KUALA LUMPUR: US-based toymaker Mattel Inc is increasing its production capacity in Malaysia, which houses the world's largest Hot Wheels production, by 20 per cent within the next three years.
Mattel's journey in the country, through Mattel Malaysia Sdn Bhd, spans over four decades.
The renowned toy company has established itself as a key player in Malaysia's manufacturing landscape, creating job opportunities and driving innovation.
"Over these past 40 years, we have stayed true to our purpose of empowering the next generation to explore the wonders of childhood and reach their full potential. We are on track with our mission to create innovative products and experiences that inspire, entertain and develop children through play," said Mattel Malaysia general manager Ching Chiau Lee.
Mattel Malaysia was established in Perai, Penang in 1981, marking Mattel's entry into the local market.
It now employs over 3,900 workers across various facilities.
Besides Mattel Malaysia, the group also established Mattel Development and Tooling Sdn Bhd (MDT) in Perai and Mattel Continental Asia Sdn Bhd (MCA) here.
Mattel Malaysia's 496,000-square-foot manufacturing plant is the world's largest Hot Wheels production facility, churning out over nine million cars every week.
"Mattel Malaysia takes pride in being the sole manufacturer of the hugely popular Hot Wheels singles, which was recognised as the Global Top Selling Toy of the Year in 2022 by the NPD Group.
"MDT, established in 1985, serves as a state-of-the-art facility for product development, digital model making, mould design and mould manufacturing," said Ching.
Through the challenges brought about Covid-19, the company has had to navigate changing market trends as consumer behaviour evolved during the trying times, showing resilience and adaptability.
Mattel Malaysia transformed into an intellectual property-driven toy company, offering a wider range of consumer products and experiences to meet the evolving demands of consumers in Malaysia and worldwide.
According to Ching, the pandemic posed significant challenges, including temporary closures of manufacturing operations.
It responded by implementing stringent safety measures to safeguard the health and well-being of its workforce.
Although supply chains faced disruptions across various industries, including the toy-making sector, the company remained resilient.
The company's collaboration with local vendors in Perai had helped establish a stable foothold in the industry, said Ching.
Furthermore, Mattel accelerated automation and digital transformation efforts to enhance productivity, competitiveness, and operational efficiency in a rapidly changing market.
Besides being a positive step towards its own growth, Mattel Malaysia's expansion plans also has potential to boost the country's economy.
Ching said by strengthening its role as a global hub for die-cast production, the company expected to witness a 20 per cent increase in production capacity by 2025.
The expansion aims to enhance the manufacturing ecosystem, support local vendors and promote a more competitive industry.
"Mattel is leading the way in digital manufacturing, digital model making, and Industry 4.0 advancements, driving innovation and reducing costs while boosting productivity and operational efficiency," said Ching.
The Penang plant's expansion has already contributed to increased production capacity, with an average output of about nine million cars per week in 2022.
This targeted strategic investment aligns with Mattel's Capital Light strategy, which focuses on increasing manufacturing capacity, leveraging technological capabilities, and reducing costs.
The expansion is also expected to create job opportunities, with the total workforce at Mattel Malaysia and MDT estimated to grow by 10 per cent to nearly 4,300 workers.
Ching said Mattel Malaysia's role in the domestic manufacturing industry extends beyond its own operations.
"The company has played a significant part in developing a thriving ecosystem for the toy industry, collaborating with various sectors such as packaging, paint, material supplies, and automation.
"Partnerships with local vendors, including Walta Engineering and Phoenix Press, have grown alongside Mattel in Malaysia, contributing to the overall success of the industry.
"Mattel's alignment with the government's plans to digitalise the manufacturing sector and its participation in initiatives like the Malaysia Investment Development Authority's Green Technology Incentive demonstrate the company's commitment to fostering a robust and competitive industry through collaboration," she said.
The company is evaluating renewable energy solutions as part of its global corporate citizenship strategy, aiming to contribute to a more diverse, equitable, inclusive, and sustainable future.
It is actively working towards sustainable design and development, responsible sourcing and production, and thriving and inclusive communities.
By incorporating sustainable materials and circular design principles, Mattel aims to achieve 100 per cent recycled, recyclable, or bio-based plastic materials in its products and packaging by 2030.
The company also seeks to reduce plastic packaging by 25 per cent per product by 2030 and maintain at least 95 per cent recycled or FSC-certified content in the paper and wood fiber used.