GEORGE TOWN: RGT Bhd
plans to produce evaluation and test interface systems for the automotive industry this year.
Group chief executive officer Datuk S.H. Lim told StarBiz that negotiations were now being carried out with potential customers from Europe and the United States involved in the automotive, hygiene care, factory automation, and precision engineering business.
“The automotive is a new business we hope to supply to a US-based customer with an evaluation and test interface system to check light detection and ranging high-performance safety sensors.
“We’re now pursuing the necessary automotive certifications for our manufacturing facilities to supply the automotive industry,” he said.
According to a GFK report, global car sales in 2024 will rise beyond 74 million from over 69 million in 2023.
“Electric vehicle (EV) adoption worldwide will drive the growth,” Lim said.
According to a recent International Energy Agency (IEA) report, EV sales will continue strongly through 2023.
The IEA report said over 2.3 million electric cars were sold in the first quarter, about 25% more than in the same period last year.
The IEA expects 14 million in sales by the end of 2023, representing a 35% year-on-year increase, with new purchases accelerating in the second half of this year.
Lim said that according to the IEA report, EV sales in India, Thailand and Indonesia for 2022 tripled compared to 2021. In Thailand, the IEA reported that EV sales increased by over 3% in 2022, while India and Indonesia registered about a 1.5% rise.
According to the international research firm, Statista, the EV market revenue, standing at about US$561.3bil (RM2.6 trillion) in 2030, is projected to reach US$906.70bil (RM4.2 trillion) by 2028 growing at a 10% compounded annual growth rate, while worldwide EV sales are expected to reach 17 million vehicles in 2028.
Lim said the group had already spent RM100mil on expansion plans to extend its production floor for its hygiene care and automation business.
“Because of the market conditions in Europe and the United States, we have not started utilising the extended area.
“We hope to finalise a few deals with new customers before the end of 2023.
“The new business should start contributing later this year or in early 2024,” he said.
The group’s hygiene care business generates 80% of its revenue, while the automation segment contributes 20%.
“The hygiene care revenue contribution should adjust to 60% while that of the automation segment to 40% by 2025.
“The hygiene care revenue will continue to rise, but the quantum of revenue contribution increase from the automation segment will be higher,” he said.
The group’s hygiene care production floor is now 80,000 sq ft after the expansion, compared to 30,000 sq ft previously.
“Currently, we have in the pipeline new US customers involved in the hygiene care business, who are bigger than Rubbermaid, a major customer of the group,” he said.
RGT’s extended production floor built-up is now 52,000 sq ft, after the group extended it by 32,000 sq ft.
Under the automation segment, the group also provides automation lines for cleanroom assembly, autonomous guided vehicles and overhead hoist transporters.
