October – December 2003
MALAYSIAN
TIN PRODUCTS
MANAGEMENT COMMITTEE
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PRESIDENT MR. JASON LEE HENKEL (MALAYSIA) SDN
BHD VICE-PRESIDENT MR. MAMORU KAWASAKI (ALTERNATE – MR. LOH
YOON SOON) SELAYANG SOLDER SDN BHD HON. SECRETARY MR. C.S. LIM METAL RECLAMATION (IND)
SDN BHD TREASURER MR. EDWARD WONG E.M.I.S. SDN BHD |
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COMMITTEE MEMBERS MS. GAY LEONG ROYAL SELANGOR
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MALAYSIA (PERSTIMA) BHD MR. KOJI TSUBONO SENJU (M) SDN BHD |
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EDITORIAL SUB-COMMITTEE MR. JASON LEE MR. C.S. LIM MR. EDWARD WONG MS. GAY LEONG EN. AB. PATAH MOHD |
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Dear Members,
The end of the year is fast approaching and on behalf of the Management Committee and its various Sub-Committees, I would like to wish all of you Happy Deepavali, Selamat Hari Raya Puasa, Merry Christmas and a very happy, healthy and fruitful New Year ahead.
The Malaysian economy continued to strengthen in the fourth quarter of
2003, attaining a 6.4 per cent growth from a year ago. The manufacturing sector
achieved a 12.0 per cent growth. Fabricated metal products, electronics,
machinery and equipment contributed 66.8 per cent to this growth. With these
improved figures we look forward to a better and more robust 2004.
2004 will continue to bring challenges for all of us in the business
sector and there are still a lot do to ensure that business and industry in
Malaysia continues to flourish.
Finally, I would like to take this opportunity to thank the Management Committee, members and the Secretariat staff for their hard work in supporting the Association. Please feel free to let us know if you have any news you would like to share with the other members.
Jason Lee
President
ELECTRONIC NEWS
Amcham Expects Electronics Exports to Rise 8.8pc in 2004
Major US electronics firms operating in Malaysia expect 2004 export sales to expand 8.8 per cent to RM64.2 billion, driven by spending on wireless communication and computer replacements in the US. Sales are expected to rise about 15 per cent to RM59 billion this year from RM51.3 billion before, after a 15.54 per cent growth over 2001 sales of RM44.4 billion.
"The (numbers) confirm the ongoing recovery of the electronics industry in Malaysia and worldwide. Personally speaking, I am optimistic that the industry will exceed this forecast growth," said Teh Chin Bin, chairman of the American Malaysian Chamber of Commerce (Amcham) electronics division, Malaysian American Electronic Industry (MAEI). Amcham president Datuk Timothy Garland said he does not expect existing US investments in Malaysia to be adversely affected by the power transition on Friday or the recent controversial remarks on Jews. "Time will tell whether new investments will be impacted, but right now our belief is that (investments on the ground) will not be impacted. I think time has proven that the Malaysian Government is pro-business, and we do not see that changing with the transition of leadership. Those who are here, we know enough (about Malaysia). Seventeen out of the 19 major US companies here are run by Malaysians and understand the environment we are operating in," Garland said.
A survey done by the MAEI for the quarter to September found capital investments by its 19 members to be on track at RM1.5 billion for this year, with a similar amount to be spent in 2004. Teh said spending fell from RM1.6 billion in 2002, RM2.3 billion in 2001 and RM2.6 billion in 2000 as many companies have excess capacity from previous investments. The RM51.3 billion in electrical and electronic (E and E) exports by MAEI members like Dell, Agilent, Fairchild and Motorola last year accounted for 14.5 per cent of Malaysia's entire export earnings and 24.5 per cent of E and E exports. Economists have said that a full recovery for exports hinges on how the E and E industry fares. E and E exports, which make up half of the country's exports have fallen 8.6 per cent in the year-to-date. The notion that Malaysia may have been marginalised in the early stages of the global economic recovery arose when Malaysia saw two consecutive months of shirking exports since July despite a more bullish outlook for the second half. Bucking the overall trend, Teh said, exports by its members have risen steadily and a better fourth quarter is expected, owing to the traditional year-end sales surge. He said that while capital expenditure is expected to remain flat at RM1.5 billion next year, spending "could be surpassed" with continual improvement in plant utilisation.
Higher production boosted plant utilisation to 84.1 per cent in September compared to the 70.3 per cent initially forecast for the whole year in June, and 65.2 per cent last year. It did not give a forecast for 2004. Amcham represents more than 350 members, including Intel, International Business Machines Corp and Western Digital Corp. Together, they employ over 105,000 people in Malaysia.
(Source: Business Times, 29
October 2003)
Samsung Malaysia Sees
2003 Sales Hitting RM1bil
Samsung Malaysia Electronics Sdn Bhd hopes to achieve sales of US$270 million or more than RM1 billion this year, its managing director Kim Jeong-Wook said recently. He said Samsung Malaysia was on track to achieve its target following tremendous response to its products. The company now ranks among the top three in several categories such as thin film transistor liquid crystal display (TFT LCD) displays, computer monitors, digital video disc players, mobile phones, refrigerators, washing machines and microwave ovens.
"We are also projecting a sales growth of 30 per cent minimum for next year," Kim said in Kuala Lumpur after launching the Sama-Sama Samsung campaign in conjunction with Samsung Malaysia's elevation from representative office to subsidiary of South Korea's Samsung Electronics Co Ltd. Kim said Samsung Malaysia had outlined three major goals to be achieved by 2005 – to be number one in Malaysia's consumer electronics market; to be number one in network of partners and distributors; and to be number one in terms of brand awareness and brand preference for its customers. He said Samsung Malaysia was already on its way to achieve those goals as the company now held a reasonably comfortable market share in specific segments of the consumer electronics market. "For example, we are already number one in the LCD display segment with a 60 per cent market share. We are number two in the mobile phone segment with 25 per cent and number three in the colour television segment with 12 per cent market share. With a little more effort, we can be in the driving seat," said Kim.
To this end, he said Samsung Malaysia would be spending another RM38 million on advertising and promotions, starting with the Sama-Sama Samsung campaign. The campaign, translated into Together With Samsung in English, was aimed at making Samsung the "most loved brand" among Malaysians, he said. As part of the campaign, Samsung Malaysia has also established a Samsung Customer Service Plaza at Plaza Sentral near the Kuala Lumpur Sentral Station. The centre was set up at a cost of RM3 million and would service and repair all Samsung products, said Kim. At the launch, Samsung Malaysia also announced hotline number 1-800-889999 to help customers who previously had to dial different hotlines for different product categories either for service or repairs.
(Source: The Star, 12 November
2003)
Philips Expects Market
Share in Malaysia to Grow by 20pc Next Year
Philips Consumer Electronics, a division of Philips Malaysia Sdn Bhd, expects its market share in Malaysia to grow by 15 per cent to 20 per cent next year, Philips Malaysia general manager Srikanth V. Nott said. In an interview with Business Times, Srikanth said the growing affluence of the population and improving demand from the Malaysian market will boost the company's sales growth. Philips' involvement in the consumer electronics market includes design and manufacture of DVD players, DVD recorders, liquid crystal display (LCD) projectors, CTVs, wide screen and standard rear projectors, computer/television (TV) LCD screens, plasma, audio systems, multi-channel audio systems and most forms of telecommunication equipment and computers.
Globally, Philips chalked up sales of 31.8 billion euros (1euro = RM4.49) in 2002. The Asia-Pacific region, including Malaysia, contributed about 7 billion euros. Next year, the Netherlands-based company targets to achieve at least 5 per cent growth in revenue. "Turnover for the past three, four years has not grown, so if you took the conventional approach, you'll say (the business) is not doing well. But this is a business where prices go down month after month, year after year. Even though we sell more, the turnover remains the same. So, the right measure to check whether the business is doing well is market share," Srikanth said. In the last 12 months, Philips market share has expanded by between 20 per cent and 25 per cent in all its product segments. The market share of Philips flat TV segment, for example, has grown to 20.5 per cent to date, from 13.7 per cent last year. Meanwhile, market share for DVD and monitors increased to 10.4 per cent (2002: 8.1 per cent) and 11.1 per cent (2002: 8.1 per cent) respectively.
Overall, Philips currently ranks first in the portable audio segment with a 29 per cent market share while in the monitor and television category, it stood in second and third place, respectively. Beginning next year, Philips plans to re-enter the Malaysian mobile phone market by introducing three new mobile phone models. Having carved a reputation in sound quality, Philips will incorporate numerous audio features with these models. "Some models will come with FM tuner, stereo headphone, built-in synthesiser so that you can mix your own tunes," Srikanth added.
In addition, the company foresees a tremendous growth potential in Malaysia for its "flat, slim, and wide" products category such as plasma and LCD TVs in the coming years as evidenced in the rising consumption of these gadgets in neighbouring countries. Products from this segment have been much sought after in countries such as Taiwan, New Zealand, Hong Kong and South Korea where these markets are chalking up growth as much as 25-30 per cent on an annual basis. According to Srikanth, seven out of 10 TV sets sold in Hong Kong recently, for example, is a plasma or LCD television, whereas just four years ago the market share of this segment there was 0 per cent. He added that Malaysia is expected to experience a similar growth in this segment of market within the next one or 1½ years. "In fact, even today in Malaysia, this category is high-growth category," he said. Currently, the "flat, slim and wide" category is estimated to be some 8 per cent to 10 per cent of total market.
Meanwhile, Philips has also launched several infotainment products recently, including a mobile phone dedicated to music and a range of digital cameras and audio players the size of a pack of chewing gum, as part of its "Personal Expression" campaign. The marketing campaigns, in which Philips is continuously embarking on in an effort to enhance brand awareness, has so far shown some positive results, according to Srikanth. "We are seeing some improvement already in the sense that the market share of our products is growing," he said.
At the moment, 40 per cent of Philips' consumer base consists of Malaysians between the age of 15 and 29 while the age bracket of 30 to 39 years old made up 29 per cent of its customer profile. Although Royal Philips Electronics of the Netherlands, which is Europe's biggest consumer electronics manufacturer and third-biggest semiconductor maker, may close as many as one-third of its factories in the coming years to rein in spending, the on-going cost-cutting measures, according to Srikanth, will not affect Philips' operations locally. The company will close or sell 50 of its 150 factories to reduce costs and revive profit after two straight years of record losses. The company had already transferred some of its Stadskanaal plant's production lines in the Netherlands to Asia earlier this year. The company reported a net income of 42 million euros in the second quarter, the first profit in five quarters.
(Source: Business Times, 27
December 2003)
SEMICONDUCTOR NEWS
Chipmakers Warned of
Capacity Crunch
Chip producers used 90 per cent of their production capacity in September, which should set off much-delayed investments in new machinery, a survey found recently. Dan Hutcheson, analyst at chip research group VLSI, said the data are uniformly high (capacity utilisation), yet the industry is nonchalant about expanding production capacity.
He warned of an imminent capacity crunch because chip sales are increasing by some 10 per cent this year. Total chip unit production is almost back at the peak levels of 2000. Capacity utilisation in September is estimated by VLSI at an average 90 per cent in Japan, the US and Europe, 89 per cent in South Korea and a hefty 92 per cent in Taiwan where most of the big contract manufacturers are based. Those rates compare with actual August levels of between 86 and 88 per cent in most regions of the world. Utilisation levels greater than 90 per cent normally trigger investments in new machinery. But these orders have not come through so far.
Chipmakers are cautious about investments now because they want to publish fat profit margins after two of the industry's worst ever years. But VLSI warned the waiting would eventually make things worse, raising the prices of equipment and chips, leading to another bubble.
(Source: The Malay Mail, 9
October 2003)
Intel 3rd Quarter
Earnings Double
Intel Corp, the world's largest semiconductor maker, has reported a third-quarter net income that was more than double that of a year ago on sales that topped Wall Street expectations, reflecting improved demand from Asia and stronger sales of pricier chips for laptops and servers. The company also forecast higher fourth-quarter revenue in line with bullish Wall Street expectations, but cautioned that while consumer spending was picking up, corporations remained conservative about new investment in technology.
Intel said cost cutting and release of new products drove a 150 per cent year-on-year rise in third-quarter net income, while strong sales of more expensive chips for laptops and servers pushed its gross margin to 58.2 per cent. That margin could improve to 60 per cent or so in the current quarter as revenue and factory utilisation rates both rose, Intel said. For the three months ended Sept 30, Intel's net earnings amounted to US$1.7 billion, more than double the US$686 million a year earlier. Revenue for the quarter was US$7.8 billion up 20 per cent from US$6.5 billion a year ago and topping the company's own forecast. Intel saw strong sales in so-called emerging markets, including China, Russia and India, in the third quarter, while sales in the United States grew by a smaller margin, chief financial officer Andy Bryant said in a conference call with analysts recently. In particular, sales were strong for notebooks and camera phones in Japan and for back-to-school personal computers in the United States, said Intel president Paul Otellini. "This is key not just for Intel but for the entire technology sector," Lehman Brothers analyst Dan Niles said of the continuing strength in emerging markets.
For the full 2003 fiscal year, Intel's revenue and profits should show a "substantial improvement" over 2002, Bryant said, adding that he expected sales growth of 10 per cent to 12 per cent over last year's US$26.8 billion. For the fourth quarter, the company expects revenues of US$8.1 billion to US$8.7 billion.
(Source: The Star, 16 October
2003)
Sony to Slash 20,000
Jobs, Focus on High-End Chips
Sony Corp said recently it will cut its work force by 13 per cent or 20,000 jobs in the next three years, while focusing on cutting-edge semiconductors to revive an ageing product line-up and overhaul its struggling electronics business. The entertainment and electronics giants, giving details of a three-year, US$3.1 billion restructuring plan announced earlier this year, also said it will establish a liquid crystal display (LCD) joint venture with Samsung Electronics.
The plan, dubbed "Transformation 60", was announced after Sony revealed disappointing results to September last week but chairman and chief executive officer Nobuyuki Idei said a turnaround was in the works. "Sony will be 60 years old in 2006," Idei told a news conference. "We strongly feel that we want it to become a strong, muscular entity." Executive deputy president Ken Kutaragi said at the news conference. "People have said we have fallen into a black hole and these are our first steps out." While Sony was unveiling a series of steps aimed at restoring profitability, rival Matsushita Electric Industrial, maker of Panasonic brand products, said quarterly net profit jumped 32 per cent from DVD recorders and flat panel televisions.
Sony aims to reach an operating profit margin of 10 per cent and slash annual fixed costs by 330 billion yen (100 yen = RM3.54) by 2006/07. Price competition with more cost-efficient rivals and mounting inventory pushed its margin down to 2.5 per cent in 2002/03. The company said it will hive off its financial units – Sony Life Insurance Co, Sony Assurance Inc and Sony Bank – into a holding company to be established in April. It said it will consider an initial public offering for the holing company. For the three years ending in March 2006, Sony said it had earmarked restructuring charges of 335 billion yen, 300 billion yen targeted solely at electronics, which account for 65 per cent of consolidated revenues. The total restructuring cost was up from the company's original estimate of 300 billion yen. "The year 2006 is a goal point for us. We envisage that the world of broadband and wireless networks will be very prevalent. That's what we have been preparing for in the last few years," said Idei. April's "Sony Shock" put its troubles in the spotlight. It stunned investors with an unforeseen quarterly loss of almost US$1 billion, resulting in it losing a quarter of its market value in two days, prompting shareholder calls for action. "This could be considered a stepping stone, the building of a new foundation. It's nothing surprising, but it's important that Idei is taking these steps," said John Yang, an equity analyst at Standard & Poor's in Tokyo. "It all shows that Sony does have a sense of urgency now."
Prior to the announcement, Sony shares close up 1.05 per cent at 3,860 yen compared to a 1.28 per cent rise on Tokyo's electric machinery sub-index. The stock has plummeted 89 per cent from a lifetime high of 33,900 yen in March 2000. Sony has said it expects electronics sales to improve in the six months to March 31, but now its games division – hitherto an engine of growth – appears to be slowing. For the three months to September 30, sales in the games division fell by more than one-third, prompting a 25 per cent slide in net profit. "It's not clear what the pillar of Sony's profits is going to be," said Akio Yoshino, general manager at SG Yamaichi Asset Management. Kutaragi, who is credited with making the PlayStation 2 game console a success, said the company's growth will come from its ability to differentiate its digital consumer electronics products with components unique to Sony. Along with being the head of its games unit, Sony Computer Entertainment, Kutaragi will now direct the company's strategy in developing next-generation displays, imaging devices and cutting-edge semiconductors. "Chips are really the heart of digital goods and their importance will only grow with time," Kutaragi told reporters.
Sony plans to invest 500 billion yen over the next three years in semiconductors, including research and development for a high-powered microprocessor codenamed "cell" that is being developed with Toshiba Corp and International Business Machines Inc. Sony's restructuring will include a cut of about 20,000 jobs in its global work force of 154,500, excluding those in financial segments. The cuts will include 7,000 jobs in Japan, but Sony president Kunitake Ando said the company was not prepared to say if certain domestic factories would be targeted. Two Japanese factories manufacturing bulky cathode ray tube (CRT) TVs were expected to be hard hit as Sony focuses on slimmer, flat-screen models. To ensure a steady supply of LCD screens for TVs, Sony announced a US$2 billion joint venture to make flat screens for televisions with Samsung. The venture will begin full production in mid-2005 and be run by an executive from Samsung, the world's second-largest maker of LCD panels. Sony said it plans to continue procuring panels from other manufacturers.
(Source: Business Times, 29
October 2003)
Strong Demand for PCs
Boosts Chips Sales
Worldwide semiconductor sales in the third quarter rose 13.7 per cent from the prior quarter and 17.5 per cent from a year ago, driven by strong demand for personal computers (PCs), an industry group said recently. Chip revenue rose to US$43.3 billion for the third quarter, according to the Semiconductor Industry Association (SIA) based in San Jose, California. Sales in September were US$14.4 billion, up 6.5 per cent from August, making it the seventh consecutive monthly increase and the strongest percentage gain since 1990, the SIA said.
"September and third-quarter data confirm that demand in the global semiconductor market is rising briskly," said SIA president George Scalise. "Performance is strong in all major market sectors – computation, communications and consumer, indicating a solid, continuing and broad-based growth cycle." PCs, which represent nearly one third of the end market, drove growth in the quarter, producing a 33 per cent rise in sales of dynamic random access memory chips and a 24 per cent rise in sales of microprocessors, the SIA said. Strong growth in sales of cell phones, which account for 12 per cent of end-market demand, led to a 27 per cent rise in flash memory sales and a 20 per cent rise in digital signal processors, the SIA said. Geographically, sales rose in all sectors in the quarter, led by 19 per cent in Asia Pacific, 12 per cent in Europe, 11 per cent in Japan and 8.6 per cent in the Americas.
The SIA has forecast revenue growth of at least 10 per cent for 2003, followed by stronger double-digit growth in 2004. The industry is slowly recovering from its worst-ever downturn that began in 2001 amid a broader technology slump resulting from a general economic slowdown and corporate spending cutbacks. Intel Corp, seen as a bellwether for the industry as the world's largest chipmaker, on October 14 posted quarterly net income that more than doubled from a year earlier and forecast higher fourthquarter revenue. The SIA's global sales report reflects a three-month moving average of sales activity. It is tabulated by the World Semiconductor Trade Statistics organisation.
(Source: Business Times, 4
November 2003)
ASE Boosting Chip Ops at
Penang Plant
Advanced Semiconductor Engineering Inc (ASE) will channel future investments into its Penang facility for the expansion of its research and development (R&D) and manufacturing capabilities. ASE Americas, Europe and Japan president Dr Wu Tien said the future investments were in view of the expected growth in the semiconductor industry next year. "Analysts are forecasting a growth of 19 per cent to 25 per cent for the semiconductor industry. The growth will be stimulated by demand for new personal computers with flat display panels, cellular phones with new features, and consumer electronic products such as new generation of digital cameras and digital video disc players," he said.
Speaking at the ASE Tech Forum 2003 recently, Wu said the Penang plant was not only involved in assembling and testing of integrated circuits. "It is also actively involved in R&D work related to improving cost efficient manufacturing capabilities and processes. About 3 per cent of the revenue from the Penang facility is channelled into R&D. Thus our future investments into Penang will go towards recruiting highly-skilled and knowledgeable workforce who can assist in R&D activities," he added. Wu said in the past three years more multinational corporations based in Penang had decided to go to ASE for integrated circuit packaging design manufacturing and test services. "Previously, all such decisions were made at their headquarters in overseas. This change testifies to the Penang plant's ability to provide high quality and consistent assembly and test services," he added.
Wu said ASE had last year generated US$2.22 billion in revenue, of which US$1.32 billion was from its assembling and testing facilities in Taiwan, South Korea, Malaysia and the US. "The remainder came from our electronic manufacturing services segment," he added.
(Source: The Star, 6 November
2003)
2003
Chip Sales Set to Rise 16%
Global semiconductor sales are set to rise nearly 16 per cent this year in an accelerating recovery led by demand in Japan and the rest of Asia, and powered by sales of chips used in communications, a trade group forecast recently. The Semiconductor Industry Association (SIA) raised its 2003 sales forecast to growth of 15.8 per cent from its prior forecast of 10.1 per cent. The forecast for broad-based growth was based on sales data for the first nine months of the year.
The stronger forecast is the latest positive news for the beleaguered technology sector, which has lately seen an upswing in stock prices as company outlooks began to brighten. Tech stocks staged a late-day rally on Wednesday as investors scooped up seemingly low-prices stocks, nudging the tech-packed Nasdaq up into positive territory. For 2004, semiconductor sales were projected to grow 19.4 per cent, up from the trade group's previous forecast of 16.8 per cent growth. That demand was being driven by stronger shipments of everything from cell phones and personal computers to server computers used to run corporate networks, the association said. PC shipments were expected to increase 8 per cent this year and 11 per cent next year, while cell phone shipments were forecast to grow 10 per cent this year and stay about the same next year, SIA director of finance Doug Andrey said on a conference call.
Next year, meanwhile, shipments of server computers were projected to grow about 15 per cent, as corporate spending on information technology recovered, he said.
(Source: The Star, 7 November
2003)
More Chipmakers Going
'Fabless'
Chip makers ranging from giants Motorola Inc and Texas Instruments Inc to younger mid-tier companies are finding that letting others manufacture their technology-intensive products makes good business sense. The move towards a "fabless" business model, where firms focus on chip design and marketing but leave capital-intensive production to others, is helping drive down costs for makers of chips that power gadgets from PCs to cellphones and DVD players. US semiconductor and communications gear giant Motorola recently agreed to transfer ownership of a US$1 billion chip-making plant, of "fab", in China to Shanghai-based Semiconductor Manufacturing International Corp (SMIC), a so-called foundry that makes chips based on the designs of its customers.
The fabless trend has opened up the industry to a crop of upstart chip designers that in the past would have been locked out by the prohibitive cost of production facilities that can run into billions of dollars. "Fabless has become a real business model because you can have three or four people who have ideas and they don't have to invest in the manufacturing site," said HSBC Securities analyst Abraham Leu. "It is much easier for people who have ideas and don't have money. Last month's agreement to transfer its only China chip plant to SMIC was part of Motorola's ongoing "asset light" approach, said spokeswoman Mary Lamb. "Motorola has an outsourcing strategy to leverage resources during the industry's cyclical ups and downs and to continue to hold down capital expenditures," she said. Fabless production accounted for US$16-US$17 billion – or about 11 per cent – of the semiconductor industry's estimated US$150 billion in output last year, according to the US-based Fabless Semiconductor Association (FSA). Output by fabless producers is expected to grow to 14 per cent of the industry's forecast US$205 billion of annual output by 2005, according to the Semiconductor Industry Association and research firm Dataquest. The fabless trend dates to the mid-1980s, when a field of idea-rich but capital poor upstarts entered the industry.
A corresponding group of contract manufacturers – most notably Taiwanese giants Taiwan Semiconductor Manufacturing Co Ltd (TSMC) and United Microelectronics Corp – sprang up to fill the need for production capacity. This year alone, the pair are expected to post combined revenue of US$8.4 billion, compared with an expected US$6.7 billion for the world's biggest semiconductor maker, Intel Corp, which still makes its own chips. The move to fabless output should accelerate in the years ahead as chips become more sophisticated and the equipment to make them grows more expensive, analysts said. A factory to produce high-end semiconductor wafers with 300 millimetre diameters – cutting-edge product – costs between US$2 billion and US$3 billion on average, said Chris Chang, a senior marketing official at SMIC.
Most major fabless chip designers are in the US and Taiwan, whose government has aggressively promoted development of the technology industry. The US companies include Qualcomm Inc, Conexant Systems Inc and Xilinx Inc, while big Taiwanese competitors include VIA Technologies Inc and Media Tek Inc. Some industry heavyweights such as Motorola and Texas Instruments use a hybrid model, making some chips in-house and contracting others out to foundries. In a nod to Taiwan's growing prowess, the FSA last month set up its first non-US office in Taipeh. It estimates the island now accounts for about 25-30 per cent of fabless output, with the US accounting for most of the rest.
(Source: Business Times, 14
November 2003)
Semiconductor Sector Set
to Boom in 2004
The growing appetite among Malaysian consumers for digital devices is expected to give a strong boost to the local semiconductor sector next year. The Gartner Group told In.Tech that the Malaysia semiconductor consumption market is forecast to grow 21 per cent from US$6.7 billion (RM25.5 billion) in 2003 to US$8.1 billion (RM30.8 billion) in 2004. "Notebook PCs will account for the 25 per cent of semiconductor consumption growth, while digital cellphones will account for 18 per cent and videogame devices for 15 per cent," said Gartner principal analyst Dorothy Lai. "Servers and desktop PCs are excepted to account for 15 per cent and 10 per cent growth respectively," she said.
An incrementally improving PC market is increasingly supplementing continued strength in the cellphone handset market, Gartner said in a statement. Another Gartner principal analyst, Annie Chung, told In.Tech that PC upgrades were done due to the need for advanced graphics and display cards for gaming or other multimedia purposes; storage and memory. "PC upgrades usually come from consumers and not corporations in general. It is not feasible for corporations to have PC upgrades according to Gartner's Total Cost of Ownership concept, which refer to high maintenance cost and standardisation of PC systems across any corporation," she said. Looking further forward, the consumption market is going to be "relatively strong" into the year 2005. Gartner principal analyst Philip Koh said, "We are looking at around 17-18 per cent year-on-year growth. Further on, factoring in a supply side driven downturn in 2006, we expect Malaysia's semiconductor consumption market to contract slightly by about 1.4 per cent. The beginning of the next industry upcycle is expected to happen from 2007, whereby we expect to see Malaysia's semiconductor consumption market to grow again, by 7.4 per cent," said Koh. He stressed that the electronics industry in Malaysia is the country's leading local industrial sector in terms of investment, exports and employment. It will continue to be the major contributor to Malaysian economy. "Multinational corporations have contributed significantly to the growth and development of this industry. They have also developed a strong manufacturing base for computers and computer peripherals such as monitors and rigid disk drives, as well as a developed telecommunications system in deploying modern technologies such as optic fibre," he said.
In addition, Malaysia is also one of the world's largest consumer electronics equipment manufacturer and has a strong presence in South-East Asia for semiconductor manufacturing and IC assembly and test operations. The country's initial strengths in IC assembly and test were developed into higher value-added industries such as wafer fabrication and chip design. Two foundry service providers – First Silicon and Silterra Malaysia Sdn Bhd – have started production since 2002. Gartner said that 2005 represents the peak year in the forthcoming semiconductor industry upcycle worldwide, with market revenues forecast to exceed US$245 billion.
(Source: The Star, 27 November
2003)
Semicon Industry Poised
for Upswing
A global semiconductor upcycle has likely commenced based on recent data on sales, output, order of equipment and prices, says Mayban Securities Sdn Bhd. "The upcycle is supported by personal computers replacement cycle, seasonal electronics and electricals demand, and mobile digital convergence technology," said the research house.
In a report on December 15, Mayban Research said the indicators included global semiconductor sales growth for October accelerating to a 47-month high of 23.3 per cent year-on-year. It said semiconductor players are gearing up for higher demand next year in line with Semiconductor Industry Association's forecast that semiconductor sales in Asia Pacific will grow 15 per cent annually in the next three years, outperforming the global semiconductor growth of 11 per cent in the same period. The research house has put a buy call on Malaysian Pacific Industries Bhd (MPI) and Globetronics Technology Bhd with their respective fair value at RM20 and RM6.90. It has a hold on AKN Technology Bhd with a fair value of RM5.80. Mayban Research said each counter's fair value was calculated based on their respective historical average price-to-earnings ratio. "On the whole, semiconductor players registered improving growth and profitability in the first nine months of 2003," it said.
It added that semiconductor counters registered significant year-on-year (y-o-y) growth in revenue based on latest quarterly results: MPI (12 per cent), Unisem (M) Bhd (33 per cent), Globetronics (16 per cent) and AKN Tech (56 per cent). On MPI, Mayban Research said its share price declined recently following a suit by Amkor Technology Inc in the US against MPI's subsidiaries for alleged infringement on Amkor's patented packaging technology. "On a better note, MPI in October signed an MoU with Swiss-based ST Microelectronics to jointly develop a separate packaging technology. It also recently announced that its plant in Suzhou, China, will start operations in the first half of 2004."
Similarly, Mayban Research said Globetronics expected its plant in Jiaxing, China to start operations in 2004. The plant will be used to mass produce a range of IC chips that Globetronics is currently developing. Unisem recently proposed to acquire Wales-based semiconductor assembler and tester Atlantic Technology Holdings Ltd to complement its existing operations and expand its client base. AKN's shareholders had approved the company's proposed acquisition of SR Technology Sdn Bhd, a local semiconductor assembler specialising in optoelectronics.
(Source: The Edge, 18 December
2003)
Micro-Mechanics to Open
Chips Factory in China
A Singapore parts manufacturer for Intel and Motorola says it plans to open a plant in China next year to meet rising demand for chipmaking gear. "Our customers are more positive," Chris Borch, president of Micro-Mechanics, said recently. "They've seen an increase in orders and some are beginning to order production equipment to handle the increased order level."
Micro-Mechanics makes parts like the tiny needles that push freshly cut silicon chips out from wafer slabs, and the metal plates that hold chips in place while machines etch their circuitry. The global chip industry is estimated to reach US$200 billion next year driven by sales for chips used in everyday goods like mobile phones and televisions. The plant will be located in Suzhou near Shanghai and is expected to open in June.
(Source: The Malay Mail, 27 December 2003)
ECONOMIC NEWS
Economic Growth Shows Signs of Surpassing 4.5pc Forecast
Malaysia's economic growth this year may surpass the official forecast of 4.5 per cent, Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said. "We are seeing some very encouraging signs … to show that this will be the case," she told reporters after the launch of the International Centre for Leadership in Finance (ICLIF) by Prime Minister Datuk Seri Dr Mahathir Mohamad in Kuala Lumpur recently. Zeti was asked to comment on remarks by Dr Mahathir over the weekend that Malaysia's gross domestic products (GDP) growth in 2003 would be much better than projected.
Earlier in her opening speech, Zeti said Malaysia is indebted to the Prime Minister for his leadership in helping the country recover from the 1997/98 regional financial crisis. "Since we emerged from the turbulence, the country has strengthened its foundation on a solid and steady growth path. For your (Dr Mahathir) leadership, this is one dept that the nation would not be able to repay. Malaysia is always indebted to you for the leadership and vision," she said. In the most testing time during the crisis, Zeti said, a critical decision was made that it was Malaysia's legitimate right to defend itself. "At that time, we were able to avoid being put under the IMF (International Monetary Fund) programme," she said. Dr Mahathir, who steps down on Friday after 22 years in office, was instrumental in instituting unorthodox capital controls and pegging the ringgit at RM3.80 to the US dollar in September 1998. This was aimed at insulating the currency and economy from speculative attacks. He also went against the IMF's doctrine practised in Indonesia, Thailand and South Korea, and introduced expansionist monetary policies that led to business starting up again.
On the ICLIF, Zeti said it will help develop a generation ofleaders in the financial sector. She said efforts are now directed not only towards the creation of a sound and resilient financial sector but also institutional development and capacity-building for higher performance, efficiency and excellence. Zeti said leaders need to be visionary, able to adapt to changes rapidly and have corporate social responsibility so that the profit mindset is balanced against obligations for long-term sustainability. "This is vital if the industry is to forge ahead and remain in the forefront of new innovation which is critical to their long term competitiveness. The establishment of ICLIF is part of our commitment towards providing an avenue to enhance leadership capability and towards developing world class leaders in finance and the service sector," she said. The ICLIF is set up as a non-profit organisation by Bank Negara to build a high quality human resource pool of top management for the financial sector and corporations in Malaysia and throughout the South-East Asian region. Established as a company limited by guarantee and provided with a grant of RM500 million, the ICLIF is a strategic initiative to ensure that Malaysia and the region as a whole become an important global player amid increasing globalisation, competitiveness and liberalisation in the international arena.
(Source: Business Times, 29 October 2003)
Growth Set to Accelerate
With Global Economic Recovery
Malaysia's economy should accelerate next year in tandem with the synchronised recovery of the global economy, registering some 5 per cent gross domestic product (GDP) growth, Morgan Stanley Dean Witter vice-president and South-East Asia economist Daniel Lian said. Economic pick-up worldwide, which happened sometime before the end of the second quarter this year, will benefit Malaysia as the country has been on the right track of stimulating the economy.
"We do have a synchronised recovery in the making. Being a leveraged play of the global economy, the near-term prospects of Asia ex-Japan looks decisively bullish as growth is forecast to accelerate from 5.6 per cent in 2003 to 6 per cent in 2004," he said. The Singapore-based Lian was speaking at the Malaysian Capital Market Summit 2003 in Kuala Lumpur recently. The US economy, he said, appeared to be picking up and this year economic growth could surprise on the upside. In the July-September period this year, its GDP is estimated to grow to up to 6.4 per cent quarter-on-quarter, the best performance since a Y2K-related surge in the last quarter of 1999. Although still struggling, the Euro economies are expected to enter the recovery phase earlier than previously anticipated with GDP reaching 0.7 per cent in 2003 and accelerate to 2 per cent in 2004. Japan is forecast to grow at 2.6 per cent this year and maintaining a relatively healthy momentum of 1.4 per cent in 2004. Meanwhile, Malaysia is expected to maintain its first half growth momentum into the last quarter of this year. Morgan Stanley Dean Witter forecast the country's GDP to reach 4.5 per cent this year. "We have become more bullish on the Malaysian economy, predicting it will grow at 4.5 per cent in 2003 and rising to some 5 per cent in 2004," he added.
Lian, however, said the global upward trend will not last as the US will not be able to sustain its consumption binge and twin deficits for long. The US Federal Reserve has increased liquidity in the US to unprecedented levels since the collapse of the Nasdaq. Currently, the ratio of money with zero maturity to GDP ratio is 50 per cent above normal. "The rise in the US trade deficit causes supply of dollars outside the US to increase rapidly. As the US is the only country that funds its trade deficit with its own currency, the Fed just prints more money when the US trade deficit increases," he said.
This, Lian said, has put an extraordinary burden on central banks to support the dollar value and will assert pressure on the Chinese yuan to revaluate as well as having an implication on the ringgit. Due to its peg, both the Malaysian ringgit and Hong Kong dollar could be affected should the yuan fixed exchange regime unwind. "However, we do not believe a revaluation of the yuan is imminent. And more importantly, the Malaysian monetary authorities and policymakers have sufficient tools to cope with a yuan revaluation, even if it brings revaluation pressure to the ringgit," said Lian.
(Source: Business Times, 29 October 2003)
Manufacturing
Sector Forecast to Grow at 7.8pc
Malaysia's manufacturing sector is expected to pick up pace in the next two years, growing a forecast 7.8 per cent annually even as Malaysia looks to diversify the growth source of the sector. The Government's bullish forecast in the Eight Malaysian Plan (8MP) Mid-term Review is higher than the 7.4 per cent growth targeted for next year made in last month's 2003/2004 Economic Report.
Over the past three years, manufacturing has significantly underperformed the original 8MP target growth of 8.9 per cent per year as the sector was hit hard by the global technology sector slump and poor growth in major markets. It only grew an average 1.5 per cent during the period. But a pick-up in the electronics sector in 2004-2005 should stoke growth in manufacturing, pushing the export-oriented sector to rebound strongly to 9.6 per cent per year. The increased demand for personal computers, high-end memory, flash and digital signal processing chips in consumer products, and digital electronics in the automotive industry will support this recovery, according to the review. Domestic-oriented manufacturing, meanwhile, is expected to pick up to 8.6 per cent as growth continues to come from the transport and food industry.
During the next two years, the Government expects the manufacturing sector to contribute 31.4 per cent to gross domestic product (GDP) and 29.3 per cent to total employment. Out of the 6 per cent GDP forecast in the 2004-2005 period, 2.4 per cent will come from the manufacturing sector. This is compared to 0.5 per cent out of the 3 per cent GDP growth registered in the first half of 8MP. Electronics and electrical goods currently make up more than half of Malaysia's total exports, but the country is looking to diversify the source of growth in manufacturing. The marine industry – shipbuilding and repairing and construction and fabrication of offshore structures – is one of the new areas identified to strengthen the manufacturing sector.
While Malaysia continues focusing on pulling in foreign direct investment – particularly in the high technology and knowledge-based industry – it will also give more emphasis to the small- and medium- sized enterprises (SMEs). The Government has increased its allocation for industrial development by 12 per cent, or RM308 million, to RM2.9 billion in the next two years. Allocation for training and consultancy services is doubled to RM519.3 million, while that for SME and rural sectors are up 3 and 10 per cent respectively.
(Source: Business Times, 31
October 2003)
GDP Growth to Expand 6pc
Malaysia’s gross domestic product (GDP) growth is expected to expand at an average rate of 6 per cent per annum in 2004 – 2005, with the private sector spearheading the economy. The sector is now more resilient following its restructuring and is expected to regain momentum to lead in stimulating the nation’s growth, deputy director-general (macro) of the Economic Planning Unit Datuk Halipah Esa said.
Briefing reporters and editors on the Mid-Term Review of the Eighth Malaysia Plan (2001 – 2005) in Putrajaya, Halipah said in the first half of the development plan from 2001 – 2003, the Malaysian economy expanded by an average of 3 per cent. For the whole of the Eighth Plan period, she said, the economy was forecast to expand by an average of 4.2 per cent from the original target of 7.5 per cent. She said although the growth rate was lower than the Plan target, the 3 per cent growth in 2001 – 2003 was credible given the challenging external economic and geopolitical environment, the openness of the economy and its high dependence on electronics, the exports of which slowed down. Among them were the adverse effects of the war on Iraq and the Severe Acute Respiratory Syndrome outbreak, she said.
Prime Minister Datuk Seri Dr. Mahathir Mohamad tabled the mid-term review of the Plan in Parliament recently. Halipah said despite the fallout from various crises, Malaysia was still on course to achieve many of the targets under the five-year plan and performed better when compared to other countries. Per capita income increased by almost 2.4 per cent and in terms of purchasing power parity by 3.9 per cent, while inflation was contained below 2 per cent and unemployment at 3.5 per cent, which is regarded as full employment if the rate is below 4 per cent. Halipah also said the current account of the balance of payments continued to maintain a large surplus contributing to strong external reserves, while the fiscal deficit, which increased due to pre-emptive measures introduced by the Government, remained within prudent limits. An encouraging feature of the economy was it became more broad-based with increased contribution to growth from the services sector and high technology and knowledge-intensive manufacturing. The agriculture sector witnesses renewed vitality prompted by improved primary commodity prices and increased output of food crops, fisheries and livestock.
But she cautioned on the external challenges likely to be faced in the remaining Plan period between 2004 and 2005. Among them are increased competition from China and India for foreign direct investments, minimising the risks from a global economy that continues to carry downside risks, and, on the local front, there is a need to strengthen indigenous capability. On the review, Halipah said the policy focus will be to reposition Malaysia so that it is better placed to meet the challenges arising from the changing economic landscape as well as secure the opportunities that arise. “This will set the Malaysian economy on a solid foundation to increase its dynamism and put in motion a steady and sustainable rate of growth consistent with its long-term potential,” she said. Halipah said during the last two years of the Eighth Plan, Malaysia is expected to be confronted with challenges, which include dealing with the changing dynamics in global competition, implementing a more effective innovation system and propelling Bumiputera equity ownership by setting up another investment trust company. Among the challenges is to increase the minimum required proportion of public sector procurements and contract works that is to be allocated to Bumiputera entrepreneurs.
On the review’s strategic focus, Halipah said this will be concentrated on reinforcing macroeconomic fundamentals, bolstering economic resilience, enhancing competitiveness, reactivating private investment and venturing into new sources of growth. The focus is also on accelerating transformation to high technology and knowledge-based economy, increasing supply of quality human resource, moving towards a more equitable society promoting an exemplary value system and enhancing international cooperation.
(Source: Business Times, 31
October 2003)
MEMBER NEWS
Royal Selangor –
Creation of Pride
One word sums up the Royal Selangor International Sdn Bhd approach to its products – pride. It takes pride in its creations and its goal is to rub off some of that pride on everyone its products come in contact with. Royal Selangor has over the years become synonymous with quality and excellent pewter craftsmanship. Having established a good reputation internationally, it has often been cited as a role model for aspiring Malaysian brands venturing overseas. After all, not many brands can lay claim to being “Malaysia’s gift to the world”.
Consistent advertising and promotion, and participation in renowned trade fairs, such as the Birmingham Spring Gift Fair, and the Toronto and Melbourne gift fairs, had played a major role in bringing awareness of the brand, especially overseas. But more importantly, its image also relies on positive world-of-mouth from satisfied customers. Royal Selangor managing director Datuk Yong Poh Kon said that in the early days, the company did not go about promoting the brand per se. The focus of founder Yong Koon, Poh Kon’s grandfather, was on creating items of good quality and design, two characteristics intrinsic to the brand since. “It was brand value he was after. The products kind of spoke for themselves,” Yong said. Every item that left Yong Koon’s workshop / factory bore his touch-mark comprising four Chinese characters yu he zu xi, which mean “jade and harmony”. The mark was used till 1930. “And after years of giving good experience to the consumer, brand equity was acquired. People appreciate the brand as a quality, well-designed product,” Yong said. The Yongs later named the brand, Selangor Pewter, which was subsequently changed to Royal Selangor.
“The name Royal Selangor invokes certain thoughts in the customer. These thoughts are valuable to us,” he said in an interview. “We want our customers to have a good experience with us when they shop, and it is our desire that they would actually use the item with pride, or to give it as a present with equal pride,” he added. The company’s commitment to product quality is reflected in the string of international awards gained over the years. Among them are the prestigious Design Plus Awards at the 1989 and 1991 Frankfurt International Gift Fairs, the American Pewter Guild Award (1994), and the British Gift of the Year Award (Licensed Gifts) (1997). Royal Selangor’s team of 20-odd designers are given creative freedom. And they frequently consult experts in the target group, such as wine experts, on the range of wine accessories and tea experts for its tea sets. As it has discovered, the best thing about creating something unique was that it would get the appreciation and endorsement of experts. A recent example is its award-winning wine funnel, which has an innovative five-stream design compared with the traditional single spout decants, which has been appraised by wine connoisseurs and featured in numerous wine appreciation magazines, some on the front cover.
As a licensee of Victoria & Albert, the world’s finest museum of decorative arts, Royal Selangor designers have access to, and could draw ideas from, the former’s vast archive of over five million objects. This was how The Inspired range of tableware was created. The company also works with foreign or quest designers, such as award-winning Erik Magnussen and Gerald Benney; and Graeme Anthony, the sculptor for the Lord of The Rings series. Riding on the hype and popularity of the Lord of the Rings movies that hit the silver screens in 2001, the Lord of the Rings collection (fist launched in 1997) became a hit and greatly boosted the Royal Selangor brand globally. “We’re continually building our brand because, unless we keep doing the right things, there’s always the danger of the brand becoming irrelevant. While we’ve certainly gained some brand recognition in our field of endeavour, there’s still much more to do, either in new markets or reinforcing the brand in the existing markets,” Yong said.
Undoubtedly, one of the best things the company did was to open the doors of its factory to visitors in the early 1990s. Hundreds of thousands of people have visited since. Among them were royalty and famous personalities such as The Earl of Wessex Prince Edward, Queen Silvia of Sweden, Queen Rania of Jordan, Sir Edmund Hillary, Mel Gibson, Lee Majors, Edward de Bono, and the Vienna Boy’s Choir. “We found that visitors to the factory have a stronger relationship with the brand and are more likely to appreciate the work that has gone into making an item. And every time they use the item, they would be reminded of their visit here,” Yong said. The idea of the “School of Hard Knocks” was mooted in 2000. For RM50, visitors can enrol into a one-hour long pewter-smithing workshop. Where each would be given a sheet of pewter, and wooden hammer and anvil to work on to produce their own pewter bowls. Royal Selangor expects its new Visitors’ Centre, currently under construction, to be opened in a month’s time. Besides the factory tour, it would have an interactive gallery and over 21,000 sq ft of retail space.
(Source: The Star, 8 November
2003)
Building
Brand from Scratch
In 1885, a young pewtersmith named Yong Koon arrived in Malaya from the Chinese port of Swatow, armed with little more than a set of tools slung over his shoulder, a belief in craftsmanship and the determination to succeed. Working alone from a small workshop in Cross Street in the heart of Kuala Lumpur, he touted his wares from door to door, concentrating on ceremonial items such as altar sets, joss-stick holders and tea caddies. He struggled for many years, until the depression in 1930s caused a surplus in tin, which gave impetus to the creation of new uses for pewter – a tin alloy – such as tankards, ashtrays and vases.
As the economy improved, especially after World War II, sales increased and the business expanded. By the time he passed on in 1952, Yong Koon had laid a foundation for his family. His son, Yong Peng Kai, modernised and expanded the operations. The company, then called Selangor Pewter Sdn Bhd, was moved to its first factory site in 1962. The current managing director Datuk Yong Poh Kon, his son, took over the helm in 1968. By the 1960s, Selangor Pewter had established itself as the undisputed brand in pewter excellence in Malaysia, popular among locals and tourists. It exported on a small scale – less than 2% of its production – via distributors.
In the early 1970s, export became a more concerted effort and brand-building efforts also picked up, especially in the targeted export markets. The company started exporting to Singapore, Hong Kong and Australia, and then expanded to Europe and Japan. It now has offices in Singapore, Japan, Hong Kong, China, Britain, Canada, Australia and Thailand. Today, its products are sold in over 3,000 outlets worldwide, mostly in upmarket shopping areas. The company, which was conferred the Royal endorsement from the Sultan of Selangor in 1979, changed its name to Royal Selangor International Sdn Bhd in 1992. As the story goes, Sultan Salahuddin Abdul Aziz Shah, on a visit to Australia in the 1970s, was asked where he was from. He said Selangor, and the immediate response was “Oh yes, Selangor Pewter.” So impressed was he of Selangor Pewter’s reputation overseas that he subsequently made the company the royal pewterer. The name change to Royal Selangor, Poh Kon said, was to reflect its commitment to quality and reaffirmed its long-term goal to diversity its products offering.
Today, Royal Selangor has over 1,000 product offerings including tableware, desk accessories, figurines, plaques, trophies, goblets, chess sets and more. The company also makes customised corporate gifts and commemorative items for specific events such as the Sydney Olympics. Although most items were made of pewter, other materials such as gold, silver, porcelain and wood are also used. Two-thirds of Royal Selangor’s production is exported. Although the company recently acquired a Canadian pewter company, that outfit would maintain a separate brand that carries more casual lines. All Royal Selangor – branded products are manufactured in its factory on 5ha in Setapak Jaya. Though technology has enabled production on a faster and larger scale, each Royal Selangor piece is still handcrafted to precise detail. Its more than 600 craftsmen use the traditional elements of the craft and lavish upon each creation the same meticulous care and attention of its founder. The elaborate pewter-making processes can be viewed at its factory, where complimentary guided tours are available year round, without the need for prior appointment.
Just as Peng Kai was credited for bringing production to the assembly line, Poh Kon has been credited for putting Royal Selangor on the world map. But the modest and low profile Poh Kon is quick to downplay his role in the success of Royal Selangor in the international arena. “It’s teamwork,” he insisted, and proceeded to name directors, managers and executives.
(Source: The Star, 8 November
2003)
Metal Reclamation May
Expand Smelter Capacity
Metal Reclamation Bhd, Malaysia's dominant producer of lead ingot and alloys, is raising output at its new smelter and will consider expanding capacity should the metal hold on to recent price gains. The smelter will hit full capacity of 120,000 tonnes a year by end-2004, said a senior official at Metal Reclamation. The plant is currently operating at around 70 per cent of this total, or 84,000 tonnes a year, he said recently.
Metal Reclamation started its lead smelter in 2001 on the small island of Pulau Indah, off Port Klang. The company is considering transferring its previous plant from Batu Caves, near Kuala Lumpur, to the new site. "If the lead price keeps on going up, we'll be moving faster than you think. We may want to (transfer and) re-commission the old plant. We haven't decided anything yet but it wouldn't be difficult to do," the official said. Lead closed at US$670 a tonne on the London Metal Exchange (LME) on Wednesday, up US$24 on the previous day's kerb close and by over US$100 since early-October. Supply of the metal in Asia is tight, said traders in Singapore. China is exporting less lead to the region and in-warehouse premiums in Singapore have leapt to around US$60 a tonne over the LME cash settlement price, they said. Of the smelter's output, around 70-75 per cent is lead alloy and the remainder is 99.99 per cent lead ingot, the official said. The company sells direct to customers in South-East Asia and West Asia, he said.
The Pulau Indah smelter can process either lead battery scrap or lead concentrate. "At the moment it's about 50:50. We'd like to treat more battery scrap but there's a limitation on that. Any more production will be fed by concentrates," the official said. The smelters sources 80-90 per cent of its lead battery scrap from Malaysia and buys its concentrate on the open market, much of it from Europe and Australia, he said. The Batu Caves smelter, which stopped operating at the time Pulau Indah came on stream, can process only battery scrap for production of secondary lead and lead alloys.
(Source: The Malay Mail, 5
December 2003)
Centre to Learn All
About Pewter
Every year, an average of 150,000 visitors from all over the world flock to the Royal Selangor Pewter headquarters in Setapak Jaya to see how the 118-year-old company's masterpieces are created. Often, the crave to know more about the bluish-grew pewter, an alloy that is mainly made of tin, and the story behind what is said to be Malaysia's oldest and the world's most prestigious pewter brand.
Now, their questions will be answered, with the establishment of the Royal Selangor Visitor Centre at the same site. Conceptualised in 2000, the centre was completed recently at the cost of RM15 million. Media members were given the chance to get a glimpse of this new centre on Thursday. Situated within the industrial tourism zone designated by the government, it is anticipated that this centre will be ranked among the five most popular tourist attractions in town. After all, the headquarters has already been recognised as one of the top 10. A gigantic pewter tankard, acknowledged to be the largest in the world by the Guinness Book of Records, beckons visitors to explore this classy building that comprises three main sections – the gallery, factory tour and retail store. Built in an avant-garde design coupled with pewter, steel and wood furnishes, the centre, which has a built-up area of 40,000 sq ft, is both contemporary and comfortable. "It is both a culmination of the brand's 118 years of history and success as well as a symbol of Royal Selangor's constant efforts to embrace the future. It will become a focal point for people to learn not only more about our company but also about the rich history and promising future of pewter in Malaysia. What began as crafting of candle holders, incense burners and subsequently tankards and tea sets, has today grown into more than 1,000 collectibles and tableware designs," said Royal Selangor executive director Tham Tuck Hoong.
Its general manager, Francis Lee, briefed the group on the visitor centre. "We use this centre to showcase some of our more avant-garde ideas. We will consider marketing these ideas commercially, but we will conduct more research and development before doing that," Lee said. The tour of the centre begins at The Gallery where educational exhibits detailing the origins and science of pewter are displayed. Among them are giant replicas of the tin crocodile and tree coins there were used as currency in the old days, three dredge buckets suspended near the main entrance and Royal Selangor's version of the Twin Towers, made of 7,062 pewter tankards stacked 9m-tall. The gallery also features interactive sections that promise to be fun for both children and adults. Among them are the Chamber of Chimes were visitors can hear the melodious sounds produced by different materials, the Hall of Finishes that features 24 types of pewter finishes to highlights its versatility, as well as the Game Port that gives an insight into some computer software that facilitates pewter designing. Another attraction in the gallery is the Pewter Museum, where some of the oldest pewter-smithing tools as well as a diverse range of pewter artefacts dating back to the 1800s, are on display. Also notable are the walls of palm prints, on which are the impressions of about 400 palms of Royal Selangor designers and craftmen as a tribute to these people for their valuable contributions.
During the factory tour that follows, visitors not only get to see but also to participate in the pewter-crafting process. At the School of Hard Knocks, visitors can try their hand at using traditional tools to shape pewter products. While the first two sections feed visitors with information, the last will certainly induce them to part with their money with delight. The 18,000sq ft retail store houses some 1,300 pewter designs, plus sterling silver selections by Comyns and fine jewellery by Selberan. The Royal Selangor Visitor Centre opens from 9am to 5pm daily. There is no admission fee and tour guides are stationed there. Further details can be obtained at www.visitorcentre.royalselangor.com and email enquiries can be directed to visitorcentre@royalselangor.com.my. Royal Selangor, formerly known as Selangor Pewter, was founded by Yong Koon. It now has 40 shops in Malaysia and 3,000 outlets worldwide. Royal Selangor pewter ware is exported to 20 countries.
(Source: The Star, 23 December
2003)
Metal Reclamation
Confident of Doing Well Next Year with New Plant
Metal Reclamation Bhd is confident it will recover in the financial year ending June 2004 now that its new lead refinery plant in the Pulau Indah industrial park in West Port, Port Klang, has begun operations. The plant is one of a handful in the world able to smelt both lead ore and lead acid battery scrap at the same time. The ability to accept dual feed is critical to ensure the plant's operations will not be restricted by short supply.
"Our new plant's capability to produce 50,000 tonnes of lead products annually will enable us to meet demand and put us back on solid footing," managing director Lim Sheng Seaw told Bernama after the company's AGM in Kuala Lumpur recently. The group would focus on consolidating its position to ensure sufficient production, he added. "We are confident of doing better in the financial year 2004 after overcoming most of the technical problems. Our performance has improved in the June 2003 quarter. With a lower depreciation rate and better performance, we recorded our first quarterly operational profit since the commissioning of the new plant in 2001," Lim said. The company posted a profit of RM983,000 in the June quarter. For the full year ended June 30, the group generated a lower net loss of RM17.46 million, against RM21.12 million in the previous financial year.
Currently, Lim said, the group's finished products were exported to regional markets, the Indian subcontinent and east Africa. "For now, we will focus on catering to the regional markets as implementation of the Asean Free Trade Area will benefit us. After that, we will move to other markets," he said. Besides Pulau Indah, Metal Reclamation has another plant in Selayang, also in Selangor. However, production in Selayang will be reduced gradually and the focus will be on the Pulau Indah plant.
(Source: The Star, 24 December
2003)