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Machinery and Equipment

The M&E industry serves to catalyse Malaysia’s transition into a high-technology, Industry 4.0-ready nation, due to its linkages to various large-scale economic sectors such as manufacturing, construction and services. According to the IMP3, investments in the M&E industry is targeted to grow by an average annual rate of 3.7 per cent. By 2020, investments in the industry are projected to reach RM30.8 billion, while exports are expected to grow at an average rate of 6.7 per cent per annum, reaching RM48.3 billion.

There are currently 1,418 companies of all sizes in the M&E industry across multiple fields, including power generation, metal working, specialised-process M&E for specific industries, general industrial M&E, modules and industrial parts, and remanufacturing of M&E. These include 197 companies involved in the production of semiconductor M&E, and 143 companies involved in robotics and factory automation systems. Malaysia is the leading manufacturer of specialised-process machinery for the E&E industry and automation equipment in the SEA region.

Malaysian M&E companies are capable of providing a full range of world-class, international quality services, including design & development, test simulation and software programming, structure fabrication, module assembly and integration, as well as automation solutions. They are able to produce advanced machinery with full automation and robotics handling systems, and can easily integrate themselves into global supply chains, exporting their products worldwide. Notable companies in the industry include Advantest, SRM, Vitrox, Muehlbauer, Pentamaster, UMS and Multitest.

Driven by industry trends including Industry 4.0 and the Industrial Internet of Things (IIoT), M&E companies are currently revolutionising their production processes, adopting key Industry 4.0 technologies to increase the level of automation, connectivity, and big data analytics (BDA) required in a smart factory environment. This includes connecting cyber and physical systems via an enterprise resource planning (ERP) system, as well as employing remote monitoring, machine-to-machine (M2M) communication, and fully-robotic, automated assembly lines in their production floors. A local company have ventured into developing software and platforms as well as providing ERP, production monitoring and supply chain management services and solutions to manufacturing companies.

Innovation and R&D will catalyse the growth of more sophisticated M&E. Access to financing for this may prove to be a challenge; especially from the commercial financial sector, which usually evaluates such loan applications conservatively. This could be an area of interest for potential investors seeking to enter the market and help integrate industry players into the global supply chain through strategic collaborations.

In 2017, a total of 77 projects with investments amounting to RM2.2 billion were approved. Of these, 39 were new projects (RM1.3 billion or 61.6%) and 38 were expansion / diversification projects (RM840 million or 39.4%). Compared with 2016, there were 11 fewer projects approved overall, but an additional RM650 million was invested – an increase of 42.3 per cent over the RM1.5 billion in 2016, and an indicator that the M&E sector is moving up the value chain and becoming more capital-intensive.

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Last Updated : Monday 22nd October 2018