IKEA to set up RM908 mil regional hub in Malaysia

KUALA LUMPUR (Aug 23): The world’s largest furniture retailer IKEA will invest RM908 million to set up a regional distribution and supply chain centre in Malaysia to serve the Asean market.

The centre will adopt the structure and technology of IKEA’s biggest regional distribution centre in Germany and will be one of the company’s largest regional distribution centres globally, the Malaysian Investment Development Authority (Mida) said in a statement yesterday.

The new 100,000-sq m specialised warehouse will serve IKEA’s 12 retail stores in Asean. IKEA plans to increase its presence to 20 stores in this region by 2026.

“IKEA’s decision in selecting our country as a base to support retailers in Malaysia, Singapore, Thailand, Indonesia, Vietnam, the Philippines and India underscores Malaysia’s strategic fit in supporting IKEA’s overall growth strategy in the Asean region,” said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

Mida said the government has been encouraging local and multinational conglomerates to set up their regional establishments in Malaysia via business models such as the Principal Hub (PH) scheme allowing companies to centralise their global activities such as procurement and distribution.

Since May 2015, Mida has approved 26 PH projects, which it said will contribute RM16.8 billion in business spending over the next decade.

This article first appeared in The Edge Financial Daily, on Aug 23, 2017.

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