SWS Capital expects drone, robotics business to lift earnings

The firm’s 51% stake in MATA Aerotech will immerse its business in IR4.0 technologies


MANUFACTURING company SWS Capital Bhd has diversified into the drone and robotics business, after having acquired a 51% stake in drone and robotics technology firm MATA Aerotech Sdn Bhd, which will provide “significant” profit contribution in the future.

The company paid RM4.73 million in cash for 3.44 million shares in MATA Aerotech, following the option agreement signed last month with local information technology firm Nexus Union Sdn Bhd for the acquisition.

“Our purchase of 51% control in MATA Aerotech will transform our business from a plastics and furniture manufacturer into one that is immersed in Industrial Revolution 4.0 (IR4.0) technologies.

“Malaysia is moving towards IR4.0, so we have to be ready. In the agribusiness, drone and robotics technology will allow for up to 30% savings in pesticide and labour costs, help to overcome manual labour shortage and increase crop efficiency,” SWS Capital executive chairman Tan Sri Dr Tan Khoon Hai told reporters at a briefing in Kuala Lumpur yesterday.

MATA Aerotech CEO Wan Azrain Adnan said the technology company has received indications of interest from large agribusiness firms and government ministries, both locally and regionally.

“For the immediate future, our focus will be in Malaysia as the agriculture sector in the country will keep us busy for many years,” he said.

Last month, MATA Aerotech inked a memorandum of understanding with Federal Land Consolidation and Rehabilitation Authority Bhd (Felcra) for a collaboration to incorporate drone technology into Felcra’s management and operations.

Felcra has 257,078ha of land under management, comprising 212,093ha of palm oil, 40,045ha of rubber and 4,130ha of paddy.

The deal will serve as the first phase of MATA Aerotech’s drone technology rollout locally, and is projected to contribute RM10 million in revenue to the firm by 2020.

Over the same period, the firm will invest RM3 million to expand its operations, particularly on its fleet of drones and the training of drone pilots and technicians. The firm’s collaboration with Felcra will also add about RM2 million to SWS Capital’s net profit in 2020, Tan added.

For the third quarter ended May 31, 2019, SWS Capital’s net profit fell 88.8% to RM177,000 from RM1.58 million last year, due to manpower shortage in its furniture division, and higher sales promotion and fixed operations overhead costs in its plastic wares segment.

MATA Aerotech has also conducted drone technology demonstrations over the past two months to several government-linked agencies, including the Federal Land Development Authority and the Integrated Agriculture Development Area Barat Laut Selangor.

On whether these would materialise into firm collaborations, Wan Azrain said discussions are ongoing with all parties, while the company plans to hold more demonstrations with other agencies.

MATA Aerotech is a joint venture between Nexus and Taiwan-listed Geosat Aerospace and Technology Inc.