Perodua announces new state-of-the-art plant
Despite protectionist tax policies, Japanese and Korean car makers have been turning up the heat in the automotive industry, and the local boys are feeling the pinch. Newly-launched models such as the Mitsubishi Mirage and Nissan Almera encroach precariously close to national car territory, and complacency is a luxury that the likes of Proton and Perodua can no longer afford.
Nevertheless, complacency is a word we hardly ever associate with Perodua. Whilst it is true that the company has benefited enormously from Government tax breaks, Perodua’s management policies have been consistently long term and focused on building a sustainable business. The company is in the midst of executing a five-year business plan to increase its overall competitiveness with the idea of making sure that Perodua remains relevant even in a fully liberalized market.
The latest piece in that five-year puzzle was just announced at a press briefing yesterday, where Perodua Managing Director Datuk Aminar Rashid Salleh laid out plans of a new RM790 million plant to be built adjacent to its existing facility in Sg Choh, Rawang.
According to Aminar, “This new plant is part of our 5-year strategic road map to stay competitive in the ever liberalizing automotive industry by helping us to be more productive and efficient while at the same time reducing cost.”
“The Perodua Board of Directors have recently approved this investment and the process of obtaining approval from the respective share holders is still ongoing,” he added.
The new plant will have a maximum annual capacity of 100,000 units on a one-shift cycle, complementing the 200,000-unit capacity of the existing plant. Perodua will set up a new subsidiary company to oversee the new plant’s construction and operation. According to schedule, the new company will be established by March 2013 with a paid-up capital of RM200 million. Share-holding equity of the company will see Perodua Auto Corporation Sdn Bhd owning 51% and Perusahaan Otomobil Kedua Sdn Bhd owning 49%.
It is all well and good to set up a new plant, but why go through the trouble of creating a new company to go with it as well? Why not just park the new plant under the existing corporate structure? According to Aminar, this elaborate arrangement is to facilitate the creation of a new company culture and introduction of newer and more advanced practices. Old habits die hard, they say.
“The new company will be a role model for our existing manufacturing plant. It will have improved systems, new technology, more automation, and is environmentally friendly,” Aminar commented.
The new plant will operate on procedures and practices that conform with the standards set by top manufacturing plants operated by Daihatsu, Perodua’s long-term technical partner. It will incorporate increased usage of automated robots for improved assembly accuracy and consistency. Plant logistics and workflow will similarly be streamlined to create a more efficient working environment and also ensure traceability of all assemblies and work processes.
Perodua has yet to decide the models that will be produced in the new plant, although a tentative opening date of mid-2014 has been announced. The company is currently in the final phases of constructing of a new automatic transmission plant in Seremban as part of a joint venture with Akashi-Kikai Industry Co Ltd and Daihatsu. That plant is on course for a Nov 2013 opening.
