HGST to close Penang plant, 450 workers to be redeployed

GEORGE TOWN: HGST plans to close its Bayan Lepas plant, which has 450 workers, next March.

The workers, who have been informed of the move, are likely to be redeployed to the group’s subsidiaries.

It is learnt that the managerial staff would be transferred to HGST subsidiaries in Singapore.

The consolidation exercise in Penang follows from the recent green light given by China’s Ministry of Commerce, known as ‘Mofcom’, for Western Digital (WD) to integrate parts of the Hitachi storage business.

In 2012, WD acquired Hitachi, but Mofcom prevented the full integration of their respective drive-making operations.

According to a report published in Barron’s on Oct 19, the integration process will proceed over the course of two years, and will involve integrating the corporate, research and development, heads, media and hard disk drive (HDD) manufacturing divisions.

Besides Penang, HGST has another site in Sarawak, employing 1,500 workers.

A check on its Facebook page shows that the facility in Sarawak was still recruiting workers in September.

The plant in Bayan Lepas is focused on research and development and manufacturing for solid state drives, while the Sarawak facility is engaged in substrate manufacturing. 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.

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

The declining revenue from the mobile consumer product division in Malaysia has also influenced this decision.

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

As for its two high-speed connector manufacturing plants in Bukit Minyak, business would carry on as usual.

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

Blaupunkt Malaysia is in the midst of negotiating with another European-based company to take over its operations in Penang.

If the deal goes through, which is expected to be concluded in two weeks, then the plant here, which employs 300 workers, would not have to wind up.

On October 5, Blaupunkt Malaysia Sdn Bhd announced in a local English daily that a provisional liquidator had been appointed and that the company would wound up.

Its directors have declared that the company can no longer continue its business due to its liabilities.

The recent agreement between AMD Inc and Nantong Fujitsu for the latter to acquire a 85% ownership and become the controlling shareholder in AMD’s operations in Malaysia and Suzhou will not lead to any reduction in the headcount of the workforce.

“The joint-venture allowed AMD in Malaysia to leverage the capabilities of Nantong’s and AMD’s facilities worldwide and about 5,800 employees to offer differentiated assembly, test, mark, and pack capabilities and scale for a broad range of customers.

“AMD and Nantong could bring in new products to be manufactured in Penang,” AMD senior vice-president and chief financial officer, Datuk Devinder Kumar said.

Sanmina Corp will take over Motorola Solutions facility in Bayan Lepas, employing some 3,00 workers, in early 2016, but there will be no reduction in headcount for the manufacturing and the research and development divisions.