Pentamaster to invest RM20mil in Batu Kawan plant

GEORGE TOWN: Pentamaster Corp Bhd will invest RM20mil in a new manufacturing facility in Batu Kawan next year despite the global economic downturn.

Group executive chairman C.B. Chuah told StarBiz the plant would be located on 3 acres to manufacture a new generation of test and robotic equipment for the semiconductor industry.

Construction work is expected to start next year and the plant is scheduled to start operations in 2017.

“We are already fully utilised at the present site in Bayan Lepas,” he said.

Chuah said Pentamaster’s order book still had about RM30mil worth of test equipment to deliver to customers in Asia Pacific.

“We are expecting more orders to come in.

“From January till August, the group had delivered RM65mil worth of test and robotic equipment for the semiconductor industry, which was about 12% higher than a year ago.

“Some 80% of the equipment was for use in the smart device segment, with the remaining 20% in conventional computing,” he added.

Chuah said the group was projecting a strong double-digit percentage growth over a year ago’s revenue.

He added that 20% of the raw materials used were imported from the US and Japan, while the rest was sourced locally.

“Some 90% of the group’s earnings are in US dollar,” he said.

Chuah said the group was doing well not only because of the stronger US dollar and weaker ringgit situation.

“The technological differentiation of our equipment plays a key role in enhancing our competitive edge.

“You can be in the export segment, but if the product does not have any value-add differentiation, you will be subject to price pressure,” he said.

Chuah said the group’s test equipment and robotic system was now priced between US$100,000 and US$300,000 per unit, about 20% higher than prices last year.

“The equipment we make today has more sophisticated functions, so the pricing has increased,” he said.

Chuah said that for the past three months, the global semiconductor market had weakened in tandem with the global economic slowdown.

“Demand from Japan and the US has slowed down, and the trend is expected to continue till the first quarter of 2016. We expect it to pick up in the second quarter of 2016,” he said.