CYBERJAYA: Datasonic Group Bhd has set plans to tap the African market, particularly Tanzania for the data and microchips segment.
Describing it as its first move abroad, deputy managing director Chew Ben Ben explained that Tanzania has massive potential to push the company even further.
"This will be our first move abroad and we have identified, Africa as having massive potential for growth especially within the data and microchips segment,” he told reporters at the conclusion of ninth annual general meeting (AGM) here, earlier today.
"We are keen in Tanzania because of its position as a gateway into Africa as most travelers going to Africa will pass through Tanzania. That's why we are working on a collaboration with their border control."
The group is in the midst of finalizing its 67 per cent stake buy into a Tanzanian border control-related security contract.
Datasonic, a secure identity and personalisation system solutions provider, is offering US$192 million for the stake.
Once materialized, the deal could bring in earnings accretion of RM10 million to RM15 million per year over eight to 10 years.
Chew said infrastructure also plays a big part in the company's decision making.
“China as you know, have long been making inroads into Africa and have over the years built various infrastructures there,” he said.
“We intend to leverage on the infrastructure that China has built in Tanzania and Africa in general for our own business expansion.”
He added that if all goes well with Tanzania, the company will definitely expand its reach into other parts of the African continent.
For its first quarter ended June 30, 2017, the firm saw its net profit decrease by 27.2 per cent to RM15.12 million in comparison to the RM20.79 million made last year, on the back of lower revenue.
The group's quarterly revenue was also down by 21 per cent to RM60.1 million, from RM76.08 million a year ago, on lower contribution from the supply of smart cards, consumables, passports and personalisation services.