Hicom Downturn

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The downturn of heavy industries corporation of
Malaysia Berhad (HICOM) due to depleted demand, poor planning, adverse economic factors, and inexperienced or inept management..

CHAPTER 1

OVERVIEW OF THE PROBLEM
The depressed economic condition experienced in the last financial year continued to prevail during the period under review. Consequently, HICOM’s companies involved in the manufacture of intermediate industrial products such as steel billets and cement had been severely affected, particularly due to the slowdown in the construction industry. The passenger car market also shrank considerably and as a result Perusahaan Otmobil
Nasional Sdn Bhd (PROTON) was unable to achieve its planned volume of production. Similarly, the production of motorcycle engines by HICOM’s three associated companies drastically reduced due to poor demand.

In line with the objective of achieving vertical integration in the motorcycle industry, a new company named HICOM Diecasting Sdn Bhd was formed during the year to manufacture die-cast parts for motorcycle and automotive components.
Approval was also granted by the Government for
HICOM to implement the Engineering Complex project which would provide modern facilities to undertake forging, casting, and machining of components and other industrial uses.

The adverse result of the Group was mainly due to the losses suffered by its subsidiary companies,
Perwaja Trengganu Sdn Bhd (PTSB) and
(PROTON) and its associated company Kedah
Cement Sdn Bhd (KCSB).
On its incorporation on the 27th of November
1980 the activities of HICOM have grown tremendously and as a result more efforts are now required to consolidate the operations of its subsidiaries and associated companies.

One significant change is the creation of a new Division called the Operations Division which is responsible for monitoring and coordinating the Group’s operations.

Two other new functional Divisions, namely the



References: • Soriano, A. Business Policy in an Asian Context. • Mankiw, Gregory. Microeconomics. • http://www.businessdictionary.com/definition /organizational-structure.html#ixzz2J92watDA • http://www.trusteddealers.co.uk/blog/archive s/new-car-market-continues-to-depreciate

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