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Konica Minolta expects a better year for its Malaysian operations

Konica Minolta expects a better year for its Malaysian operations

07 Jun 2021

Konica Minolta Inc, a leading Japanese technology company, is expecting a better outlook for its manufacturing operations of multifunction printers in Malaysia this year in line with the recovery in worldwide market after a tough and challenging year in 2020, due to the effects of the COVID19 pandemic.

Hideyuki Yoshida, managing director, Konica Minolta Business Technologies (Malaysia) Sdn Bhd, the Malaysian production unit of Konica Minolta, said there are plans to expand the product range in office multifunction printers to cater to the increase in demand.

Konica Minolta, which was formed through a merger of two Japanese imaging companies, Konica and Minolta in 2003, has been listed among the Global 100 Most Sustainable Corporations this year, for the fourth time and the third consecutive year.

The multinational company headquartered in Tokyo, with its presence in 45 countries, produces a wide range of printing products for business and industrial use as well as Internet of Things (IOT) solutions.

“We have been producing office multifunction printers and parts in the factory site in Melaka mainly for exports to Europe and the US since it was established in 2014,” Yoshida told Bernama in an interview recently.

Yoshida was one of the panellists on the online investment forum titled “Malaysia in its Present State”, organised by the Japan External Trade Organisation (Jetro), in collaboration with the Ministry of International Trade and Industry (MITI) and Malaysian Investment Development Authority (MIDA) on April 6.

According to Yoshida, the factory in Melaka is now busy catching up on orders after the plant shutdown in the first quarter of last year due to the full lockdown implemented.

“However, we are now facing supply of raw materials constraints mainly from component parts from Japan, China and other East Asian countries due to confusion of logistics (air and sea) worldwide that are affecting many manufacturers as the pandemic affected production facilities and the global supply chain,” he said.

“Constraints in supply of raw materials make it difficult for us to control cost as it could further inflate production cost,” he added.

Nevertheless, Yoshida said Konica Minolta will continue to invest in the production facility in Melaka to ramp up production and boost its production capacity in smart manufacturing with the budget allocated in tandem with the amount of revenue and profit achieved.

“Overall investment in the Melaka plant for seven years since it was established in 2014 amounted to about RM350 million in terms of automation, building and innovation,” he said.

“We need to allocate investment to boost automation for higher productivity and efficiency to compete with rival companies.

Yoshida said currently the factory in Melaka, with an area of about 104,000 square metres, has been operating at almost 90 per cent capacity before  the government announcement to limit private sector operations to 60 per cent of its workforce.

The government announced that starting May 25, 40 per cent of the private sector workforce would be required to work from home in the move to curb the spread of the COVID-19 pandemic.

“We are not facing major issues about manpower with our total 3,000 employees in the Melaka plant comprising Malaysians and about 300 foreign workers,” he said.

However, he said, with the reduced production due to the 60 per cent headcount, the gap is spreading and there is a need to recover the gap later to catch up with rising demand of products.

Yoshida said while labour issues are not the main problem for the Melaka plant, it is important to maintain a healthy working environment as money is not the only benefit that people are looking for.

“For example, we set up partitions at all desks in the office area, make additional prayer areas and canteens at the factory to prevent Covid-19 infections.

Also we complied with the Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Act 446) for our foreign workers’ hostel. And fortunately, none of our foreign operators have been tested positive for COVID 19 so far,” he said.

He emphasised that Malaysia is still an attractive location for Konica Minolta with government support and incentives for multinational companies and seamless sea and land distribution network for its base in Melaka that provides a strategic point for shipping of consumable products to various parts in the world.

“While the Malaysian government has good incentives for multinational companies, the application and documentation process can be simplified to facilitate and attract investment,” he said.

Another attractiveness of Malaysia, according to Yoshida, is in terms of its cost competitiveness to many other countries in Asia as China’s labour cost is also increasing.

 “However, other countries within the Asean region could also have lower labour cost than Malaysia,” he said.

“Malaysians also have good skills and are talented people,” he said.

Malaysian manufacturers, he said, can look at ways which do not rely on huge manpower.

Since 2015, the factory in Melaka has been adopting the Smart Industry Centre (SIC), the first of its kind in Malaysia, which enables various industrial sectors such as local suppliers working together on various improvements at production sites, according to Yoshida.

Konica Minolta, he said, is also determined to support companies participating in the SIC by sharing innovative technologies for digital manufacturing and establish a new manufacturing model in Malaysia through innovation, thereby raising the global profile of Malaysia in the international manufacturing industry.

The company, he added, is also promoting digital manufacturing initiatives worldwide.

“Besides the production base in Malaysia, we also have manufacturing facilities in China, France and the US. The two factories in China are mainly catering for the huge China market in printing while the factories in France and US are mainly catering for consumer printer parts,” he said.

He said the Melaka plant produced about 50 per cent of the office equipment printing products for Konica Minolta globally.

“Now the Malaysian government has announced a total lockdown from June 1 to 14. Fortunately our company has been approved by the Ministry of International Trade and Industry as an important company in the global supply chain.

Although we are in a difficult situation, I believe that it is our mission to comply with strict standard operating procedures, continue operations and contribute to Malaysia’s economy as a multinational company.

Yoshida, who was stationed in Konica Minolta’s China unit previously, has been the president and managing director of the Malaysian manufacturing facility since 2014.

Source: Bernama