Royal Philips Electronics of the Netherlands is one of the world’s biggest electronics companies, as well as the largest in Europe, with 159,709 employees in over 60 countries and sales amounting to Euro 30.4 billion in 2005.
Philips has had a presence in Malaysia since the late 1930’s. The business activities of the Philips Group of Companies in Malaysia at that time included manufacturing, exports, local sales and marketing. In 1960, Philips Malaysia Sdn Bhd, which was incorporated initially, sold light bulbs through appointed agents. By the 1970s, Philips had taken over marketing operations and expanded its range of products. Today, having established a credible and reputable name in various industries which include lighting, semiconductor, medical systems, digital networks, domestic appliances and personal care and consumer electronics, the business activities of the company consist of manufacturing, sales, marketing, technical and application support.
In July 1992, Philips and Motorola established a joint venture company called Semiconductor Miniature Products (Malaysia) Sdn Bhd. Situated at Tuanku Jaafar Industrial Park in Seremban, this plant produces surface mount discrete semiconductors for global consumption and incorporates high tech assembly and testing. Today, the company is a fully owned by Royal Philips Electronics of Netherlands and employs a workforce of over 900 employees at its plant.
In August 2005, Royal Philips Electronics of Netherlands acquired Agilent Technology’s 47% shares in Lumileds Lighting Int B.V. This resulted in Philips having earned the controlling ownership in Lumileds, which produces solid-state lighting. Through this Philips will expand its leadership
profile in lighting by further expansion of the solid-state lighting business. Located in Penang, Lumileds has an annual production value of RM700million. Over the next few years, the world market for high brightness LEDs is forecasted to grow by approximately 25% per year and Philips is in the best position to reap the benefits from here, Malaysia is the only manufacturing facility for Lumileds and employs 1200 people out of the total 1760 it employs in US, Netherlands and Asia.
“The Malaysian government policies are pro-business and I strongly believe this will ensure the continued resilience of the economy and attract foreign investors. The education system continues to produce talented and skilled resources. The government is already making headways by making Malaysia a regional education hub and providing incentives for the development of knowledge workers, says Mr. Rajah Kumar, Chairman and Chief Executive Officer (CEO), Philips Group of Companies, Malaysia. “Upgrading the infrastructure environment to ensure everyone is connected both online, offline, and the further development of the ICT landscape is important. This will enable big firms to outsource transactional activities to local based companies as well as support the business of smaller companies that cannot afford leased lines, with the availability of advanced broadband capabilities,” added Mr. Kumar.
Determined to maintain its profitable growth, Philips contributes significantly to the Malaysian economy with a turnover of around RM3 billion annually. Philips’ goal is to enhance its position in the Asia Pacific region and to ensure that the region contributes about one third of Philips’ global revenue. Key to Philips’ success is the need to grow in China, India and the ASEAN countries. Philips views ASEAN as a single integrated market of which Malaysia plays an important role. Philips Malaysia ranks second in contributing to the overall sales of Philips’ ASEAN group of companies.
“We are very pleased with our investments in Malaysia. The measure of success is in the return we get as tangible and intangible benefits. Intangible benefits are fundamentally important for the long-term sustainable growth of the firm. While the tangible benefits can be directly measured in terms of sales growth, profits and ROI, the intangible ones are deeper and are perceived, creating an emotional attachment to the firm, its people, and businesses”, observes the Chairman and CEO of the Philips Group of Companies in Malaysia.