By CHEN HUIFEN

California- headquartered Affymetrix Inc has shifted all production of its microarray products to Singapore - a move that will help the firm save US$20-25 million a year.

The consolidation, which began in mid-2008, was completed three months ahead of schedule.

'Affymetrix's decision to consolidate its entire microarray manufacturing activity in its Singapore facility, within three years of establishing operations here, is a strong vote of confidence for Singapore's competitiveness,' said Economic Development Board (EDB) managing director Beh Swan Gin. 'With this expansion, Singapore will account for more than half of the global supply of microarrays, which are increasingly used by scientists to better understand complex disease biologies, and to identify pre-disposition to disease.'

Microarrays are small chips that help to amplify and analyse complex genetic data. They are used to identify DNA markers for predicting a person's predisposition to certain health conditions or to collect information, such as in the Human Genome Project.

Before the consolidation, Singapore was making less than 50 per cent of Affymetrix's total volume worldwide. The company did not say how many units it makes today but has forecast an annual production in excess of one million microarrays a year 'as we grow our business'.

The gradual increase in production capacity has also created new jobs. In the past 12 months, Affymetrix has added about 80 workers to its 140,000 sq ft plant located in Gul Circle. In its initial year of operations, it had about 120 workers.

Apart from being home to its sole manufacturing plant outside the US, Singapore is also the Asian distribution centre for Affymetrix and the base of its regional headquarters.

Over in the US, Affymetrix has outsourced all of its US distribution to UPS. Its reagent business is also being consolidated into a new manufacturing site in Ohio.

'These changes will create significant operating leverage for Affymetrix,' said Affymetrix president and CEO Kevin King. 'As a result, our manufacturing capabilities are significantly more efficient and in turn will lower our product costs and improve our gross margin. Now that all of our consolidation activities are complete, we anticipate annual savings on the order of US$20-25 million.'

Affymetrix is estimated to have 40 per cent of the world's market share in microarrays. The other leading player in the field, Illumina, recently opened a 30,000 sq ft factory that makes about half of its global supply in Singapore. With the two major suppliers here, Singapore now accounts for more than half of the world's microarray production.

This article was first published in The Business Times.