The company is pumping in US$26 million for its initial phase to
purchase a 50,000 sq ft plant on 7.5 acre plot of land at the Kulim
Hi-Tech Park in the northern state of Kedah.
"We are very excited about the potential in Malaysia and firmly
committed to growing Malaysia to meet our customers' needs," said
corporate communications representative Pam Goddard.
The new plant is projecting an annual output of three million units of
electronic components for its workstation, server, PC and
communications markets. It is set to begin production in December and
will hire 1,000 staff for Phase One of the project.
Goddard said the plant can quickly expand to an adjacent lot of about
200,000 sq ft and has reserved an additional 5.5 acres for its second
phase which may involve a much larger investment.
"Celestica recently completed
significant expansions in its facilities in China, Thailand and Hong
Kong. Malaysia represents the next step in the company's strategic plan
for Asia as it is a new market," she said.
Goddard said the Toronto-based company chose Malaysia after thorough
evaluation on costs, labor, infrastructure and tax incentives and the
results were "very positive".
"The overriding factor was the quality of the people we saw there.
There is a highly-skilled employee base and the government has created
an environment that is conducive to investment by large multinational
firms to build profitable and successful businesses," said Goddard.
Celestica has more than 16,000 staff with 28 manufacturing and design
facilities in 11 countries. In its second quarter this year, Celestica
posted record profits of US$27.5 million, or 31 cents a share, on revenue
of US$1.25 billion compared to adjusted net earnings of US$4.6 million, 12
cents per share, on sales of US$773 million last year. That represents
a 158 percent jump in earnings and 62 percent rise in sales over 1998.
Celestica's entry marks another coup for Malaysia which has managed to
attract most of the top-tier contract electronic manufacturers (CEMs)
in the world including SCI Systems
Inc, Solectron Corp, Jabil Circuit Inc, NatSteel Electronics Ltd ,
Flextronics International Ltd
to set up plants here.
Industry trackers Technology Forecasters Inc said CEMs completed 60
acquisitions of plants between 1996 and 1998. This year more
multinational OEMs are expected to divest their manufacturing
operations and fully embrace the outsourcing model.
Technology Forecasters project the worldwide electronic manufacturing
services revenue will grow from US$89.6 billion in 1998 to US$178 billion in
2001, representing a 25 percent compound annual growth rate.
(Published in CNET Asia, October,8, 1999)