Higher capex for expansion


According to its group managing director Alvin Mui, (pic) the last significant expansion exercise was in 2019, involving an RM50mil budget. Mui told StarBiz that the group needed to expand because it had already fully utilised the production space in four manufacturing facilities in Seberang Jaya.

GEORGE TOWN: PIE Industrial Bhd is expanding with a record high budget allocation of RM150mil in its effort to secure new customers as well as achieve an RM1bil revenue target for the financial year 2021.

According to its group managing director Alvin Mui, (pic) the last significant expansion exercise was in 2019, involving an RM50mil budget.

Mui told StarBiz that the group needed to expand because it had already fully utilised the production space in four manufacturing facilities in Seberang Jaya.(pic below)

“We have also secured new projects for 2021 that include manufacturing box-build consumer electronic products for a renowned client.

“The box-built consumer electronic business should contribute 20% to the group’s revenue this year.

“The contribution should hit 50% next year, ” he said.

Mui also noted that the RM150mil includes purchasing an RM20mil manufacturing facility with an 80,000 sq ft production floor space, which will be extended to 150,000 sq ft soon.

“We are now waiting for the state government to endorse the purchase. It will take at least six months to renovate and extend the plant, which will be the biggest of the eight manufacturing facilities that we have in Seberang Jaya.

“The plant should be operational by the fourth quarter of 2021. We expect to fully utilise the 150,000 sq ft production floor by middle of 2022, ” Mui added.

The group will engage more than 800 workers, including engineers, technicians, and operators, for the new plant.

PIE Industrial will also invest heavily in automation and AI robot-assisted operation for the final box-build assembly operations.

“We will work with Mida to institute advance manufacturing capabilities to enhance Malaysia’s competitive edge as a preferred manufacturing destination, ” explained Mui.

PIE will install six high speed and high precision surface mount technology (SMT) lines for the new plant.

“We will also increase the new plant’s plastic injection line capacity by 30%.

“The group presently has a total of 21 SMT production lines, ” he added.

Mui said the new plant would produce box-built consumer electronic products and mobile energy devices such as battery chargers and battery packs.

“The mobile energy business has enormous growth potential, ” he added.

He said the group had recently ventured into the research and development work to produce portable energy products, including charger, battery pack and power banks.

“We are now negotiating with potential customers to finalise several original design manufacturing mobile energy projects.

The portable power bank business, for example, valued at US$11.8bil in 2021, is expected to reach US$15bil by the end of 2026, growing at a compounded annual growth rate (CAGR) of 3.4% from 2021 to 2026.

“In the next five years, the global consumption of power banks will have a high annual growth rate.

“The demand from smartphone and tablet production will drive the demand for mobile energy devices.

“The profitability of companies depends on their ability to bid accurately, secure contracts, and control costs.

“Large companies have the advantage of obtaining financing and the ability to provide a wide range of services in many locations.

“Smaller companies will have to compete effectively by specialising in particular services or focusing on a specific geography. The industry is fragmented.

“Despite intense competition, due to the global recovery trend, investors are confident of growth in this area.

“We expect to see more new investments entering the field in the future, ” he said.

Mui said the group would target its mobile energy devices for the European and US market.

According to Mui, the group has recently secured another new project to manufacture printed circuit board assembly or PCBA products for a US-based robotic product customer.

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