“ Intensifying Malaysia as The Global Solution Provider in Outsourcing /Contract Manufacturing ”

Historical Journey of a Local Metal Precision Component Parts Solution Provider

by Lim Tham Cheng – 30th Oct 2013

Alpha Precision Turning & Eng Sdn Bhd – Kulim Kedah

Company profile

Established mid 1985 in Butterworth Penang

Employed 8 workers 2 cam auto-lathes 2 manual lathes and 2 work shop milling machines

88’- 91’ shifted twice to cater for business expansion

94’ bought factory and shifted to Kulim Ind Estate

Mid 12’ built 2nd factory in Kulim Ind Est - land area 400,000 sq. feet prod floor areas 220,000 sq. feet

H/C 550 people posses > 200 units CNC machines Swiss CNC auto-lathes, CNC Chucker Lathes, Vertical Machine Centers; center-less grinding, gun drilling machines, cam auto-lathes etc.

Market Sectors Growth 1985 - 1990

85’-88’: Engineering workshop services viz. jigs and fixtures, cam auto-lathes parts to motor cycle industry: Honda, Yamaha, Suzuki

88’: Purchased 1st Citizen CNC Swiss Auto-Lathes with milling function, supplied walkie-talkie parts to Motorola in FTZ Penang

Pioneer in CNC components manufacturing

90’: Expanded business in E&E, automotive and motor cycle industries

S/N Model / Machine Unit

1 Traub A-25 - till 25mm diameter 21

2 Traub A-30 - till 30mm diameter 1

3 Traub TB42 – till 42mm diameter 2

4 Jarng Yeong – till 45mm diameter 2

5 Ge- Fong Machine 2

6 Gear Drawing Machine 1

7 Nomura N 1053 - till 10mm diameter 11

8 Nomura N 1653 - till 16mm diameter 1

Cam Automatic Lathe

10 years business growth 1990 - 2000

90’- 95’: Expanding in automotive market servicing Bosch, MGAE Lighting, Proton 1st & 2nd tier vendors

97’: Started business with Emerson Corp Flow Process Mgm divisions (O&G – FPM)

2000: Enjoy strong growth in E&E market

Electrical Home Appliances, HDD, Audio Video and Telecommunication industries

Market share 48% E&E, Automotive 20%, motor cycle 19% and O&G – FPM 13%

ALPHA

Citizen-L20 IV

Tornos Deco 20a

CNC Swiss turning lathes and related components

Tornos Deco 13

Market sectors comparison 86’-2000

Auto'tve 2%

Mot Cycle 71%

E&E 6%

Proj & Gen 21%

1986 ttl sales RM 0, 211 mio

Auto'tve 38%

Mot Cycle 31%

E&E 27%

Proj & Gen 4%

1990 ttl Sales RM 2,03 mio

Auto'tve 47%

Mot Cycle 23%

E&E 24%

Proj & Gen 6%

1995 ttl Sales RM 5,91 mio

Auto'tve 19%

Mot Cycle 20%

E&E 48%

O&G FPM 13%

Proj others 0%

2000 ttl Sales RM 15,1 mio

Subsequent 10 years growth 2000-2010

Mid 01’: Started semi-finish steering rack for ZF Steering, 07’ developed TRW Automotive

Customers: BMW FORD VOLVO PEUGEOT GM TOYOTO PROTON PERDUA local and export

00’-10’: O&G - FPM business include oil & gas, petrol chemical, paper & pulp mill, marine and nuclear industries etc.

O&G -FPM 1st 5 years growth by 9.4 times and 2nd 5 years by end 2010 another 68% growth in sales revenue

CNC chucker lathes and related components

Miyano-BNJ-42s

Moriseiki-SL200

ALPHA

Okuma- LB300

Nakamura Tome WT300

Automotive Industry-Hydraulic Steering System

Auto'tve 19% Mot Cycle

4%

E&Ele 7%

O&G FPM 62%

Others 6%

Medical 2%

2011ttl Sales RM 64,11 mio

Auto'tve 20% Mot Cycle

4%

E&Ele 7% O&G FPM

60%

Others 8%

Medical 1%

2010 ttl Sales RM 50,79 mio

Auto'tve 14%

Mot Cycle 6%

E&E 18%

O&G FPM 38%

Other 23%

Proj others

1%

2005 ttl Sales RM 29,56 mio

Auto'tve 14%

Mot Cycle 4%

E&Ele 6%

O&G FPM 67%

Others 7%

Medical 2%

2012 ttl Sales RM 64,90 mio

Market sectors comparison 2005-2012

0

10000000

20000000

30000000

40000000

50000000

60000000

70000000

2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

Market Sector Growth 2000-2012 in RM

Med

Proj others

Other Equipm

Emerson

E&E

Motor Cycle

Automotive

Continue market diversification 2010 onwards

10’- 13’: Textile machinery components sales growth from RM 60,000 to RM 1.6 mio

10’-12’: Medical Orthopedic and Surgical Instrument sectors growth from RM 350,000 to RM 1.0 mio

Mid 13’ started new O&G sector and export to USA, Norway, Saudi Arabia, Africa. Forecast RM 2.0 mio sales by end 2013

Mid 2013 started AS9100 documentation preparation and expect to be certified by Q1 2014 and be ready for Aerospace business

Expect continuous 10% growth for next 5 years

Oil & Gas (O&G) and deep sea exploration

Medical Orthopedic & Surgical Instruments

Market diversification for Higher Technology Components 10’-12’

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

2010 2011 2012 Sep-13

other O&G

Rotork-Actuator

Medical

Textile m/c

Sales Revenue Growth at 5 years Interval since FYE 85’

0

10000

20000

30000

40000

50000

60000

70000

1985 1990 1995 2000 2005 2010 2013

'000 RM

THAILAND

MALAYSIA

JAPAN

FRANCE

MEXICO

SINGAPORE

SAUDI ARABIA

HOLLAND

ENGLAND

GERMANY

RO

MAN

IA

HUNGARY POLAND

Sales to more than 20 countries globally

Challenges face in sustaining business growth

Continue search for market diversification and expansion

Up grading in latest equipment and manufacturing technologies

High investment cost in advance equipment and machineries

Providing Total Customer Satisfaction through Quality Delivery Services and Competitive Cost

Annual capital budget between RM 5-8 mio. for continue expansion

Continuous Improvement and challenges to meet Total Customer Satisfaction

Zero defect for automotive Industry

< 500 PPM for other industries

< 5 working days delivery lead time

Warehousing in USA and N Europe

Global E- Sourcing with key customers

Annual cost reduction between 3-5 %

R&D participation for new product

Incentives by Malaysian Government

96’ Obtained manufacturing license

98’-11’ Enjoy machinery re-investment allowance for 15 years at 60% tax rebate

Jan 13’ Obtain LMW license operate with > 80% export business

Grant approval in mid 13’ from MIDA under Domestic Strategic Investment Fund to further expand into capital intensive and high technology markets

High technology CNC equipment with 3~5 Axis machining capabilities acquired in 2013

Mori Seiki NMV 3000 DCG Tsunglin TTB-40ML

Nakamura Tome WT300

MAHRContourgraph

MAHR Formtester MMQ30

Laser Micrometer

Micro-Vu Spectra

profile projector

HDM30A

Mitutoyo

Height Gauge

MAHR Surface

Roughness Tester

Mitutoyo CMM

Equipment

Micro-Vu Vertex 420

Vision Measurement System

PMI Test

Equipment

Sophisticated Checking & Measuring equipment in Quality Control Laboratory

Brown & Sharpe-Global Silver

Classic SR575

Aerospace Industry – future

Questions and Answers