Proton exchanged documents with two separate parties in Beijing last week to help propel the company’s expansion plans.
The first exchange was with Alhaj Automobile, and the deal was for a licensing and technical assistance agreement (LTAA) related to the building of a factory in Karachi to assemble Proton cars for the Pakistani market. The second was with China Construction Bank (CCB) for a RM1.88 billion loan.
The document exchanges were witnessed by prime minister Tun Dr Mahathir Mohamad, who was in the Chinese capital to attend the second Belt and Road Forum for International Cooperation. He also met Proton vendors for a dialogue session together with Geely chairman Li Shufu, top Geely officials and the Proton management team.
The Proton-Alhaj LTAA is a follow-up to the symbolic groundbreaking ceremony held in Islamabad in March, cementing the agreement for both parties to build a CKD production plant in Pakistan. The Karachi plant will be built on a greenfield site with an initial investment of US$30 million (RM124 million). Operations are expected to start before the end of 2020. In the meantime, Alhaj will sell CBU imports from Malaysia.
The document exchange between Proton and CCB is for banking facilities worth RM1.88 billion. The funds are earmarked to finance the carmaker’s future business expansion plans as it aims to be the number one automotive brand in Malaysia and number three in ASEAN by 2027.
“The exchange of documents between Proton and its partners, Alhaj and CCB, is a significant step in Proton’s journey to achieve its long term goals. Expansion to foreign markets is critical for sales growth while obtaining financing allows the company to invest in the many projects required to turn Proton into a truly global automotive brand,” said Proton chairman Datuk Seri Syed Faisal Albar.
On the vendor front, Proton has made efforts to encourage local vendors to develop their efficiency, quality and expertise in order to supply the high-tech components required by future models. The company has match-made Malaysian vendors with their counterparts from China, who are existing Geely suppliers, to form new joint-venture companies and sign technical agreements.
To date, 16 Chinese vendors have signed up for the initiative with six coming in as foreign direct investors. Cumulatively, these deals have garnered an initial investment of over RM270 million, with 56% of the vendors supplying the electronics and electrical components sector.
Proton vendors from both Malaysia and China were present at the dialogue session to find out more about the market landscape, government policies, incentives and regulations for Malaysia’s automotive industry. It was also an opportunity to have their questions answered by Mahathir, a big proponent of the auto industry.
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Borrow the money from China, pay interest rates in long term and creating new thousands of jobs in Pakistan.. Boleh, in boleh land.. X ADA.. I thought debts are trillion??
Paid overdue supplier.
https://paultan.org/2016/04/14/proton-agrees-to-rm1-5-billion-loan-terms-from-govt/
That is old story. The soft loan already paid to supplier and the loan had thus been paid for when Geely bought over Proton’s shares.
Proton, being a Malaysian company should create jobs in Malaysia for Malaysians
Why bother with Pakistan? Last year went to Bangladesh, nothing happened. ZERO result. Pakistan also another poor country like Bangladesh. So results will be the same.
Better to open in Malaysia and give Malaysians jobs. Also, money circulates within our country making the economy richer. Why spend money in Pakistan?
So they don’t come here for work instead?
Many will get new Protons this Eid al-Adha .
Malaysia still the major manufacturing hub for Proton with thousands of Malaysians being employed. The Pakistanis will bear all the costs of building the assembly plant, so it’s natural they have the say who they will employ. 1.88 billion is not a big amount when you consider that to develop a new car from scratch would require much more than that.
Wah, Dr Li, nice watch you’ve got there. Keep up the good work.
This China bank abbreviation name doesn’t sound good.
Lao ban Li Shufu himself come down, this is serious business!
Geely jiayou!
Proton jiayou!