PIE Industrial to open two new plants this year
Facilities to positively impact firm’s continuous growth
GEORGE TOWN: PIE Industrial Bhd’s two new plants in Seberang Jaya, Penang, which will contribute positively to its growth, will start operations this year.
Group managing director Alvin Mui told Starbiz the fifth and sixth plants would be used mainly for manufacturing box-build computing equipment.
PIE Industrial is sanguine about its 2024 growth prospects, as the global computing equipment segment is experiencing exponential growth annually,
“We are having good ongoing discussions to secure new business opportunities for the two new plants, which could positively impact the group’s continuous growth.
“We invested Rm60mil to renovate and expand the fifth and sixth plants in Seberang Jaya,” Mui said.
The renovation work for the fifth plant has been completed, and it will be ready for use at the end of the first quarter (1Q24).
“New machines and equipment will arrive in March and production should start in May.
“Both expanded facilities will be able to support growth over the next five years,” Mui said.
The sixth facility should start operations in 4Q24. The computing equipment business comes under the group’s electronic manufacturing services (EMS) activities which contribute 84% of PIE Industrial’s manufacturing segment.
According to Mui, orders from many existing customers have shown weaknesses since early 2023 due to the downward revision of global semiconductor sales and excess inventory correction.
“Even though weakness continued with the wire and cable business, which deals with local industries, most EMS customers started reordering in the second half of 2023. The strong order book from existing and new customers from the computer equipment sector near the end of the second half of financial year 2023 (FY23) has fuelled the momentum going into FY24.
“We remain optimistic about engaging potential new customers from diverse industries, including the medical, industrial, consumer and telecommunications industries,” he said.
The Business Research Company had recently stated that the computer equipment and hardware market will grow at a 5.3% compounded annual growth rate or CAGR from Us$674.44bil in 2023 to Us$710.32bil in 2024.
“The growth in the historical period can be attributed to increasing personal computing revolution, globalisation of supply chain, the rise of the Internet, data centre expansion and operating system developments,” the report said.
PIE Industrial has completed the installation of solar panels in five of its plants and plans to install more solar panels for another two plants to generate green electric energy and reduce rising electricity charges.
The group will also prioritise investing in various automation and process optimisation to improve product yield, efficiency, consistency and quality while minimising labour dependency.
In 2023, PIE Industrial’s revenue contribution from the raw wire and cable segment, which generates 15% of the group’s revenue, was also affected by the economic slowdown.
“This was because many local customers were still severely affected by the current economic slowdown in this division.
“However, we are optimistic that the business will start to pick up again in 2024.
“The copper price has been decreasing since 3Q23. This division can maintain its profit margin, as the selling price quoted to customers is pegged to the copper price determined according to the market.
“The revenue derived from cable assembly and wire harness of Pan International Electronics Thailand (PIT) is expected to increase as more new business opportunities are now available in Thailand.
“PIT is now expanding its manufacturing capacities and technical know-how in preparation for opportunities in the new electric vehicle wire harness business,” Mui said.
He added the group’s trading segment would continue to promote the products of the respective parent companies to customers in the Asean market.
For FY23, the group posted a net profit of Rm75.4mil on the back of a Rm1.2bil revenue versus a net profit of Rm71.6mil on Rm1.16bil in revenue achieved in FY22.
“We remain optimistic about engaging potential new customers from diverse industries, including the medical, industrial and consumer sectors.” Alvin Mui