Posts tagged Penang
“A combination of low cost and high technology” is the in-a-nutshell reason The Economist gives for the beginnings of Penang’s success in the healthcare and electronics industries. Penang state and its neighboring region on the mainland now account for 21% of Malaysia’s GDP as a result of its technology focus, as well as a strong rule of law, intellectual property protection and ease of doing business.
The road to technology riches was paved in the 1970s when Penang became Malaysia’s first free-trade zone, but the article also credits Penang’s current government for freeing up the local economy further by removing economic privileges and combating corruption and waste. For its part, the federal government has also invested heavily in Penang with massive infrastructure upgrades such as a duplication of the bridge to the mainland and extensions to the main seaport and international airport.
Penang has historically enjoyed a strategic trading position thanks both to its physical location between China, India and Southeast Asia, and the well-connected multi-ethnic mix that reflects this. High-tech industries have created a skilled local workforce of technicians and engineers, the capital Georgetown is enjoying a revival, and foreign companies are moving in once again.
source & article: The Economist
Canadian technology firm Research In Motion (RIM), makers of the best selling Blackberry devices, has apparently applied to set up an international procurement center in Penang.
RIM hasn’t released an official statement on procurement yet but has confirmed it will manufacture devices in Penang. Business Times reports the Malaysian Industrial Development Authority (MIDA) has received an application for a procurement center, with no further information about its nature or when it would be approved.
The report says photos of a local electronics company which has just received a major contract to manufacture Blackberry devices for the worldwide market was included in the application. Indonesia is also believed to be lobbying RIM to set up a company-owned facility there.
There are already around 209 international procurement centers (IPCs) already based in Malaysia. Many are located around Penang’s technology parks, such as those belonging to German healthcare products maker B. Braun Melsungen AG and Japan’s Toray Industries Inc.
source & article: Business Times
Penang has been positioning itself as a center for medical device production, and a new agreement with a Swiss machinery maker will see local skills improve in this industry, and pass them on to other Malaysian manufacturers.
The Penang Skills Development Centre (PSDC) has teamed up with Tornos SA, a Swiss machinery maker, to provide a loan machine for two years and training for 10 staff of its sliding headstock type computer numeric control (CNC) lathe. The PSDC has applied to the government for funds to purchase four more of the machines under the 10th Malaysia Plan.
CNC skills are vital to advancing the medical devices industry, which in turn produces valuable skills for other high tech manufacturing sectors like semiconductors and automation. PSDC has run CNC training courses since 1992, producing 160 skilled operators every year.
Foreign medical device companies with operations in Penang are B. Braun Melsulgen AG, Symetry Medical Inc and St Jude Medical Inc. Malaysian company Vigilenze Medical Supplies Sdn Bhd also has a facility in the state.
source & article: NST Business Times, MIDA
Penang’s economy is set to thrive under a proposed Greater Penang Transformation Programme, which the Malaysian government will draw up after a four-six week ‘lab’ involving state and federal government cooperation with the private sector, and organized by Malaysia’s Performance Management and Delivery Unit (PEMANDU) and Khazanah Nasional (the Malaysian government’s investment arm).
Penang is the third-largest regional contributor to Malaysia’s GDP after Kuala Lumpur and Johor-Bahru, all of which are marked for special attention as major urban conurbations under the 10th Malaysia Plan. Penang is currently the only one of the three without its own economic master plan to identify its unique needs and sustainable growth opportunities.
Penang’s Chief Minister Lim Guan Eng said the state had already excelled at attracting investment, especially in electronics manufacturing, tourism, logistics and healthcare. With its strategic physical location it was “well-placed to take the big leap higher up the value chain and income bracket,” he said.
About RM17.9 billion (US$5.92 billion) has been set aside for improvements to Penang’s infrastructure and physical networks. Current projects include the Penang Bridge, building a second Penang Bridge, plus major expansions to the sea port and airport and road/railway construction. There’s also a plan to develop a Hong Kong-Kowloon style waterfront complex around Georgetown and Butterworth.
Malaysian Prime Minister Najib Razak also praised Penang and its cities, saying the transformation programme would create the “leading urban centre in the Bay of Bengal and the Indonesia-Malaysia-Thailand Golden Triangle.”
Access and connectivity lie at the heart of Penang’s growth plans, leveraging its key position as a center for cargo and passenger traffic via air, land and sea to and from other markets just as Johor-Bahru and its Iskandar Malaysia project were doing at the other end of the country.
Electronics manufacturer Flextronics International Ltd will increase its Malaysian presence by 7,000 staff with new operations in Penang and Johor, according to Business Times. The company, which already has nine locations in Malaysia (five of which are in Penang), wants to add new admin support staff as well as technical and engineering talent to make everything from printers and cameras to solar photovoltaic cells.
A new Flextronics Global Services (FGS) facility in Senai, Johor, will begin operating in April and will provide asset and recovery services, repairing components for numerous high technology products. Flextronics said it chose the location due to its proximity to the Iskandar Malaysia development region, three sea ports and international airport. The area also boasts a well educated and multi-lingual workforce.
source & article: Business Times
Science giant DuPont is planning to acquire and integrate Danish enzyme producer Danisco AS, a company with a sizable Penang-based subsidiary developing and producing food additives, sweeteners and sugars. The move will increase DuPont’s reach in Malaysia, and cement the company’s position as a leading global biotechnology player. Worldwide, the acquisition was worth some US$6.3 billion.
DuPont already has a presence in Malaysia, operating there since 1973 and currently employing 150 people. Its primary activities include agricultural crop protection products, polymers, chemicals, fluoroproducts, fibers, refinishes, imaging, solid materials, advance composites and packaging and industrial polymers.
Carl Lukach, President of DuPont Asia-Pacific, said his company is keen to become more involved in the oil and gas sector, as well as infrastructure related projects. Hsing Ho, the company’s sales and marketing director for ASEAN, said Malaysia is “on DuPont’s radar”, and added they would like to help others with solutions to enhance resource recoveries, such as the possibility of deeper ocean exploration.
source & article: BusinessTimes
Penang is well located, has Malaysia’s “highest economic density” and is home to dozens of development and infrastructure projects, making it the Federal Government’s preferred regional hub for the northern corridor.
Major projects are already underway, including construction of a second bridge to the mainland and a big expansion of Penang’s international airport. The government also wants to increase the capacity of Penang Port, attract even more tourists and create another multimedia super corridor to bring more technology companies to the state.
Penang’s proximity to Thailand, population density and established reputation as a tourism hotspot makes it ripe for further development. The government would like to see it as a leader for growth in the northern region, as well as stimulating the state’s own economy and increasing employment.
source & article: Bernama via The Edge Malaysia
Rubicon Technology, an American supplier of sapphire substrates and products to the high tech industry, is the latest addition to Penang’s hardware manufacturing sector with its announcement of a new crystal polishing facility, its first outside the United States.
Sapphire products are vital in the production of LEDs, RFICs (radio frequency integrated circuits), optical products and semiconductors. Demand has increased in recent years thanks to the use of LEDs in HDTVs, household/signal lighting, and displays in computers and other electronic devices. The global market for LEDs is projected to almost double, reaching US$14.3 billion by 2013.
Crystals grown at Rubicon’s facility in Batavia, IL will be sent to Penang for the labor-intensive polishing process, giving the company vastly improved production capacity. Rubicon is currently the only company able to supply the necessary large-diameter (up to 12 inches) sapphire wafers on a large scale, and a production facility in Malaysia will make them readily available for shipping to Asian electronics manufacturers.
source & article: Euroinvestor
Two major Malaysian infrastructure projects — the second Penang bridge and the Penang International Airport expansion — are well on track to meet their completion deadlines. The airport’s first stage, costing RM250 million (US$81 million) is set to open in January 2012 and the new bridge, at RM4.5 billion ($1.45 billion) should be ready by November 2013.
The Prime Minister’s Department said it was happy with the progress so far and has requested priority be given to local contractors in tendering for the projects, probably worth around RM175 million (RM100 for the bridge and RM75 for the airport).
Jambatan Kedua Sdn Bhd was formed by the government especially to deliver the 24km bridge, which began construction in 2008 and is currently 34% completed. Malaysia Airports Holdings Bhd is overseeing the other project, which will see a number of upgrades to Penang’s International gateway such as a much larger departure hall, extra check-in counters and baggage handling facilities, and separate departure/arrival halls for domestic and international travelers.
source & article: Business Times
More investment is flowing into Malaysia’s technology hardware sector, with a new plant announced by hard drive manufacturer Western Digital and a joint venture between AU Optronics (Taiwan) and SunPower (USA) to produce solar panels.
Western Digital, who already operate four plants across Malaysia, has promised to invest a further $US1.2 billion over the next five years. Its new research and development (R&D) and manufacturing facility in Penang is scheduled to open in Q3 2011. Meanwhile, AU Optronics will take a 50% share in a $700 million solar panel manufacturing operation expeced to start mass production in Q4 2010 (exact location not announced).
AUO’s partner, SunPower, is the largest commercial and residential manufacturer of solar panels in the USA, and the Taiwanese government estimates the industry will be worth $6.25 billion by 2020.
Both projects offer great benefits to Malaysia’s economy not only by increasing employment, but also by raising skills further in areas like R&D, high tech manufacturing and electronics engineering.