Looking deeper into Smiths Detection's x-ray detector investment in Malaysia

Smiths Detection, whose regional headquarters is in Singapore, chose Iskandar, Malaysia as the site for its first Asia Pacific manufacturing facility because of the availability of skilled resources, infrastructure, location, and proximity to the company's customers in Asia. 

Smiths Detection Malaysia is expected to support both global and regional sales of advanced X-ray scanners, such as those commonly seen at airports and border checkpoints.   

Demonstration of x-ray detection during the official launch of Smiths Detection's first Asia Pacific manufacturing facility in Malaysia.

Nathan Manzi, Managing Director, Smiths Detection Asia Pacific explained that an investment in x-ray technology in Asia Pacific makes a lot of sense when x-ray detection systems are a core product for the company, accounting for half of the regional business. Globally, the company has over 70,000 X-ray inspection systems installed in more than 180 countries around the world, and demand is forecast to increase as security threats evolve and more people travel. 

A further 20% of regional revenues come from bespoke projects such as airport integrated systems, 15% on the trace detection market for customs, narcotics, and explosives, and the remaining 15% on chemical programmes, he said. 

"All airports and customs departments in the area have x-ray systems, whereas not all have chemical detectors," Manzi added.
 
Smiths Detection's top three audiences are the transportation industry, organisations involved in ports and borders and those with critical infrastructure like government buildings and prisons, organisations which might well require x-ray detection systems at short notice.

"We want to demonstrate to customers that we're here and can ship quickly," stressed Manzi.
  The plant started production in 2012, and has delivered 556 x-ray detection systems as of December 2013, with the key hardware components of the machines, the generators and the detector boards, first imported from sister facilities, and then manufactured in Malaysia. The first x-ray generator was produced locally in September 2013, followed by the first detector board in December.

X-ray generators

"It was a leap of faith (to invest in Malaysia) but the initial results have been very encouraging," noted Philip Bowman, Chief Executive, Smiths Group. "It has been significantly easier to source components here than in North America. All of the cabinet work is manufactured locally; we source the electronic components locally. We will work our way through the bill of materials to source locally."

Chua Lee Hiong, Operations Director, Smiths Detection Malaysia, shared that 60% of the components used today are locally manufactured, while Manzi noted that the target is to have more than 90% of each system to be made in Malaysia.  
 
"We have already been able to bring innovation and export it back (to other facilities)," added Brian Jones, Interim President, Smiths Detection. According to Jones, expertise gained from balancing manufacturing cells versus manufacturing lines has "sped production by a material percentage". 

The manufacturing facility is supported by 60 skilled Malaysian technicians comprising specialists in assembly and commissioning, supply chain management, and quality control.

Smiths Detection executives are projecting that staff numbers will more than double by 2015, to 150, while production will go from 100 units to 150 units a month in the next 12-18 months. 

Smiths Detection has already shipped 104 machines to Japanese airlines ANA and JAL over 2013, Manzi disclosed. The Malaysian facility has also caught the eye of organisations in Korea and is actively working on projects in Malaysia as well.
"In Malaysia, we've had a lot of investment from customs (the Royal Malaysian Customs Department) for the screening of cargo going from Malaysia to Singapore. At the same time we're screening cargo coming from Singapore to Malaysia. The big one which is about to go operational is KLIA2; we are providing the cargo screening, and all the passenger screening," Manzi said.

*KLIA2 is Malaysia's new international airport hub. It is expected to open in 2014. KLIA is the capital's existing airport, and stands for Kuala Lumpur International Airport.