Business

Friday July 31, 2009

Kingston closing memory module plant in Penang


By DAVID TAN

davidtan@thestar.com.my

GEORGE TOWN: US-based Kingston Technology is closing its memory module manufacturing facility in Bayan Lepas, Penang.

The plant has commenced a shutdown of its operations, which will be completed by Sept 1.

The plant, which has played a key role in Kingston’s growth for the past 10 years, was set up mainly to support its original equipment manufacturing (OEM) customers involved in the manufacturing of memory products for the computer industry.

With this customer base declining since 2007, Kingston is finding the Penang plant no longer cost effective.

Kingston’s other manufacturing facilities elsewhere will absorb the production capacity currently handled by the Penang plant.

Its customers will see no difference in day-to-day operations.

The closure will affect some 200 workers who will receive from Kingston a very generous severance norms and legal requirements.

The company is working with the Penang labour office to help its employees find work.

When contacted, an in vestPenang spokesman said it would help some of the 90 lo cal workers find jobs in other industries.

Headquartered in California, Kingston Technology Co, Inc is the world’s independent me mory leader.

Last month, Kingston Technology president John Tu told StarBiz in an interview that the company viewed Malaysia as a potential growth market and would continue to look for new business partners in the country to deploy new creative strategies.

“For example, we are working within the music and entertainment industry to create more interesting products and creative ways to distribute content.

“Our strategy to continue growing in Malaysia is to rely on our core competency, which is competitive pricing, quality products and outstanding customer service,” he said.

Kingston’s local operations generated US$60mil revenue last year, about a 1% drop from 2007, as global sales slumped US$500mil to US$4bil.

The drop in global sales was mainly due to the downward fluctuations in the price of dynamic random access memory, although the product registered a 34% increase in units shi pped, Tu said.

Employing 4,000 worldwide, Kingston is regarded as one of the “Best Companies to Work for in America” by Fortune magazine.

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