Hitachi Malaysia looks to energy, security management for growth

The firm is currently on a long-term agreement with Sunway Group for energy management solutions


Hitachi Asia (M) Sdn Bhd is in talks with major developers to enter into long-term energy and security solutions to help bring down total ownership costs for local townships.

MD Chew Huat Seng said the Malaysian market is ready to embark on the Internet of Things (IoT) and solution-driven systems to bring down the operational cost of these projects.

“A lot of big projects in Malaysia have problems in the maintenance and operation side, and this is why operational cost is still sky high,” Chew said at a media briefing in Kuala Lumpur yesterday.

He said the strategy, typically employed to break down a project into smaller packages to reduce the initial cost and capital expenditure, does not lower the long-term operational costs.

“You have to look at the total ownership cost and how much the project will cost over the next two years or longer,” he said.

Chew said the situation is likened to the trend in Japan where the operational cost per sq ft is lower compared to the country’s income level. He said on average, a total energy reduction of between 8% and 20% can be achieved depending on the design and existing system of a building.

He added that the situation is especially true for buildings in developing countries which have higher energy reduction potential compared to developed markets where projects mostly utilise green technology.

Hitachi Malaysia is currently on a long-term agreement with Sunway Group for energy management solutions which covers Menara Sunway, Sunway University and Sunway Pyramid Mall buildings.

The company will implement the energy management system for the mall in January next year and will soon be providing holistic security services to Sunway Group to bring down operational costs.

Chew said the model used for these projects can be duplicated elsewhere and the company is discussing with major township developers and conglomerates.

He said the company is expected to announce an agreement sometime next year.

He added that the company is looking for long-term business partners instead of one-off deals to utilise its energy management and security services as the process is ongoing.

On the industrial side, Hitachi Malaysia is working with some petrochemical factories on proof of concept and final online testing to determine the applicability of its energy management system in the Malaysian market.

“We hope that we can launch the market, maybe next year, after we determine whether our system is suited to the Malaysian environment,” Chew said.

Hitachi Malaysia is the Malaysian subsidiary of Hitachi Asia Ltd which operates under the Japan-based conglomerate Hitachi Ltd.

The move towards energy and security solutions is part of the Hitachi group’s strategy to shift its resources from commodity to IoT and solutiondriven products.

The decision is made after parent company Hitachi posted a US$8.1 billion (RM33.53 billion) loss for its fiscal year ended March 31, 2009 (FY09) — the worst annual loss reported by a Japanese manufacturer. The group has since moved towards the high value- added business of IoT and solution- based products and is no longer solely reliant on the power generation, home appliance and manufacturing businesses.

For its FY18 performance, the information and telecommunication business contributed to 20% of total group revenue of ¥9.37 trillion (RM340.94 billion) and notable projects include the subway system for Denmark’s capital city and the UK’s intercity railway.

Chew said Malaysia is poised to become the centre for Hitachi’s new business in South-East Asia with a regional contribution of around ¥500 billion today. The group aims to increase this figure to approximately ¥700 billion by 2021.

“This is a big challenge and jump for us, and this is why we need to bring in a new business and our conventional business will be unable to achieve that target,” he said.

As of FY18, Hitachi Malaysia manages 23 groups of companies and employs 3,240 people in Malaysia.