Datuk Rameli Musa

AUTOMOTIVE parts maker Ingress Corp Bhd is in talks with at least two rival vendors to either merge or buy them over, as the industry continues to consolidate in the face of stiff competition. 

Executive vice-chairman Datuk Rameli Musa said it is talking to several parties, among them a similar-size competitor while another is involved in a "slightly different business, but still a vendor".

"One of them is closing down, so we are participating in a tender to buy its equipment and other assets," he said. 

"We expect to finalise negotisations with one of the parties in the next one to two months," he told reporters after a shareholder meeting in Seri Kembangan, Selangor, yesterday.

Rameli said Ingress has sufficient cash to pay for the deals when they materialise and there will be no share swap involved. 

Despite slower car sales in Malaysia in the first five months this year, Ingress still expects to maintain an over 30 per cent growth in revenue this financial year.

This is because higher sales to Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and better business in its Thailand operations will be more than enough to offset the slump in overall domestic car sales.

"Supplying high value-added products to Perodua's Myvi helps a lot," he said, adding that Ingress is ready and has sufficient capacity to support Perodua's overseas expansion.

The company made a slightly smaller net profit of RM14.9 million in its financial year ended January 31 on RM289.7 million in revenue, a 36 per cent jump from 2005.

Some 83 per cent of its revenue  last year came from making automobile parts, while the balance were from projects in power engineering and railway electrification.

"We are expecting a good year for engineering and railway, so overall we foresee strong growth for the group this year, hopefully our performance will reflect that, "Rameli said, adding that he is confident that profit will also improve.

Perodua is now the biggest contributor to the company's revenue, making up 40 per cent of its sales in automotive parts, followed by Honda in Thailand, which contributes about 16 per cent.

Proton accounts for only 10 per cent of its auto parts sales. 

Increasing volumes and new contracts have prompted the firm to keep expanding its capacity in Thailand, where its fourth plant will be up and running this month in Ayuthaya, a city north of Bangkok.

The new factory will mainly cater to the increasing supply to Honda models such as City, Jazz, and Accord, Rameli said, as the plant is located near to Honda's facility in Ayuthaya.

The company also has another factory in Ayuthaya and two in the eastern Thai city of Rayong.

"With that we have covered all auto companies in Thailand, except for Toyota. Our company has the capacity to service everyone, and all of them are growing," Rameli said.

The company also plans to diversify into more variety of products in Thailand, having just spent some RM8 million to buy a fine components maker, which is a second- to third-tier supplier to Toyota there.

Negotiations with one party are expected to be finalised in the next two months, says Rameli.