IKEA to set up RM900m regional hub in Malaysia

The IKEA Group said on Wednesday it had sold key subsidiaries for 5.2 billion euro.

KUALA LUMPUR: IKEA, the Netherlands-based furniture retailer, will be setting up a regional distribution and supply chain centre for Asean in Malaysia, with an investment of RM908 million.

In adopting the structure and technology of IKEA's biggest regional distribution centre in Germany, it would be among the top 10 largest regional distribution centres of the IKEA Group globally, the Malaysian Investment Development Authority (Mida) said in a statement on Tuesday.

“The new centre will manage an inventory of 9,500 stock keeping units worth RM6.6 billion annually.

“IKEA's new 100,000 sq m specialised warehouse will utilise its integrated information and communications technology systems and automation to reduce the dependency on labour and significantly increase the efficiency and accuracy of its inventory management processes,” Mida said.

It also said Malaysia had always been a significant market for IKEA, as retail stores in the country were among its most visited globally.

The centre would serve 12 retail stores in Asean, which would increase to 20 by 2026.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the project was a milestone for both IKEA and Malaysia.

“IKEA's decision to select Malaysia as a base to support retailers in the country, Singapore, Thailand, Indonesia, Vietnam, the Philippines and India, underscores the strategic fit in supporting the company's overall growth strategy in the Asean region.

“The establishment also adds momentum towards making Malaysia a regional distribution hub and the preferred logistics gateway to Asia, as outlined in the National Logistics and Trade Facilitation Masterplan and National E-Commerce Strategic Roadmap,” he added. - Bernama