, despite a generally harsh operating
environment, there were still pockets of opportunity during
the year. The Group’s strategy was to leverage on these
opportunities to ramp up revenue wherever possible to
compensate for the areas in which business continued to be
slow. The Business Recovery Task Force (“BRTF”) that was set
up in April 2020 was pivotal to the Group’s overall performance,
enabling to assess DRB-HICOM’s situation and adopt holistic
plans in response to the many changes and challenges faced
throughout the year. The BRTF acts as a guide in optimising
Group synergies by identifying ways for different business units
to support each other for optimum output.
A key priority was to keep employees safe – at arm’s length
or more from the virus. Safety was even more critical in 2021
than in 2020, given the emergence of more contagious variants
such as Delta and Omicron towards year end. Therefore, the
Group’s COVID-19 Committee was kept very busy monitoring
the pandemic across the nation and making the required calls in
terms of work protocols across the Group. With the Committee
serving as a focal point, there was clarity regarding policies
affecting employees. Members of the task force maintained a
constant stream of communication with everyone throughout
the Group. Direct contact lines for employees were established
to obtain relevant information on any subject they were unsure
about. This was very important given the dynamic nature of
the pandemic – with rapidly changing variants of concern,
infection incidence, government-imposed standard operating
procedures (“SOPs”), etc.
It is commendable that although there was a fair share of
infections Group-wide, the essential services kept going.
Notably, Pos Malaysia had fewer interruptions to its distribution
and sorting centres; hence the national mail company was
able to meet its service level agreement for most of the year,
especially the second half of 2021.
It should be acknowledged that not everything pandemic-
related was negative. One very positive outcome of having gone
through the last two years of working from home and managing
restrictions on physical activities has been the accelerated
adoption of digital systems Group-wide. The process of
digitalising DRB-HICOM was embarked upon even before
the pandemic. However, once it struck, not only the internal
communication on-line, but also the external interface with
the different consumer segments had improved. In particular,
an aggressive approach to digital marketing, especially for cars
was adopted. The Group can now speak to varied audience on
new platforms, engaging a new audience category on top of
existing ones.

The Cost Reduction & Optimisation Programme (“CROP”) was
initiated in 2019, identifying and addressing cost inefficiencies.
As a result, in 2020 and 2021, all unnecessary costs were trimmed
to maintain lean operations. Meanwhile, as with the year 2020,
maintaining a healthy cash flow was a key consideration and
emphasised across all business units within the Group.
Further supported by certain accommodative factors in
operating environment, DRB-HICOM was able to post two
quarters of profit during the financial year. In the fourth quarter,
post-EMCO, the Group’s performance was solid, indicating
that DRB-HICOM is fundamentally on the right path towards a
sustainable recovery.
OPERATIONAL HIGHLIGHTS
Operationally, it was encouraging to see the Group’s Automotive
business defy the market, charting a 14.7% increase in revenue
and a turnaround in profit to RM99.8 million (compared to a
loss of RM72.3 million in 2020). While the sales tax exemption
played a significant part, even more crucial was the ability of the
marques to accurately discern what the market wants and meet
their expectations with new product launches.
Once again, PROTON was a beacon of light within the Group’s
portfolio, growing its share of the automotive pie despite a
shrinking market environment. Both its SUVs remain leaders
in their respective categories, while the iconic Saga nameplate
also remained an important model, proving to offer what
consumers need as a starter vehicle or even as a small family
car.
In the Defence and Aerospace Division, DEFTECH, the defence
company, had cumulatively delivered a total of 233 units of
the AV-8 to the Royal Malaysian Army, and has only 26 units
left to be delivered in 2022 to complete this critical defence
programme.
Bank Muamalat also performed well despite the challenging
environment marked by a continued moratorium on loans.
The encouraging performance was due to increased income,
financing growth and enhanced asset quality.
In the Properties business, the remaining retail properties
in inventory (in Johor Bahru and Tanjong Malim) saw some
movement, but the industrial property market expectedly
remained stagnant.
EVOLUTION IN MOTION • DRB-HICOM 101
FINANCIAL PERFORMANCE
For the year, the Group achieved total revenue of RM12.4
billion, which was 6.1% less than the RM13.2 billion recorded in
FY2020. Excluding RM1.28 billion derived from the divestment
of property assets in FY2020, the Group’s operating revenue
for FY2021 would have been RM0.5 billion more than the
normalised revenue of RM11.9 billion in FY2020.
The principal contributor to Group revenue continued to be the
Automotive Division, at RM8.2 billion, followed by the Postal
Division, at RM1.5 billion; Banking at RM1.1 billion; Services at
RM702 million; Aerospace and Defence at RM620.4 million;
and Properties at RM241.2 million. Both the Automotive and
Services Divisions recorded revenue growth – the former due
to better performance of PROTON as well as the Automotive
Distribution and Mechanical and Engineering segments; the
latter driven by the Aviation and Logistics segments (along with
increased e-commerce).
Although the Group charted a loss before tax (“LBT”) of RM291.3
million, as opposed to a profit before tax (“PBT”) of RM540.1
million in FY2020, this was mainly due to the injection of gain on
the sale of property in FY2020. If not for the property sale, the
Group’s loss would have contracted significantly year on year,
thanks to positive contribution from the Automotive Division.
The details of divisional performance are dissected in the
Operational Review and Business Review segments in the
following pages, highlighting the key milestones and challenges
of 2021.
ACKNOWLEDGEMENTS
Highest gratitude goes out to the Board, the senior management
team and the employees across the Group’s core sectors. The
efforts in the team’s respective roles will play a part to pivot
DRB-HICOM from good to great. This journey is a marathon
instead of a sprint, the support of a great team is crucial to
ensure victory.
Syed Faisal Albar
102 DRB-HICOM • ANNUAL REPORT 2021
OPERATIONAL REVIEW
AUTOMOTIVE SECTOR
Key Highlights
It was another stellar year for PROTON, which continued to see
increasing sales and a further narrowing of the gap to reclaim its
position as the best-selling brand in the country. While TIV shrank
by 4% in 2021, the national marque sold 114,708 units, the highest
since 2014, increasing its market share from 20.4% at end 2020
to 21.9%.
Its best performing model was the evergreen Saga, which
accounted for 37.2% of total sales (42,627 units), followed by the
recently launched X50 (28,774 units) and PROTON’s first SUV,
the X70 (16,375 units). While the Saga dominated the sedan
category, the X50 is now officially the most popular SUV in the
country, and X70 leads in the C-segment. Supporting PROTON’s
steady growth, it expanded its network of 3S and 4S sales and
service centres to 147 nationwide, from 140 a year previously.
While performing very well locally, PROTON is also making a
stronger mark in the international market, exporting 3,018 units,
which was more than double the figure in 2020. This entrenched
PROTON as the definitive leader among Malaysia-made cars
outside of the country.
The modern interior of the Proton X50
has helped it become a best-seller
Other Significant Achievements
The year was also very positive for Mitsubishi, seeing both
Mitsubishi Motors Malaysia Sdn. Bhd. (“MMM”) and EON Auto
Mart Sdn. Bhd. (“EAM”), an authorised dealer for MMM, record
extremely encouraging results. MMM achieved 90.9% growth
in unit sales, contributed primarily by the Mitsubishi Triton pick-
up truck as well as the recently launched XPANDER; while EAM
achieved its highest ever sales volume and profit. This was driven
by significant fleet contracts from Tenaga Nasional Berhad
(“TNB”) and FGV.
It was also a good year for MODENAS, Malaysia’s homegrown
motorcycle brand, which stood to benefit from an increase in
demand for two-wheelers – with Malaysians switching from
public to owned transport in the face of the pandemic. This
contributed to a near-doubling of sales volume, which was
further boosted by new models such as the Elegan 250 ABS,
Kriss 110 Disc Brake, and the Dominar D400.
 EVOLUTION IN MOTION • DRB-HICOM 103

A number of our components manufacturers also performed well,

boosted by healthy demand from automakers. Among the beneficiaries
were HICOM HBPO Sdn. Bhd. (“HHBPO”), which supplies front end
modules, HICOM-Teck See Sdn. Bhd. (“HTS”), which supplies plastic
injection parts and PHN Industry Sdn. Bhd. (“PHN”), which provides
metal stamping and other components to PROTON and other brands.
HHBPO achieved its highest-ever revenue and PBT in 2021, while
HTS’s and PHN’s revenue increased by 21.7% and 9.5% year on year
respectively.

Finally, as the economy started to recover and companies began to build HICOM HBPO Sdn. Bhd. supplies front-end
up their fleets once again, demand for leased vehicles from DRB-HICOM modules for various automotive brands

EZ-Drive Sdn. Bhd. (“EZ-Drive” or Avis Malaysia) also increased.

Work-in-Progress

in October 2021, Edaran Modenas Sdn. Bhd. signed an agreement to become the official Kawasaki distributor in Malaysia. This
paves the way for greater Kawasaki influence in the design of MODENAS motorcycles – definitely exciting news for KAWASAKI
fans in the country.

Key Risks & Their Mitigation

Segment Key Risks Mitigating Actions

Vehicle assembly • Competition from other dealers or from new
& distribution models entering the market
• Employees contracting COVID-19, requiring plant
shutdown for sanitisation
• Shortage of parts/components such as microchip
• IT/cyber security risk along with greater
digitalisation of operations and processes
• Strengthen relationship with existing customers and provide value-
add service; consistently develop unique selling points to differentiate
from others; and continue to introduce new models in line with
current trends
• Strict adherence to all government mandated SOPs and the
application of the ‘bubble concept’, i.e. of restricting movement from
one zone to another
• Build and strengthen ties with local microchip makers and other
suppliers to reduce dependence on imports
• Strengthen IT security processes and firewalls to safeguard data and
operational integrity from external threats

Components • Margin contraction as cost of manufacturing • Investing in greater automation and robotic processes to enhance
Manufacturing increases capacity and operational efficiencies
• Dependence on one or two large customers • Expansion of customer base, as well as product diversification to
(e.g. PROTON) cater to non-automotive industries

What To Look Forward To

In line with the government’s electric vehicle (“EV”) agenda, PROTON seeks to become a pioneer in the segment within the country.
It is exploring potential partnerships with renowned EV brands to introduce EV in Malaysia and Thailand.

At the same time, several engineering companies, such as HICOM Diecastings Sdn. Bhd. (“HDSB”), whose primary activities are linked
to powertrains, are focused on EV component manufacturing and electric mobility.
104 DRB-HICOM • ANNUAL REPORT 2021

OPERATIONAL REVIEW

AEROSPACE AND DEFENCE SECTOR

DEFTECH’s AV8 Gempita undergoing testing at the plant in Pekan, Pahang

Key Highlights

Despite the many challenges of the prolonged pandemic, DRB-HICOM Defence Technologies Sdn. Bhd. (“DEFTECH”) is making steady
progress on a key project it has been managing for the last nine years, namely to supply the Royal Malaysian Army with amphibious 8x8
armoured vehicles (the AV8 Gempita project). DEFTECH had been granted a two-year extension for the project in 2020 due to supply
chain disruptions. In response, it set up a Supplier Management Division (“SMD”); and today, is confident of meeting its 2022 deadline.

As the AV8 Gempita project winds down, DEFTECH has been looking aggressively to win more contracts. In 2021, its efforts were
rewarded by new tenders from MINDEF valued at a total of RM74.44 million.

Meanwhile, Composites Technology Research Malaysia Sdn. Bhd. (“CTRM”) is benefitting from the pick-up in short-haul air travel,
which has spurred demand for various components in single-aisle aircraft. At the same time, its subsidiary CTRM Composites
Engineering Sdn. Bhd. (“CE”) is making its mark in the manufacture of radar antenna domes (or radomes). During the year, it received
a total order for 36 radomes from satellite solutions expert Cobham Satcom.

Segment Key Risks
Defence • Loss of revenue following the completion of the
AV8 Gempita programme
• Increased competition as MINDEF has adopted
the open tender & competitive bidding
approach, with largely indiscriminate regulations
Aerospace • Management of the purchase of about 3,400
unique parts (and about ~43,000 transactions)
required in CTRM’s product line
• Increasing cost of sea freight and longer shipping
lead times due to congestion in seaports globally
CTRM has the largest number of autoclaves
machinery in the region with 14 in one facility
EVOLUTION IN MOTION • DRB-HICOM 105
Mitigating Actions
• Active participation in more tenders with MINDEF, the Ministry of
Home Affairs and non-government customers
• Maintain strong working relationship with clients via regular
engagement, and increase competitiveness through value-add
products and service
• Strengthen organisational capacity through training and
professional development
• Began the digitalisation of inventory planning in 2015, and
completed another 11 digital projects in 2021
• Consolidation of inbound and outbound shipments through
negotiation with customers and suppliers
• Forecast & plan advance bookings for all inbound & outbound
shipments
• Track shipment lead times and adjust Master Planning Schedule
accordingly
What To Look Forward To
The government has announced a half-
billion ringgit increase in its Defence
Developmental Expenditure budget for
2022 to RM5 billion. This will translate
into more projects being tendered to
further strengthen the nation’s defence
capabilities. Meanwhile, CTRM Testing
Laboratory Sdn. Bhd. (“CTRM TL”) has
registered as an approved testing and
inspection service provider for Petronas,
creating an avenue into the oil and gas
sector.
106 DRB-HICOM • ANNUAL REPORT 2021

OPERATIONAL REVIEW

POSTAL SECTOR

Pos Malaysia headquarters located at

Dayabumi Complex, Kuala Lumpur

Key Highlights

Having embarked on a new transformation programme starting August 2021, Pos Malaysia is making excellent progress. Among others,
it has introduced full weekend operations for its courier as well as retail operations, starting with high-volume areas and eventually
extending the service nation-wide. Pos Malaysia has fundamentally transformed its service performance, achieving its next-day parcel
service level agreement (SLA) of more than 90%.

Work-in-Progress

Whilst Pos Malaysia has made significant progress, it continues to focus on its ‘Core’ transformation, including culture, customer,
segmentation parcel yield, digital transformation, brand and other needle-movers.
 EVOLUTION IN MOTION • DRB-HICOM 107

Pos Malaysia now operates seven days a week to better serve their customers

Key Risks & Their Mitigation

Key Risks Mitigating Actions

Heightened competition in the courier business • Enhance quality of services and customer experience via digitalisation
• Seek policy reforms in the courier market

Optimising last mile and retail costs • Rationalise mail outlets and expand agent-run touchpoints to reduce fixed costs
• Engaged with regulators on subjects pertaining to service rates
108 DRB-HICOM • ANNUAL REPORT 2021

OPERATIONAL REVIEW

BANKING SECTOR

Key Highlights

Bank Muamalat achieved its highest

ever PBT, of RM256.6 million, up 46.8%
from RM174.8 million in 2020, driven
by increased income, financing growth
and improved asset quality. Key factors
included:

32.9% decrease in credit cost due to

financing payment moratorium and lower
impairment allowance.
• 7.0% increase in total assets
contributed by 14.5% year on year
growth in total financing, mainly in
the retail segment and supported
by sustained growth from non-retail
segments.
• Enhanced asset quality with gross
impaired financing at 0.83% at year-
end as compared to 1.07% at end
2020.

Work-in-Progress

The Bank has established a 3-Year IT

strategy blueprint focusing on setting
a strong foundation and fixing IT-
related concerns as well as to embark
on new digital initiatives. Digitalisation
is part of its strategy to enhance its
competitive edge as it transforms into
a Next Generation bank.

Bank Muamalat headquarters

located at Jalan Melaka, Kuala Lumpur
 EVOLUTION IN MOTION • DRB-HICOM 109

Key Risks & Their Mitigation

Key Risks Mitigating Actions

Squeezed profit margins during these challenging • Target better-rated customers and establish more partnerships to expand into identified
times markets as well as to leverage partners’ strengths and expertise

Second loan moratorium further delaying banks’ • The Bank has implemented a restructure and reschedule (R&R) programme for SMEs and
recovery from the pandemic selected customers
• Pro-active initiatives for recovery and collection have resulted in a gross impaired financing
ratio of 0.83%, the lowest since the Bank’s establishment

Increased risk of cyber attack given enhanced • Established a Technology Risk Management Framework & Cyber Resilience Framework
digitalisation across the Bank’s operations • Deployed a transaction monitoring system to protect against cyber threats
• Completed a Risk Management in Technology gap assessment and cyber resilience maturity
assessment to address IT-related concerns

What To Look Forward To

Starting 2022, the Bank will roll out a revised

5-year Strategic Business Plan called
RISE26+, anchored on driving growth via
existing core business of retail and corporate
banking while diversifying its income
portfolio in Transaction banking, Commercial
and SME banking. The new plan will also see
Bank Muamalat enhance its digital banking
capabilities and platforms and drive its
values-based intermediary (VBI) agenda as it
becomes a high-performing and sustainable
bank serving the needs of the nation.
110 DRB-HICOM • ANNUAL REPORT 2021

OPERATIONAL REVIEW

SERVICES SECTOR

MyPuspakom offers on-line reservations and

payment solutions to customers

Key Highlights

PUSPAKOM received approval from the government in September
to expand its road tax renewal service to private vehicles and
motorcycles at all its branches nationwide. This marked another
step forward towards providing the whole suite of compliance-
related services to Malaysian motorists. In addition, it has
secured reappointment from the Ministry of Domestic Trade and
Consumer Affairs to continue providing Hire Purchase Inspection
service.
DRB HICOM University of Automotive Malaysia (“DRB-HICOM
University”) has introduced courses such as Phyton Programming,
Data Analytics, Cyber Security, Internet of Things and Artificial
Intelligence for Business and Management Students to prepare
them for a significantly digitalised workplace.
Both Pos Aviation Sdn. Bhd. (“PASB”) and Pos Logistics Berhad
(“PLB”) have performed better in 2021 than 2020 with the pick-
up in air travel and strong demand from the logistics segment,
respectively. The latter contributed to Pos Logistics achieving a
turnaround in profit.
Meanwhile, World Cargo Airline Sdn. Bhd. (“WCA”) is rapidly
building its capacity and network to leverage the need for
airfreight along with booming e-commerce. During the year, it
more than tripled its cargo carrying as well as flight capacities.
 EVOLUTION IN MOTION • DRB-HICOM 111

Key Risks & Their Mitigation

Segment Key Risks Mitigating Actions

PUSPAKOM No revision to inspection rates for the last 15 years • Continuous engagement with the authorities to review the tariff
despite Increasing cost to operate • Concerted efforts to enhance efficiencies

DBR-HICOM Ensuring sustainable growth of TTI and @theAcademy • Comprehensive studies/research on course content demand
University • Effective marketing strategy to promote courses

Pos Aviation Sustainability risk due to the pandemic • Rigorous cost cutting measures through weekly Business Recovery
Task Force
• Joint venture with SIA Engineering Company Limited to expand
service offerings, enhance its technology, and access regional industry
contacts.

Pos Logistic Road safety and health risks • Rigorous cost cutting measures through weekly Business Recovery
Task Force
• Joint venture with SIAEC to expand service offerings,

WCA Rising fuel prices worldwide as well as increased • Monitor fuel prices to forecast fuel costs and devise the best aircraft
operating costs fuelling plans leveraging locations with comparatively lower fuel
costs
• Maintain strong relations with aviation fuel providers to negotiate the
best rates possible.

What To Look Forward To

In the near future, subject to the

Government’s approval, PUSPAKOM will
offer road tax renewal service for the full
range of vehicles on top of the current
vehicle categories, in addition to serving
customers who wish to renew their driving
license or to perform biometric verification
for the transfer of ownership in used
vehicle sales.

PUSPAKOM’s services provide peace of mind to vehicle

owners on the roadworthiness of their fleet
112 DRB-HICOM • ANNUAL REPORT 2021

OPERATIONAL REVIEW

PROPERTIES SECTOR

Embayu lake at Proton City, Tanjong Malim

Key Highlights

Despite the pandemic, the Group managed to achieve close to 100% sales of residential properties in Glenmarie Johor and Proton
City. By end of 2021, approximately 98% of the 56 semi-detached and cluster homes in Glenmarie Johor had been sold. Meanwhile, in
Proton City, all 130 single-storey and 1½-storey link houses launched in July 2018 have been taken up.

On the industrial front, the Group have disposed of 20.08 acres of industrial and commercial land in Parcel 3 Vendor Park, Proton
City for a total of RM17.7 million; while in HICOM Pegoh Park (“HPP”), 11 acres were sold at a total of RM12.16 million. Sales in these
two developments were mostly driven by domestic demand for logistics, warehousing and business expansion. By early 2022, the
Company expects to conclude the sale of another 7.18 acres worth RM7.26 million in Proton City, and 14.28 acres worth RM16.17 million
in HPP.
 EVOLUTION IN MOTION • DRB-HICOM 113

Proton City is a 4,000 acre freehold integrated township comprising of

residential, commercial, institutional and industrial components

Key Risks Mitigating Actions

Recovery in the property market is likely to be The Company will adopt a more cautious approach in 2022. In Proton City, only residential
affected by the spike in COVID-19 cases, lack of products catering to the mass market will be launched, whereas in Glenmarie Johor, Phase 1D
incentives and stimulus packages & extremely will be launched in smaller parcels as the products cater to a niche market.
stringent loan requirements by banks

Developers are catering to demand for properties More concentrated efforts will be channelled towards the sale of industrial lands in HICOM
priced below RM500,000, adding to already high Pegoh Park and Proton City.
inventory levels of completed properties

What To Look Forward To

The team has started working on layout plan approvals for our undeveloped land banks – HICOM Glen Industrial Park in Melaka,
HICOM Johor Industrial Park in Johor, and HICOM Vertex Industrial Park in Kedah. Site works for all the developments are expected to
commence in 2024 with the first launches planned for 2025 save for HICOM Vertex Industrial Park, for which the first launch has been
planned for Q4 2024.
114 DRB-HICOM • ANNUAL REPORT 2021

BUSINESS REVIEW
AUTOMOTIVE SECTOR

The two best-selling SUVs in Malaysia are from the PROTON stable

DRB-HICOM is involved in the entire automotive value chain from research & development to the production,
assembly, sales and after-sales service of national and foreign marques. The Group is the proud owner
of PROTON, the country’s first national car brand; and MODENAS, the equivalent home-grown brand
for motorcycles. Through our subsidiaries and associate companies, we also assemble Mercedes-Benz,
Volkswagen, Isuzu, Honda and Mitsubishi commercial vehicles and passenger cars. Meanwhile, our parts and
components manufacturers not only fulfil local needs but also supply leading OEMs globally.

PROTON Holdings Berhad (“PROTON”)
Despite various pandemic-induced challenges, 2021 was another
successful year for PROTON. Achieving its highest sales volume
since 2014 – of 114,708 units (including exports) – it was able to
grow its market share while the TIV shrank by 4%. It also retained
its position as having the overall best-selling car in the country,
and the best-selling SUV brand.
The three-month shutdown aside, PROTON has been steadfast in
leveraging every opportunity to carry out its operations efficiently
and safely, its employees driven by a strong corporate culture
and shared values of TARI, which stands for Teamwork, Achiever,
Respect and Integrity. This contributed to the team overcoming
the microchip shortage to achieve spectacular sales not only
of PROTON’s attention-grabbing SUVs, but also its first and
the country’s most loved model, the Saga, as well as the Exora,
Persona and Iriz.
After launching the X70 in December 2018 followed by the X50
in October 2020, PROTON’s SUVs have dominated the segment,
with a combined sales volume of 45,149 units in 2021. Individually,
the Proton X50 ended the year with 28,774 units sold, making
it the best-selling SUV overall. Meanwhile, 16,375 units of the
Proton X70 rolled out of its showrooms, ensuring leadership in
the SUV C-segment.
Yet, the top-selling model in PROTON’s stable was its very first
offering, the Proton Saga. A total of 42,627 units of the Saga were
sold including CKD packs for production in PROTON’s export
destinations. The enduring popularity of the Saga shows car
buyers remain impressed by its performance, safety and value. At
the same time, a total of 4,035 units of the Proton Exora found
new homes, establishing its leadership in the MPV C-segment.
Proton Persona and Iriz, meanwhile, saw 16,153 and 6,708 units
sold respectively, assuring them third position in their segments.

In Malaysia, PROTON recorded total sales of 111,695 units,
representing 21.9% of the total market, up from 20.5% in 2020.
It is the third consecutive year of volume growth for the company,
in itself an achievement given that TIV in the last two years has
contracted due to the pandemic. While retaining second place in
the domestic market, PROTON remains steadfast in pursuing its
goal to regain the leading position where the interim target is to
constantly increase market share and subsequently reduce the
gap with the market leader.
Reflecting the growing popularity of its models, in 2021 PROTON
won numerous awards including five wins at the prestigious
Carlist.my. These included the Editor’s Choice for the Newcomer
of the Year (for the X50), Gold in People’s Choice for SUV of the
Year (for the X70), Silver in People’s Choice for Budget Car of the
Year (for the Saga), Bronze in People’s Choice for Compact Car of
the Year (Persona), and Bronze in People’s Choice for Compact
MPV of the Year (Exora).
Further boosting sales in Malaysia, PROTON added seven new
outlets to end the year with a 147strong network of 3S and 4S
sales and service centres.
International sales also performed very well, with a more than
doubling of export volume to 3,018 units leading to PROTON
becoming the No. 1 automotive brand in Malaysia for exports in
2021. Even more encouraging, the trend is set to continue as local
assembly ramps up in Pakistan, Kenya and Bangladesh while the
Company makes concerted efforts to overcome trade restrictions.
Aside from sales, Proton Commerce achieved a record year
with 14,550 disbursements, becoming the leading OEM finance
company and the most popular choice for Proton Saga customers.
Going forward, PROTON intends to build on increasingly
positive consumer perception and confidence in the brand by
keeping the market enticed with advanced technology and
safety specifications together with intelligence features. While
addressing operational bottlenecks in 2022, it will also continue
to develop highly competitive products and fulfil its commitment
to launch at least one new model every year.
In line with the government’s National Automotive Policy and
the Low Carbon Mobility Blueprint introduced in October 2021,
PROTON also seeks to become a pioneer in the development
of electric vehicles (EV) in the region. It is currently in discussion
with a globally renowned EV brand to introduce EVs in Malaysia
and Thailand through a strategic partnership.
EVOLUTION IN MOTION • DRB-HICOM 115
For the year 2022 itself, PROTON has set an aggressive sales
target of 136,000 units. Notwithstanding the aggressive goal,
the company also acknowledges and will continue to ascertain
operational challenges derived from the impact of incidences
from 2021 such as the COVID-19 pandemic, flood in Selangor
and global shortage of microchips and related components. This
is also seen as a stepping stone towards achieving its ultimate
objective of attaining sustainable profits as it becomes among
the top three brands in ASEAN, while regaining its undisputed
leadership in Malaysia.
DISTRIBUTION COMPANIES
Honda Malaysia Sdn. Bhd. (“Honda Malaysia”)
Honda Malaysia assembles Honda cars at its plant in Pegoh,
Melaka; and offers sales as well as after-sales service via a
network of 102 centres nationwide with 83 3S outlets.
During the year, the Company launched various new models such
as the HR-V Special Edition, CR-V Black Edition, City V-Sensing,
and All New City Hatchback. While these helped to ramp up sales
in the fourth quarter of the year, the impact of the three-month
shutdown in 2021 compared to only two months of shutdown in
2020 was evident. Total sales, of 53,031 units, was 12% less than
the 60,467 units sold in 2020.
Nevertheless, Honda Malaysia retained its No. 1 position in
the non-national passenger vehicle segment for the eighth
consecutive year. This was largely contributed by the Honda City,
which accounted for 34% of total sales, followed by the HR-V
(20%) and CR-V (14%). Notably, Honda Malaysia also reached
the one million sales milestone during the year.
The quality and popularity of Honda cars, meanwhile, continued
to be validated by numerous industry awards. In 2021, Honda
Malaysia won in six categories at the ASEAN NCAP 10-Year
Anniversary – Decade of Safer Vehicle Awards (2011-2021), and
swept seven wins at the Carlist.my - People’s Choice Awards
2021. Meanwhile, the Honda City RS was named Vehicle of the
Year, and the Honda Accord was named Sedan of the Year at DSF.
my Allianz.
In 2022, with the launch of two new SUV models, the Company
aims to enhance its sales by 51% to reach 80,000 units.
The all-new Honda City Hatchback
was launched in December 2021
116 DRB-HICOM • ANNUAL REPORT 2021
BUSINESS REVIEW
AUTOMOTIVE SECTOR
Mitsubishi’s 7-seater Xpander
Mitsubishi Motors Malaysia Sdn. Bhd. (“MMM”)
MMM is the official distributor of Mitsubishi Motors vehicles in
Malaysia. The company currently has a network of 53 showrooms,
including seven each in Sabah and Sarawak. Of the total, 48
showrooms are 3S centres.
Despite COVID-19, MMM closed the year 2021 with 17,489
units sold, marking a 90.9% increase compared to 2020. The
Mitsubishi Triton pick-up truck contributed to more than half of
this, with sales of 9,268 units, 34% more than in 2020. Sales
were further boosted by the introduction in April of the new Triton
Athlete, which replaces the Triton Adventure X as the flagship
model of the Mitsubishi Triton 4x4 pick-up range. Meanwhile, the
Mitsubishi XPANDER enjoyed healthy sales of 7,397 units in its
first full year since being launched in October 2020, making it the
No. 1 best-selling Japanese seven-seater crossover in Malaysia.
The year also saw the launch of the Mitsubishi Online Showroom,
dedicated to providing a digitally enhanced experience for
customers to research and purchase Mitsubishi vehicles online.
Complementing the online showroom, MMM launched a Home
Delivery Service such that, from November 2021 onwards,
customers in the Klang Valley can have their brand-new
Mitsubishi delivered to their doorstep.
Last but not least, MMM also introduced the Unaccompanied Test
Drive enabling customers in the Klang Valley to test-drive their
Mitsubishi vehicle of choice without having a sales consultant
present. This option comes as the Klang Valley retains strong
demand for the Triton Athlete and XPANDER while COVID-19
active cases are still rampant.
Since the COVID-19 pandemic outbreak, MMM’s online presence
has become more significant. With these efforts, the company
has become one of the first brands in Malaysia to offer a full on-
line purchase cycle from Virtual Viewing, Test Drive 2U, Booking
Assist up to Home Delivery.
With customer reach and service top of mind, the year saw MMM
expand its dealer outlets to Kota Damansara and Bukit Raja,
Klang. In addition, 70% of its dealers upgraded their outlets in line
with Mitsubishi’s new Visual Identity (“VI”) for a better customer
experience. MMM will continue to expand its dealer network in
2022 to further enhance its sales and after-sales service delivery.
Isuzu Malaysia Sdn. Bhd. (“Isuzu Malaysia”)
Isuzu Malaysia markets and distributes Isuzu commercial
vehicles, namely the light-duty ELF, medium-duty FORWARD,
heavy-duty GIGA and GIGA prime movers as well as D-Max pick-
up trucks. In the passenger vehicle category, it offers the MU-X
SUV.
Isuzu commercial vehicles have made an indelible mark in the
Malaysian market, dominating the overall truck and light-duty
truck segments for eight and 12 years consecutively. Overall, its
commercial trucks make up 42.8% of the market, while its pick-
up trucks account for 11.5% of the relevant category.
The popularity of the Isuzu pick-up continues to be manifest in
numerous awards. In 2021 itself, the D-Max won the Vehicle of
the Year by DFS.my (D-Max X-Terrain), Car of the Year by Carlist.
my, Car of the Year by WapCar (Consumer Votes & Editor’s Pick
Award), Pick-up Truck of the Year by CarPlus (Editor’s Choice),
and Pick-up Truck of the Year by RiderAth.
In 2021, the Company launched a new D-Max (3rd Generation)
pick-up on 26 April and a new D-Max variant 4x2 Auto Plus on 12
October.
Isuzu’s N-Series and F-Series trucks are a familiar sight on Malaysian roads

TATA Ultra 814 truck offers
value-for-money for fleet operators
DRB-HICOM Commercial Vehicles Sdn. Bhd. (“DHCV”)
DHCV has exclusive rights to distribute TATA pick-up, small pick-
up and mini trucks as well as light duty trucks and prime movers
in Malaysia, via its network of 11 sales and 28 service centres
nationwide. It also assembles the TATA Super Ace (small pick-
up), Ultra 814 (7.5T) and Ultra 1014 (10.4T) trucks.
Despite the pandemic, the Company continued with marketing
efforts to enhance brand awareness through digital initiatives,
and recorded an 18% increase in sales and service throughput by
3% in the year under review.
To maintain the momentum of growth, DHCV will work closely
with its principal, TATA Motors Limited (“TML”), in aligning its
product portfolio with the National Automotive Policy (“NAP”)
and market needs. Along with stricter regulations on the use
of greener fuel, there are plans to replace the Euro 2 Super Ace
and Ultra 7.5T models with those that meet Euro 4 emission
standards; as well as to ensure all TATA models will be able
to accept B20 biodiesel. In addition, DHCV is discussing the
possibility of installing telematics systems in selected models,
enabling companies to remotely track drivers’ behaviours, vehicle
location and activity, fuel consumption and more.
Together with TML, DHCV will also continue to identify suitable
products that cater to increasing demand for wider transportation
needs, such as four-tyre light duty trucks, 19T medium-duty
trucks and 6x2 prime movers. Meanwhile, it seeks to review its
dealer network and appoint experienced commercial vehicle
dealers to expand its current 3S network and support long-term
growth of the TATA brand.
EVOLUTION IN MOTION • DRB-HICOM 117
MOTORCYCLES
Motosikal dan Enjin Nasional Sdn. Bhd. (“MODENAS”)
MODENAS is a homegrown national motorcycle manufacturer
and distributor as well as contract assembler of selected
imported models such as Kymco and Bajaj. Its manufacturing
plant is located in Gurun, Kedah.
While the pandemic has had a negative impact on the automotive
industry in general, it has been kind to the motorcycle segment.
Wary of public transport, many have switched to affordable
private transport, namely motorcycles. This has been a boon to
MODENAS, which saw its sales volume almost double year on
year.
Further stimulating sales, MODENAS had introduced the
Elegan 250 ABS maxi scooter and Kriss 110 Disc Brake variant in
November and December 2020 respectively, and successfully
promoted these in 2021. It also launched an upgraded version
of its Dominar D400 sports tourer, which made its debut in
September 2021. Meanwhile, the new-look Modenas Pulsar
range (with new colours and graphic designs for the RS200 and
NS200), and a new colour scheme for the Elegan 250 ABS also
contributed to a healthy order book.
Going forward, MODENAS is set to maintain its growth
momentum following the appointment in October 2021 of
the Company’s distributing arm, Edaran Modenas Sdn. Bhd.
(“EMOS”), as the official Kawasaki distributor in Malaysia.
With Kawasaki Motors Limited (“KML”) Japan team on board,
and injection of Kawasaki’s DNA into the design of MODENAS
products and services, the MODENAS brand is set to become
more relevant and exciting.
Modenas Dominar D400 is a popular
street bike among Malaysians
118 DRB-HICOM • ANNUAL REPORT 2021
BUSINESS REVIEW
AUTOMOTIVE SECTOR
RETAIL COMPANIES
Edaran Otomobil Nasional Berhad (“EON”)
EON is a holding company for Euromobil Sdn. Bhd. (“ESB”),
EON Auto Mart Sdn. Bhd. (“EAM”) and HICOM Auto Sdn. Bhd.
(“HASB”), which are involved in the sales and after-sales service
of brands such as Audi, Mitsubishi and Volkswagen. It also has
48% equity in Mitsubishi Motors Malaysia (“MMM”) through
which it is involved in the distribution of Mitsubishi vehicles in
Malaysia.
Since acquiring nine PROTON outlets in November 2020, EON has
the distinction of being the largest PROTON dealer. In December
2021, it further expanded its dealership with the launch of its 10th
3S centre in Alor Setar, Kedah, which represents its first Platinum
outlet and the fifth PROTON Platinum outlet in the country.
EON’s PROTON network currently comprises four branches in the
Klang Valley, four in the northern region and two branches in the
southern region of Peninsular Malaysia.
The company also has 100% equity in DRB-HICOM Leasing Sdn.
Bhd. (“DLSB”) and DRB-HICOM EZ-Drive Sdn. Bhd. (“DESB”)
which are involved in the vehicle rental and leasing business,
through Avis and MY-Lease.
During the year, EON disposed of its 40% shareholding in SRT-
EON Security Services Sdn. Bhd., a non-core business of EON and
the Group. At the same time, in December it acquired shares in
Singapore-based Trusty Cars Pte. Ltd, which operates MyTukar
that serve as an online marketplace for the sale of new and used
cars. Trusty Cars also has 23 inspection and nine retail centres in
Malaysia, Singapore, Thailand and Indonesia, transacting 4,000
cars per month.
Volkswagen Arteon R-Line offers style
and performance in one package
EON Auto Mart Sdn. Bhd. (“EAM”)
As an authorised dealer for Mitsubishi Motors Malaysia (“MMM”),
EAM is principally engaged in the sales of Mitsubishi vehicles
and spare parts as well as the provision of after-sales services
in Malaysia. It accounts for 19.7% of MMM sales, making it
MMM’s biggest sales contributor. The Company has eight 3S
centres nationwide and one body and paint (“B&P”) hub in Kota
Damansara while serving as an authorised B&P service provider
in Kota Kinabalu, Johor Bahru and Ampang. Currently, EAM sells
6 variants of Triton and an Xpander to the market.
Despite MCO and restriction to businesses, EAM recorded its
highest volume of sales as well as highest profit in 2021, driven
mainly by securing major fleet contracts that involved the
delivery of 266 units Triton to a utility company and 21 units Triton
to plantation company. In total, EAM sold 3,431 units for the year,
exceeding its target of 2,800 units, while recording an after-
sales throughput of 27,346 units. Meanwhile, its B&P business
generated RM7.67mil in revenue for 2021.
Supplementing sales, EAM continued to upgrade its outlets to
ensure a consistently high customer satisfaction and experiences.
During the year, five outlets – Glenmarie, Johor, Jalan Ampang,
Kota Kinabalu and Bayan Lepas – completed their Visual Identity
(“VI”) refresh. Three other outlets – in Melaka, Kuching and Tawau
– are expected to follow suit in 2022. The planned VI revamp in
Melaka and Kuching involved relocations to a new standalone 3S
facility.

Euromobil Sdn. Bhd. (“Euromobil”)
Euromobil, a wholly-owned subsidiary of Edaran Otomobil
Nasional Berhad (“EON”), is the authorised dealer for Audi in
Malaysia, accounting for 70% of total Audi sales in the country.
Due to the many challenges in 2021, Audi did not launch any new
models in the Malaysian market. Instead, using the downtime,
and in keeping with an increasingly digital lifestyles, Euromobil
strengthened its digital presence. In August 2021, it revamped its
website to allow customers to browse through models available
in the country, make service bookings and other appointments
online.
In 2022, Euromobil plans to strengthen its sales by further
enhancing its digital and online platform along with a new model
line-up. The Audi Q2 (PI) will hit Malaysian shores at the end
of the second quarter followed by the Q5 Sportback. The after-
sales department, meanwhile, seeks to offer insurance renewal
services to gain and retain customers. In-house services for tyre,
wheel balancing and alignment will also be introduced in the
second quarter as a cheaper alternative than using third-party
services.
EVOLUTION IN MOTION • DRB-HICOM 119
HICOM Auto Sdn. Bhd. (“HASB”)
HASB is an authorised dealer for Volkswagen Passenger Cars
Malaysia (“VCPM”), operating out of a 3S centre located in
Seremban 2. It accounts for about 5% of total Volkswagen sales
in the country.
Despite the many challenges of 2021, VCPM kept VW fans
enticed with the launch in July of a new locally assembled model,
the Arteon R-Line 4MOTION, and the addition of CBU units of
the Passat Elegance, Tiguan Allspace, Passat R-Line, and Tiguan
Allspace R-Line to its model line-up.
To promote sales of the new models, HASB enhanced its
eShowroom platform on which customers can browse and
book their cars, and enjoy exclusive online savings. For equally
convenient after-sales, it introduced a pick-up and drop-off
service, all delivered in strict adherence to COVID-19 SOPs. During
the year, HASB also initiated a contactless ‘dialogue reception’
where customers can communicate with service specialists via
video on matters such as recommended repairs.
In 2022, HASB plans to strengthen its sales by enhancing its
digital and online platforms to generate more leads while
prioritising warranty audit improvements and an enhanced
customer experience. HASB aftersales will be further
strengthened by the newly established B&P business approved
by VPCM.
Audi Q8 is the flagship model for Audi in Malaysia
120 DRB-HICOM • ANNUAL REPORT 2021

BUSINESS REVIEW
AUTOMOTIVE SECTOR

The Isuzu D-Max range of vehicles

Automotive Corporation (Malaysia) Sdn. Bhd. (“ACM”)

ACM is the largest dealer of Isuzu trucks and pick-ups in Malaysia, with five 3S and one 1S centres in Batu Caves and Shah Alam
(Selangor), Kuantan (Pahang), Juru (Penang), Ipoh (Perak) and Johor Bahru (Johor).

The pandemic continued to impact ACM, with sales particularly dampened between April and September, when the country was
under various iterations of the MCO. As the economy started picking up towards the end of the year, businesses once again looked at
building their fleets, leading to a 7% increase in total sales of Isuzu vehicles. For the year as a whole, its sales dipped by 16% from 786
units in 2020 to 660 units.

Despite less than optimum performance, ACM received Isuzu’s Top Sales Award 2021 for the Medium and Heavy Duty category in
Peninsular Malaysia; as well as the Top Aftersales Award 2021. The latter was contributed by conscientious efforts to maintain a
positive customer experience. Leveraging the business slowdown, ACM renovated its showrooms in line with the launch of the Isuzu
D-Max X-Terrain, which targets the luxury segment. The objective is to provide a customer experience befitting high-end consumers.

The outlook for 2022 looks promising in line with booming e-commerce and the logistics industry, which require trucks for the delivery
of goods. At the same time, a number of solid waste management fleets will need to be replaced. Banking on these factors, ACM
targets to almost double its sales to 1,290 units.

SERVICES COMPANIES
DRB-HICOM EZ-Drive Sdn. Bhd. (“EZ-Drive”)
EZ-Drive is the licensee of Avis Rent-A-Car agent in Malaysia. It
offers short-term car rentals and long-term leasing solutions for
passenger vehicles. In recent years, Avis Malaysia has expanded
its portfolio of leased vehicles to include commercial vehicles as
well as agricultural machinery and equipment.
Despite the challenges of a prolonged pandemic, the company
increased its fleet by 9% to fulfil demands from corporate
customers’ fleet expansion projects and shifts from owned to
leased vehicles. Meanwhile, service levels were maintained by
digitising their work processes, enabling employees to maintain
a high level of productivity despite working from home during the
different stages of the MCO.
In 2021, Avis Malaysia’s KLIA outlet received an overall rating
of 8.5 out of 10 in Booking.com’s Travellers Review Awards,
indicating that customers were satisfied with the company’s
services. Avis Malaysia was also awarded Malaysia’s Leading
Car Rental Company at the World Travel Awards in the same
year. This internationally recognised achievement solidifies the
company’s market position and establishes a new benchmark for
customer service and satisfaction in the car rental industry.
Avis Malaysia intends to accelerate its expansion into the
corporate and government sectors in the coming years, while
reviving its retail operations as the travel and tourism industries
progressively recover.
EVOLUTION IN MOTION • DRB-HICOM 121
DRB-HICOM Auto Solutions Sdn. Bhd. (“DHAS”)
DHAS provides end-to-end logistics solutions for the automotive
industry, from the importation of CBU vehicles and CKD kits,
to forwarding and clearance, vehicle yard management, Pre-
Delivery Inspection, and final delivery to dealer networks as well
as warehouse management. Marques served include PROTON,
Audi, Volkswagen (VW), Honda, Mitsubishi, Isuzu, TATA, Mercedes
Benz, Fuso, Actros, Volvo and MODENAS.
Although it was a challenging year, DHAS recorded a 59%
increase in revenue compared to 2020, driven primarily by the
increased importation of CBU Mitsubishi models as well as
CKD kits for the Proton X50 and MODENAS models, the latter
in collaboration with Bajaj India, Zongshen China and Kymco
Taiwan. DHAS also benefitted from an increase in demand for
logistics services and new business from Volvo on the provision
of transport and warehousing.
For 2022, changes in the automotive market may yet prove to be
challenging for DHAS. Still, as automotive players react to this
changing landscape, opportunities will be there for the taking.
VW will increase CKD import for the new Golf model under
Volkswagen and import of CBU Kawasaki models for MODENAS.
DHAS will also continue to earn a steady income from the
provision of logistics services to Volvo while providing distribution
services for Isuzu and Hap Seng trucks, and expanding its yard
management services to other prospective customers.
122 DRB-HICOM • ANNUAL REPORT 2021
BUSINESS REVIEW
AUTOMOTIVE SECTOR
MANUFACTURING & ENGINEERING
HICOM Automotive Manufacturers (Malaysia) Sdn. Bhd.
(“HA”)
HICOM Automotive (HA) manufactures both passenger cars
and commercial vehicles at its Pekan Automotive Complex
factories. HA assembles C-Class, E-Class, S-Class, GLC and
GLC Coupé for Mercedes-Benz; Actros, Mitsubishi Fuso Light
and Medium-Duty trucks for Hap Seng; Xpander for Mitsubishi
and Passat, Tiguan Allspace and Arteon for Volkswagen.
HA has had a hectic year in 2021. Despite the pandemic, HA and
Mercedes-Benz Malaysia launched four new models in 2021 with
great success. The models are the A – Class, GLA Class, GLE
Class, and the new S Class, all of which are produced locally.
Meanwhile, in late 2021, HA, in partnership with Volkswagen
Group Malaysia, successfully launched the new Golf GTi.
During the year, the existing Body Shop Building was refurbished
as part of Mercedes-Benz’s MRA2 Integration expansion project
to prepare for future new model introductions. HA produced over
7,000 units of Mitsubishi Xpander for the Malaysian market alone
in 2021, and with the increased demand for Xpander, two-shift
operations were implemented for both the production line and
the paint shop.
Meanwhile, in line with DRB-HICOM Group, HA continued with
its intensive Cost Saving Initiative (“CSI”), exceeding its target
by 26%. As part of CSI and sustainable program, it has also
installed a 2MW rooftop solar system which is expected to save
approximately RM360,000 annually. For the 2021 audit of the
Environmental Management System, ISO 14001, the Safety
Management System, ISO 45001 and IATF 16949 certification,
HA has achieved outstanding levels of compliance.
HICOM Diecastings Sdn. Bhd. (“HDSB”)
HDSB supplies aluminium die cast products and services to some
of the biggest names in the local and international automotive,
motorcycle and related industries. It manufactures a range of
precision aluminium casting products specialising in powertrain
and drivetrain engine components such as steering housing, oil
pans, cover cylinder heads, cover timing chains, oil pumps, water
pump covers, fuel pipe delivery and engine brackets.
Its clients include PROTON, Perodua, Robert Bosch Automotive
Steering, Honda Malaysia, Mazda Japan, Magna Power Train and
Hanon System in North America, among others.
Although the three-month lockdown during MCO 3.0 delayed
mass production of many new projects, HDSB continued to
secure new business and embarking on powertrain and engine
dress modules assembly for Volkswagen in Pekan, Pahang.
From 2019 to 2021, HDSB has secured RM88 million worth of
new business, primarily comprising of engine development and
localisation programmes for PROTON, Honda and Perodua.
These projects are scheduled to commence from 2022 onwards.
HDSB is also actively participating in bidding for components
required in electric vehicles, which represents a growing
aluminium-related business. Electrification products have
applications beyond the automotive industry which can be
exported. HDSB is keen to demonstrate its capabilities in the
electric engine components manufacturing as this will allow
them to tap into global business opportunities.
Securing its longer-term prospects, HDSB is investing into more
automation and robotic processes to enhance its capacity,
operational efficiencies and to achieve the economies of scale
volume production. This will help the company to sustain its
competitive edge as it accelerates its business growth.
HICOM Diecastings Sdn. Bhd. manufactures a diverse range of
aluminium products that caters to the expanding automotive industry

HICOM HBPO Sdn. Bhd. (“HHBPO”)
HHBPO designs, develops and supplies Front End Modules
(“FEM”) for PROTON, Volkswagen (“VW”) and BMW in its plants
in Tanjung Malim, Perak; Pekan, Pahang; and Kulim, Kedah.
Despite production disruption by three-month shutdown during
the MCO 3.0 and year-end Klang Valley flood, HHBPO recorded
its highest-ever revenue and PBT in 2021, with sales driven by
PROTON followed by BMW. The PROTON line was kept running
on Saturdays while BMW line ran on two shifts for the last
quarter of the year to fulfil customer bookings. In addition to that,
headlining production for VW commence in September 2021 for
Pekan plant. Consequent from the non-renewal of Kulim plant
lease, it had to relocate during this period and the relocation was
completed without disrupting customer supply.
With concerted efforts to maintain quality products and service,
HHBPO was honoured with the Best Delivery award by PROTON
and was also a finalist for the Best Quality award for 2021.
Moving forward, and working with HBPO as a group, HHBPO
is approaching other OEMs in Malaysia and ASEAN that are
embarking on CKD assembly as this would help the Company to
strengthen its market position. Moreover, diversification into new
modular parts, especially for electric vehicles, will enable entry
into a new segment which is expected to gain traction quickly.
The Company is upbeat for the year 2022, with PROTON and
BMW ramping up production as well as the introduction of a
new Porsche Cayenne line commencing March. PROTON’s 2022
volume is set to increase by 30% compared to 2021 with X70 CBU
export to Thailand and CKD to Pakistan, while demand continues
to be high for both X70 and X50 SUVs in the domestic market.
BMW will continue to run two shifts for certain models until
April 2022 to maximise production until the sales tax exemption
expires.
HHBPO is also actively pursuing for new projects and expects
to receive nominations for three new models from two existing
customers.
Various improvement activities launched in 2021 will continue
in 2022 and beyond, including productivity and assembly line
improvements to increase capacity and flexibility, notwithstanding
digitalisation efforts in line with IR4.0. Data digitalisation will
facilitate inventory and warehouse management as well as
improving accuracy in reporting.
EVOLUTION IN MOTION • DRB-HICOM 123
New robotic painting line with a fully-automated system at
HICOM-Teck See Manufacturing Malaysia Sdn. Bhd.
HICOM-Teck See Manufacturing Malaysia Sdn. Bhd. (“HTS”)
HTS is a leading manufacturer of precision plastic injection
mouldings for the automotive industry. It has been accredited with
the IATF 16949:2016, EMS ISO 14001:2015, OHSAS 18001:2007,
and AS9100 Rev D certifications for the aerospace industry.
For the financial year ended 2021, the company recorded a revenue
of RM571.4 million, mainly from automotive parts comprising
bumpers and cockpits. HTS began the financial year 2021 with
Letter of Award (“LOA”) for Perodua’s chromed parts mainly for
Aruz, Alza, and Myvi, followed by LOA from Proton for the SAGA
MC2 Upper Grille project. Middle of the year, Isuzu awarded HTS
the LOA for its VL01 truck emblem and Toyota for its Vios model
trim parts. HTS conclude the financial year with Proton’s LOA
for its VX11 Bumper Loose Parts and Panel Assy Cowl, which is
scheduled for Start of Operation (“SOP”) in February 2023.
Under a comprehensive transformation to automate its
production lines, HTS has installed two units of advanced
injection moulding machine and state-of-the-art robotic painting
at its new Tanjong Malim plant.
Systems and processes are also in place for enhanced operations
with continued focus on the Innovative Creative Circle and HICOM
Management System Capability Development programmes to
inspire greater innovation and productivity among employees.
This is supported by human capital development programmes
aimed at excellence in manufacturing. Meanwhile, as HTS
continues to explore the non-automotive segment, it is expanding
its range of plastic components to cater to future needs.
124 DRB-HICOM • ANNUAL REPORT 2021

BUSINESS REVIEW
AUTOMOTIVE SECTOR

HICOM-YAMAHA Manufacturing Malaysia Sdn. Bhd. manufactures

and assembles Yamaha motorcycle engines and parts

HICOM-YAMAHA Manufacturing Malaysia Sdn. Bhd.
(“HYMM”)
HYMM manufactures and assembles Yamaha motorcycle
engines and parts for mopeds and scooters with engines ranging
in capacity from 115cc to 155cc.
Yamaha motorcycle demand remained strong, with the brand
retaining its dominance with 48% market share. For the month
of March, just before MCO 3.0, HYMM recorded a record sales and
production of 31,398 units and 32,391 units respectively.
Nevertheless, the three-month MCO 3.0 shutdown and year-end
flood has impacted the FY2021 engine sales adversely, which
stood at 197,911 units, 31% lower than target. The year-end flood
also see that 118,000 CKD engine sets stored at a warehouse
in Shah Alam being inundated, causing a production slowdown
until April 2022. HYMM is working closely with its CKD suppliers
on the urgent replacement of the inundated parts.
ISUZU HICOM Malaysia Sdn. Bhd. (“IHM”)
IHM manufactures ISUZU commercial vehicles such as the
N-Series light-duty trucks, F-Series medium and heavy-duty
trucks, and D-Max pick-up trucks.
Sales of ISUZU light, medium and heavy-duty trucks in 2021
totalled 4,808 units, capturing 42.8% market share, cementing
the brand leadership in its segment. ISUZU retained its position as
the No. 1 overall truck brand for the 8th consecutive year and the
No. 1 light-duty truck brand for the 12th consecutive year. In the
pick-up segment, sales stood at 4,601 units, making up of 11.3%
market share. To further boost its market position, IHM plans to
introduce a fully revamped D-MAX pick-up truck boasting an
energy-efficient engine by 2022.
At the same time, IHM will continue to introduce new models,
extending its current model line-up while adhering to all new
regulatory requirements both locally and internationally.

Despite the parts drawback, HYMM is pressing ahead with all

the initiatives to enhance its operational efficiency. The overall
equipment effectiveness of the assembly line and machining
line is maintained above 97% and 91% respectively. HYMM has
also invested RM10 million for the purchase of a new crankshaft
line which will double its machining capacity. The machines are
currently fabricated in Japan and expected to be installed by
second quarter of 2022. All these initiatives are important to
cater for expected surge in demand once the parts supply return
to normalcy in the second quarter of FY2022.

To further strengthen Yamaha’s brand position and market share,

two facelift models are planned for the BDK (T135) in March
2022 and the BBY (T115) in December 2022.

PHN Industry Sdn. Bhd. (“PHN”)
PHN is a Tier-1 manufacturer of automotive components,
specialising in metal stamping, roll forming, welding and modular
assembly, dies design and manufacturing, as well as electrical
and electronic device assembly. It fully owns DRB-HICOM
Mechatronics Sdn. Bhd. (“DHMSB”), a supplier of automotive
batteries and electrical/electronic devices. In recent years, PHN
has diversified into the non-automotive sector via tool making
and the production of premium fan blades as well as industrial
air filters. PHN has altogether nine plants in Malaysia.
PHN’s revenue increased 9.5% from 2020 to 2021, driven by
PROTON’s stronger sales and a 3% increase from Honda, for
which it received a Honda Best Supplier Award 2021. However,
revenue from Perodua, another important client, decreased by
5% year on year.
EVOLUTION IN MOTION • DRB-HICOM 125
The year 2022 will be busy year with the production of new
PROTON and Honda models. A new model by Toyota as well
as a number of new facelift models for the Perodua Axia,
Perodua Bezza, Perodua Alza and Toyota Vios will also be in their
development stage. In the non-automotive segment, besides
growing its business with Steelcase, Camfil, Bafco and Hewlett
Packard, PHN seeks to expand its customer base while looking to
localise its in-house tool-making business.
To further enhance operational efficiencies, PHN has started to
implement the concept of Industry 4.0 within its manufacturing
processes. This is especially evident in the Pegoh Plant in Melaka
supplying to Honda which is highly automated. In the meantime,
with the growing demand of module localisation by the OEM,
PHN has expanded its Tanjung Malim plant recently to cater for
PROTON localisation programme.
Robotic MIG welding at PHN Industry Sdn. Bhd.
126 DRB-HICOM • ANNUAL REPORT 2021

BUSINESS REVIEW
AEROSPACE AND DEFENCE SECTOR

The Malaysian army testing the AVF capability in

removing the power pack from the AVF30

DRB-HICOM plays a key role in the nation’s defence industry through DEFTECH, a premier contractor involved
in the development, manufacture and supply of armoured and logistics vehicles for the military and homeland
security. Through CTRM, which specialises in the manufacture of composites for the aerospace industry, we
also supply global players in the aviation sector.

DRB-HICOM Defence Technologies Sdn. Bhd. (“DEFTECH”)

DEFTECH is a key player in the national defence and security industry, dedicated to the design, development, manufacture, supply and
maintenance of land platforms, aeronautics, composite structures, unmanned technologies and systems integration primarily for the
military and homeland security, but also other government agencies and commercial applications. Its two main customers are the
Ministry of Defence (“MINDEF”) and the Ministry of Home Affairs (“MOHA”).

The pandemic has been particularly challenging for DEFTECH as, in 2020, the defence budget was slashed; and in 2021, despite an
increased budget of RM32.7 billion, a portion was channelled towards the government’s economic stimulus packages. Accordingly,
certain military and defence tenders that were expected to be issued in 2021 and 2022 have been delayed.

The AV8 Gempita project, for which DEFTECH had been granted
an extension, was also not without challenges. During the
year, multiple original equipment manufacturers (“OEMS”)
involved in the project, together with their suppliers, issued force
majeure notifications due to the inability to meet their supply
commitments. Fortunately, DEFTECH had already set up a
Supplier Management Division (“SMD”) in 2020, and the division
proved its worth by overcoming most of the supply chain issues.
Along with various mitigation efforts – such as inventory building
and sourcing for other suppliers – DEFTECH expects to meet its
2022 deadline. The two-year extension had been granted in 2020
as a result of budget constraints at the government’s end as well
as DEFTECH itself invoking force majeure.
Keeping the project to deliver the amphibious 8x8 armoured
vehicles on an even keel, AV8 Gempita continued to be the prime
source of revenue for the Company. Recognising that the project
is nearing completion, however, DEFTECH has been working
conscientiously to diversify its revenue base. Its efforts paid off in
2021, with the award of a total of RM74.44 million in new tenders
from MINDEF, with deliveries from 2022-2023. These wins were
particularly significant given that the ministry had not awarded
any contract in 2020.
Nevertheless, the year as a whole did not present an optimum
environment for DEFTECH. The cumulative effect of stringent
regulations, ever-changing restrictions and limited operational
uptime, together with a shrinking government budget, resulted in
a decrease in revenue compared to the year 2020.
EVOLUTION IN MOTION • DRB-HICOM 127
On a more positive note, DEFTECH’s aggressive pursuit of
new projects saw it take part and submit tenders for various
contracts under the Army Mobility Phase 2 (2021-2025) and
Royal Malaysian Air Force (RMAF) Capability Development 2055
(“CAP 55”) programmes. Some of these are described below.
i. Medium Altitude Long Endurance (“MALE”) Unmanned Aerial
Vehicle (“UAV”). This is part of the RMAF CAP 55 plan, which
DEFTECH has been pursuing since the tender was opened
in the fourth quarter of 2020. DEFTECH, in partnership with
Turkish Aerospace Industries, submitted its bid in November
2020, and the duo is currently one of two shortlisted
companies being considered. A firm decision by the RMAF is
expected by the third quarter of 2022.
ii. Maintenance contract for AV8. DEFTECH is in the final phase
of commercial negotiations for the AV8 Maintenance and
Repair (“AV8 MR”) programme. DEFTECH’s SMD has also
successfully ramped up localisation efforts, registering 367-
line items that are prone to wear and tear to be manufactured
by Malaysian SMEs.
iii. Soft-skinned vehicles and trucks. DEFTECH successfully
won the tenders for the first batches of both the one-tonne
and three-tonne GS Cargo trucks from MINDEF in 2021, with
deliveries expected between 2021-2023. In February 2022,
DEFTECH has also won the second batch tender of the three-
tonne GS Cargo with expected deliveries between 2023-
2025. Going forward, DEFTECH will continue to participate
in business opportunities to supply soft-skinned vehicles and
trucks to all arms of Malaysian national security sectors.
DEFTECH is a premier contractor in developing, manufacturing
and supplying armoured and logistics vehicles
128 DRB-HICOM • ANNUAL REPORT 2021

BUSINESS REVIEW
AEROSPACE AND DEFENCE SECTOR

iv. Trucks, UAVs and specialised vehicles. DEFTECH has

been participating in tenders in areas involving its and
its subsidiaries’ core capabilities, such as the delivery of
trucks, unmanned aviation vehicles (“UAV” or drones) and
specialised vehicles to governmental agencies such as the
Fire Brigade, the Malaysian Maritime Enforcement Agency
(“APMM”) and Royal Malaysian Customs Department. These
are some of the new frontiers that DEFTECH is exploring in
order to diversify its product portfolio and mitigate the risk of
heavy dependence on the military segment.

v. Armoured Wheeled Vehicle Program (AV6 & AV4). Among

the important pursuit by DEFTECH as a follow on to our AV8
Program. With the final delivery of AV8 vehicles expected to
end in 2022, Malaysian Army will call for this Tender by the
First Half of 2023. The budget allocated for this program
is at RM 4 billion for 224 vehicles (Variants of AV4 & AV6).
DEFTECH is advantageously positioned for this program,
due to our technical proficiency, manufacturing facilities and
financial wherewithal over our competitors.

Supporting its diversification strategy, DEFTECH is cultivating

strategic partnerships with research and development (“R&D”)
centres on the design and development of new products. Among
others, it is collaborating with MINDEF’s research entity, STRIDE,
and the National Defence University of Malaysia (“UPNM”).
Meanwhile, it continues to benefit from technology transfer from
long-term partners with leading defence players such as Turkish
Aerospace Industries, FNSS, Aselsan, Havelsan and IVECO.

The government has announced a total defence budget of
RM33.2 billion for the year 2022, marking an RM0.2 billion increase
from the 2021 budget. More specifically, the Developmental
Expenditure has increased to RM5 billion from RM4.5 billion in
2021. This bodes well for defence players including DEFTECH.
Supplemented by on-going projects, tenders that are in the
pipeline as well as new projects it is working towards, DEFTECH
is confident of an enhanced financial performance in 2022 and
the years to come.
Composites Technology Research Malaysia Sdn. Bhd.
(“CTRM”)
CTRM is a leading composites aero-structure manufacturer in
ASEAN, supplying Tier 1 and other OEM companies which, in turn,
provide essential components to leading names in aviation such
as Airbus and Boeing. It is supported by three subsidiaries, namely
CTRM Aero Composites Sdn. Bhd. (“AC”), CTRM Composites
Engineering Sdn. Bhd. (“CE”) and CTRM Testing Laboratory Sdn.
Bhd. (“CTRM TL”).

CTRM Group is firmly established in the local and international

aero-space, and has been supporting the government’s Malaysia
Aerospace Blueprint 2030 by bringing in major projects to the
country. Among others, it has successfully transferred the Boeing
B787GE metallic work package worth USD800,000 per annum
from USA to two aerospace suppliers in Malaysia, namely UPECA
Aerotech Sdn. Bhd. and SME Aerospace Sdn. Bhd.

While the pandemic has had a significant impact on the aviation
and aerospace industries, in 2021 domestic and short-haul travel
began to pick up; and with it, demand for single-aisle aircraft.
Reflecting the recovery, Airbus surpassed its annual delivery
target of 600 jets while Boeing resumed the manufacture of its
bestselling single-aisle aircraft, the B737 Max, after a nearly two-
year hiatus. As 57% of CTRM’s aircraft business is from narrow-
bodied aircraft, it was able to capitalise on this recovery.
During the year, CTRM Group also stood to benefit from the strong
relationships it has built and maintained with key customers such
as US-based Cobham Satcom and Diehl Aviation from Germany.
Early in 2021, CTRM’s subsidiary, CE, received an order for eight
mid-sized ground radomes (domes that protect radar antenna)
from Cobham Satcom. This was followed by a second order
for three smaller Ka-band radomes measuring 144-inches in
diameter. Finally, in November, CE received a third radome order,
this time for 25 sets of the Ku-band 144-inch structure valued
at RM1.1 million. The year also marked another major milestone
for CTRM CE when it was awarded with the 1st aircraft interior
composite components namely the A320 Lavatory Floor Pan
project in March 2021 from a new customer Diehl Aviation, a Tier
1 company to Airbus and Boeing.
EVOLUTION IN MOTION • DRB-HICOM 129
CTRM’s Twin Tower Non-Destructive Testing
process provides design quality assurance
Contributions from another subsidiary, CTRM TL, added to
the CTRM Group’s overall performance. During the year, CTRM
TL spread its wings further by venturing into training and
consultation services, while also leveraging its partnership
with Thailand’s Institut De Soudure (involved in the oil and gas
industry), to successfully register as an approved testing and
inspection service provider for Petronas. Its diversification helped
the Group to maintain steady revenue.
Although CTRM Group saw lower activity in on-going projects
such as the B787 Fan Cowl, A350 J-Nose and REFF, A320/321
Single Aisle, A400M ADS and PW1000GTF C-Series programmes,
revenue decreased only by a marginal 3.7% year on year, while its
profit and profit margin improved. Boosted by this performance,
and with a recovering economy, CTRM Group is confident of
achieving even stronger results in 2022.
130 DRB-HICOM • ANNUAL REPORT 2021

BUSINESS REVIEW
POSTAL SECTOR

Apart from physical branches, Pos Malaysia

reaches out to its customers via digital platforms

Through Pos Malaysia, we fulfil a significant national service, namely the provision of mail and parcel delivery
for everyone in the country. To remain relevant, the universal postal services licence holder is diversifying into
end-to-end logistics services.
Pos Malaysia Berhad (“Pos Malaysia”) Proactively responding to the decline in mail volume underpinned
by the rising trend of online communications, Pos Malaysia has
Pos Malaysia is the national postal service provider and sole embarked on a journey to reinvent its business model. This has
licensee for universal postal services in the country. In operation seen the organisation go through a series of transformations
for over 200 years, the company has diversified beyond the to leverage on growing market opportunities, especially in the
traditional provision of mail and parcel delivery to also offer retail, segment of parcel deliveries. In short, Pos Malaysia has pivoted
logistics and aviation products and services. from a mail company that also delivers parcels to a parcel delivery
company that also delivers mails.
 EVOLUTION IN MOTION • DRB-HICOM 131

Although a fast-growing segment, the parcel delivery market

is highly competitive and challenging. Aggressive competition
from new entrants and in-sourcing of logistics from shopping
platforms will continue to test the performance of the parcel
segment. Additionally, the sector has some established players
with extensive financial resources, as well as, at the other end
of the spectrum, a number of crowdsourcing start-ups with low
overheads – both having the ability to offer aggressively low
prices.

In its favour, Pos Malaysia has the most extensive last-mile reach
built over two centuries of delivering to more than 9 million
addresses across the nation. It now also has a new management,
led by a new Group CEO, who is focused on an exciting
transformation and great execution. Since August 2021, the new
team has put in place a refreshed transformation programme
focused on three key pillars of having Highly Motivated, Engaged Pos Malaysia has the most extensive last-mile reach delivering to
more than 9 million addresses across the nation
and Safe Employees, Delivering Service Quality & Delighting
Customers and Delivering a Profit.
Financially, as a result of right-sizing, overheads have been
Much emphasis is being placed on the first pillar, namely its reduced from 18% to 12% of sales. However, this was not
people, they are critical to the other two pillars and will determine sufficient to overcome many of challenges faced over the course
the success of the current transformation programme. Pos of the year, and particularly the impact of multiple movements
Malaysia is investing in a culture change programme called Wira restriction orders. Together with reduced footfall at its retail
(or hero) which aims to nurture a dynamic workplace in which outlets and decreased need for the delivery of parcels upon
people are highly engaged and purpose-driven as they embody relaxation of movement restrictions in the last quarter of the year,
the values of the DRB-HICOM Group. revenue from the Parcel and International business dropped,
leading to a 5.9% decrease in Group revenue, as well as losses
Although the transformation plan was rolled out only in August increasing by 9.2%.
2021, early wins are already evident. From the service perspective,
Pos Malaysia is now meeting its service-level agreement (“SLA”) Going forward, a key priority will be to diversify its customer base.
of next-day delivery at over 90%. In a regular mystery shopper Pos Malaysia seeks to increase parcel yield and focus on the long-
programme initiated to benchmark its performance against tail business-to-customer (B2C), direct-to-customer (D2C) and
key competitors, Pos Malaysia emerged as the courier service business-to-business (B2B) sectors.
provider with the fastest delivery.
In 2022, Pos Malaysia will focus on its transformation programme
In building trust and transforming the customer experience and is committed to its purpose of being passionate about
journey, customer service has been ramped up with full-weekend building trust to connect lives and businesses for a better
offerings to key locations in the Klang Valley, Penang and other tomorrow.
Tier 1 cities. At its outlets, express lanes have been created just for
parcels, reducing customers’ waiting time. To enhance its online
presence, Pos Malaysia now also welcomes Whatsapp queries
from customers for timely response.
132 DRB-HICOM • ANNUAL REPORT 2021

BUSINESS REVIEW
BANKING SECTOR

Bank Muamalat Malaysia Berhad’s lobby entrance

We are represented in the banking industry by Bank Muamalat Malaysia Berhad, which distinguishes itself
through focus on values-based banking. It is the first Islamic bank in the world, and the first in South-east Asia,
to be a member of the Global Alliance for Banking on Values.

Bank Muamalat Malaysia Berhad (“Bank Muamalat”)
Bank Muamalat is a leading full-fledged Islamic bank driven to
consistently deliver value to its stakeholders and society via its
network of 67 branches located across 14 states nationwide.
The year 2021 continued to be challenging for all banks, in
part due to the low overnight policy rate (“OPR”) of 1.75% and
introduction of a second loan moratorium in July, 2021. Bank
Muamalat, however, demonstrated its resiliency to be supportive
of customers undergoing financial stress while enhancing the
Bank’s performance. Despite the restructure and reschedule
(“R&R”) programme for SMEs and selected customers, the Bank
recorded its highest ever profit before tax and zakat - of RM256.6
million - up 46.8% year on year.
Its performance was due to multiple factors, including the
continuous launch of relevant products as well as concerted
efforts to enhance productivity.
A key launch was that of its own i-Tekad offering - i-Tekad
Mawaddah - to support B40 individuals and micro-entrepreneurs.
Unlike other similar products, this offering incorporates the two-
tiered Mudarabah principle, in line with the Shariah convention,
under which profits and losses are shared with investors, thereby
easing the burden of financing of the entrepreneurs.
In terms of productivity, Bank Muamalat underwent a structural
rationalisation process which included separating its Corporate
Banking and Commercial Banking divisions to increase emphasis
on their respective portfolios. It also appointed a Chief Financial
Officer (“CFO”) to oversee all finance-related matters and steer
the Bank’s strategy based on its financial performance, budget,
and forecasts.
In line with the Group’s digitalisation agenda, and to keep up
with the industry’s evolving needs, the Bank also established a
3-Year IT Strategy Blueprint. Among others, it has expanded its
Muamalat Application Platform (“MAP”)’s capabilities to allow
customers to access and apply for a greater number of products
online. In addition, an Online Deposit Account Application has
also been made available via MAP, enabling customers to fill out
personal information forms ahead of visiting a branch.
EVOLUTION IN MOTION • DRB-HICOM 133
In addition, Bank Muamalat has collaborated with Amanah
Warisan Berhad (AWARIS) to launch a comprehensive suite of
legacy planning services including Islamic will writing and estate
administration – all available to its customers online.
For enhanced operational efficiencies, the Bank has initiated a
pilot Robotic Process Automation (RPA) project, and is currently
testing the automation of a number of high-volume, manual
and repetitive tasks for back office credit operations involving
personal, home and vehicle financing.
Going forward, Bank Muamalat has revised its 5-Year Strategic
Plan, RISE24, and renamed it RISE26+. RISE stands for: Future
Ready Workforce, Innovation and Next Gen banking, Sustainable
Business Growth and Profitability and Excellent Customer
Experience; while the number “26” refers to the year in which
the plan’s goals are to be realised – 2026. At the heart of
RISE26+ are five aspirations that strive to enhance sustainable
shareholder returns, capture new customer segments, transition
more customers online, cultivate a high-performing culture,
promote values-based intermediation initiatives and drive
greater sustainability. As part of structure rationalisation moving
forward, the bank has also established a Transaction banking
department as a new strategic business unit, responsible to
provide working capital solution to SMEs, business and corporate
clients leveraging on the digital platform.
Given its track record of resilience coupled with an expected
economic recovery, Bank Muamalat forecasts an improved
growth trajectory in 2022. Anticipating more opportunities in
retail financing, it plans to leverage its increasing digital and
technology capabilities to tap into these. At the same time, it will
continue to enhance its operational and cost efficiencies, and
place greater emphasis on improving its asset quality as a means
to drive financial performance.
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SERVICES SECTOR

Within the Services Sector, we provide a range of transport and logistics-related facilities. These include
vehicle inspection under a concession with the government, ground-handling and cargo handling services for
the aviation sector, logistics as well as airfreight services. In addition, we have established the region’s first
university geared towards the automotive industry.

CONCESSIONS

PUSPAKOM Sdn. Bhd. (“PUSPAKOM”)

PUSPAKOM is a government appointed vehicle inspection body entrusted with ensuring the safety of commercial and private vehicles
via regulatory inspection carried out at its 54 centres throughout the country. The Company also has a fleet of 38 mobile units that serve
Malaysians who do not have easy access to its network of centres.

Like most other companies, PUSPAKOM continued to be impacted by the pandemic, and particularly the longer periods of shutdown
in 2021 than in 2020 as well as intermittent closures when a member of staff contracted the virus, requiring deep sanitisation of the
affected centre. Yet PUSPAKOM did not allow these obstacles to derail its focus on further strengthening its technological base to build
its capabilities and improve efficiencies while elevating its customer experience. Together with efforts to expand its service offerings
under its one-stop centre concept, the result was a year of commendable performance.

PUSPAKOM’s inspections ensures the roadworthiness of
commercial and public transport vehicles
A key achievement was to receive approval from the government
in September to expand its road tax renewal service to private
vehicles and motorcycles at all its branches nationwide. This
marked another step forward towards providing the whole suite
of compliance-related services to Malaysian motorists following
approval in February 2020 to renew the road tax of decontrolled
commercial vehicles weighing under 7.5 tonnes.
Meanwhile various advances were made on the digital front. In
terms of enhancing operations, upon the successful proof of
concept in 2020 of using an automated 3D scanner to measure
vehicles prior to their inspection, in 2021 PUSPAKOM launched the
scanner in five branches. Helping to reduce the inspection cycle
time significantly, more scanners will be installed at high-volume
branches to improve inspection accuracy, capacity and efficiency.
PUSPAKOM also expanded the online inspection reservation
and payment system to encompass mobile inspection services.
In addition, as of April 2021, customers have even more cashless
options for the payment of their inspection services. Besides
using credit or debit cards or the FPX service, customers can now
avail of e-wallets at all PUSPAKOM branches. Receipts have also
EVOLUTION IN MOTION • DRB-HICOM 135
gone electronic — and will be emailed to customers, along with
their inspection e-report almost instantly upon completion of an
inspection. This not only helps to reduce the Company’s carbon
footprint, but is more convenient for customers, adding to their
overall experience.
Financially, despite various phases of movement control orders
(MCO), PUSPAKOM’s revenue for the year dipped only about
3%. This was mainly due to a favourable increase in volume of
inspections post-MCO at the centres as well as via the mobile
service. The mobile service gained in popularity this year, perhaps as
a result of customers choosing to have door-to-door personalised
service. To meet customer demand, the mobile unit was made
available seven days a week in 2021. The team also embarked on
more aggressive marketing to expand its customer base, targeting
potential customers such as second-hand car dealers. A number
of them recognised the value of having their cars inspected and
opted for the service. Revenue from non-inspection services also
increased from the expanded road-tax renewal and insurance
renewal scope.
A key challenge going forward is the ability to manage escalating
costs despite PUSPAKOM’s inspection rates not having been
revised for the last 15 years. While our concessionaire continues to
engage the authorities on the possibility of tariff review, as well as
on renewal of its concession which expires in 2024, it will continue
to press ahead with all efforts to enhance efficiencies and quality
service delivery.
It also seeks to continue to expand its non-concession business
by adding more vehicle categories under its road tax renewal
service, as well as attain approval to provide service for renewal
of customers’ driving licence and the biometric verification for the
transfer of ownership in used vehicle sales.
As the economy recovers, the transportation sector will return
to pre-pandemic levels, which would mean more volume of
vehicles requiring inspection service. Based on projected numbers,
PUSPAKOM expects to see its revenue increase. More importantly,
it also expects to see its customer satisfaction levels increase
as it pulls out all stops to enhance the quality and integrity of its
customer service.
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SERVICES SECTOR
EDUCATION
DRB-HICOM University of Automotive Malaysia
(“DRB-HICOM University”)
DRB-HICOM University, formerly the International College
of Automotive (“ICAM”), became a full-fledged university in
2015 to fulfil the country’s need for professionals in the fields
of engineering, technology and business management related
to the automotive industry. Its 42-acre campus is strategically
located within the DRB-HICOM Automotive Complex in Pekan.
In recent years, the university has been undergoing an academic
programme rationalisation (“APR”) to fine-tune its offerings
according to emerging skills requirements. This has seen it
reduce the number of programmes offered within its Faculty of
Engineering and Technology (“FOE”) and Faculty of Business &
Management (“FOB”) to 38; and by 2023, DRB-HICOM University
targets to offer only 25 high-quality, highly relevant courses.
Further contributing to innovation and thought leadership in
the industry, in 2021 DRB-HICOM University produced one PhD
graduate; Azihan binti Othman, PhDM.
Recognising the increasing need for a workforce equipped to
succeed in the Fourth Industrial Revolution (“IR4.0”), DRB-HICOM
University has refined its curriculum and introduced courses such
as Phyton Programming, Data Analytics, Cybersecurity, Internet of
Things and Artificial Intelligence, as well as financial technology
(“fintech”) for Business and Management Students. Meanwhile,
catering to growing urgency in the area of sustainability,
its refreshed course contents include ‘Sustainability in the
Community’ and ‘Sustainability and the Development Goals’. The
Development Goals refer to those issued by the United Nations.
Bird’s eye view of the DRB-HICOM University of
Automotive Malaysia’s campus in Pekan, Pahang
Programme accreditation continues to be a key focus area, to
reflect the quality of the university’s academic offerings. Of the 38
programmes offered during the year under review, 30 had been
accredited by the Malaysian Qualification Agency (“MQA”) or the
Malaysia Board of Technologists (“MBOT”), while the remaining
eight programmes are expected to gain accreditation in 2022.
Underlining the culture of innovation that has been established,
DRB-HICOM University won two gold, four silver and three bronze
medals in a number of international innovation competitions
throughout the year. It was also awarded a place in the Top 10
Best Winner list in the Science and Technology category at the
4th International Malaysia–Indonesia–Thailand Symposium on
Innovation & Creativity (IMITSIC2021).
Although the university is making a stronger imprint locally
and regionally, it continues to be affected by the pandemic, as
demonstrated by its intake numbers. New enrolments dropped
33% to 284 students compared to 486 students in 2020.
Nevertheless, international student enrolments increased,
leading to DRB-HICOM University ending the year 2021 with 41
students from China, Pakistan, Indonesia and Zimbabwe.
Leveraging the relaxation in movement restrictions, the university
has switched from purely online learning in 2020 to a hybrid
model. The university believes that there can be no substitute for
in-person training and exercises to develop the most capable and
employment-ready graduates.

Meanwhile, the Technical Training Institute (“TTI”) at the
university, formerly known as the Corporate Training Institute
(“CTI”), is rapidly growing. In addition to its existing programmes,
TTI began offering micro-credential programmes to all Group
subsidiaries and the public in 2021. Micro-credential programmes
are certified programmes, recognised by DRB-HICOM University,
that take between three and six months to complete. Credits
earned during the course can be transferred towards pursuing
pathways in academia at the university.
During the year, TTI also welcomed @theAcademy under its fold.
Located in Port Dickson, @theAcademy will be used as the main
training ground for in-person courses. At the same time, TTI is
entering into strategic partnerships to further enhance the quality
and industry relevance of its programmes. With Grab Academy,
it has developed modules focused on customer-centricity. And
under a newly signed agreement with Sterling Insurance Brokers,
both parties are to co-develop a Professional Diploma in Risk
Management as a micro-credential programme.
In 2021, TTI hosted 94 training sessions that garnered a total
of 2,837 participants, as well as 59 seminars attended by 4,691
participants. TTI looks forward to cementing its role as a solutions
provider by growing its training and consulting services in 2022.
AVIATION
Pos Aviation Sdn. Bhd. (“PASB”)
Air transport is key to global economic development, enabling
the flow of goods, people, capital, technology and ideas. Pos
Aviation Sdn. Bhd. (“PASB”) is an integral player in the industry,
providing ground handling, cargo handling, inflight catering,
aircraft maintenance, engineering services and e-commerce
handling to commercial airlines in Malaysia.
Following a challenging 2020, which saw 66% decline in global
revenue per kilometre (“RPK”), 2021 marked the beginning of a
gradual recovery of the global aviation industry. As international
borders reopen and consumer confidence improves, global RPK
is projected to increase by 18% in 2021. Domestically, this positive
trajectory was particularly evident in the air cargo sector, which
saw 8% year-on-year growth in cargo volume during the first half
of the year.
PASB’s performance has been tracking the aviation sector’s
rebound, with revenue in 2021 improving by 17% year-on-year
to RM217.9 million, while loss before tax narrowed significantly
by 73% to RM31.7 million. PASB’s revenue exceeded its target
by 24%, as the freighter flights and cargo businesses picked up
considerably, offsetting the decline in commercial travel.
EVOLUTION IN MOTION • DRB-HICOM 137
Other than to benefiting from an improved operating environment,
PASB’s performance reflects continued efforts to maximise its
service package through strategic partnerships. In February, it
entered into a joint venture (“JV”) with SIA Engineering Company
Limited (“SIAEC”) by divesting of a 49% stake in its subsidiary,
Pos Aviation Engineering Sdn. Bhd. Through this JV, PASB will be
able to expand its aircraft maintenance service offering, access
state-of-the-art technology, and leverage SIAEC’s regional
industry contacts.
At the same time, PASB made significant progress during the
year towards streamlining and digitalising its operations, while
implementing a range of improvement initiatives under the
HICOM Management System, with positive results. Notably, the
first batch of teams to undergo the Lean Six Sigma Green Belt
Productivity Programme generated cost savings of RM3.5 million.
PASB also implemented a consolidated Customer Relationship
Management (“CRM”) system which creates a single store for
CRM data, accelerating the rate with which its Operations Division
can respond to customer issues in timely manner.
To leverage its expanding service package and streamlined
operations, PASB’s management has devised a 5-Year Plan
to ensure long-term success and sustainability. This 5-Year
Plan aims to promote innovation among PASB’s staff, cultivate
the internal generation of ideas, and enhance e-commerce
awareness across the organisation.
PASB’s fulfilment of its 5-Year Plan will depend on its ability
to maintain an agile and productive workforce. Accordingly, in
2021, PASB selected nine employees as “Innovation Trainees” to
participate in a Digital Upskilling Programme, focusing on areas
including Ground Handling, Procurement and Cargo. Innovation
Trainees will be at the forefront of the development of digital
solutions, which will be applied across PASB’s operations.
As the economy begins to recover, PASB’s focus will be on
optimising its suite of services, value creation through strategic
partnerships, and growth of its cargo freight business. Guided by
its 5-Year Plan, management expects 2022 to be a profitable year
for PASB.
Pos Aviation Sdn. Bhd. provides services to several
commercial airlines operating in KLIA, Malaysia
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SERVICES SECTOR

LOGISTICS

Pos Logistics Berhad (“PLB”)

From its inception in 1984, PLB has grown into one of the largest
logistics service providers in Malaysia, servicing clients across the
Central, Northern and Southern regions of Peninsular Malaysia.
PLB specialises in providing solutions across four key logistics
subsectors, namely automotive logistics, freight management,
project logistics and marine logistics.

While logistics operations servicing the essential services sector

have continued largely uninterrupted during the pandemic,
the overall operating environment has been challenging due to
labour shortages, inflation, and rising costs.

Nevertheless, PLB staged a turnaround in 2021, recording revenue

of RM356.6 million and profit before tax of RM8.5 million. Its
revenue was supported by a strong showing from the automotive
logistics segment, which was also PLB’s largest revenue
contributor at 29% of total revenue. The automotive logistics
segment benefited from higher automotive sales towards the end
of 2021, in tandem with Malaysia’s broader economic recovery.

PLB’s resilience during this second pandemic year underscores

the success of its turnaround plan, which commenced in June
2020. The first two of this four-phased plan, focusing on internal
reorganisation, have been completed.

Moving forward, PLB will build on the strong foundations laid

since June 2020 by proceeding with the third and fourth phases
of its turnaround plan. Key focus areas include the continued
growth of PLB’s automotive and freight management businesses,
improved efficiency within PLB’s production warehouses, and
increased capacity within PLB’s haulage business.

As PLB advances with its transformation it will continue to

take a proactive stance towards risk management. Rigorous
COVID-19 SOPs, prudent management of receivables, and the
implementation of a Truck Restoration Plan for PLB’s truck fleet
are among the mitigating measures being implemented across
PLB’s operations.

Underpinned by continued execution of its turnaround plan and

risk management initiatives, PLB expects revenue and profit
before tax to grow in 2022.
Pos Logistics Berhad is one of the largest
logistics service providers in Malaysia
 EVOLUTION IN MOTION • DRB-HICOM 139

OTHERS SECTOR

World Cargo Airline Sdn. Bhd. (“WCA”)

WCA, formerly known as POS Asia Cargo Express, or POS ACE, provides airfreight services from Kuala Lumpur to East Malaysia as well
as major cities within Asia including Delhi, Madras, Bombay, Shenzhen, Kunming, Wuhan, Macau, Saigon, Manila, Yangon, Dili, Jakarta,
Lombok and Bandar Sri Begawan. Prior to its rebranding in 2020, WCA was a 100% subsidiary of Pos Malaysia. In August 2020, Asia
Cargo Network Sdn. Bhd. acquired a major shareholding in the company following which it underwent a rebranding.

The year 2021 marked significant growth for WCA in terms of capacity and network. From having only one aircraft previously, it acquired
a Boeing 737-800BCF and a Boeing 737-300F which have more than tripled its cargo carrying as well as flight capacities. In real terms,
the year saw WCA transport a total of 39,164 tonnes of cargo, 92.8% more than the 20,315 tonnes carried in 2020. Significantly, the
new aircrafts have enabled WCA to introduce international destinations, leading to the addition of the abovementioned major cities
to WCA’s network.

In 2022, there are plans to induct another two new aircrafts being two (2) additional Boeing 737-800. With five aircraft in its fleet, WCA
will acquire the distinction of being the largest freight-exclusive airline in Malaysia. Leveraging its increased capacity, WCA is set to
further expand its network of destinations and is eyeing markets that enjoy healthy trade with Malaysia.

Its expansion, along with the forecast of 4.9% annual growth in air cargo traffic in Asia and Oceania from 2020 till 2039, lends a
positive outlook for WCA.

World Cargo Airline Sdn. Bhd. provides airfreight services from

Kuala Lumpur to East Malaysia as well as major cities within Asia
140 DRB-HICOM • ANNUAL REPORT 2021

BUSINESS REVIEW
PROPERTIES SECTOR

Proton City offers an idyllic lifestyle and is located an hour

away from the hustle and bustle of Kuala Lumpur

DRB-HICOM is involved in property development and the management of assets built under concession
agreements with the government. Although well-known for our Glenmarie brand of residential developments,
we are now training our focus on industrial estates, leveraging many years of experience and expertise in this
niche area.
PROPERTY DEVELOPMENT Phase 1D-2A, launched in July 2021, offers 38 semi-detached
and cluster houses. Each semi-detached house has a built-up
GLENMARIE PROPERTIES SDN. BHD. (“GPSB”) area of approximately 2,690 sq. ft. while the cluster houses are
slightly smaller at approximately 2,429 sq. ft. with standard land
GPSB, the Group’s property development arm, is developing an dimensions of 40ft x 80ft and 34ft x 75ft respectively. Priced
industrial park in Alor Gajah, Melaka, and Proton City in Tanjong from RM998,000 to RM1,268,000, approximately 58% of the
Malim, Perak. It also has on-going residential development houses had been sold by year end.
projects in Tebrau, Johor and Proton City.
In December 2021, Phase 1C of Glenmarie Johor was accorded
Glenmarie Johor a certificate for high achievement in the Quality Assessment
System (“QLASSIC”) under the landed residential category,
Glenmarie Johor, located at the epicentre of the bustling and with a score of 85 out of 100 points. QLASSIC is a method
mature Tebrau region, is a 69-acre freehold development which of evaluating the workmanship quality of a building based
is being rolled out in phases. Phases 1A and 1B, comprising a total on the Construction Industry Standard issued by Malaysia’s
of 291 two-storey linked houses; and Phase 1C, boasting 56 semi- Construction Development Industry Board (“CIDB”).
detached and cluster houses, have been completed.
Homes in Glenmarie Johor are much sought-after given the
residential area’s proximity to Johor Bahru’s central business
district as well as the Malaysia-Singapore Causeway.

HICOM Pegoh Park
Sprawling across 729 acres, HICOM Pegoh Park (“HPP”) is one
of the largest freehold industrial parks in Melaka. It is also one
of the most strategically located, being easily accessible via the
Alor Gajah/Simpang Empat Interchange in Alor Gajah, Melaka. To
date, approximately 326 acres of the industrial park have been
developed; and 98% of the land earmarked for sale has been
taken up. This includes 11 acres valued at RM12.16 million that was
sold in 2021.
Phase 3 of HPP, launched in September 2019 and occupying
about 69 acres, is expected to be fully completed by the first
quarter of 2022. To date, 20.65 acres carrying a total gross
development value (“GDV”) of RM22.57 million have been sold –
leaving only about 70% of land earmarked for sale in this phase
left for prospective investors. Based on on-going discussions,
our property arm expects to conclude the sales of another 14.28
acres worth RM16.17 million in early 2022.
Proton City
Proton City Development Corporation Sdn. Bhd. (“PCDC”) is
developing Proton City, a 4,000-acre township located in Tanjong
Malim, Perak, comprising residential, commercial, institutional as
well as industrial parcels surrounded by lakes, Proton’s a-state-
of-the-art plant and Universiti Pendidikan Sultan Idris (UPSI),
which has the distinction of being one of the oldest functioning
institutions of higher learning in the country.
Sales efforts to date have largely concentrated on the affordable
housing range. In January 2021, a total of 130 units of mixed
single-storey and 1½-storey linked houses on standard lots
measuring 22ft x 70ft were completed, and by the end of the year
all the units had been taken up. There were no new residential
property launches for the year.
EVOLUTION IN MOTION • DRB-HICOM 141
PCDC also managed to dispose of 20.08 acres of industrial and
commercial land in Parcel 3 Vendor Park for a total of RM17.7
million. In addition, approximately 87.08 acres of a total of 125.32
acres of industrial and commercial lots in Parcel 3 Vendor Park
have been sold. PCDC expects to conclude the sales of another
7.18 acres worth RM7.26 million in early 2022.
HICOM Vertex Industrial Park
HICOM Vertex Industrial Park is to be developed on a 200-acre
freehold land in Bukit Kayu Hitam, Kedah, that was acquired
in 2015. The location is extremely strategic, only 350m from
the Malaysia-Thai border and neighbouring the Immigration,
Customs, Quarantine and Security (ICQS) Bukit Kayu Hitam
Complex. Site work is expected to commence in 2024 with the
first launch planned in the same year.
HICOM Glen Industrial Park & HICOM Johor Industrial Park
HICOM Glen Industrial Park, measuring 287 acres, is located in
Pulau Sebang, Melaka, approximately 6km away from HICOM
Pegoh Park. HICOM Johor Industrial Park, meanwhile, sprawls
across 1,243 acres in the Tebrau region of Johor Bahru, Johor. Site
works for both developments are expected to commence in 2024
with the first launch planned for 2025.
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PROPERTIES SECTOR

The artist’s impression of the

completed Angkasapuri Complex

CONCESSION DEVELOPMENT & CONSTRUCTION Northern Gateway Infrastructure Sdn. Bhd. (“NGISB”)

Media City Development Sdn. Bhd. (“MCDSB”)
DRB-HICOM Bhd has 100% equity in Media City Ventures Sdn.
Bhd. (“MCVSB”), the parent company of MCDSB, which holds a
23-year concession from the government to build, operate and
maintain Media City for the Ministry of Communications and
Multimedia Malaysia (“MCMM”). Modelled on MediaCityUK, the
revamped Angkasapuri is envisaged as a modern destination
for technology, innovation and creativity revolving around the
nation’s primary broadcasting complex boasting the latest
technology and infrastructure.
Development of Phase 1, comprising new office buildings including
broadcasting systems, studios and an auditorium, began in 2018.
Carrying an estimated GDV of RM860 million, it is scheduled to
be completed in Q4 of 2022, following which a new commercial
development under Phase 2 will commence.
NGISB, a 100%-owned subsidiary of DRB-HICOM, holds a 28-
year concession from the government beginning 14 June 2014
to develop and subsequently maintain the new Immigration,
Customs, Quarantine and Security (“ICQS”) Complex in Bukit
Kayu Hitam, Kedah.
Following its completion in June 2019, the RM425 million Bukit
Kayu Hitam ICQS has been facilitating smoother border crossing
to and from Thailand given its enhanced capacity and security
features (compared to the previous ICQS). Meanwhile, the more
than three million travellers who cross the border every year
appreciate the Integrated Facility Maintenance service provided
by NGIB. In all Customer Satisfaction Survey conducted on
resident users (i.e. government officers) and public users of the
complex, NGISB has been scoring a commendable 4 (out of
a maximum of 5). Our subsidiary will continue to manage the
complex until its concession agreement expires on 26 June 2044.

Acceptance by the government of the first stage (Lease 1) of

Phase 1 on 11 March 2019 marked a milestone in the country’s
broadcasting space, as it led to the termination of analog
terrestrial TV transmission nationwide. Lease 1 has garnered
returns through lease rental and maintenance payment from
the government, which will continue until the eight-year lease
expires on 10 March 2027. Lease 2 Agreement of Phase 1 is to be
handed over in Q1 2022, followed by delivery of the final stage,
the Concession Agreement, which includes the development of
new buildings - mainly studios and an auditorium – equipped
with state-of-the-art broadcasting systems including a Digital
Media Asset Management System.
 EVOLUTION IN MOTION • DRB-HICOM 143

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