KOSMO-AnnuaReport2006 (1.9MB).pdf - Bursa Malaysia

KOSMO TECHNOLOGY INDUSTRIAL BERHAD 13
GROUP MANAGING DIRECTOR’S OPERATIONAL REVIEW
(CONT’D)
The Kosmo Technology Industrial Berhad Group of Companies (“the
Group”) recorded a better performance this year from that of 2005,
resulting from the increased activities of all the subsidiaries and
associate company. As explained by the Chairman in his statement on
page 28, the Group’s overall profit of RM10.26 million was mainly
contributed by the automotive division in the Group. Our main thrust
of harnessing technology and enhancing our R&D foundation
continues to be the core driving factor in our daily operations.
There have been several new developments within the Group and
quite a few alliances have been sealed with leaders of industries from
overseas, which have further strengthened the Group’s reputation as
a new Malaysian corporate citizen with global aspirations and
universal appeal.
REPORTS ON THE MAIN ACTIVITIES OF INDIVIDUAL SUBSIDIARIES
Outlook and Prospects
Kosmo Motor Company Sdn. Bhd.
The automotive arm of the Group, Kosmo Motor Company Sdn. Bhd.
(“Kosmo Motor”),which positions itself as a full-fledged commercial vehicle
manufacturer with design capabilities, has proven worthy of its aspiration
with the two major highlights of the year.These are the unveiling of the first
CNG bus chassis prototype to be designed and developed by a Malaysian
company and the sneak peak at the Loremo L22, an affordable,
environmentally-friendly car which will be jointly produced with Loremo
AG of Germany. Production is scheduled for 2008 and Kosmo Motor hopes
to see the L22 plying Malaysian highways by 2010.
The company entered 2006 on an optimistic note, having been
appointed in January as the exclusive importer and distributor of
China’s FOTON commercial vehicle in the Malaysian market. This was
shortly followed in March 2006 by Fiat’s appointment of Kosmo Motor
as the franchise holder of its commercial vehicle range.With these two
global brands, Kosmo Motor now has the potential to supply the full
range of commercial vehicles from vans to trucks and buses to local
and international clients.
In April 2006, Kosmo Motor received the much anticipated licence
from the Ministry of International Trade and Industry (MITI) which
permitted the company to manufacture bus chassis and bus body kit
as part of its undertaking, and it was soon after this that Malaysia was
introduced to the first prototype CNG bus chassis designed and
developed by Malaysians for the global community.
During the second half of 2006, having secured MITI’s approval in
September to import and assemble commercial vehicles from China,
Kosmo Motor was appointed the licensed assembler for FOTON
commercial vehicles to be sold in South East Asia. Intent on fulfilling
the company’s mission to introduce Malaysian technology to the
world, another exciting opportunity presented itself when the
KOSMO brand of CNG city buses caught the attention of senior
officials from government and quasi government authorities in Peru.
The increasing concerns of global warming has led to many countries
and companies exploring alternative fuels and new ways of doing
things as a united effort to protect our earth. The introduction of
KOSMO CNG buses is therefore very timely and the company is
poised to offer this world-class product to fulfil the needs in
environmentally-conscious markets. As a first step into the global
market, Kosmo Motor appointed Diaveco SAE of Peru to become its
distributor for the green public transportation vehicle in Peru, with
limited rights in other South American countries.
According to the Malaysian Automotive Association statistics, there
were a total of 70,384 commercial vehicles registered between
January and June of 2006, as compared to a total of 97,820 units for
the whole year in 2005 and 70,948 in 2004. These figures indicate an
increasing demand for commercial vehicles and with its original
Made-In-Malaysia CNG bus chassis completing the range of
commercial vehicles on offer, Kosmo Motor is confident of acquiring
a bigger share of the local market in the months to come.
In view of this, the company has moved to its new premises in Berjaya
Park, Section 32, Shah Alam, which houses the headquarters as well as
the bus chassis manufacturing plant, the central warehouse and also
the Sales, Service and Spare Parts (3S) centre for all vehicles sold by
Kosmo Motor. The year ended on a high note with the company’s
official handing over of the first 30 Kosmo diesel city buses to Syarikat
Prasarana Negara Berhad for its Rapid KL service.
Business Plans for 2007
For the coming year, Kosmo Motor expects to ramp up its R&D efforts
on four more bus chassis namely the 7m, 9m, 10.5m and 11m variants
of the 12m buses, as well as CNG variants for all types. The current
range offers 12m Diesel City Bus, 12m CNG Bus, 12m Diesel Express
and Stage bus, which are targeted for sale in the local and
international markets. Also in the pipeline are plans to study the
feasibility of bringing in trucks and other models, which may be of
interest to local commercial enterprises and also those in other