OPENING CEREMONY OF AVX MANUFACTURING (MALAYSIA) SDN. BHD

SPEECH BY CHIEF MINISTER OF PENANG

OPENING CEREMONY OF AVX MANUFACTURING (MALAYSIA) SDN. BHD

 

28 June 2019

AVX Bayan Lepas

 

Ladies and Gentlemen

Good morning to all distinguished guests. It gives me great pleasure to be present here today to witness the official opening ceremony of AVX Manufacturing (Malaysia) Sdn Bhd new plant.

AVX, which started its operation in Penang since 1998, has chosen to deepen its roots in the state with a RM600 million investment, furthermore AVX has just added 250 thousand square feet new facility in the State. With a total square footage of 450,000, the Penang site is now AVX’s largest flagship multi-layer ceramic manufacturing factory in the world. Worth to highlight, AVX’s accumulated investment has already amounted to RM 1 billion since its inception in Penang.

With this new expansion, AVX will double its headcount in Penang to 2,000 over the next 2 years. I am also pleased to learn that AVX collaborates with local universities to offer employment opportunities for graduates and provides in-house and overseas training to its employees on cutting-edge manufacturing technologies and operating of state-of-the-art equipment. I believe these initiatives will strengthen the skill set of local technical talent and create a larger pool of trained professionals in Penang.

The ceramic capacitors that AVX manufactures are used in a wide range of products and this factory’s primary focus is to support the automotive sector. Thanks to the evolvement in the automotive industry, the electronic content in cars have increased exponentially over the years. The advent of hybrid and electric cars has doubled the number of capacitors per vehicle, pushing the development of technology to manufacture devices that are faster, smaller and more powerful. 

Ladies and gentlemen,

We are now at a highly uncertain period due to the latest trade and technology disputes between the two world superpowers, the US-and China, which accumulatively made up 40% of the world’s total GDP. The tensed relationship between them resulted global trade slowdown and the automotive market also recorded sales contraction in the past months. According to VDA which track global automotive market, China’s new passenger car sales volume plunged 15% year-on-year in January to May 2019 while the car sales in both Europe and the US markets dropped 2% year-on-year for the same period. 

Despite the near-term outlook seems sluggish, the automotive industry is undergoing a radical transformation. According to the research report from J.P. Morgan, electric vehicles only represented 2% of total global vehicle sales volume in 2015. The global market share of electric vehicles is estimated to climb to 30% and 60% in 2025 and 2030, respectively. Against this backdrop, those companies which have already position themselves to ride on this megatrend will be benefitting over the mid to long term. 

Ladies and Gentlemen

The Penang State government welcome and is committed to support high quality investments that are related to the disruptive technologies, such as those from the areas of Internet of Things, 5G networks, Industry 4.0, autonomous vehicles, artificial intelligence, virtual and augmented realities, among others.   

I believe that the first quarter 2019 FDI figure is a strong evidence that Penang is a preferred destination for high quality investments. In first quarter of 2019, Penang attracted RM8.5 billion of FDI and it was mainly led by the high value E&E industry. Notably, Penang contributed 42% of Malaysia’s total FDI during the period. Of course, this stellar investment performance would not have been possible if not for the hard work from both state government and various federal ministries, particularly the support from MIDA and MoF.

Last but not least, I am pleased to see that AVX’s presence in the State spell out one of the themes in my Penang2030 vision - “Upgrade the economy to raise household incomes” through the advanced readiness of manufacturing industries.

With that, I once again congratulate AVX in this grand opening event. I look forward for more expansion from your company in the future.  

Thank you.