The distributor and contract manufacturer of electronic components is investing roughly a billion yen (RM32.4 million) in the plant over five years through the fiscal year ending March 2026, according to a report by Nikkei.

The capital spending on the new factory comes at a trying time for electronics supply chains, which have struggled with a chip shortage, pandemic-induced production and shipping bottlenecks.

Kaga, which intends to relocate its capacity in stages, plans to begin full operations in mid-September.

Its current plant, also in Penang, generated about 3 billion yen (RM97.2 million) in revenue in the year ended March 2022. The new factory is expected to chalk up 5 billion yen (RM162 million) in revenue in three years.

The old factory in Penang had produced electronic parts on contract since 2000 and now makes power supply components and circuit boards for sanitary devices, power tools and consumer electronics.

The new facility, which is 20% larger, is expected to also grow the group’s electronics manufacturing business.

Kaga aims to reach a group operating profit of 20 billion yen (RM648.2 million) in the year ending March 2025.

The company had, in fact, already hit the target in its last fiscal year. It returned 20.9 billion yen (RM677.3 million) in revenue, up 82% from the previous year.

The company forecasts operating profit climbing 1% this fiscal year to 21.2 billion yen (RM687 million) on 3% growth in sales to 510 billion yen (RM16.5 billion).