US firm closing down one plant in Penang, moving to China

File pic shows Penang Chief Minister Lim Guan Eng (third right) being brief by Amphenol Corporation president and ceo Richard Adam Norwitt (second right) during his visit to the factory in Bukit Minyak, Penang. - THE STAR/ASRI ABDUL GHANI.

GEORGETOWN: United States-based Amphenol Corp is closing one of its manufacturing facilities in Penang, following the group’s decision to relocate its mobile devices and mobile networks operations on the island to China.

Sources told StarBiz that the group made the decision to shift to China following its business strategy to consolidate its mobile consumer products division in Asia-Pacific.

Some 150 workers, including engineers and operators, will be affected by the move.

“The compensation package given is competitive,” the sources said.

Operating in FIZ Bayan Lepas, the mobile consumer product division supplies antennas to critical mission communication devices made by multinational companies (MNCs) in Malaysia.

The plant will shut down on Oct 31, 2015.

It is learnt that the decision to shift to China has to do with the declining revenue from the mobile consumer product division in Malaysia.

The revenue from the sales of mobile consumer products to the global market is still growing, said the sources.

For the third quarter of the 2015 fiscal year ended Sept 30, Amphenol president chief executive officer R. Adam Norwitt said that the group had achieved new record sales and earnings per share (EPS) of US$1.46bil and 65 US cents respectively.

“Sales increased a strong 7% in US dollars and 11% in local currencies over the prior year, with robust growth in the mobile devices and automotive markets,” Norwitt said.

When contacted, Amphenol TCS general manager Lee Teong Li said business would carry on as usual for the two plants in Bukit Minyak, which are involved in the high-speed connector business.

The plants, which have been in operations since 2001 and employ over 800 workers, sell high-speed connectors to MNCs worldwide.

Headquartered in Connecticut, Amphenol is one of the world’s largest designers, manufacturers and marketers of electrical, electronic and fibre optic connectors, interconnect systems, antennas and sensors.

Amphenol had recently paid US$1.27bil to buy over FCI Asia Pte Ltd, a global leader in providing interconnect solutions for telecommunications, wireless and data companies.

FCI is based in Singapore and owned by affiliates of Bain Capital, employing about 7,400 workers worldwide.

In another development, Sanmina Corp will take over Motorola Solutions’ facility in Bayan Lepas in early 2016.

The exercise to buy over Motorola Solutions is expected to conclude in early 2016, when Sanmina will also take charge of the plant.

Sanmina will take ownership of the Technoplex manufacturing facility in Bayan Lepas, allowing Technoplex to continue and maintain its competitive edge.

There will also be no changes to the research and development (R&D) operations in Penang, leaving the R&D team to focus on serving customers worldwide.

The takeover will not lead to any reduction in the headcount of the Penang facility, which currently stands at 3,000.

Sanmina is a leading integrated manufacturing services company, which is working with Motorola Solutions on manufacturing in Reynosa, Mexico, Kunshan, China, Campinas, and Brazil.

Founded in 1980, Sanmina, a Nasdaq-listed company, is a leading integrated manufacturing solutions provider, offering leading technology companies with design, manufacturing and logistics solutions.

Headquartered in San Jose, Sanmina generated over US$6bil in revenue for the 2014 fiscal year.