Malaysia launches industrial township
Malaysia launches industrial township
KUANTAN, Malaysia (Reuter): Prime Minister Mahathir Mohamad
launched a US$1.6 billion industrial township built to make
electrical appliances yesterday, part of a multi- pronged effort
to go global with made-in-Malaysia products.
MEC City, undergoing construction on a 1,215-hectare (3000-
acre) site outside the east coast city of Kuantan, will build air
conditioners and refrigerators in its first phase.
The project, a brainchild of Mahathir, is part of government
efforts to reduce a worrisome current account deficit by cranking
up exports of Malaysian-made goods.
"I am convinced the project will help the country's
industrialization process and help reduce the current account
deficit through exports of the goods produced, and lower imports
of the same products," Mahathir said at the launch.
The township is owned by Malaysia Electric Corp Bhd (MEC), a
wholly-owned subsidiary of property and manufacturing firm Kuala
Lumpur Industries Holdings Bhd MEC has been producing electrical
appliances for the past 20 years.
"Most of the foreign branded electrical products are actually
being made in Malaysia, by companies owned by Malaysians through
contracts," Mahathir said.
"Products made by us have the same quality as products
imported from foreign countries. I believe Malaysian-branded
products will one day be well-known like Japanese and European
brands," he added.
Malaysia is already one of the world's biggest exporters of
air conditioners through various Japanese joint ventures.
At the launch, the Finance Ministry's Khazanah Holdings Bhd
signed an agreement to take a 30 percent stake in MEC, which has
a paid-up capital of 70 million ringgit. KLI Holdings will hold
60 percent while the rest will be held by a yet-to-be identified
Bumiputera (indigenous race) firm, company officials said.
MEC on Monday set up a joint venture to market its electrical
products in 11 Middle Eastern countries.
It also signed technical collaboration agreements with Japan's
Osaka Shoji Ltd, Taiwan's Kolin Co Ltd and four South Korean
Companies -- Korea Electronics Co Ltd, Hanchang Corporation,
Samsung Electronics Co Ltd and Saekwang Aluminium Co Ltd -- to
transfer technology for making the various electrical products.
Sales to the Middle East are expected to be worth "hundreds of
millions of ringgit" with the first shipment there expected in
April, company officials said.
MEC will eventually produce items such as rice cookers,
kettles, television sets, irons, blenders and hairdryers under
the MEC brand. Company officials said MEC hopes to export 70
percent of its products within three years.
Some 29 plants form the manufacturing core of MEC City, which
will also have research and development centers, shops and
cinemas, and a residential area with 6,280 houses.
The Malaysian-made Proton car, which is exported to Europe,
Africa and Southeast Asia, was the first high-profile effort to
go global with a made-in-Malaysia consumer product.
Malaysia posted a trade deficit of 617.97 million ringgit in
1996, against a 9.36 billion gap in 1995. The deficit is widely
expected to narrow further over 1997, but at a slower pace as
infrastructure projects suck in imports, analysts said.
The current account, measuring trade in services as well as
merchandise, was officially projected to level off at a deficit
of 11.45 billion ringgit in 1997, about the same as in 1996.