VAT holds groundbreaking ceremony for its phase three factory extension in Malaysia
27 Jan 2022
Swiss-based VAT Group AG, the world’s leading supplier of high performance vacuum valves, today held a groundbreaking ceremony to initiate the extension of its 39,200 square meters production facility in Penang, Malaysia.
In a joint statement, the Malaysian Investment Development Authority (MIDA), Invest Penang, and VAT said the new plant will create 500 job opportunities and double the production capacity of VAT’s Malaysian operation, increasing factory output to over RM4.6 billion.
“Once completed and running at full capacity, the extension is expected to contribute approximately 50 per cent of VAT’s total global production capacity by 2028,” they said. “VAT Manufacturing Malaysia will be the primary supplier for the company’s customers in the Republic of Korea, Japan, People’s Republic of China, and the rest of Asia.”
Currently, the local plant employs about 600 people and with demand driven by long term trends such as global digitalisation, VAT has anticipated employment growth to be over 1,200 people by the end of 2027.
MIDA chief executive officer (CEO) Datuk Arham Abdul Rahman said the extension of VAT’s enhanced vacuum valve technology manufacturing facility reflected the long term global growth in demand for the industry, and how Malaysia is well-positioned to harness these opportunities.
“While leveraging on Malaysia’s attractive industry ecosystem, this facility will be of strategic importance to attract more multinational companies particularly from various high-end equipment industries that use the company’s technology to set up their plants in Malaysia.
“This will attribute to the enhancement of the country’s supply chain, particularly for the semiconductor industry, as well as create new and high value job
opportunities for Malaysians and accelerate the export of made-in-Malaysia products to the world,” he said.
As of September 2021, MIDA had approved a total of 230 manufacturing projects from Switzerland worth RM14 billion.
“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 as a testament to the conducive investment climate in the country,” he added.
Penang Deputy Chief Minister 1 Datuk Ahmad Zakiyuddin Abdul Rahman said true to its reputation as the Silicon Valley of the East, Penang, aside from being one of the prominent hubs for electrical and electronic (E&E) manufacturing, which accounted for an estimated 5 per cent of global semiconductor sales, is also a regional thriving hub in machinery and equipment (M&E) and medical devices.
“Importantly, we are proud that Penang is gaining momentum in frond-end equipment manufacturing, where VAT plays an important role in the value chain,” he said.
The launching of VAT’s Phase Three extension in Penang substantially will increase the company’s production capacity further with an initial investment of about RM321 million over 2022 to 2024.
VAT CEO Mike Allison said the company concluded that Penang was the best location for a number of reasons, after thoroughly assessing a number of options for
expanding the company’s production capacity.
“Our team in Penang has already done a great job ramping up production in recent years to meet the needs of our fast-growing market, and our decision to expand
further in Penang is an acknowledgment of their outstanding efforts,” he said. “In addition, several of our largest original equipment manufacturer customers have
operations in the region, and boosting our production there will enhance our ability to collaborate with them more effectively and deliver value faster and more