SWS Capital acquires 51% stake in drone and robotics firm MATA Aerotech

• Felcra deal to potentially contribute approximately US$2.4 million in revenue by 2020
• Multiple indications of interest from agribusiness companies and government ministries

MALAYSIAN plastics and furniture manufacturing company SWS Capital Bhd has exercised its option to purchase a majority 51% share in the drone and robotics technology firm MATA Aerotech Sdn Bhd, propelling its business into a worldwide market which PwC predicts will be valued at US$127 billion (RM528.3 billion) by next year.

SWS will pay US$1.13 million (RM4.725 million) in cash for 3,442,500 shares in MATA Aerotech, following its option agreement earlier this month with local IT company Nexus Union Sdn Bhd.

Nexus formed MATA Aerotech in a joint-venture with Taiwan-listed Geosat Aerospace & Technology Inc, a full-service Unmanned Aerial System (UAS) and robotics technology firm that has been offering military-grade commercial drone solutions since 2004.

SWS' purchase in MATA Aerotech comes as commercial drone usage has hit mass adoption globally, driven by the integration of artificial intelligence and advanced machine learning algorithms.

"Our purchase of 51% control in MATA Aerotech will transform our business from a plastics and furniture manufacturer into one that is immersed in Industry 4.0 technologies," said SWS Capital executive chairman Dr Tan Khoon Hai.

"The interest shown by large, respected players like Felcra and Felda and support from the government augurs well for this new business."

According to MATA Aerotech chief executive officer Wan Azrain Adnan, there have been multiple indications of interest from large agribusiness companies and government ministries both locally and in the region for MATA Aerotech in Malaysia.

The MATA Aerotech JV is a result of a facilitation and matching exercise by Taiwan’s Ministry of Economic Affairs, via the Industrial Development Bureau of Taiwan and the Institute for Information Industry (III) Taiwan.

MATA Aerotech possesses in-depth expertise and experience in drone and robotics technology and is involved in various activities ranging from research and development (R&D), manufacturing and assembly, testing, training, service provision, and data analytics.

Through this joint venture, MATA Aerotech aims to boost key local industries with Geosat’s technology, focusing primarily on agribusiness as a first step. 

Financial contribution

On July 22, 2019, MATA Aerotech inked an MoU with government-owned Felcra, outlining a collaboration to incorporate drone technology into the management and operations of the rural development entity's plantations.

Witnessed by Minister of Economic Affairs Mohamed Azmin Ali, the MoU with Felcra forms the first phase of the rollout of drone technology services in Malaysia by MATA Aerotech.

The first phase of the rollout is projected to potentially contribute approximately US$2,4 million (RM10 million) in revenue to MATA Aerotech by 2020.

By then, MATA Aerotech would have invested over US$720,301 (RM3 million) to expand its operations, especially its fleet of drones, and the training of drone pilots and technicians.

Felcra, with total land under management amounting to 257,078 hectares (palm oil 212,093 ha, rubber 40,045 ha and paddy 4,130 ha), wants to leverage on drones and data analytics to drive down costs, increase crop efficiency and reduce the use of manual labour on its estates.

"Precision agriculture is the future of farming," said Wan Azrain. "By utilising drone and robotics technology in Felcra’s plantations, pioneering research and development for the agricultural sector and training drone pilots in our academy, we are propelling local Malaysian agriculture into the 21st century.

“It’s a good start, a promising start. We’re happy with what we have achieved so far and operationally, we’re rushing to commence operations in September.”

Agribusiness players like Felcra have been attracted by the prospect of replacing farmers with drones, resulting in reduced wastage of pesticides, fewer incidents of theft and decreased man-hours spent counting trees, harvesting and human error.

"This leads to vastly reduced dependency on foreign labour, thus allowing our local workforce to be upskilled and redeployed in higher-value tasks in the agriculture ecosystem," added Wan Azrain.

Felda, IADA demos

Over the past two months, MATA Aerotech has conducted drone technology demonstrations to several organisations, including Felda, Felcra and Integrated Agriculture Development Area (IADA) Barat Laut Selangor, an agency under the Ministry of Agriculture and Agro-Based Industry.

Felda manages almost 530,000 hectares of palm oil plantation, whilst IADA Barat Laut Selangor covers an area of almost 20,000 hectares of paddy farm.

"Our work with Felcra will generate data that is invaluable for Artificial Intelligence (A.I) Predictive Analysis," added Wan Azrain.

"This would be key for Felcra as it moves towards a Smart Agriculture model, which is driven by data that has been provided by a combination of technologies, including via drone technology."