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Submitted by: Carla Rosales Nikko Lexis Tejano Jennifer Zonio May Hazel Ann Sanchez Ryan Rommel Rosario
Heavy Industries Corporation of Malaysia Berhad(HICOM) TIME CONTEXT: March 31, 1987 POINT OF VIEW: Tan Sri Jamil, President of the Heavy Industries Corp.
MAIN PROBLEM: What should be HICOM do to its three(3) subsidiaries or associate companies to mend its adverse effects to the company?
SECONDARY PROBLEM: Production of motorcycle engines by HICOMs three associated companies which
projects has also resulted in abnormally huge foreign exchange losses for HICOM.
COMPANY OBJECTIVES: Allude measures for minimizing, if not totally eradicating HICOMs losses and avoid its future re-incurrence.
SWOT ANALYSIS: STRENGTHS: HICOM owns 51% of interest in Perwaja Trengganu Sdn Bhd(PTSB) 70% of interest in Perusahaan Otomobil Nasioal Sedab
Bhd(PROTON) aside from other subsidiarycompanies under metalbbased, engineering, realty development, trading and processing industries.
monitoring and coordinating its operations which is envisaged that prompt assistance due to it could be rendered to the subsidiaries and associated companies as when
required.
Malaysia
Executives are viewed as bureaucratic and lacking of leadership needed to cope with
OPPORTUNITIES: The improvement in prices of primary commodities in the world market, inflow of
funds into the country and the improved business confidence that are expected
private construction was anticipated and would mean the rise for
The closure of the direct reduction plant had resulted in the price of steel scrap to be
cheaper than that of hot briquetted iron, with its view to incorporate increased use of
THREATS: Future market share of Kedah cement (another subsidiary of HICOM) was expected
Potential entrants within the manufacturing and sale of hot briquette iron and steel
perspectives and innovations. Cons : a. Anticipated increase in demand may not materialize b. Obsolescence of equipments due to technology advancement. Perusahaan Otonobil Nasional Sedan Bhd(PROTON)
Pros: a. Retain and exploit 65% market share b. Seize opportunity to enter US market c. Termination will undermine Malaysias industrialization plans d. Domestic and international markets appear to be more promising Cons: a. Loss may be significant but tolerable.
2.
b. Stop the incurring of debts in the future. Cons: a. KCSB would be out of the processing industry.
RECOMMENDATIONS : Poor performance of HICOM and its company subsidiaries was brought by both internal and external factors. It is therefore necessary to discontinue some of its subsidiaries or associates. With its most desirable effects to HICOMs current situation, it would be necessary that PROTON should continue its operations, that Perwaja Trengganu Sdn Bhd(PTSB) be closed and Kedah Cement Sdn Bdh be discontinued.