KUALA LUMPUR, March 18 (Bernama) — China Automobile Parts Holdings Ltd (CAP) looks set to receive a licence to establish a production facility in Xiamen (Fujian Province), China, to produce a rubber compound using Malaysian technology.
CAP’s Managing Director Li Guo Qing said the company is looking to commercialise the rubber recycling technology of SRI Elastomers Sdn Bhd (SRI) which is focused on eco-friendly and sustainable solutions using recycled tyres and waste rubber products.
SRI Elastomers is a research and development, clean technology company, that provides solutions to the rubber industry and the growing challenge posed by the need to recycle tyres sustainably.
Leveraging on its expertise would allow CAP to expand into China’s rubber business as the consumption of rubber is closely tied with the automobile industry which is the top consumer of both natural and synthetic rubber.
“This is also in line with CAP’s business as a manufacturer of chassis components used in automobiles,” said Li.
He was speaking at a press conference after the signing of a Memorandum of Understanding (MoU) with SRI here today.
Both companies estimated the capital expense required to build the manufacturing facility is about US$3 million with the share proportion to be decided when the agreement is finalised.
According to the MoU,CAP has the right to produce, market, sell and distribute the SRI compound exclusively in Fujian Province. The necessary technical and processing expertise would be provided by SRI.
Meanwhile, SRI’s Chief Executive Officer Gopinath B Sekhar said working with CAP is in line with the company’s strategy of developing, supporting and growing new markets for the SRI compound, as well as establishing a regional network of licensees through partnership.
He said the company is currently operating in Sungai Buloh with an output capacity of 6,000 tonnes of compound rubber annually and had been distributing it in all the ASEAN countries.
The facility in China is expected to operate nine months after the final agreement is signed and is capable of producing about 10,000 tonnes of compound rubber annually.
Gopinath said the facility would replicate the Malaysian plant, except for the scale.