Proton to decide on Shah Alam plant by 2011

By Sharen Kaur
Published in NST, February 17 2010
National carmaker Proton Holdings Bhd (5304) may decide by the end of this year or early 2011 if it wants to sell or lease its main car manufacturing plant in Shah Alam, Selangor, says its chief.


Managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir told Business Times that Proton expects to move its staff and some of its machines in Shah Alam to its manufacturing facility in Tanjung Malim, Perak, within the next two to three years.

Based on book value, the land and building in Shah Alam is worth around RM700 million.

Talk of consolidating the two plants first surfaced during the stewardship of Tan Sri Tengku Mahaleel Tengku Ariff, who was the chief executive officer until July 2005.

Proton is doing a feasibility study on the consolidation. It expects to complete it by end-2010. The move to Tanjung Malim would help cut costs and make it more efficient in production.

Five times larger than the Shah Alam plant, the Tanjung Malim manufacturing facility, which occupies a 518ha site, can produce up to one million cars a year. Proton makes 230,000 cars in Shah Alam.

The relocation means about 6,000 employees at the Shah Alam plant will have to move. But before that happens, Proton will invest in infrastructure and carpark facilities at the Tanjung Malim plant, Syed Zainal said.

He said the Tanjung Malim plant, which has some 3,000 workers, has space to triple its workforce.

The Tanjung Malim plant is part of the RM11 billion Proton City development, which started in 1996.

The integrated project is developed by Proton City Development Corp Sdn Bhd, a 60:40 joint venture between DRB-HICOM Bhd and Proton.

Developments at Proton City are expected to take another seven to 10 years.

Proton City comprises the Proton plant, which is estimated to be worth RM7 billion, a 120ha Proton Vendor Industrial Park, Universiti Pendidikan Sultan Idris' main campus, as well as residential and commercial properties.
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