HK Multinationals Unlikely to Switch to Penang

By Julian Matthews

The July 1, 1997 deadline does not seem to have the business community in Malaysia rattled in any way. Manufacturers, government officials and industry analysts are of the consensus that it will still be “business as usual” in Hong Kong.

They say that Hong Kong’s role as a center for sales, marketing and distribution of electronic components and as a springboard into the burgeoning Chinese market will remain despite its return to China.

“We do not anticipate any lacking in ease of business. Hong Kong will maintain its role as an operational and service center, and may even expand this role over time,” said James Chuen, business development director for Solectron Technology Sdn Bhd.

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Xircom Expands Penang Factory Amid Sales Hike

By Julian Matthews

Mobile connectivity solutions provider Xircom Inc of the US is expecting record sales of its PC communication card products this year, with the strong showing of its first quarter sales for 1997.

Dirk Gates, Xircom chairman, president and CEO, said net sales of company’s PC card products grew to US$56.3 million for the first quarter of fiscal 1997, up 15% from the previous quarter, and a 67% rise over the first quarter of fiscal 1996.

Xircom earlier reported a turnover of US$193 million for its 1996 fiscal year ending September 30, up 53% from the previous year. Gates predicted a growth rate of about 85% for Xircom in 1997.

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Iomega Shifts All US Manufacturing to Penang

By Julian Matthews

Leading US removable disk drive maker Iomega Corp announced plans to shift production of its entire family of products from the US to Malaysia by the middle of 1997.

The shift to the US$30 million manufacturing facility in Penang will result in a cut of between 500 and 700 employees at the company’s headquarters in Roy, Utah.

Iomega (M) Sdn Bhd managing director K H Teh said the Penang facility will be in volume production of the company’s entire line of Jaz, Ditto and Zip drives and disks by the end of 1997.
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Global Slowdown Strikes Malaysian Electronic Factories

By Julian Matthews

The global downturn in the electronics industry is beginning to be felt in Malaysia following the closure of factories and a slowdown in production of existing plants.

Many factories, mainly in Penang, have put a freeze on recruitment and are controlling overtime, reducing shifts and shutting down during weekends, claimed OK Lee, chairman of the northern branch of the Federation of Malaysian Manufacturers.

“Business will be slow for the next six months, possibly until early next year,” Lee said.

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