Injection molder VS raises investment in Vietnam plant
By Steve Toloken
PLASTICS NEWS CORRESPONDENT
JOHOR, MALAYSIA (May 1, 2007) — Pushed by increasing interest in Vietnam as a manufacturing base for multinational electronic and household appliance firms, large Malaysian molder VS Industry Berhad is boosting investment in its plastic injection molding and toolmaking factory there.
VS, which has 15,000 employees in factories in China, Indonesia and Malaysia, said April 23 that it and its partners were planning to raise investment in their first Vietnam plant from US$6 million to US$10.2 million (46.3 million yuan to 78.7 million yuan), to build additional capacity and warehouse space.
“The directors are optimistic about the future growth of the plastic injection industry in Vietnam,” the company said in the April 23 filing to the Hong Kong Stock Exchange. The Vietnam operation is part of VS’ Hong Kong listed associate company, VS International Group Ltd.
Company officials did not respond to an interview request, and VS International provided few details about the Vietnam operation in public filings. But it suggested last year in its annual report that rising labor and operational costs in China, where it has 14 factories, makes Vietnam more attractive.
“Considering the increasing overhead in China and given the rather low cost infrastructure in Vietnam, the investment in Vietnam is envisaged to enhance the group’s competitiveness in the long run,” VS International said. “Our early presence … will enable us to grasp the golden opportunity to emerge as one of the major plastic molded product suppliers in Vietnam.”
The Vietnam plant is part of a broader expansion that VS Berhad, based in Johor, is undertaking.
Last year, VS opened an electronics plastics plant in Qingdao to increase its presence in North China, and told Malaysian newspapers it was opening a new molding plant, with 39 presses, at its Johor headquarters. The Johor plant is expected to boost injection molding capacity by 20 percent.
The company counts vacuum cleaner maker Dyson and electronics firms Sony and Samsung among its customers.
VS Berhad, which says it’s among the 50 largest contract manufacturers in the world, said that its Hong Kong-listed VS International subsidiary had plastic sales of US$146 million (1.16 billion yuan) last year, or 80 percent of its sales.
About US$2.6 million (20.1 million yuan) of the additional money for the Vietnam factory is coming from a firm controlled by the brother of VS Berhad Chairman Beh Kim Ling, with the remaining $1.6 million (12.4 million yuan) coming from a VS subsidiary. VS International Group Ltd. shareholders need to vote on the Vietnam transaction at a May 11 meeting.
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