Bayan Lepas facility to be its third largest by 2012

GEORGE TOWN: Testing and automation product company National Instruments (NI) is targeting to transform its manufacturing-cum-research facility in Bayan Lepas, Penang, into its third-largest plant in the world by 2012.

Chief operating officer and chief financial officer Alex Davern said that by 2012, the Penang operations would be the US-headquartered group's third-largest global hub after its facilities in the United States and Hungary.

By 2020, the Penang facility would become its second largest in the world, he added.

Davern said this after the launching of NI's temporary office in SunTech Tower by Penang Chief Minister Lim Guan Eng.

The temporary office is now occupied by NI's research and development (R&D), information technology (IT) and manufacturing employees.

Construction work on the first phase of NI's new US$80mil plant in Bayan Lepas would start next year and is scheduled for completion in 2012.

The plant will eventually employ 1,500 people in manufacturing, product development, R&D, IT and finance positions, he said.

Operations will begin in the third quarter of 2012, Davern said, adding that second phase construction was expected to start in 2016.

He said the group would hire about 200 people in the next three years for the operations in Penang.

The Penang operation is important as Asia-Pacific is expected to generate close to 40% of the group's revenue by 2016.

Asia-Pacific now contributes about 30% to group revenue compared with about 9% some 16 years ago, Davern said.

In its latest annual report posted on its website, NI said it had doubts on the long-term viability of Hungary as a location for its manufacturing and warehousing operations.

Our long-term manufacturing and warehousing capacity planning contemplates a third manufacturing and warehousing facility in Malaysia.

Deployment of this facility could be accelerated in response to an unfavourable change in the corporate taxation, regulatory or economic environment in Hungary, it said.

It added that if it failed to accelerate the deployment of its Malaysian manufacturing and warehousing facility, there could be a material adverse effect on its ability to meet customer demands, ability to grow its business as well as its liquidity, capital resources and results of operations.

- The Star Online