JOHOR BAHARU, July 13 (Bernama) -- The Port of Tanjung Pelepas (PTP) and electronics manufacturing service provider Flextronics, Wednesday signed an agreement which will see the port building and leasing an integrated industrial campus at its Pelepas Free Zone to the company.

PTP chief executive officer Datuk Mohd Sidik Shaik Osman said construction of the facility, measuring 1.3 million feet, is expected to begin soon.

He added that the facility is scheduled to be completed by the first quarter of next year and will be leased to Singapore-based Flextronics for a period of 10 years.

"Flextronics' investment marks another important milestone in the development of PTP and Johor's south-western corridor in entirety. We are confident that Flextronics' move will incite more investors to follow suit and take advantage of the unique opportunities offered by the Pelepas Free Zone," Mohd Sidik said to reporters after the signing ceremony with Flextronics president and managing director (Asia operations) Peter Tan at PTP, here Wednesday.

He said the agreement represented a big start for the fast-emerging PTP as the setting up of more industrial facilities at the Pelepas Free Zone is expected to attract more independent shipping lines to make calls at the port, transforming PTP into South East Asia's premier transhipment hub.

"We hope the Flextronics' venture will start a cluster of other industrial facilities at the port," Mohd Sidik said, adding that people in southern Johore would benefit from the venture in terms of jobs and other opportunities.
 
He said PTP is currently holding discussions with several parties which are interested to invest in the Pelepas Free Zone.

Meanwhile, Tan said the Flextronics facility in the Pelepas Free Zone, due to come onstream by the first quarter of next year, would bring together several of the company's current operations in the south, including in Senai, Tampoi and Malacca.

He said the new facility would employ between 12,000 and 13,000 workers, including more than 1,000 engineers.

"The campus will develop into a fully integrated state-of-the-art manufacturing centre, combining in a single location engineering, printed circuit board assembly, plastics injection moulding and logistics," Tan said. "Additionally, it will co-locate strategic suppliers on-site to reduce material procurement cost, transportation time and enhance time-to-market," he added.

Tan said Flextronics, which employed 18,000 workers in Malaysia, would be investing up to RM1 billion in the integrated facility or RM100 million every year during the lease period of 10 years.

He also commended the approach taken by PTP in building and leasing the integrated facility to Flextronics, describing it as "the prefect arrangement by the perfect partner" which will ensure further growth on both companies in the future.

Asked about the future of the Flextronics plant in the south after the integrated industrial campus is ready, Tan said the workers would be relocated and the company would decide later whether to close the plant.

Flextronics, which registered a revenue of US$15.9 billion (US$1.00=RM3.80) last year, help customers to design, build, ship and service electronics products through a network of facilities in over 30 countries in five continents.