LOCAL WORKFORCE: MSTY’s facility in the Sama Jaya Free Industrial Zone, with a paid up capital of RM100 million, employs 3,456 staff as of February this year.
Taiyo Yuden Co Ltd (Taiyo Yuden), the world’s third largest manufacturer of multi-layer ceramic capacitors (MLCC) and ranked second in Japan, is gearing up for the next level of operations in Malaysia via its manufacturing facilities in Sarawak.
Incorporated on December 20, 1994, Taiyo Yuden (Sarawak) Sdn Bhd (MSTY) in the Sama Jaya Free Industrial Zone is an integral part of the group which is set to take advantage of the increasing global demand in the personal electronics industry.
Manufacturing a focused range of electronics components including optical media products, ferrite-related products and circuit modules, MLCCs commanded 48 per cent of 210.4 billion yen in overall group net sales for the financial year 2011 ended March (FY2011).
According to MSTY managing director and chief executive officer Koichi Ando, the group chose Sarawak as its Malaysian manufacturing site due to a politically stable environment, business-friendly incentives and local human capital for MSTY’s initial operations.
“Also strong infrastructure was provided by the local government. We are located in the Sama Jaya Free Industrial Zone (Sama Jaya FIZ) along with eleven other major companies and we have over the years received many incentives to remain in the zone,” he said.
As such, the MSTY facility with a paid up capital of RM100 million was officially opened in April 1996 sited on a 152,140 square metre plot. It had a staff force of 3,456 as of February this year.
GEARING UP: MSTY managing director and chief executive officer Koichi Ando and corporate management department head Abdul Rahman Usop are seen with a picture of the premises. MSTY is an integral part of the Taiyo Yuden group which is gearing up to take advantage of the increasing global demand in the personal electronics inddustry.
“MSTY is one of several plants of the Group located in Asia which produces MLCCs for worldwide use. To address customers’ satisfaction, we are looking forward to having green products to minimise energy consumption and reduce harmful emissions,” he said.
In order to produce green products, MSTY succeeded in acquiring a string of management systems standards that included OHSAS 18001 for safety and health, ISO 14001 on the environmental issues and ISO 9001 on quality control.
“With these systems, our concept in the process involves safety first where everything must follow the rules, and then we have to look into our energy efficiency while the yield of the process must be 100 per cent.
“Emphasising minimisation of waste materials from the process, the materials after use must be recyclable as well. We want to develop the products that we have towards this direction – high quality products with low energy consumption and further downsizing of product dimensions and abolition of any prohibited substances,” he revealed to BizHive Weekly.
Expanding on the operations Ando said, in addition to raw materials (such as ceramic powder) destined for the various MLCC plants, all research and development (R&D) originated from Taiyo Yuden’s MLCC manufacturing and development base in Gunma prefecture, about 100 kilometres from Tokyo.
“All our new products are conceptualised, researched and evolved in our plant in Japan and when the product is 80 per cent ready for mass production, the technology is then transferred to MSTY and we commence manufacturing and also fine-tune the process continuously. The majority of our equipment is from Japan and the US,” he added.
While the different plants manufactured MLCCS and inductors of various sizes and values for a variety of applications, MSTY’s role in the overall picture was the production of small and medium sized MLCCs with high capacitance values.
Delving into the finer details of manufacturing, the MLCC consisted of external electrodes made of nickel and ceramic body with layers inside to form the internal electrode layer. The ceramic ‘green sheet’ was printed with nickel paste to form the conducting portion, thus completing the overall basis of the passive two-terminal device.
Other processes included stacking and pressing of multiple layers, cutting and formation of terminating electrodes, the firing process which would actually make the device shrink in size.
Expanding on the sourcing for raw materials Ando informed that the raw materials were shipped to MSTY from Japan via sea freight including the ceramic powder. Whereas the finished products rolling out of the plant were transported by air to the various destinations.
With steadily improving standardised practices and relatively consistent human capital, the plant had boosted its productivity to an impressive 844 per cent in FY2010 when compared with production levels in FY2000 as a reference point.
“Our rapidly increasing production capacity can be attributed to advanced technology in the form of new machinery that maximised production efficiency. This remains a constantly evolving procedure as we manufacture new products.
“We are constantly monitoring evolving electronics technology which means we are able to further miniturise devices with layers as thin as two micrometres (microns), where one micrometre is one millionth of a metre,” he explained.
This was integral to the changing landscape in end user products such as laptops, hard drives, smart phones and other personal electronics devices where tiny electronics components were necessary to their feasibility according to Ando.
As MLCC technology in Japan was a step ahead from the rest of the world, Ando revealed the current development and application of even smaller devices incorporating layers measuring no more than 0.8 micron were in the research and development stage at the plant in Japan.
“Currently, in Sarawak we are about to commence on the next level of production where we will be mass manufacturing 1.8 micron and 1.5 micron products and continuously finetuning the process along the way,” he revealed.
Touching on the challenges faced by the company, Ando elaborated, “First when we cmmenced operations at Samajaya FIZ MSTY was given pioneer status for the first ten years which was later extended by another five years. Now we need to fulfill certain conditions in order to avail of further tax exemptions.
“We have three conditions to fulfill, firstly that we continue to invest in machinery, secondly we are required to employ a certain number of engineers who are Sarawakians and thirdly we need to valu-add to our products. If we fulfill these three criteria, the authorities will study the possiblity of extending further tax exemptions,” he revealed.
However, he pointed out that with more attention being directed at the sarawak Corridor of Renewable Energy (SCORE) which included Tanjung Manis Halal Hub, Bakun Dam and the Samalaju Industrial Park, Sama Jaya FIZ had been pushed backstage.
“When Sama Jaya FIZ commenced we did receive incentives and tax exemptions but now that the focus is on SCORE things are different, I do believe that companies in that area will stand to gain more and receive better incentives,” Ando observed.
Reverting back to the requirement for lacal engineers, Ando said a major concern was that there were only a few companies in Sarawak that dealt with high technology and that meant the engineers’ levels were not that high and most local engineers had their eyes set on West Malaysia or overseas.
“Manpower is actually one of the biggest challenges, in two or three years down the road we have to get engineers ready to be able to address the level of high technology and be able to perform. In the meantime we just need to continue investing in training our workforce,” Ando concluded.