D&O to invest in R&D, capacity expansions for automotive LED market

by NUR HAZIQAH A MALEK / pic by MUHD AMIN NAHARUL

D&O Green Technologies Bhd (D&O) plans to leverage on the automotive light-emitting diode (LED) industry by investing in research and development (R&D), capacity expansions, automation, quality assurance, human resources and sales and marketing efforts.

The LED manufacturer group MD and CEO Tay Kheng Chiong (picture) said the company believes that innovation is its critical success factor.

“We channel 4.5% of our sales revenue into R&D every year, which is RM20.9 million this year and more than 8% for capital expenditure, which is at least RM37.1 million,” he said at the company’s annual general meeting in Kuala Lumpur yesterday.

For the financial year of 2017, D&O registered a 7.7% increase to RM463.4 million versus RM430.1 million recorded in the previous year. Its automotive segment also registered 18.7% growth.

Tay added renovation works will also be done to the recently acquired 2.41 ha land cum factory building which is expected to begin in the second quarter of 2018 and completed within a year.

“Upon completion, the support offices will move to the next building which will free space in the existing plant for future production capacity expansion,” he said.

Tay added the company’s balance sheet has also strengthened further during the year when its net asset jumped from RM21.1 million to RM218.5 million.

“We plan to continue strengthening our presence in all of our key markets, namely China, United States, Japan, Europe, Korea and India to reduce single-customer dependency risk.

“The group mainly trades in foreign currency, therefore any gains will balance out all potential currency fluctuations,” he said.

He said with the new ruling government he hopes that further investment will be made into local original brand manufacturers (OBM).

The Malaysian Reserve previously reported the components manufacturer to enter the local market through Zhejiang Geely Holding Group Co Ltd’s investment in Proton Holdings Bhd.

The automotive LED market is forecast to grow by 12.45% in 2018 from US$2.82 billion (RM11.21 billion) in the previous year, according to an industry report titled “Global Automotive LED Market Outlook 2018” by LEDinside.