IKEA to establish US$212m regional hub in Malaysia

IKEA to establish US$212m regional hub in Malaysia

Ikea

KUALA LUMPUR: IKEA, the Swedish furniture retailer, will be establishing a regional distribution and supply chain centre for ASEAN in Malaysia, with an investment of RM908 million (US$212 million).

In adopting the structure and technology of IKEA’s biggest regional distribution centre in Germany, it would be among the top 10 largest regional distribution centres of the IKEA Group globally, said the Malaysian Investment Development Authority (MIDA) in a statement on Tuesday (Aug 22).

The new centre will manage an inventory of 9,500 stock keeping units (SKUs) worth RM6.6 billion annually.

“IKEA’s new 100,000 square metre specialised warehouse will utilise its integrated information and communications technology systems and automation to reduce the dependency on labour and significantly increase the efficiency and accuracy of its inventory management processes,” MIDA said.

It also said Malaysia had always been a significant market for IKEA as retail stores in the country were among its most visited globally.

The centre would be serving 12 retail stores in ASEAN and this will increase to 20 by 2026.

Malaysia's International Trade and Industry Minister, Mustapa Mohamed said the project represented a significant milestone for both IKEA and Malaysia.

“IKEA’s decision to select Malaysia as a base to support retailers in the country, Singapore, Thailand, Indonesia, Vietnam, the Philippines and India, underscores the strategic fit in supporting the company’s overall growth strategy in the ASEAN region.

“The establishment also adds momentum towards making Malaysia a regional distribution hub and the preferred logistics gateway to Asia, as outlined in the National Logistics and Trade Facilitation Masterplan and National E-Commerce Strategic Roadmap,” he added.

Source: Bernama/aa

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