GEORGE TOWN, January 27 – 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 production facility in Penang, Malaysia.
The new plant will cover an area of about 39,200 square meters and is estimated to create 500 employment opportunities once completed and running at full capacity. This project will more than double the production capacity of VAT’s Malaysian operation, increasing factory output to over CHF 1 billion (MYR 4.6 billion1).
The ceremony was attended by the Ambassador of Switzerland to Malaysia, Her Excellency Madam Andrea Reichlin, Deputy Penang Chief Minister 1 YB Dato’ IR Haji Ahmad Zakiyuddin Abdul Rahman, and representatives from numerous other local organizations, including the Malaysian Investment Development Authority (MIDA), InvestPenang, the Penang Development Corporation (PDC), and other distinguished guests.
Her Excellency Madam Andrea Reichlin, the Deputy Deputy Penang Chief Minister 1 YB Dato’ IR Haji Ahmad Zakiyuddin Abdul Rahman, Mike Allison, CEO of VAT, Thomas Berden, COO of VAT, Urs Gantner, Head of VAT’s business unit Semiconductor and Paraveen Singham, Managing Director of VAT Manufacturing Malaysia Sdn Bhd officially broke the ground for the extended production site.
Congratulating VAT Manufacturing Malaysia on its commendable milestone in the country, Dato’ Arham Abdul Rahman, Chief Executive Officer (CEO) of MIDA said “The extension of VAT’s enhanced vacuum valve technology manufacturing facility reflects 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. The extension will also create new and high value job opportunities for Malaysians and accelerate the export of made-in-Malaysia products to the world.”
“As of September 2021, MIDA has approved a total of 230 manufacturing projects from Switzerland worth MYR 14.0 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 testament to the conducive investment climate in the country,” added Dato’ Arham.
“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% 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,” said Dato’ Ahmad Zakiyuddin Abdul Rahman, Penang’s Deputy Chief Minister 1, representing the Right Honourable Chief Minister of Penang, Mr. Chow Kon Yeow to officiate the groundbreaking ceremony.
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 CH F70 million (MYR 321 million) over the period 2022 – 2024.
“After thoroughly assessing a number of options for expanding our production capacity, we concluded that Penang was the best location for a number of reasons,” explained Mike Allison, VAT’s CEO. “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 acknowledgement of their outstanding efforts.
In addition, several of our largest OEM 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 efficiently. “MIDA, InvestPenang, PSDC and all local authorities have rendered us with excellent support over the last several years and we look forward to working with them during this next extension step.” he added.
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. VAT Manufacturing Malaysia will be the primary supplier for the company’s customers in 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, the company anticipates the employment growth to over 1200 people by the end of 2027.
VAT first began the construction of its manufacturing facility in Penang in 2012 and commenced production in April 2013. The first phase of the Company’s factory is reflected through an investment of over CH F30 million (MYR 102 million) in a 6,000 square-meter factory, a landmark event for VAT as it was the company’s largest-ever capital investment outside of Switzerland.
In September 2019, VAT inaugurated the second extension of its Penang factory with an investment amounted to CHF 40 million (MYR 165 million), covering an area of 24,000 square-meter to support the company’s significant growth.
The operations in Malaysia play a prominent role in the company’s strategy to further build its global market and technology leadership, to cater for 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. VAT’s second expansion included new resources in engineering and product management which enable them to respond faster based on the increasing demands in the region.