IKEA, the world’s largest furniture retailer headquartered in the Netherlands, has made a strategic decision to establish its Regional Distribution and Supply Chain Centre for ASEAN in Malaysia.
The Centre, which will adopt the structure and technology of IKEA’s biggest Regional Distribution Centre in Germany, will also be among the top 10 largest Regional Distribution Centres of IKEA Group globally.
The company will invest RM908 million for the new Centre that will manage an inventory of 9,500 stock keeping units (SKUs) worth RM6.6 billion annually. IKEA’s new 100,000m2 specialised warehouse will utilise its integrated ICT systems and automation to reduce the dependency on labour and significantly increase the efficiency and accuracy of its inventory management processes.
Malaysia has always been a significant market for IKEA. IKEA’s retail stores in Malaysia are among IKEA’s most visited stores globally. With the establishment of the Regional Distribution and Supply Chain Centre, Malaysia will strengthen its role in supporting IKEA’s growth in the ASEAN region. The Centre will serve 12 retail stores in ASEAN, which will increase to 20 stores by 2026.
On congratulating IKEA, Mustapa Mohamed, Minister of International Trade & Industry (MITI) said, “The project, which resulted from continuous engagements and facilitation by the Malaysian Investment Development Authority (MIDA), represents a significant milestone for both IKEA and Malaysia. IKEA’s decision of selecting our country as a base to support retailers in Malaysia, Singapore, Thailand, Indonesia, Vietnam, Philippines and India underscores the strategic fit of this country in supporting IKEA’s overall growth strategy in the ASEAN region.”
“The establishment also adds momentum towards making Malaysia a Regional Distribution Hub and preferred logistics gateway to Asia as outlined in the National Logistics and Trade Facilitation Masterplan and National E-Commerce Strategic Roadmap (NESR). Deployment of technology in the logistics chain has been identified as the key factor in strengthening the capabilities of logistics service providers towards enhancing trade facilitation mechanisms. Thus, IKEA’s high-flow and automated warehouse is certainly well-aligned to this agenda,” he added.