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03 Jul 2018

KULIM, 1 July 2018 - Technology Depository Agency (TDA) and Thales signed a Pre-Industrial Collaboration Program Agreement (Pre-ICP Agreement) today at Celestica plant in Kulim Hi-Tech Park witnessed by the Finance Minister, YB Tuan Lim Guan Eng together with His Excellency Frederic Laplanche, French Ambassador to Malaysia. TDA was represented by Dato’ Zailani Safari, Chief Executive Officer and Thales was represented by Mrs Frederique Miller, Vice President South East Asia.

This agreement is a result of a thorough negotiation between TDA and Thales for the sub-contracting job of Thales’ In-Flight Entertainment (IFE) screens for global supply to be carried out in Malaysia and to be recognized as ICP credit. Thales, one of the worldwide market leaders on IFE systems selected Celestica Malaysia Sdn Bhd, a Malaysian company based in Kulim, Kedah to carry out the complete manufacturing, assembly and final testing of airborne displays for the latest generation of Thales’ IFE. This project is expected to achieve 60% local content and to generate more than RM1 billion ICP credit value worth of business opportunities by 2022, and at the same time to create about 450 job opportunities per year for the next 5 years.

YB Tuan Lim Guan Eng said, “ICP was one of the major parameters for award consideration. Malaysia, Kedah especially, was selected as the sub-contracting destination, beating India and Thailand. The value of the subcontract is estimated to be RM447 million, but the subcontracting program itself will see more than RM1.2 billion worth of products made in Malaysia by 2022”

Currently, TDA manages 88 ICP Programmes and 441 ICP projects worth RM69.3 billion. These programmes and projects have triggered RM28.4 billion worth of ICV (or ICV Credit Value). Out of the RM28.4 billion, RM7.9 billion ICV has been implemented. TDA is actively identifying and negotiating the balance of the ICP programmes to be implemented in Malaysia.

Thalés and Celestica will deliver 27% content localisation by 2021, and 32% by 2023. While these figures are encouraging, the Government of Malaysia through TDA hopes Thalés would increase the ratio to 60% by 2023. TDA projects 450 jobs will be created annually for the next 5 years. These jobs include direct, indirect and induced employments.

“Thales continues to support the big ambitions of Malaysia as they build capabilities for the future. As a committed partner to TDA in the Industrial Collaboration Programme, today’s agreement further reinforces Thales’ presence in the country and strengthens our relationship with our local partners. We remain focused on building sustainable, long-term partnerships with Malaysia and look forward to growing our collaboration for the future,” said Frédérique Miller, Vice-President for Thales, South East Asia.

Meanwhile, TDA, an agency under the Ministry of Finance, keeps on supporting the local economic development through ICP by creating activities that add value to strategic procurements made by the Government of Malaysia, with an effective cost. ICP is an initiative by the Government that include Economic Enhancement Programme (EEP), Counter Trade and Offset Programme.

The outcome of ICP through EEP is the creation of more local companies in the field of manufacturing and services. It involves the usage of medium and high technologies to add value in support of the development of industrial cluster in selected sectors. Countertrade on the other hand helps in the payment through counter purchase and buy back approaches. Meanwhile, the Offset

Programme which consists of Direct Offset and Indirect Offset covers Human Capital and Capability Development, Local Work Packages, Transfer of Technology, Global Market Access, Foreign Direct Investment etc. which will help support further the development of local industry to the next level.

Also present at the event was YB Tuan Tan Kok Yew, EXCO Member for the Kedah State Government; Mr Naguib Mohd Nor, President of Malaysia Aerospace Industry Association (MAIA); Mr Yong Chong Chin, Vice President Malaysia and Singapore Operations, Celestica Malaysia Sdn Bhd; and representatives from ministries, agencies and private sectors.

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