The Heavy Equipment Division of Sunway Trading and Manufacturing has acquired Dongfeng Commercial Vehicle Malaysia.
Dongfeng Aims to be One of Sunway Group’s Leading Brands
In line with its overall strategy, the Heavy Equipment Division of Sunway Trading and Manufacturing, a subsidiary of Sunway Group, has officially announced that it has acquired Dongfeng Commercial Vehicle Malaysia (DFCVM).
“The acquisition is part of the new products and business diversification of our Heavy Equipment division. Sunway is always on the lookout for new ventures and acquisitions,” said Sunway Trading and Manufacturing Division’s Chief Executive Director, Yeoh Yuen Chee. “DFCVM, the Malaysian sole distributor of Dongfeng, one of the top 3 commercial vehicle brands from China and a key supplier of military vehicles to the Chinese army, initially approached us regarding this,” he added.
Meanwhile, DFCVM Managing Director Lim Khoon Yee explained that DFCVM had been in talks regarding the acquisition for quite some time, but that everything had been on hold due to the pandemic. He revealed that Yeoh even flew to China to visit the Dongfeng commercial vehicle plant.
As a new automotive division of the Sunway Trading and Manufacturing division, DFCVM will still be run by Lim and his team for the time being. Yeoh pointed out that they worked closely together during this transition period.
“Our first step is consolidating DFCVM operations by moving their office from Batu Caves to our Heavy Duty Equipment business operations headquarters in USJ, Subang. DFCVM has competitively priced and high-performance models such as the Kingrun 270, Kinland 375, DF concrete mixer and DFSK minivan and Super Cab in their range of products. We will focus on marketing these models and strengthening our after-sales services and parts for our customers,” he continued.
Synergistic Acquisition Explained
This procurement, Yeoh noted, allows both companies to leverage their respective strengths and competencies to maximise benefits from operational synergy and competitiveness. “Currently, our customer base lies within quarrying and construction, infrastructure, plantation and agriculture, the oil and gas industries, as well as within the manufacturing sector. On the sales side, it will provide us with an opportunity to diversify and tap into a new market segment of haulage and logistics, while DFCVM will also have new opportunities to expand.
“For the Sunway Group’s in-house synergy, DFCVM offers a full range of trucks for our internal requirements, while operations-wise, DFCVM will gain significant operational and cost synergies from Sunway Trading and Manufacturing. This will include the consolidation of their warehouse operations into our warehouse, as well as strong IT, financial and logistics strength and support.”
Although it is a new segment for the company, Yeoh stressed that strong branding, coupled with the trustworthy reputation of the Sunway and Dongfeng brands, gives them confidence that this acquisition will be a successful venture.
“One of the main challenges we face includes helping DFCVM change their work culture to incorporate our business style. We also want to help transform DFCVM into the preferred supplier and market leader of Chinese commercial vehicles in Malaysia. By making changes, we can grow together into one coherent entity with shared goals, values and ways of working. This acquisition is a long term and strategic investment, which is why we will focus on the adoption of both hardware and technology solutions to realise the full potential of the Dongfeng brand in Malaysia.”
Keeping an Eye on the Light and Medium Commercial Vehicle Segment
Lim added that DFCVM launched two new products, the DFSK Super Cab and C35 Mini Van two months ago, with a very encouraging response. Yeoh added that they are planning to bring in more light and medium commercial vehicles, especially the deregulated Dongfeng 5.5 and 7.5 tonnes truck models, which cover a market worth around 16k units. Specialist vehicles such as refuse compactors and sweepers are also in the pipeline.
“In the near future, we would like to have our own body–building facility and assembly plant for complete knock–down (CKD) units. Our goal is to bring Dongfeng to greater heights in the next two years, and we firmly believe that this challenge is achievable if we have the right products and right people to realise it,” Yeoh said with full confidence.
About Sunway Trading & Manufacturing Division
The Trading & Manufacturing division is part of the Sunway Group. Established in 1974, the Sunway Group is one of Malaysia’s largest conglomerates with 12 business divisions, which includes property, construction, retail, hospitality, leisure, healthcare, education, commercial, trading and manufacturing, building materials, quarrying and Real Estate Investment Trust (REIT). The Group has 3 public-listed companies — Sunway Berhad, Sunway Construction, and Sunway REIT. In total, the Group has a combined market capitalisation of RM 16 billion, which forms a real-estate value chain that exemplifies socially responsible business practices, evidenced by their listing on the FTSE4Good Bursa Malaysia Index.
The Trading & Manufacturing division, he pointed out, traces its roots back to 1981. Beginning with the trading of heavy equipment, the division later expanded into trading of building materials, hoses & fittings, heavy equipment parts, as well as heavy equipment and industrial hardware. To date, the division has successfully spread its wings throughout Malaysia and abroad, including Singapore, Thailand, China, Indonesia and Australia. The division has 41 strategic locations serving its diverse customer groups. These include agriculture, construction, logging, manufacturing, marine, mining, oil and gas, and quarrying.
Over the years, the division has developed a range of in-house brands, including Sunflex and TotalRubber hoses and fittings, Suntrak undercarriage parts and Sunguard oil filters. Added to this are Sunway’s well-recognised agency lines like CASE, Furukawa, Airman, Sany, Daechang Forging, FP diesel, Copperstate, SEL, 3M, Araldite, Bosch, Buick, Nietz, Picasaf, Stanley and OSRAM.
“In short, we have 19 operating companies with offices and warehouses in 40 locations across seven countries, four manufacturing facilities, 200 brand agency lines, 45,000 Stock Keeping Units (SKUs), a team of 1,100 employees across seven countries with 13,000 active customers,” said Yeoh.
Lim concluded that being a new division under Sunway Trading and Marketing Division will allow DFCVM to leverage on the division’s infrastructure, networks and services platform. This will provide DFCVM with an incredible opportunity for further growth to make Dongfeng into one of the division’s leading brands.
