Oriental Metal Industries (M) Sdn Bhd (OMI) is targeting to be the largest Tier 1 integrated wheel manufacturer in Malaysia with its investment in a new RM103 million alloy wheel manufacturing plant north of Rawang.

The investment is part of a strategic plan by OMI’s parent company, MBM Resources Bhd (MBMR) to expand its automotive manufacturing division. Those who follow the business pages will recognise MBMR as a major (but not majority) stakeholder in Perodua.

MBMR owns 78% of OMI, while its technical partner, Central Motor Wheel Company Limited of Japan (CMW) has a 19% stake. The remaining 3% is held by Toyota Tsusho Corp. Established in 1939, CMW, a subsidiary of Toyota Motor Corp, is Japan’s largest supplier of automotive wheels. It has plants in China, Indonesia, South Korea, Taiwan, Thailand and the USA.

Phase one of the project, scheduled to be completed by the fourth quarter of this year, will be adjacent to OMI’s existing Wheel Module Assembly plant, which is located near Perodua’s Sg Choh factory. When fully completed by Q3 2015, the 13,000 square metre facility will have the capacity to produce one million units of alloy wheels annually, for both domestic and export markets.

The alloy wheels will be manufactured to original equipment manufacturer (OEM) standards, which require the products to undergo a heat treatment process after casting for optimum strength and durability. The new plant will use a combination of proven Japanese production methods and high precision and energy efficient low pressure casting equipment from Europe.

At the press conference this afternoon, it was revealed that the demand for alloy wheels in Malaysia is around 1.8 million pieces per year, with 800k of that imported. OMI is looking to reduce the need to import. To a question, OMI bosses say that a portion of Perodua’s alloy wheel supply currently comes from Indonesia. Needless to say, this new plant is expected to satisfy P2’s demand and keep profits within the family, so to speak.

MBMR’s MD Looi Kok Loon adds that this venture into alloy wheel making is a natural progression for OMI, which has been rolling out steel wheels since 1985.

“There is a growing demand for high quality yet competitively priced alloy wheels by car manufacturers and assemblers in this country. We aim to offer our current and potential customers a very attractive locally made alternative to imports, which are often exposed to vagaries such as currency fluctuations, product quality and delivery issues,” he said, adding that OMI is targeting to export about 35% of output.