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Acme Manufacturing Sdn Bhd 01 / 09
Capital Expenditure Proposal · For Board Approval · Q3 2026

Production Line 2
Capacity Expansion

A second production line to capture demand we are turning away today — and to protect our highest-margin SKUs.

The ask MYR 4.0m capex · works start Q3 2026
DecisionApprove / Decline
SponsorOperations
Horizon5-year case
Acme Manufacturing Sdn Bhd 02 / 09
The problem today

We are out of capacity — and
losing orders because of it.

Line 1 utilisation
94%
Effectively maxed out — no headroom for new orders
Quoted lead time
6 wks
Pushing customers toward faster competitors
Revenue lost / year
MYR 1.2m
Estimated annual orders turned away

Every quarter we wait, that MYR 1.2m recurs — and customer relationships migrate.

Source: Capex Proposal — Production Line 2, §2
Acme Manufacturing Sdn Bhd 03 / 09
Proposed solution & scope

Double capacity on our
best-margin SKUs.

  • ✓Doubles capacity for Gadget C & D — our highest-margin SKUs
  • ✓Adds automated QA — higher quality, lower labour dependency
  • ✓Contingency built in — included within the MYR 4.0m envelope

Where the MYR 4.0m goes

MachineryMYR 3.1m
Installation & commissioningMYR 0.5m
Training & contingencyMYR 0.4m
Total capexMYR 4.0m
Source: Capex Proposal — Production Line 2, §3
Acme Manufacturing Sdn Bhd 04 / 09
Investment case

The returns clear our hurdle
with room to spare.

Payback
2.6 yrs
IRR
24%
vs 12% hurdle
NPV
MYR 2.9m
10% discount · 5 yr
EBITDA / yr
~MYR 1.6m
at full ramp

IRR of 24% sits at 2× the 12% hurdle rate — and NPV is positive on conservative assumptions.

Source: Capex Proposal — Production Line 2, §4
Acme Manufacturing Sdn Bhd 05 / 09
4-year cashflow · MYR 000

A short dip, then durable cash.

−3,400 net
Year 1
+1,350
Year 2
+1,600
Year 3
+1,650
Year 4

Year 1: −4,000 capex +600 operating (net −3,400). Years 2–4 contribute +1,350 / +1,600 / +1,650.

Source: Capex Proposal — Production Line 2, §5
Acme Manufacturing Sdn Bhd 06 / 09
Sensitivity · ±10%

The case survives a 10% miss.

ScenarioIRRvs 12% hurdleNPV
Base case24%Clears +12 ptsMYR 2.9m
Volume −10%17%Clears +5 ptsplaceholder — not in source
Price −10%15%Clears +3 ptsplaceholder — not in source
Volume +10%placeholder — not in source—placeholder — not in source
Price +10%placeholder — not in source—placeholder — not in source

Even at −10% on price, IRR of 15% stays above the 12% hurdle. Upside cases to be supplied.

Source: Capex Proposal — Production Line 2, §6 (downside only). Upside & scenario NPVs: to be supplied by Finance.
Acme Manufacturing Sdn Bhd 07 / 09
Risks & mitigations

Each risk is already owned.

Risk
Mitigation
Demand softens
Phased ramp — machinery is redeployable, so capacity is not stranded
Install overruns
Fixed-price vendor contract with penalties — cost risk sits with the vendor
Skills gap
Training budget already included within the MYR 4.0m scope
Source: Capex Proposal — Production Line 2, §7
Acme Manufacturing Sdn Bhd 08 / 09
Timeline

From approval to full ramp
in ~3 quarters.

Q3 2026
Order machinery
Q4 2026
Install
Jan 2027
Commissioning
Q2 2027
Full ramp

Approve now and the first incremental cash lands within the year. Every quarter of delay extends the MYR 1.2m leakage.

Source: Capex Proposal — Production Line 2, §8
Acme Manufacturing Sdn Bhd 09 / 09
Recommendation

Approve Production
Line 2.

The Board is asked to approve MYR 4.0m of capex for Production Line 2, with works starting Q3 2026.

24%
IRR · 2× hurdle
2.6 yr
Payback

Decision required today

  • 1Approve MYR 4.0m capex for Production Line 2
  • 2Authorise works to start Q3 2026
  • 3Note upside & scenario NPVs to be circulated by Finance
Source: Capex Proposal — Production Line 2, §9
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Speaker notes