IKEA (IKEA), the Swedish furniture retailing giant, announced that it would invest 9.08 billion ringgit (the Malaysia monetary unit, about $212 million) to build the world's largest regional distribution and supply chain center in Malaysia.
On Tuesday, the Malaysia Investment Development Agency (MIDA) said in a statement that the supply chain center will manage IKEA's value of 66 billion ringgit's inventory to support IKEA's development in the ASEAN region.
IKEA spends 200 million knives to build the world's largest supply chain center in Malaysia
The new supply chain center will reach 100 thousand square meters and will supply 12 retail outlets in the region. IKEA plans to increase the number of stores in Southeast Asia to 20 by 2026.
Malaysia is an important market for IKEA, and its retail outlets are among the largest in the world.
Minister of international trade and Industry Mustapa Mohamed He said: "the establishment of the supply chain center has given IKEA plans to increase Malaysia's momentum as a regional distribution centre. This is the preferred logistics portal into Asia, and also in line with domestic logistics, trade facilitation planning and national e-commerce strategy roadmap.
Malaysia has been encouraging large local enterprises and multinational companies to enhance business trade through various initiatives, including major plans to allow enterprises to focus on global activities such as centralized procurement and distribution.
In the past few years, IKEA's retail business ownership is attributable to the main dealer IKEA Group, including: shopping center and food retailing; supply chain management and design business is fully responsible for the IKEA brand owner and the franchiser Inter IKEA.
In the year to August 2016, online sales of IKEA Group, with most IKEA entity stores worldwide, rose 30% to 1 billion 400 million euros from a year earlier, and total sales rose by 7% to 34 billion 200 million euro.