KUALA LUMPUR: Ekuiti Nasional Bhd’s (Ekuinas) recent investment in the APIIT/UCTI education group is seen as timely to further boost the Malaysian private education sector as the latter gears for growth over the next decade.
EDUCATION GROWTH: UCTI has more than 13,000 graduates and collaborations, with 20 universities in the UK and Australia - Photo from universityfairs.com
The RM102-million investment will see Ekuinas, the government-linked private equity fund holding a 51 per cent stake in the education group, with Sapura Resources Bhd (Sapura Resources) having the remaining 49 per cent.
“Ekuinas is smart to go into the education sector as this is a sunrise industry. This will serve as a take off point for Ekuinas to zero in on the twin APIIT/UCTI colleges, which is a good entry point to the education sector,” said chief executive officer of FA Securities Bhd Zakie Ahmad Shariff.
“The two colleges are bursting at the seams with nearly 7,000 students, out of which, 70 per cent are international students coming from 72 countries,” he added.
The strategic pact will allow Sapura Resources to be better positioned to take advantage of the fast-expanding Malaysian education sector currently estimated to be worth some RM7.2 billion.
Under the 10th Malaysia Plan, the government is committed to supporting effective and smart partnerships through the public-private partnership initiative, especially in high growth and strategic sectors to create stronger and more competitive industry champions.
“While Ekuinas is assured of a good investment, at the same time, Sapura will be able to take its colleges on a fast expansion track.
“This will be the next phase development, now that they have fresh funding,” said Zakie, whose securities firm tracks investments by fund managers.
The divestment enables Sapura Resources to unlock the value of its investment in APIIT and UCTI and raise immediate funds which will be channelled towards acquisition of new businesses and pare down borrowings.
The education sector is the major revenue earner for Sapura Resources.
The APIIT/UCTI colleges have a combined revenue growing in excess of 40 per cent per annum and this is expected to hit RM83 million for the year ending Jan 31, 2011.
Education has been identified as one of the 12 National Key Economic Areas (NKEAs) and private education has become an important industry that has vaulted Malaysia into becoming the fastest-growing education hub in Southeast Asia.
“The Education NKEA focuses on strengthening the private education services sector by increasing private consumption and investments, as well as expanding education export.
“The Ekuinas-Sapura pact is a perfect example of a public-private partnership in the education sector,” said Prof Dr Saifollah Abdullah, from the Faculty of Applied Sciences at Universiti Teknologi MARA (UiTM).
“As public sector growth (in education) was expected to be limited, the aim is to see the private education sector growing by six-fold and needing RM20 billion in investments over the next 10 years,” Dr Saifollah said.
He said the Education NKEA was targeted to more than double the total gross national income (GNI) to RM60.7 billion by 2020, from the current RM27.1 billion.
Sapura Resources’ wholly-owned APIIT/UCTI education group comprises Asia Pacific Institute of Information of Technology (APIIT) and Asia Pacific University College of Technology and Innovation (UCTI) and Sapura Smart School, a primary and secondary school operating in Subang.
UCTI has more than 13,000 graduates and collaborations, with 20 universities in the UK and Australia, that includes Brighton University and Staffordshire University in the UK, and Queensland University of Technology in Australia.
It was Malaysia’s first institution to achieve Multimedia Super Corridor (MSC) Company Status in 1997 and to be awarded the MSC Research and Development Grant in 1999.
It is also the only institution to have won the prestigious MSC Asia Pacific Information and Communications Technology (ICT) Awards every year since the inception of the awards in 1999. — Bernama