VAT Group’s Penang factory extension to contribute 50pc of group’s global production
30 Jan 2022
The world’s leading supplier of high-performance vacuum valves, Swiss-based VAT Group AG’s phase three extension in Penang is expected to contribute approximately 50 per cent of the group’s total global production capacity by 2028.
The company, which held a ground-breaking ceremony to initiate the extension last Thursday, said the 3.92-hectare new plant is estimated to create 500 employment opportunities once completed and running at full capacity, while doubling the production capacity of VAT’s Malaysian operation.
In a statement, VAT chief executive officer (CEO), Mike Allison said the Phase Three extension would substantially increase the company’s production capacity, with an initial investment of about RM321 million between 2022– 2024.
“Our team in Penang has done a great job in ramping up production in recent years to meet the needs of our fast-growing market, and our decision to expand further in Penang is in acknowledgement of their outstanding efforts.
“In addition, several of our largest original equipment manufacturer (OEM) customers have operations in the region, and boosting our production here will enhance our ability to collaborate with them more effectively and deliver value faster and more efficiently,” he said.
Allison added that VAT Manufacturing Malaysia would be the primary supplier for the company’s customers in South Korea, Japan, China and the rest of Asia.
He said currently, the local plant employs about 600 people, and with demand driven by long-term trends such as global digitalisation, the company anticipates employment to double to more than 1200 people by end-2027.
VAT’s manufacturing facility in Penang had commenced production in April 2013, with an investment of over RM102 million in a 6,000 square meter (sqm) factory.
In September 2019, VAT began the second extension of its Penang factory with an investment amounting to RM165 million, covering an area of 24,000 sqm to support the company’s significant growth.
It said the operations in Malaysia play a prominent role in the company’s strategy to further build its global market and technology leadership; to cater to its customers within niche and targeted sectors, especially key customers in Asia; as well as to increase the speed and flexibility of the company’s global footprint.
In the statement, Malaysian Investment Development Authority CEO, Datuk Arham Abdul Rahman said the extension of VAT’s enhanced vacuum valve technology manufacturing facility reflects the long-term global growth in demand for the industry, and that Malaysia is well-positioned to harness these opportunities.
“As of September 2021, MIDA has approved a total of 230 manufacturing projects from Switzerland worth RM14 billion, and the sustained inflow of Swiss investments into Malaysia reflects the country’s continuous competitiveness for businesses.
“The very fact that these companies continue to invest in Malaysia, even during such challenging times in the global economy, is indeed noteworthy and a testament to the conducive investment climate in the country,” he added.