N.Z. exports help Malaysia’s exports

Press, 16 May 1978, Page 16

N.Z. exports help Malaysia’s exports

By

NAYLOR HILLARY

f who recently visited Kuala Lumpur.

A light is switched on in a hotel in Kuala Lumpur, or an electric razor is plugged into a wall socket designed to handle various pins and voltages in Manila. The chances are that the electrical equipment had its origins in Christchurch. The parts for the switches and sockets are made in Christchurch by PDL Industries, Ltd. They are being assembled in Malaysia,, near Kuala Lumpur, by PDL (Asia), Ltd, and sold in several South-East Asian countries.

PDL (Asia) is a joint venture with Malaysian participation. For five years it will enjoy “pioneer status”, by which the Malaysian Government offers incentives to foreign firms prepared to invest there.

“The decision to set up a local operation, rather than to export finished electrical products from New Zealand, was made several years ago.” said the Malaysian company’s general manager, Mr John Vale, in a report on the firm’s beginnings. “Malaysia seemed to offer the best incentives. There is a building boom in the whole region. We are expected to export 80 per cent of our production in Malaysia to other countries to help Malaysia’s export drive.”

PDL (Asia) has a new factory on an industrial estate at Shah Alam, 16 kilometres from Kuala Lumpur and midway between the capital and the port of Kelang on Malaysia’s west coast. The company has a five-acre site und ample room for expansion. Production began on October 1 last year. At present the firm employs 41 people of whom only the manager and his deputy, Mr Miles Jones, come from the Christchurch parent company. Within five years the firm

expects to employ 350 people.

“From here we have access to markets not available from New Zealand.” said Mr Jones. “Some of these may be outside South-East Asia — in the middle east and Iran.”

So far, PDL (Asia) represents an Asian and New Zealand investment of SNZSOO,OOO. Eventually the investment is expected to reach SNZ2 million. Exports of components from New Zealand to Malaysia are expected to reach $NZ750,000 at the end of the first year of business and to increase to SNZS million within three years. The value of the output of the Shah Alam factory in its first 12 months is likely to be SNZI.S million.

The firm already has a high reputation for the quality of its products which are made to New Zealand standard specifications. These are usually higher than the British standards adopted officially by Malaysia. Building contractors are beginning to ask specifically for “PDL” products.

To begin with, work done in the factory is being kept simple and flexible until local staff have been trained in more sophisticated tasks. “We expect that, gradually, more of the moulding of components will be done here and the local content will increase. This will please the Malaysians,” said Mr Jones.

The managing director of the PDL group of Jinpanies in Christchurch, Mr R. H. Stewart, said the factory had been set up because the firm believed the future for some New Zealand industries lay in manufacturing outside New Zealand. “Eventually, in Malaysia, we envisage we will have sophisticated plant working 24 hours a day and producing for the whole South-East

Asian market,” he said. The main consideration, however, was to increase exports from New Zealand.

Although the factory as Shah Alam has been able to assemble the nucleus of an efficient Staff, it still faces difficulties from being ont of the first tenants in an industrial estate along with much larger firms whose investments total SM2OO million (about SNZBO million) and which employ 15,000 people. ' “We have trouble from squatters in the area; security has to be watched carefully,” said Mr Jones. “So far the Shah Alam estate does not have a fire brigade. The 60 members of the Federation of Malaysian Manufacturers here are taking up that problem with the Government.

“The mails are slow. Shipping parts from New Zealand can also be slow. We have to work three to six months ahead in our ordering of what we think we will want from Christchurch,” he said. But the factory’s site has advantages. It is close to the motorways connecting Kuala Lumpur and Kelang, It also has a distant view of the handsome new palace of the Sultan of Selangor, and a much closer view of the Malaysian Grand Prix motor racing circuit.

In Christchurch, Mr Stewart’s famous PDL Mustang racing car is believed to be in search of new, challenging opposition. The staff at PDL (Asia) will not be surprised if the Mustang appears in the factory car park one day, waiting for an opportunity to test the Kuala Lumpur circuit. “But our principal aim in Malaysia,” said Mr Stewart, “is to make ‘PDL’ ,a household name there in the same way it has become a household name in New Zealand.”