PETALING JAYA: The planned RM1bil investment by DRB-Hicom Bhd to accelerate the development of Proton City in Tanjung Malim, Perak over the next five years may be a move to consolidate Proton’s manufacturing activities in a single location, automotive analysts say.
They pointed out that news reports had claimed that Proton’s manufacturing land bank of 250 acres in Shah Alam could have a gross development value of more than RM1bil.
“We think that a property development play of the Shah Alam land bank would be a good move, as the value of the Shah Alam real estate can be extracted to fund Proton’s plans,” said an analyst.
However, other analysts pointed out that DRB-Hicom would need to look at issues such as the costs of moving the production facilities from Shah Alam to Tanjung Malim as well as employees’ concerns.
“It would not be easy because employees in Shah Alam are not keen on moving to Tanjung Malim. Also, would DRB-Hicom want to incur the one-time costs and deal with the hassles of moving all the equipment and facilities?” one analyst questioned.
Another analyst said the reported planned RM1bil investment by DRB-Hicom was likely to be more of a property development play in Proton City.
“Based on the news reports, this is not just about investing in machines and vehicle production facilities. Perak Mentri Besar Datuk Seri Dr Zambry Abdul Kadir had spoken about infrastructure development in the area, including better road access to Proton City from the North-South Expressway as well as building commercial areas and schools,” he noted.
OSK Research said in a report late last year that a potential sale of Proton’s Shah Alam land bank could fetch at least RM500mil. The research unit also pointed out that DRB-Hicom could be keen on developing Proton’s land bank in Shah Alam for its housing development arm.
Automotive conglomerate DRB-Hicom took over and privatised national carmaker Proton earlier this year.
Dr Zambry was recently reported as saying the development of the 4,000-acre Proton City is set to be re-ignited after slowing down since it started 15 years ago.