Speech by the Rt. Hon. Chief Minister of Penang, Mr Lim Guan Eng "Announcement by Boon Siew Honda on their Expansion Plan" September 22, 2011 at the Chief Minister Office, Level 28, Komtar

Good morning

Mr. Satoshi Okada, Managing Director and CEO Boon Siew Honda and Senior officials

Dato’ Lee Kah Choon, Chairman of the Executive Committee of the Board of investPenang

Dato’ Rosli Jaafar, General Manager of Penang Development Corporation (PDC)

Puan Maimunah bt Mohd Sharif, Mayor of the Municipal Council in Seberang Perai (MPSP)

Cik Zabidah bt Daud, Director of Malaysian Industrial Development Authority (MIDA), Penang

Representatives from the various Federal & State Government Agencies and Utilities Organisations -  Department of Environment (DOE),  Penang Water Authority (PBA),

Telekom Malaysia  ( TM ) and Tenaga Nasional Berhad (TNB)

Member of the Press

Ladies and Gentlemen,

Penang is the proud location of the only motorcycle production facility of Boon Siew Honda. Boon Siew Honda, I understand, is the strategic partnership that dates back to 1958, when the late Tan Sri Dato' Loh Boon Siew and the late Mr Sochiro Honda, founder of Honda, one of the world’s mightiest corporations, met for the very first time. This meeting actually developed into a business collaboration and eventually in September 2008, Boon Siew Honda Sdn Bhd, a 50:50 joint-venture between Honda Motor Co., Ltd. and Oriental Holdings Bhd, came into operation. As we are aware, Boon Siew Honda solely supplies to the domestic market, which relates very well with the goals of the company, i.e. (i) to consolidate motorcycle production and sales in Malaysia; and (ii) to achieve higher customer satisfaction and efficiency

Presently, Boon Siew Honda is the largest manufacturer of motorcycles in Malaysia with major competitors comprising Hicom-Suzuki in Perai, Penang; Modenas in Kedah; and Hong Leong Yamaha in Selangor as well as lesser competitors such as SYM or Sanyang Motorcycle in Perai, Penang; Kawasaki in Selangor as well as Demak in Kuching.

Today, we have the representatives of Boon Siew Honda here to share with us their expansion plan in Penang. This expansion plan will encompass the consolidation of their present operation at Mak Mandin with their proposed development. To be located in Batu Kawan Industrial Park, the new Boon Siew Honda facility will incur additional investment of RM200 million. The new facility will provide additional 100 new jobs to further complement its existing 1,000 workers, out of which 85% are production workers. What amazes me is that all of Boon Siew Honda’s production workers are local. Boon Siew Honda must have very good human resource strategies that are able to attract and retain the local workforce despite its labour intensive nature of the industry.

Today, Boon Siew Honda dominates 45% of the Malaysian motorcycle market share with the production of 250,000 units of motorcycles of various models per year. The company is expected to produce about 350,000 units of motorcycles once the new facility is operational.

Motorcycle was once a mode of transportation for the working class population but today, it is a popular mode of transportation for small businesses such as retail and petty trading; alternative mode of transportation for those with cars as well as for leisure transport. Given the diverse applications of motorcycles today, it justifies that our number one motorcycle producer has a wide range of models to offer today, which includes a variety of Wave series, EX5 and Icon. Boon Siew Honda plans to introduce additional CUB models.

Although I have been told that the new facility at Batu Kawan which will commence construction in November 2011 and begin operation in February 2013, will only be for manufacturing activities, I strongly urge the management of Boon Siew Honda, who are represented here today, to take full advantage of what Penang can offer, and to extend your operation to include design & development as well as vendor development.

We are currently planning to set up a SME Village at Batu Kawan Industrial Park, not far from the Boon Siew Honda’s new facility. The proposed 150-acre SME Village will be an ideal location to accommodate parts and components vendors of Boon Siew Honda, thus will further enhance supply chain development for the industry.

This RM200 million  investment only deepens the the long standing relationship between Boon Siew and Honda. Further we hope for more Japanese investment in the high precision automation and chemical engineering, electrical and electronics as well as renewable energy. Penang is the location of choice for investors not just for our availability of human talent, proficiency in English and mastery of technical processes, efficient supply chain management, logistics hub and a livable city filled with culture and lifestyle but also a good government that protects intellectual property rights. Many prominent Japanese have made Penang their home such as Tan Sri Konishi, the Japanese Bon Odori Festival is the largest in Malaysia with 70,000 visitors and their investors extend even to running the Penang Golf and Country Club(formerly BJCC).

Last but not least, I would like to thank Boon Siew Honda for considering Penang and expand its operation in Penang.

Thank you.