GEORGE TOWN: PIE Industrial Bhd plans to spend about RM50mil before the end of this year to expand its manufacturing operations in Seberang Jaya, Penang.
Group managing director Alvin Mui told StarBiz that this was the group’s biggest budget for an expansion exercise so far.
According to Mui, the previous expansion exercises were usually done in stages over a period of time but this time, it is being done all at one go.
The expansion exercise is scheduled for completion in mid-2020.
“The expansion will expand the production floor of our main manufacturing plant in Seberang Jaya by another 50,000 sq ft and many more advanced and high-precision machinery will be added.
“The expansion will help us provide a complete system integration process work for our box-built projects, ” he said.
He added that following the expansion, the group would be able to offer various testing design services and employ certain high-end production technologies, which it had to outsource to third parties previously to make its box-built products.
“We will also add a new advanced automation division to further enhance our current automated manufacturing activities, ” he said.
PIE Industrial is currently negotiating for a couple of high-value business deals with overseas multinational corporations (MNCs) that will be concluded soon.
“One of the projects involves manufacturing electronic components and printed-circuit-board assembly (PCBA) products for an MNC.
“It should be an important contributor to the group’s top and bottom line in 2020, ” he added.
According to Mui, the group has successfully concluded some of the business deals that it was negotiating in June.
“These deals involve manufacturing box-build industrial electronic equipment and PCBA products, ” he said.
Mui said the group had also added new surface-mount-technology (SMT) lines for its main plant in Seberang Jaya.
“We now have a total of 24 SMT production lines, which enable electronic components to be fixed directly on printed circuit boards (PCB), ” he said.
In 2020, the group will also concentrate on expanding its manufacturing operations in Thailand.
“Currently, the plant is involved in making wire and cable products. We are planning on adding a new box-built production division to the Thai plant, ” he said.
Mui said the electronic manufacturing services (EMS) division, which generated 75% of the group’s 2018 revenue, should improve this year.
In 2018, the revenue of the EMS segment dropped by RM22.4mil or 4.3% compared with the preceding year.
Moving ahead, the policy of minimum wages and levies for foreign labour and the fluctuation of foreign currency exchange are the main challenges of the group.
“The group will gradually transfer some of the production lines in Malaysia to Thailand to mitigate the risk of uncertainties in the foreign workers hiring policy and the greater use of automation to reduce labour dependency.
“We will enhance innovation and extend our vertical integration capabilities while introducing more automation for the manufacturing process, ” he said.