UMW Toyota plant in Bukit Raja achieves 21% efficency boost - MIDA | Malaysian Investment Development Authority
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UMW Toyota plant in Bukit Raja achieves 21% efficency boost

UMW Toyota plant in Bukit Raja achieves 21% efficency boost

19 Sep 2023

UMW Toyota Motor Sdn Bhd’s integrated manufacturing complex in Bukit Raja, Klang, has achieved an impressive 21% boost in production efficiency since 2019.

This underscores the company’s substantial advancements in manufacturing processes.

Kenanga Research noted the “takt” time or the rate at which a product is completed based on orders at the Bukit Raja plant has shortened to 4.5 minutes from 5.7 minutes and outperforms UMW Toyota’s Shah Alam plant, which operates at seven minutes “takt” time.

“Consequently, the Bukit Raja plant is currently able to produce one car in nine hours or 260 units per day simultaneously, with a capacity utilisation rate ranging between 120% and 130%.

“This is compared with one car in 12 hours or 190 units per day in 2019 when the capacity utilisation was at 60%,” it said in report on UMW Holdings Bhd, the parent company of UMW Toyota.

Kenanga Research added that UMW informed the overcapacity then was incurred due to the addition of Toyota Corolla Cross in 2021 as well as the latest addition of the all-new Vios in March 2023.

The research firm pointed out the Bukit Raja plant has a maximum capacity of 50,000 units, utilising two shifts.

The company added that there is available land for future expansion that could accommodate up to 100,000 units, all without incurring significant capital expenditure.

Kenanga Research said the Bukit Raja plant, covering 674,300 sq m and is 2.4 times larger than the old Shah Alam plant, is well equipped with environmental, social and governance-centric features.

It pointed out the Bukit Raja plant incorporates ground-bolt machineries which facilitate easier, safer and more cost-effective expansion efforts.

The plant also utilises flexible jigs capable of assembling different car models within a single manufacturing line, enhancing versatility and efficiency, while its rooftop design incorporates natural light openings and solar panels, promoting energy efficiency and sustainability.

The facility employs zirconium coating paint, which not only reduces wastewater and emissions but also offers a 15-year rust guarantee, with a specifically-designed funnel to release clean and odourless air.

Furthermore, the welding shop line at the Bukit Raja plant operates at a 45% automation level, in stark contrast to the Shah Alam plant’s automation level of 0%, thus streamlining production processes and improving overall efficiency.

“Initial investment for the Bukit Raja plant is at RM1.8bil, which includes land cost, construction, equipment and engineering support from Thailand and Japan, with depreciation cost between RM60mil and RM70mil per year for 30 years since January 2019,” the research firm said.

UMW Toyota’s integrated manufacturing complex houses the group’s main office, welding station, resin paint station, vehicles assembly station, integrated quality hub catering to both Bukit Raja and Shah Alam plants as well as Toyota Boshoku UMW Sdn Bhd plant, which is the manufacturer of seats, door trims, package trays and tool bags.

The plant in Bukit Raja is specifically designed to produce up to C-segment platforms, including Vios, Yaris and Corolla Cross while the Shah Alam plant, with a capacity of 32,000 units, is dedicated to manufacturing commercial vehicles such as Hilux, Fortuner, Innova and Hiace, the report noted.

The research house has maintained its target price of RM5 per share for UMW, which equals the mandatory general offer price tabled by Sime Darby Bhd to the remaining UMW shareholders.

Source: The Star