“Supportive” is finalising a US$ 15mil deal to supply toys to IKEA. The malaysiaan toy producer already has a plant in Taman Ria Jaya Industrial Estate, Sungai Petani, which also manufactures for IKEA.
The toy manufacturing business for IKEA should generate about 25% of Supportive’s turnover for the 2009 fiscal year ending next January, Lee said.
“The rationale for going into Vietnam is that we are finalising a deal with IKEA, the Swedish-based toy and furniture retailer, to obtain a three-year US$15mil contract to manufacture wood and plastic-based toy products”, group executive chairman Lee Kuang Shing told StarBiz in Malaysia.
“The move will also bring us close to IKEA’s operations in Vietnam.”
About US$5mil will be injected into the facility, which will create 300 to 400 jobs.
Lee said Supportive would serve as original design manufacturer (ODM) for IKEA.
Supportive International’s manufacturing facility in Taman Ria Jaya, Sungai Petani.
To stay competitive with its pricing and reduce production costs, the company will source plastic and metal raw materials directly from suppliers in China, thus bypassing the high-cost middlemen.