GEORGE TOWN: PIE Industrial Bhd will start developing prototypes of consumer and industrial electronic products for a key customer with a global distribution network once the movement control order (MCO) is lifted.
Group managing director Alvin Mui told StarBiz that the group had secured orders from an important customer with global distribution networks for box-build consumer and industrial electronic products.
“In fact, we invested RM50mil to add 500,000 sq ft to expand our manufacturing plant in Seberang Jaya in anticipation and to meet the demand of this customer.
“The expansion was completed early this year and since then the new production facilities, processes, and machinery have been undergoing qualification.
“Once the MCO is lifted, we will be able to complete the qualification and begin the development of prototypes of box-build consumer and industrial products, ” Mui said.
Accord to Mui, during this MCO period, the group has been operating with a skeletal staff, which makes it difficult for the qualification of the new production floor to be completed.
After the MCO is lifted, the group expects to commence commercial production in the final quarter of 2020.
Mui also said that the group plans to use the newly added floor space 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.
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.
Mui added that the group is currently negotiating for a couple of high-value business deals with overseas multinational corporations (MNCs) that will be concluded soon.
“It should be an important contributor to the group’s top and bottom line in 2021, ” he added.
Mui said the group’s first and second-quarter results will be impacted negatively by the MCO. “We will consider postponing the announcement of the first-quarter results and the annual general meeting if the MCO is extended further into May, ” he added.
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