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Hope is not lost for manufacturers

As the Malaysian manufacturing sector kicked off the new year with its weakest output performance in 16 months, concerns arise about the future of the sector, which makes up almost a quarter of the domestic economy.

With the rising recessionary fears in advanced economies being a key risk, some also worry that a softer export demand ahead may prolong the slowdown in manufacturing activities, which in turn could water down the country’s economic growth.

Headwinds aside, economists are hopeful that Malaysia’s manufacturing production will eventually recover in coming quarters.

The optimism is premised upon a resilient domestic demand and the positive spillover effect from China’s reopening.

Malaysian manufacturers are also “increasingly optimistic” on the outlook for 2023, according to S&P Global.

S&P Global, which publishes the monthly manufacturing Purchasing Managers’ Index (PMI), said manufacturers expect both domestic and external demand conditions to improve as global macroeconomic headwinds dissipate ahead.

“The overall level of confidence rose to the strongest since August 2019 as a result,” it said in an earlier note.

The seasonally adjusted PMI dipped from 47.8 points in December 2022 to 46.5 points in January 2023, indicating a sustained gradual slowdown in manufacturing production and gross domestic product (GDP) growth into the new year.

It is noteworthy that the PMI fell for the fifth straight month in January.

The weaker headline figure was in part due to a stronger moderation in output volumes that was the steepest reported for 16 months.

“Firms commonly attributed muted production to subdued incoming orders,” said S&P Global.

Speaking with StarBiz, Bank Islam Malaysia Bhd chief economist Firdaos Rosli believes that Malaysia’s manufacturing output will go up in the coming months amid China’s reopening news, which will drive demand and ease supply chain pressures.

However, he acknowledged that it will take “a bit more time” to reverse the current trend.

“Malaysia’s production capacity will eventually rise to cater to high demand, thus leading to a better performance in trading activities.

“For the record, we are pencilling in Malaysia’s GDP growth for 2023 to come in at 4.5% sans the positive impact of China’s economic reopening and subsidy rationalisation,” he said.

Firdaos highlighted that the International Monetary Fund had recently revised its global GDP forecast from 2.7% to 2.9% for 2023.

This is in anticipation of softer inflation coupled with the US dollar weakness that could support the global economic outlook.

“Sentiment among business owners or manufacturers could be higher in the immediate timeframe.

“As such, the right thing for the government to do is to ensure that our overall growth is sustained amid external challenges,” he added.

In a note issued yesterday, TA Securities Research said Malaysia’s pessimist PMI performance was in line with some regional peers such as Myanmar and Vietnam.

“Nevertheless, four of the seven Asean nations monitored by the (PMI) survey registered growth across their manufacturing sector in January, namely the Philippines (53.5 points), Thailand (54.5 points), Singapore (51.9 points) and Indonesia (51.3 points).

“As a result, Asean manufacturing firms reported an improvement in operating conditions at the start of this year (51 points),” it said.

TA Research noted that the economic conditions in the country remained muted, as challenging situations across the manufacturing sector limited demand and production at Malaysian manufacturing firms.

However, it expects a continued rise in demand, going forward, mainly due to China reopening, coupled with a sustained rise in domestic spending and business activities to support a resilient outlook.

“For this reason, we are sticking with our prediction that manufacturing in Malaysia will remain in the black this year, albeit at a slower clip,” it said.

Bank Islam’s Firdaos pointed out that Malaysia is not spared from the impact of global growth moderation, being the world’s 24th largest exporter.

He also highlighted that other major exporting countries such as China, the United States, Germany, the Netherlands and Japan were all under 50 manufacturing PMI points in January 2023.

According to Firdaos, Malaysia’s manufacturing PMI seems to suggest the direction of other key economic indicators, notably the Manufacturing Industrial Production Index (IPI) and the Coincident Index (CI).

The IPI, on a month-on-month basis, peaked in June 2022 at 12.76% and has been on a declining trend since August 2022.

The CI, a comprehensive measure of the overall current economic performance, appears to be following a similar trend as well, he said.

On global semiconductor sales, Firdaos said it has been in contraction for six straight months since June last year.

“We foresee that the trend could ease in the upcoming months with China’s economic reopening last month.

“We believe high input and operating costs amid prolonged supply-side constraints, such as elevated commodity prices and supply shortages, will remain the growth headwinds in the coming months,” he added.

Semiconductors represent an important area for the Malaysian economy.

In 2021, semiconductors formed 62% of Malaysia’s total electrical and electronics exports, amounting to RM281.38bil.

Meanwhile, Kenanga Research said the latest manufacturing PMI reading signals a continued slowdown in the manufacturing sector, reflecting a weak start for the first quarter of 2023 amid subdued demand brought by uncertainty in the global economic outlook.

This was further pressured by the ongoing Russia-Ukraine crisis and the impact of tighter financial conditions on the back of aggressive monetary policy tightening by global central banks.

“Therefore, we maintain our GDP growth projection for 2023 at 4.3%, which reflects a sharp moderation from the 8.6% estimated in 2022.

“Nevertheless, we still expect manufacturing growth to remain on a positive expansion albeit at a slower pace, primarily supported by the continued domestic demand and to benefit from China’s economic reopening,” it said in a note.

Source: The Star

Hope is not lost for manufacturers


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Carmaker Perusahaan Otomobil Kedua Sdn Bhd (Perodua) intends to maximise its production capacity to 330,000 units this year from 282,019 units last year (14.2% higher) to fulfil outstanding orders carried forward from 2022 and to meet demand so far in 2023.

Perodua president and CEO Datuk Seri Zainal Abidin Ahmad said it has 220,000 units of outstanding bookings and is facing difficulties in managing operations because it has reached maximum capacity due to high demand.

“Perodua has earmarked RM10 billion to purchase parts from local suppliers to meet our 2023 targets. Hopefully by maximising our production to 330,000 this year, we will also be able to fulfil our average normal orders,” he said during the Perodua 2023 Outlook Media Conference in Kuala Lumpur today.

In addition, Perodua is targeting sales of more than 314,000 units this year, or 11.3% higher than the preceding year’s 282,019.

Currently, the normal installed annual production capacity for Perodua Manufacturing and Perodua Global Manufacturing plants is at 320,000 units on a two-shift cycle, and Zainal said it can increase the volume by improving productivity and by instituting overtime.

He said the impact of such production growth on the Malaysian automotive industry would be significant as Perodua purchase commitment is expected to encourage the Malaysian automotive ecosystem to improve its production capabilities and quality standards.

“In short, the increase in production will give a much-needed boost for our local industries to improve economies of scale and to better compete with counterparts abroad,” he added.

Zainal also affirmed that Perodua will make sure customers who booked vehicles during the National Economic Recovery Plan (Penjana) scheme period and are supposed to get their orders by March 31 will still be able to enjoy the sales and services tax (SST) exemption intended for them.

Based on the waiting period for most brands, as well as the still strong demand for Perodua’s vehicles, Zainal said, total industry volume (TIV) has the potential to reach 700,000 units this year.

“In terms of the overall market, we believe that there is still a bright silver lining for the industry despite the cost pressures. We believe that the TIV can go beyond the 650,000 units announced by the Malaysia Automotive Association,” he added.

Perodua, he said, will not increase the prices of existing models but there will be some price increases for newer models due to new and enhanced specification features rather than due to the impact of inflation or higher material prices.

Perodua has allocated RM1.15 billion in capital expenditure this year to improve its group operations. One key area for improvement is its new business division where Perodua is expanding its Pre-Owned Vehicle and Subscription business.

“We have allocated RM537.1 million for the development of multiple new models that we are planning to launch in 2024 and 2025. In addition, we will allocate RM247.1 million to modernise operations, which also includes upgrading existing 1S (sales showroom) and 2S (service and spare parts centres) into 3S centres (a combination of the two),” he said.

With these improvements planned for its network, Perodua is targeting an increase in its vehicle intake at its service centres.

“For 2023, we target to see an increase in vehicle intakes to 2.8 million units from 2.6 million recorded in 2022. This growth would be a combination of improved service time as well as increasing our service bays throughout the country,” said Zainal.

Source: The Sun Daily

Perodua to ramp up production capacity this year to fulfil order backlog


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Sarawak is on schedule to produce its own methanol for the open market by January, next year, said Sarawak Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg.

He said the Sarawak Petchem methanol plant in Tanjung Kidurong is in its final stage of development and will start its trial run in April, this year.

“If it goes as planned, Sarawak will commission methanol production in January 2024,” he told reporters after his working visit to the methanol plant today.

The methanol plant, once in full operation, is capable of producing 5,000 metric tonnes per day or 1.7 million tonnes per year of methanol.

Abang Johari said the methanol plant would also be equipped with a dedicated jetty to allow international tankers or ships to bring methanol to the market.

“We have been able to train the workforce for a relatively sophisticated industry such as petrochemicals,” he added.

The Premier said the 5G network coverage will also be developed in this industrial area.

“Now we have installed 5G in several areas, by 2024 the whole of Kidurong, Samalaju and parts of Bintulu will be upgraded to 5G, with the hope of being able to upgrade to a higher speed.

“This is an important area for Malaysia’s economy, even more so for Sarawak,” he added.

Abang Johari said during a briefing earlier, he was informed a second methanol plant will be built once the first plant is fully developed.

“From the point of view of financing, we have prepared everything, this (methanol plant 2) is a private sector investment, not the government.

“The financial institutions, have high confidence in the efforts of the downstream gas industry in Sarawak,” he added.

Abang Johari believed the future of Sarawak’s oil and gas downstream industry is bright considering that eight out of the 10 new gas areas that were discovered by Petronas are located in Sarawak.

“I believe our feedstock is sufficient, what we need is to use new technology to encourage downstream activities for the petrochemical plant.

“We will develop the petrochemical hub in stages, we will not develop it like in Pengerang but with the will to invest, but we will provide the infrastructure in stages,” he said.

During the event, Abang Johari also presented the certificates of appreciation to six companies for achieving 10 million safe manhours without lost time injury incident on Jan 27 at the Sarawak methanol project.

The six companies were Samsung Engineering Malaysia, China Communications Construction Company (M) Sdn Bhd, Rahabco Engineering and Construction Sdn Bhd, See Energy Sdn Bhd, Syarikat Caya Daya Sdn Bhd and WZS Misi Setia Sdn Bhd.

Among those present were Minister of Utility and Telecommunication Datuk Julaihi Narawi, Minister in the Premier’s Department Datuk John Sikie Tayai, Deputy Minister of Infrastructure and Port Development Dato Majang Renggi, Sarawak Petchem Sdn Bhd chairman Tan Sri Datuk Amar Abdul Aziz Dato Husain,  Deputy State Secretary (Economic and Development Planning) Datu Dr Muhammad Abdullah Zaidel, Murum assemblyman Kennedy Chukpai Ugon, Jepak assemblyman Datuk Talib Zulpilip, Tanjong Batu assemblyman Johnny Pang and Bintulu Resident Nyurak Keti.

Source: The Borneo Post

Abg Jo: Sarawak on schedule to produce methanol by January 2024


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The government has decided to initiate an anti-dumping duty investigation on imports of cold-rolled products of alloy or non-alloy steel with a width less than 1,300mm (cold reduced), not clad, not plated, or not coated (in coil, sheet, strip, hoop or any other forms), originating or exported from Japan.

The Ministry of International Trade and Industry (Miti) said the move was taken after it received a petition from a domestic producer, Mycron Steel CRC Sdn Bhd, on January 1, 2023, which alleged that imports of the subject merchandise originating or exported from Japan were sold at a price much lower than their domestic selling price in Japan (dumped price).

“The petitioner further claimed that dumped imports of the subject merchandise from Japan have increased in terms of absolute quantity and have caused material injuries to the petitioner,” it said in a statement today.

Miti said, on the investigation requested by Mycron Steel CRC, the government had evaluated and considered the information and evidence of dumping, injury, and causal link set out in the petition, and decided to initiate the anti-dumping duty investigation, pursuant to section 20 of the Countervailing and Anti-Dumping Duties Act 1993 (the Act) and regulation 2 of the Countervailing and Anti-Dumping Duties Regulations 1994.

“In accordance with the Act and the Regulations, a preliminary determination will be made within 120 days from the date of initiation.

“If the preliminary determination is affirmative, the government will impose a provisional anti-dumping duty at the rate that is necessary to prevent further injury to the domestic industry,” it said.

Miti will distribute a set of questionnaires and relevant documents to interested parties such as domestic producers, foreign exporters/producers of the subject merchandise in Japan, importers, as well as the government of Japan.

Other interested parties who wish to participate in the anti-dumping duty investigation may request for the questionnaires in writing to Miti no later than February 15, 2023.

“Interested parties may also provide their views in writing, questionnaire responses and additional supporting evidence to Miti by March 2, 2023,” it added.

Source: Bernama

MITI initiates anti-dumping duty probe on cold-rolled products of alloy from Japan


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Malaysia Steel Works (KL) Bhd (Masteel) has invested some RM60 million in various carbon reduction initiatives, earning itself the first ‘ultra-low carbon emission’ integrated steel mill in Malaysia with its inclusion in the FTSE4GOOD Bursa Malaysia Index last month.

In a statement on Tuesday (Jan 31) Masteel said it earned three out of four stars in the Environmental, Social and Governance (ESG) Ratings among public listed companies (PLCs) in FBM EMAS, placing it within the top 26%-50% of PLCs assessed by FTSE Russell.  

The integrated steel manufacturer said it had decreased its overall greenhouse gas emissions by a significant 47% from the baseline year of 2017 to 2021, primarily attributable to the reduction in Scope 1 emissions from the steel making process due to the transition to new steel making technologies starting in 2018.     

The new facilities also reduce energy inputs required from natural gas and oxygen.

Masteel had completed the construction of a curtain wall of its reheating furnace which resulted in further decrease in usage of natural gas.  

“This has already yielded positive results, with estimated reduction in natural gas usage of more than 9 Sm3/mt and a reduction of oxygen of more than 7 Nm3/mt2. These improvements also serve to reduce mill downtime,” it added.

Masteel managing director and chief executive officer Datuk Seri Tai Hean Leng said the group aims to reduce emissions by a further 10% by 2026, and 15% by 2031.  

“At the same time, we will also expand our emissions monitoring systems from Scopes 1 and 2 currently to include Scope 3, to implement incremental step ups in a systematic and sustainable manner.

“We have invested approximately RM60.66 million across various carbon-reduction initiatives in our operations towards our goal of reducing total CO2 (carbon dioxide) emissions by approximately 7,300 tonnes.”

Source: The Edge Markets

Masteel invests some RM60m in capex to become first ultra-low carbon emission integrated mill


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Only 15km away from Bandar Malaysia, the 686-acre MRANTI Park has no lack of suitors keen on setting up their business at Malaysia’s premier technology park.

However, the Malaysian Research Accelerator for Technology and Innovation (MRANTI) is curating its tenant profile, ensuring that the community it builds will benefit from another to accelerate the commercialisation of technology and innovation.

MRANTI CEO Dzuleira Abu Bakar said the Park will be the centre of activity for collaboration, serving as a springboard for new ideas and creative solutions that can be accelerated for commercialisation.

“It is where researchers, creators and innovators are brought together to nurture ideas into industry-changing products and services. We are not just the landlord of a very prime piece of land. We want to streamline the right tenants to bring to life the concept of co-location”.

“It is important to provide an innovation-centric location with a strong infrastructure through an integrated co-location concept. MRANTI Park will be a meeting point for innovators, researchers and investors. Thus, it can bring together key stakeholders and strengthen the Science, Technology and Innovation (STI) ecosystem. The combination of these factors can attract foreign and domestic direct investment that is needed to improve the STI ecosystem and at the same time develop the national economy,” Dzuleira said.

Optimising Return on Ideas

MRANTI, a technology commercialisation accelerator borne from the strategic convergence of Technology Park Malaysia and Malaysian Global Innovation and Creativity Centre (MaGIC), is intended to catapult Malaysia towards becoming a high-tech nation and an innovation-driven economy.

“Our focus now is to build a complete innovation ecosystem, to overcome the issue of low commercialisation rate, strengthening core technologies and development of local talents,” said Dzuleira.

In short, she said MRANTI aims to fast-track innovators and optimise Malaysia’s return on ideas.

“This means we need to accelerate the creation, development, and commercialization of technology and innovation to ramp up our innovation output. Our goal is to put Malaysia on the top 20 list of the most innovative countries in the world by 2030. This will create more jobs for Malaysians and bring about higher incomes and better livelihoods for them,” she said.

Dzuleira added that by building a pipeline encompassing the entire value chain, from start-ups in incubation to high-growth technology companies, Malaysia can strengthen and unlock greater value in its technology and innovation ecosystem, and increase income generation, job creation, and export earnings while putting our economy on the path of recovery.

MRANTI Park Masterplan

To achieve this, MRANTI has launched the MRANTI Park Masterplan in October 2022 to nurture Malaysia’s capabilities in 4IR (The Fourth Industrial Revolution) and rapidly developing technologies from IoT (Internet of Things) systems, end-to-end intellectual property (IP) services and laboratories to contract manufacturing facilities with advanced technology.

Under this masterplan, MRANTI is targeting a Gross Development Value (GDV) of RM 20 billion, with returns from land leases valued at RM 2.8 billion. It is also expected to create 8,000 job opportunities from various technology clusters within the Park itself.

The rejuvenated technology park, powered by ‘impact technology’ is positioned to attract young professionals, as well as create a stable funnel for highly skilled talent. Modem infrastructure, including high-speed broadband and 5G technology; universities or research-intensive institutions; as well as incentives and funding opportunities are some of its salient features.

With a development area 10 times bigger than Kuala Lumpur Sentral, MRANTI Park is the first and currently only 5G infrastructure enabled innovation park in Malaysia to support AI related activities and development. Its secure and confined environment is purpose designed for sandbox environments and live testing of UAV (unmanned aerial vehicle).

The Park offers facilities which enable everything from ideation to prototype to commercialised product. In terms of 5G connectivity, the Park has inked MoUs with Huawei, Digital Nasional Berhad, Ericsson, Telekom Malaysia and Tenaga Nasional Berhad. The community includes Novozymes Malaysia, Securemetric Technology, Plus Xnergy Services, Sartorius Stedim Malaysia, Terra Drone Malaysia, MIT Innovation and ACGT. The Park also houses the Asia Pacific University of Technology and Innovation. David Hagerbro, Head of Ericsson Malaysia, Sri Lanka and Bangladesh, said MRANTI provides an environment with access to world-class integrated infrastructure, programmes, services, facilities and a suite of resources that can nurture the 5G ecosystem.

“Our initiatives with MRANTI are exciting because they will contribute to developing the 5G ecosystem in Malaysia. Together with MRANTI, Ericsson is leveraging its experience and technology leadership to accelerate the development of use cases to increase the uptake of 5G, as well as to support local start-ups and technopreneurs on 5G development and readiness. Ericsson will also be participating in a 5G knowledge building program through activities such as presentations and seminars,” he said.

To date, MRANTI Park has attracted the interest of many technology companies, including Intervenn Biosciences, Dedikasi Aba Biosciences, BoomGrow, Spygene Laboratories, Vivantis Technologies and Reszon Diagnostics. Several international technology companies have started serious discussions with MRANTI to establish a foothold at the Park.

While MRANTI Park is in a prime location coveted by many, Dzuleira reiterated that it is not real estate play.

“We are not any ordinary landlord. We want to develop a human-centric tech ecosystem which is designed beyond the ordinary. We aspire to nurture a fun, safe and well-connected community within the Park,” she said.

Proponents of ESG

It is common to associate modernity with a concrete jungle and shiny metallic machines, and that is the perception most people have of a technology park and advanced innovations.

MRANTI Park seeks to dispel this myth, as it is committed to be developed in accordance with the principles laid out by the United Nations for Sustainable Development Goals (SDGs) as well as the Environmental, Social and Governance (ESG) framework.

The park intends to serve as a viable innovation centre and technology hub based on sustainable and clean concepts and act as an inspiration and a catalyst for market-driven innovation through smart partnerships and ecosystems.

This integrated park and its open space will harmonize biodiversity between human activities and the existing unique species such as smooth-coated otters, wild boars and migratory birds. Overall, it will be a new lifestyle design for a sustainable, vibrant and inclusive working environment.

“The new provision of infrastructure and utilities with an estimated construction cost of RM500 million will oversee development based on SDG/ESG pillars and reflect global sustainable development principles. The plan will facilitate application of the cluster approach to synergise the multi-segment of tech & innovation.”

“This is in line with our country’s aspiration to become a carbon-neutral and zero Greenhouse Gas emission country by 2050, preserve natural forests and implement nature-based solutions to reduce the long-term impact on the environment including planting 100 million trees by 2025,” said Dzuleira.

Progressive Culture

She is also a strong proponent of equal gender opportunities in the workplace, and calls for more women to get involved in the male-dominated tech industry.

“At MRANTI, we have equally nurtured a growing number of female-led start-ups such as BoomGrow, Data 8, Rich Trees Consultancy, HTM Hengtech, Arteca, Three Little Ahmads, EZplast Solution, Medieva, Gula Cakery, Optimist Technology, Zelikha Holdings, Read Genius, Dunita International, infinitech Solution, Pelangi Network and Cordoba Leadership Centre,” she said.

She cited a survey by TrustRadius, where women are outnumbered three to one in tech; around one in four leadership roles at large tech companies are held by women; women in tech earn 94.6 cents for every dollar earned by a man with the same role or experience; and women tend to work in lower-level, lower-paid positions and progress in their careers less quickly than men.

“The need for more women in STI goes beyond issues of fairness and ethics. The United Nations (UN) acknowledges that equal access to and participation in STI for women is imperative for the achievement of development goals,” she said.

BoomGrow CEO Dr Jay Desan said MRANTI Park will always be the organisation’s “ground zero for innovation and creativity”.

“Being in MRANTI Park has allowed us to build many connections within the industry. What’s exciting for us next is introducing a more robust R&D facility, new farms and also several new products to the market. Beyond this, the events and seminars hosted by the MRANTI team have enabled us to reach a wider audience and translated into brand awareness,” she said.

“We can’t wait to see more neighbours joining us and creating a community of innovators that lift each other up!” she added.

Source: The Edge Markets

MRANTI Park Invites Investors and Innovators


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Sarawak may export hydropower to Singapore via submarine cables linking Kuching and the island republic.

The proposed project has been actively pursued after Singapore expressed its keen interest to buy hydropower energy from Sarawak.

“Now we (Sarawak and Singapore authorities) are in the negotiation process and in early preparation on the deal.

“The first step is to carry out the undersea cable project’s survey for the next 10 months,” according to Sarawak Deputy Minister for Energy and Environmental Sustainability Dr Hazland Abang Hipni.

From the findings of the survey, he said both parties will further hold talks on the project which was discussed again during his meeting with Singapore Energy Market Authority (EMA) chief executive Ngiam Shih Chun here recently.

In April 2022, Sarawak Premier Tan Sri Abang Johari Tun Openg met with Singapore Trade and Industry Minister Gan Kim Yong and EMA officials on Sarawak-Singapore collaboration on renewable energy and hydrogen economy.

According to a media report later, state-owned Sarawak Energy Bhd (SEB) is part of a consortium with Sembcorp Industries (Singapore’s leading energy and urban development player) and SP Group ( a leading utilities group in Asia-Pacific) to conduct a feasibility study to explore the potential of power connections between Sarawak and Singapore.

Hazland said Singapore requires more energy supply for its industries and companies and Sarawak via SEB,could provide the republic island with green and renewable energy generated by its major hydroelectric dams.

SEB owns the 2,400 megawatts (MW) Bakun dam, 944MW Murum dam and 108MW Batang Ai dam.

The 1,285MW Baleh dam, which is currently under construction, is expected to be commissioned by 2027.

The Bakun, Murum and Baleh dams are all located in the upper Rajang Basin in Kapit Division in central Sarawak.

Hazland said with the coming on stream of Baleh dam and other future energy projects, SEB is expected to raise its installed capacity to at least 8,000MW in the next six to seven years from the current about 5,800MW.

Sarawak has the potential to generate 20,000MW of hydropower if more dams are built.

Under a heads of agreement inked between SEB and Tenaga Nasional Bhd (TNB) in 2008, two submarine cables would be laid to connect Peninsular Malaysia and Sarawak for the export of Bakun hydropower to TNB.

The construction of the two submarine cables, which were supposed to be ready by 2016 and 2017 and each capable of transmitting 800MW, was however scrapped due to the project’s high development cost.

Bakun dam, which was then held by Federal government-owned Sarawak Hidro Sdn Bhd, was acquired by SEB in 2017.

The Bakun power has been supplied to energy-intensive industries like aluminium and ferroalloy smelting plants in Samalaju Industrial Park, Bintulu set up under Sarawak Corridor of Renewable Energy.

Gan has said recently that Singapore plans to further reduce the carbon footprint of its power sector by importing about 30% of its electricity from low-carbon sources such as renewable energy plants by 2035.

This move he added will allow Singapore which lacks access to most renewable energy options other than solar to tap sources such as hydropower and wind energy in other countries.

Gan described the discussion to buy green energy from Sarawak as an important project for Singapore to help decarbonise the island’s power system and in line with the global world’s commitment to zero-carbon emissions.

Saying that selling energy to Singapore will bring huge benefits to Sarawak, Hazland said Sarawak’s plan to export electricity to Singapore is also in line with its big plan to connect countries through the Asean Grid.

Under the Borneo Grid, SEB has been exporting electricity to west Kalimantan, Indonesia since 2016, and it is expected to sell electricity to Sabah by 2024 when its northern grid extension project is completed.

A power exchange and interconnection agreement signed between Syarikat Sesco Bhd (wholly-owned by SEB) and Sabah Electricty Sdn Bhd in 2021 will pave the way for an initial export of 30MW for 15 years via a 31kms 275 kilovolts double circuit transmission line which will run from Lawas (Sarawak) to Mengalong (Sabah).

SEB also plans to export electricity to oil-rich Brunei Darussalam.

Source: The Star

Sarawak set to export hydropower to Singapore


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The development of the halal industry, especially involving food, is one of the new areas of collaboration that can be explored between Malaysia and Brunei in the post-pandemic era.

Foreign Minister Datuk Seri Dr Zambry Abdul Kadir said Malaysia and Brunei’s joint investment efforts in the development of the halal industry, especially in the production of halal food, will open a new chapter in terms of quality and certification of the halal industry that can have a mutually beneficial impact.

“(The standards set by) Malaysia and Brunei are among those which are renowned in terms of food quality and determination of halal food products, and (moving forward) we can both explore the halal industry even further,” he said to reporters here today.

He added that during Prime Minister Datuk Seri Anwar Ibrahim’s two-day official visit to Brunei which began today, the Malaysian Investment Development Authority and the Brunei Investment Agency will be signing a Memorandum of Understanding involving several major economic areas, aside from the halal food industry.

The areas include digital economy, oil and gas, artificial intelligence, smart farming and tourism.

“This is a significant joint understanding in terms of business relationships via the agencies involved.

“The Ministry of International Trade and Industry and other investment agencies will have plans to ensure that both parties can cooperate steadily and explore new business aspects that will drive economic growth,“ he said.

Meanwhile, Zambry said that there are various potentials for both nations to enhance trade relations as import and export activities are improving and showing better growth.

He added that during a meeting between the Sultan of Brunei, Sultan Hassanal Bolkiah and the Prime Minister on Nov 28, 2022, the parties had discussed several issues, including ways to enhance trade relations.

He noted that there had been significant changes in the supply chain in the post-pandemic era, and this was adversely aggravated by the Russia-Ukraine war.

“The idea of globalisation was also challenged, with demand being unfulfilled. However, regional cooperations pose new potentials, and in this case, ASEAN can play a major role to ensure that supply is unaffected.

“The movement of goods and services can be done within the ASEAN region more easily, so there is no need to rely on sources that are too far away.

“Cooperation at the ASEAN level will give us advantages, so I believe that Malaysia and Brunei will see that the regional cooperation will give added value and help to address economic gaps,” said Zambry.

He added that following the reopening of the economic sectors post-pandemic, the Malaysia-Brunei trade relations recorded a positive performance with a trade volume of more than RM10 billion, thus boosting confidence for the exploration of cooperation in many new areas.

Last year, Brunei was Malaysia’s 26th biggest trade partner and its sixth in ASEAN, with total trade at RM13.22 billion.

From January-December 2022, Malaysia’s exports to Brunei increased by 33.3 per cent year-on-year to RM7.4 billion, while imports from Brunei stood at RM5.82 billion, an increase of 154.8 per cent compared to the previous year. 

Source: Bernama

Halal industry among collaboration avenues to be explored by Malaysia, Brunei


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SEDC Energy Sdn Bhd will invest in a manufacturing plant in Bintawa Industrial Estate here for the mass production of electrolysers by next year.

The wholly-owned subsidiary of Sarawak Economic Development Corp (SEDC) is currently working together with Petroliam Nasional Bhd (PETRONAS) to produce electrolysers using technology that has been developed by the national oil company, according to SEDC chairman Tan Sri Abdul Aziz Hussain.

An electrolyser is an apparatus which separates hydrogen and oxygen molecules from water using electricity. Via the electrolysis process, the electrolyser system creates hydrogen gas.

In July 2022, SEDC Energy signed a supply arrangement on hydrogen production technology with PETRONAS Technology Ventures Sdn Bhd to expand the application of green hydrogen technologies in Sarawak.

The arrangement covers the supply and operation of PETRONAS’ proprietary Proton Exchange Membrane electrolyser for the production of green hydrogen that would be delivered to Petroleum Sarawak Bhd or Petros’ three-in-one multi-refuelling stations in Darul Hana and Batu Kawa here which were built by SEDC Energy.

These refuelling stations offer conventional fuel, electric charging and hydrogen refuelling for vehicles. Similar refuelling stations have also been planned in other major towns in Sarawak.

Abdul Aziz said besides producing electrolysers to meet the demand in Sarawak, SEDC Energy is looking into supplying electrolysers to other countries, including those which have requested Sarawak to produce for them.

“We need to produce hydrogen because it is possible that the automated rapid transit (ART) that will be operating next year will require about two tonnes of hydrogen per day and we need to ramp up to five tonnes per day,” he added after witnessing the delivery of several units of Toyota Mirai, a hydrogen fuel cell vehicle, at Menara Pilita here last week.

Sarawak Premier Tan Sri Abang Johari Tun Openg received one unit of Toyota Mirai while Sarawak Energy Bhd got four units.

Johari said the mass production of electrolysers will help to reduce the cost of producing hydrogen, which is currently quite expensive, in the next five to 10 years.

According to the premier, the high-tech Toyota Mirai can travel 1,000kms on a single “tank” of hydrogen, which is the distance between Kuching (in southern Sarawak) and Limbang (Northern Sarawak), and only needs three to four minutes to be refuelled.

Another SEDC’s wholly-owned subsidiary, Sarawak Metro Sdn Bhd, has been tasked by the Sarawak government to implement the RM6bil Kuching Urban Transport System (KUTS) project.

Under KUTS ART phase one, covering 69.9kms, it will involve the construction and operation of three lines (the Blue, Red and Green Line) and 31 stations in the Kuching and Samarahan divisions.

The ART vehicle is a hybrid vehicle – a cross between a train, bus and tram – powered by hydrogen fuel cells, and uses rubber tyres and runs on virtual tracks on dedicated lanes. The ART will have three coaches, and each can accommodate 100 passengers.

According to KUTS project director Zafrin Zakaria, SEDC Energy will construct and operate a hydrogen production plant next to the ART and feeder bus depot in Rembus.

The Rembus depot on 33ha is scheduled to begin operations in the second half of 2025, which coincides with the opening of stage one of ART passenger service for the Blue Lane.

Abdul Aziz said there was a need to further develop and improve the technology for electrolysers in the coming years. “Hopefully, we will be able to have a larger plant for mass production of hydrogen in Bintulu later.”

In September 2022, SEDC Energy inked a memorandum of understanding with South Korean companies – Samsung Engineering, Lotte Chemical and Posco Holdings – to build a large-scale green hydrogen plant (H2biscus project) in the petrochemical hub, Tanjung Kidurong in Bintulu.

The plant is expected to produce 220,000 tonnes of green hydrogen, 630,000 tonnes of green ammonia and 600,000 tonnes of blue ammonia per year.

Source: The Star

SEDC Energy to mass produce electrolysers


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International Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz yesterday held a meeting with AstraZeneca chairman Leif Johansson to discuss the potential of the leading pharmaceutical company expanding its operations in Malaysia.

The minister, who is currently attending the World Economic Forum (WEF) annual meeting in Davos, Switzerland, said AstraZeneca has established its global business services hub in Malaysia to support operations in the Asia-Pacific region with a projected investment of over RM500 million over a five-year period.

“The pharmaceutical sector is one of the focus areas of the Ministry of International Trade and Industry (Miti) given its significant economic potential and sustainable long-term benefits,” he said in a post on Instagram.

Tengku Zafrul said AstraZeneca, which gained popularity as a vaccine manufacturer following the outbreak of Covid-19, opened its new headquarters in Malaysia in March 2019 as part of its ongoing commitment to boost high-value skills and employment and bring new science and innovation to help patients.

“Miti will always facilitate quality investments which are capable of creating high-income jobs to improve the standard of living of Malaysians,” he said.

Earlier, Tengku Zafrul said Miti’s mission at the WEF annual meeting was not only to attract investment to Malaysia but also to explore business opportunities for local companies internationally.

The 53rd WEF annual meeting from Jan 16 to Jan 20 brought together 2,700 leaders from 130 countries, including 52 heads of state, at the ski resort town of Davos in the eastern Alps region of Switzerland.

This year’s WEF, with the theme “Cooperation in a Fragmented World: Addressing Pressing Crises, Tackling Future Challenges”, was organised amid multiple crises that deepened divisions and fragmented the geopolitical landscape.

Source: Bernama

Tengku Zafrul meets AstraZeneca chairman to discuss potential expansion in Malaysia


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A unique characteristic of oil is that it never loses its properties. Used engine oil, for instance, can be transformed into fuel oil to power boilers in factories.

The flip side of this quality is that when used oil is dumped, it becomes a dangerous pollutant that does not go away. The 2019 Kim Kim River pollution incident, which affected over 6,000 people, was due to the illegal dumping of marine oil. Waste oil is considered a scheduled waste and requires proper disposal.

“There was an incident once where someone dumped collected waste oil into the sewage system. Sewage has gas, so this one now has oil on top of it. There’s the potential for the whole thing to blow up. Can you imagine that gory scenario? We were called to provide a solution to this,” says Oon Kin Seng, group executive director of Pentas Flora Sdn Bhd, a company that specialises in hazardous waste management.

Pentas Flora, which is a member of the Exsim group of companies, was founded in 2007. One of its main services is collecting used engine oil and other related substances from waste generators such as motor vehicle service centres. It then treats the waste oil and turns it into fuel and base oil for the premix, food, laundry and lubricant blending industries.

Many of these industries consume huge amounts of energy for heating. Instead of using virgin oil or fossil fuels like natural gas, they use the re-refined oil produced by Pentas Flora.

“The road builders, for instance, need to heat bitumen to liquefy it. They put it in boilers, which need to be heated up. That’s where my oil comes in. The same thing [goes] for laundry facilities that need energy to heat big vats of hot water,” says Oon.

“This could have a lower carbon footprint. Why? Because it is recycled fuel. Diesel (which many industries use) is virgin oil that is mined and extracted. Oil never loses its properties. You must know how to segregate the dirty oil and eliminate the metal shavings, moisture and dirty stuff to get oil, which is then mixed through our formulas to become fuel oil.”

Oon has not yet calculated how much emissions can be reduced by companies using re-refined oil. However, he emphasises that the appeal for their clients is more than just lowering emissions. It is to save money.

“If you use fresh oil from the ground, it’s more expensive than what we have. I am taking away the oil that, in the old days, would be dumped into the longkang [drain]. But today, there’s money in this longkang oil,” says Oon.

Many industries now use diesel or natural gas to generate energy for heating processes. But the prices of these resources are high, especially after the Russian invasion of Ukraine last year. The most competitive re-refined oil products by Pentas Flora could be almost 40 times cheaper, according to Oon.

The demand for recycled oil has increased over the years due to the focus on sustainability, he acknowledges. “I would say in the last 10 years, the awareness and desire to do more [on sustainability] have gained traction. It helps when we go to companies and tell them about this. But at the end of the day, it’s still about ringgit and sen for a lot of them.”

Different re-refined oil products by Pentas Flora

Investment in quality

Pentas Flora also handles scheduled waste from other industries, including glove and shipping companies. It can deal with maritime waste, whether it is de-slopping or desludging.

All the waste oil that is collected goes to its plant in Banting, Selangor, for treatment. There is a fully accredited lab on site to test the waste and fuel oil that enter and exit the plant.

“Eight years ago, we put in around RM5 million to invest in the lab. In the waste management business, we are the only ones who have invested in a lab. Why? Because we want to make sure that the waste oil that we buy has more dirty oil than water or chemicals,” says Oon.

The end product is also tested before it is sold to customers for quality assurance. “We have a certificate of analysis that tells [clients] what is in the product.”

The focus on quality, however, also means its cost may be higher than its competitors who do not have the same standards. According to Oon, the company invested over RM100 million in the machines to treat the waste oil, blend it according to the customers’ needs and certify that the end product is authentic through lab tests.

“It’s all a question of money. Some people just put a piece of cloth over a drum and pour the dirty oil over the cloth. Then they remove the stuff above and process the oil,” says Oon. The quality of this “recycled” oil is untested, he adds, and in the long run, using this kind of oil could damage factory equipment.

Pentas Flora is determined to do things the right way, Oon emphasises. This includes using its own tanker trucks to collect dirty oil from waste generators, which is required by law.

Irresponsible waste management operators that do not adhere to these rules or standards can offer more competitive rates to buy waste oil. This is a challenge for Pentas Flora.

“We put our money where our mouth is. If [our product] doesn’t work, we will send you a replacement. If we don’t have enough oil, we even send them diesel. The brand promise that we have is very important,” says Oon.

Another challenge that the company is juggling with is the cost of running the plant. Treating the waste oil requires huge amounts of energy. At first, the company used its own re-refined oil to do so.

“But five years ago, we found out that it made more financial sense for me to sell off the recovered fuel oil than to burn it myself,” says Oon. The company then began using natural gas to power its processes. But the high gas prices are a problem.

“We are now looking at the efficiency of the machines. While I like to be ESG compliant [and use my own recovered fuel oil], I need to balance my costs. Do I want to spend so much on gas? No, but I’ve got long-term clients and not enough oil to supply them,” he says.

To prevent further instances of illegal waste oil dumping, Oon regularly engages with the Department of Environment. One way of identifying players that are not properly treating the waste oil is by looking at their electricity bills, because the process requires huge amounts of energy, he says. It is one of his suggestions to help the authorities catch bad players.

He is also eager to expand the company’s capabilities to manage other types of hazardous waste, namely electronic waste, batteries and clinical waste.

“People are talking about clean energy. That requires batteries. But where does it go [after it is used]? It needs to be stripped down. There is mercury, silver and acidic water inside,” he says.

As the amount of waste continues to increase alongside rising awareness about the value of recycling waste, waste management operators have a lot of work to do.

“Essentially, if you are concerned about this planet, somebody has got to do this. Waste management is not a cheap business,” he says.

Source : The Edge Markets

Circular Economy: Offering an alternative to fossil fuels


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Malaysia’s automotive total industry volume (TIV) hit a record high of 720,658 units in 2022, breaking the previous record of 666,598 units set in 2015.

RHB Investment Bank Bhd said the total production volume (TPV) also rose to a record high of 702,000 units.

“The strong numbers were driven by pent-up demand, new launches, the sales and service tax (SST) exemption which prompted customers to rush to place orders, improved production and recovering supply chains.

“The 2022-high TIV of 77,000 in December brought the total TIV for the year to 720,658 units, an increase of 42 per cent year-on-year (y-o-y), breaking the previous record set in 2015,” it said in a research note today.

The investment bank also said that the TIV in 2022 was also higher than their forecast of 700,000 and Malaysian Automotive Association’s (MAA) 630,000 estimate.

“As for this year, we expect earnings to decline from a high base due to softening sales and as forward valuations are at or above historical averages.

“Downside risks consist of persistent macroeconomic headwinds that may further soften orders, higher-than-expected interest rates, and a resurgence in supply chain constraints. Upside risks include stronger-than-expected orders and favourable foreign exchange movements,” it said.

Meanwhile, MIDF Amanah Investment Bank Bhd said that 2022’s record TIV was largely driven by Perodua, which registered its highest-ever TIV of 282,029 units (+48 per cent y-o-y).

“As for other key brands, their performance was still relatively strong in 2022, albeit not exactly ahead of their all-time highs.

“We expect this year’s TIV to remain elevated at 678,000 units and do not rule out the possibility of TIV re-testing the last record, given the large backlog orders and still strong new booking momentum,“ it added.

Source : Bernama

Malaysia’s 2022 TIV hits record high, surpasses 2015


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Intel Corp, the US-based chip maker has reiterated his commitment with investment of more than RM30 billion to expand its operations in Penang and Kulim, Kedah.

“This investment is expected to create more than 4,000 jobs at Intel and also over 5,000 jobs in the construction sector,” said Minister of International Trade and Industry Tengku Datuk Seri Zafrul Aziz.

“I welcome the commitment by Intel and such cooperation will be continued with other companies in an effort to increase investments in Malaysia,” he said after a meeting with Intel chief global operation officer Kevyan Esfarjani, here on Wednesday.

Intel is the world’s largest semiconductor producer and was among the pioneers in the electrical and electronics industry in Malaysia, which began operations in 1972.

In 2021, Intel announced the investment to build a new chip-packaging and testing factory in Malaysia, which is expected to begin production in 2024.

The minister also had a meeting with P&G president for Asia Pacific, Middle East and Africa, Suranjan Magesvaran, and P&G Asia Pacific, Middle East and Africa, vice-president, global government relations and public policy, Cecilia Tan.

“P&G is also making a commitment to invest more in Malaysia. We also discussed opportunities in Malaysia,” he said.

There is also another big investor that is coming into Malaysia in the logistics sector.

“I will be meeting them. So, it has been a productive day,” he said, adding that he would also be meeting a number of his counterparts from the region.

Tengku Zafrul also has bilateral meetings with New Zealand’s Minister of Trade and Export Growth Damien O’Connor and Port of Antwerp-Bruges chief executive officer Jacques Vandermeiren.

Earlier in the day, he was in a closed door session on Global Trade: Navigating the Post Pandemic Supply Chain Challenge. 

Source: Bernama

Intel reiterates investment commitment in Malaysia


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Improving investment environment and prudent management are giving an optimistic outlook for state-owned POIC Sabah which has been recently rebranded as a logistics hub for ports services, investment destination and palm oil downstream activities.

Based on the 2023 budget and business plan approved by the Board of Directors last December, POIC Sabah Sdn Bhd is projected to turn into a profit-making government-linked company (GLC) in 2023.

It has started paying back its loan to the Sabah State government with the first repayment of RM2 million.

This was revealed to Chief Minister Datuk Seri Panglima Haji Hajiji Noor during a courtesy call by the chairman of POIC Sabah Sdn Bhd (developer of POIC Lahad Datu), Datuk Seri Panglima Yong Teck Lee and its Chief Executive Officer Datuk Fredian Gan on Wednesday.

During the courtesy call, Hajiji received on behalf of the State government a cheque for RM2 million being part payment of a state loan towards the development and operations of the industrial park.

Gan who took over the reins of the company less than two years ago, said the maturing company and positive investment environment will be key to POIC Sabah fulfilling its various obligations.

He added that while he shared the view that government-linked corporations should be profit oriented, POIC Sabah’s role in promoting industrialisation in Sabah requires longer gestation and capital input for requisite infrastructure.

POIC Lahad Datu has expanded into logistics by leveraging on its integrated port facilities located in proximity to the resource-rich BIMP-EAGA territories.

This has attracted the interest of a major port group in China who sees POIC Lahad Datu as a gateway to a BIMP-EAGA with a market of 90 million people.

Northport Malaysia, based in Klang, Selangor also sees POIC Lahad Datu as a strategic port to the Southern Philippines and Kalimantan as well as the large market for halal products across BIMP-EAGA.

Source: The Borneo Post

POIC Lahad Datu sees bright days ahead


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Capital A Bhd’s engineering arm, Asia Digital Engineering (ADE), has opened the doors to its new maintenance, repair and overhaul (MRO) hangar facility in Senai, Johor Bahru.

In a statement today, Capital A said this further strengthened its mission of delivering MRO services with high efficiency across an extensive coverage of locations.

Capital A chief executive officer Tan Sri Tony Fernandes said the company owe a large part of AirAsia to the maintenance and high efficiency of ADE, and in turn, guarantees its fleet of work to ADE, which allows it to reduce costs for airlines, thus lowering fares for customers.

“Moreover, due to Capital A’s digital ecosystem with our investment into data, ADE has greatly benefited from using data science to increase efficiency, reliability and productivity.

“As a 21st-century engineering company driven by big data, we are sure ADE will put Johor and Malaysia firmly on the map as a world-leading MRO provider for AirAsia and other third-party airlines within the region,” he said.

The Crown Prince of Johor Tunku Ismail Ibni Sultan Ibrahim inaugurated today’s launch event.

The 5,000 sq m hangar, built on 43.46 hectares at Senai Airport’s Free Industrial Zone (SAFIZ), is the first MRO facility at the Senai International Airport Aviation Park and ADE’s third MRO facility.

With over 20 years of engineering experience servicing the world’s best low-cost airline AirAsia, ADE is extending its expertise and best practices in airline engineering with third-party airlines providing services including component support, line maintenance and base maintenance for various aircraft models, such as the Airbus A320 and A330 aircraft families with plans to grow their capacity to service other aircraft types in the future.

Capital A said ADE’s newest hangar facility is a well-aligned strategic partnership servicing AirAsia’s growing fleet of commercial aircraft and other third-party airlines.

The new facility leverages one of Malaysia’s most important development zones – the Crown Jewel of The South, Johor.

Following today’s announcement, ADE will have more excellent proximity to numerous economically bustling countries, which will further expand its presence and services in the MRO industry within the Asia Pacific region, and beyond, contributing vastly to the growth of Malaysia’s aviation industry. 

Source: NST

Capital A’s engineering arm opens MRO hangar facility in Johor


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OCIM Sdn Bhd, a leading company in the green energy and polysilicon manufacturing, plans to increase its investment in Sarawak, focusing on expanding its existing polysilicon manufacturing for the solar value chain, and new investment in polysilicon production for semiconductors..

This would be the first polysilicon for semiconductors to be commercially produced in Southeast Asia, it said.

“It will be a foundation for the front-end industry of semiconductors in Sarawak, which will attract companies of other related businesses such as fine chemicals, facilities, and maintenance.

“Ultimately, Sarawak will be a hub for the semiconductor and precision material industries and thereby secure a stable industrial base,” it said in a statement issued after the company’s courtesy visit to the Office of the Premier of Sarawak here, today.

OCIM said, in order to achieve commercial production in 2026, the company would be implementing its investment strategy now.

The investment is expected to create more than 1,000 job opportunities in Sarawak.

“We had established a research and development centre in Miri in cooperation with Curtin University to attract talent in Sarawak.

“The research institute will supply our business and the local community with top-notch human resources to support Sarawak’s sustainable growth,” it added.

Source: Bernama

OCIM plans to expand polysilicon business in Sarawak


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Dialog Group Bhd has allocated an additional investment of RM700 million for the development of services facilities in Pengerang, Kota Tinggi through Morimatsu Dialog (Malaysia) Sdn Bhd (MDMSB).

Johor Menteri Besar Datuk Onn Hafiz Ghazi said the development of the facilities would be carried out in three phases.

“Dialog’s contribution is very significant to Johor’s economy, especially through investments worth RM14 billion for the development of Pengerang Deepwater Terminal (PDT) from 2011 to 2021,” he said in a Facebook posting today.

Onn Hafiz said he is confident that such cooperation would not only provide more job opportunities but also increase the transfer of technology and knowledge to local companies and workers.

Meanwhile, he said the state government intended to continue strengthening the level of investment in Johor after an encouraging performance last year.

“Hopefully, Johor can always attract more quality investments that can contribute to the development of the state and improve the economic status of the people of Johor in the future,” he added.

Earlier, he received a visit from the top management of Dialog Group, which is one of the leading oil and gas and petrochemical services company.

Also present at the meeting were Dialog Group executive chairman Tan Sri Dr Ngau Boon Keat and independent director Datuk Ismail Karim.

Source: Bernama

Dialog Group allocates RM700 million additional investment in Pengerang


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More incentives to expedite the adoption of electric vehicles (EVs) in Malaysia are anticipated under the revised Budget 2023 that will be tabled on Feb 24.

This is given the “still sluggish” EV adoption domestically, said RHB Research in its latest report.

The research house said Budget 2023 would likely provide incentives to attract original equipment manufacturers to assemble their EVs locally, which in turn could incentivise them to sell domestically.

This will also further increase the EV options and units availability, it added.

RHB Research also anticipated a longer tax-free period for EV purchases which could help more buyers take advantage of the tax break, when more EVs enter the market.

Note that Budget 2023 under the previous government only extended the import and excise duty tax exemptions for completely built-up unit EVs by one year to end-2024 from end-2023, while the completely knocked-down EV tax exemption period remained at end-2025.

The research house said direct incentives for corporations to install EV chargers could help address the impediment to adoption.

Recently, Natural Resources, Environment and Climate Change Minister Nik Nazmi Nik Ahmad said there would be more EV-related incentives in the revised Budget 2023.

On the long wait for EVs, RHB Research pointed out that BYD’s new Atto 3 has received about 1,500 orders within a month of its launch.

“However, we believe that the demand for EVs in Malaysia is still soft,” it pointed out.

Currently, all existing popular EV models here such as the BMW iX, Hyundai IONIQ5, Kia EV6, Mazda MX-30 have available stocks.

Although more affordable brands such as Lingbox are set to enter the market, RHB Research said certain impediments to EV adoption were still present.

Firstly, many consumers find existing EVs too pricey, relative to internal combustion engine vehicles.

“This is mainly due to the high battery costs of about 30% to 40% of the EV, which are expected to remain elevated in 2023,” noted the research house.

Secondly, customers are not used to the long charging period from around 30 minutes to over eight hours compared with the short time spent refuelling at the petrol stations.

Having said that, the time used to charge an EV should gradually decrease with technological advancements.

Thirdly, insufficient charging infrastructure would make EV ownership challenging, said RHB Research.

Another important point is that auto companies currently are lacking visibility on the excise duty reform implementation slated for 2023.

The reform is deemed unpopular amid the current high cost of living environment.

“As the government has just come into power and strives to tackle the cost of living crisis, we think that implementing the excise duty reform may lead to a step back in achieving its objective,” the research house said.

The policy will likely lift car prices by 8% to 20%, according to the Malaysian Automotive Association.

RHB Research said: “While we expect a slew of strong fourth quarter 2022 earnings, we remain ‘neutral’ on the auto and auto parts sector.

“We expect 2023 car sales to soften from a high 2022 base due to the lack of sales and services tax exemption and higher car prices,” it added.

Furthermore, the auto-related companies’ valuations are at or above historical means and also, lack rerating catalysts.

The research house’s top picks are Bermaz Auto Bhd and Sime Darby Bhd for their sturdy dividend yields of 7% and 5% respectively.

“Both companies have the most EV offerings among companies under our coverage, positioning them to capture the growing EV adoption in Malaysia and in the region,” it pointed out.

For Sime Darby, given its significant operations in China, the stock is also an attractive China reopening play, said RHB Research.

The key downside risks include persistent macroeconomic headwinds that may further soften orders, higher-than-expected interest rates and a resurgence in supply chain constraints.

Source: The Star

More incentives for EVs


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Fitch Solutions Country Risk and Industry Research said the outlook for Malaysia’s long-term gas production remains positive in line with the start-up of offshore fields.

In a report last Friday (Jan 13), the firm said the long-term outlook for the share of liquefied natural gas (LNG) in Malaysia’s gas consumption mix points to an upside.

“Despite growing domestic demand for LNG, we anticipate Malaysia to maintain a high level of LNG exports in the near to medium term.

“We forecast Malaysia’s LNG imports to increase up to seven million tons per annum (mtpa) in 2030, with most of the incremental imports stemming from third-party LNG players,” it said.

Fitch Solutions said it anticipates upside risks to LNG supply due to a projected increase in LNG production capacity additions.

It said Malaysia’s LNG production is set to rise due to a combination of LNG production capacity additions and a potential increase in LNG production from the Bintulu plant.

The firm said floating LNG projects are literally changing Malaysia’s LNG landscape, because they are considered to be less capital-intensive and flexibile.

It said floating LNG vessels can be deployed to multiple gas fields, and monetise small stranded gas assets.

“The state-owned Petroliam Nasional Bhd (Petronas) and Sabah Oil & Gas Development Corp are going ahead with the third 2.0mtpa near-shore floating LNG project dubbed as ZLNG in Sabah, after they announced their final investment decision in December 2022.

“The ZLNG project, which is slated to come online by mid-2027, will raise Malaysia’s total LNG production capacity from 32mtpa in 2022 to 34mtpa in 2027.

“The outlook for Malaysia’s long-term gas production remains positive in line with the start-up of offshore fields,” it said.

Fitch Solutions said prospects for gas production in Malaysia are somewhat positive, as it expects Petronas to accelerate development of offshore gas fields intended for LNG production.

It said Petronas is developing the Kebabangan Phase 3 expansion project in Sabah, which is earmarked for LNG production from FLNG projects.

“We anticipate an uptick in LNG production from the Bintulu LNG plant, which would be fed by additional gas supplies of 550 million standard cubic feet per day from the Pegaga field.

“The Kasawari field, which is planned for development, will provide additional supply of feed gas for LNG production.

“Given the near-term upside to gas production from upstream projects, we expect to see a steady increase in gas supplies available for LNG production,” it said.

Source: The Edge Markets

Malaysia set for strong growth in two-way LNG trade, says Fitch Solutions


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Intel Malaysia has launched the Robotics for University (RoboFun) programme to help varsities build capabilities and ultimately emerge as the core technology and solutions provider for small and medium enterprises (SMEs) in the country.

The initiative is in collaboration with the Malaysian Investment Development Authority (MIDA), the Malaysia Productivity Corporation (MPC) and Scuttle Robotics.

Intel vice-president of network and edge group, and general manager of customer application support and enabling, Eric Chan said RoboFun aims to bridge the digital divide among the faculties and create a new generation of a workforce equipped with a higher appreciation of digital skills and artificial intelligence (AI) technologies, regardless of their training disciplines.

Autonomous mobile robots (AMR) system is one of the best applications to realise multiple advanced technologies’ integration from mobility, AI, control systems, operating systems (OS) and automation.

“We are also proud that it would serve as a catalyst for the ecosystems to do the same and create a vibrant pool of talents, industry players and adopters of the technology,” he said in a joint statement issued in conjunction with the programme launch here today.

MIDA chief executive officer Datuk Arham Abdul Rahman said Intel’s initiative on talent development via RoboFun’s comprehensive training module is an effective method to spur industry and academia knowledge sharing in developing an AMR system.

He said the solution and Industry 4.0-related technology created by local own university talents will encourage SMEs to optimise productivity as well as to enhance their capabilities.

“MIDA is looking forward to supporting the success of this programme which will ultimately improve local graduates’ marketability to meet the industry needs.

“MIDA will continue to work together synergistically with the industry and academia to support the development of the electrical and electronics ecosystem in Malaysia,” he said.

Meanwhile, MPC director-general Datuk Abdul Latif Abu Seman said the RoboFun programme will continue to increase the productivity and competitiveness of Malaysian industries and that this trend will continue in the foreseeable future.

He said that AMR would be a workable solution to the problem of growing labour expenses if only the price of automating processes could be brought down.

“MPC, in its capacity as the programme’s operational partner, will be in charge of administering the whole training process, with Intel and Scuttle Robotics providing all the necessary technical assistance,” he said.

Intel said that five public and private universities, namely Universiti Malaya, Universiti Sains Malaysia, Universiti Tunku Abdul Rahman, Universiti Putra Malaysia and Universiti Teknologi Petronas participated in the launch ceremony and received their AMR kits.

It said that the kits will be instrumental to establish the universities’ respective robotics laboratories and to empower students of all faculties to upskill their knowledge and adapt to AMR systems.

Source: Bernama

Intel Malaysia and partners launch RoboFun Programme


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Pentamaster Corp Bhd expects its supply of semiconductors testers to the electric vehicle (EV) business will drive the group’s growth this year.

Group executive chairman C.B. Chuah told StarBiz the group had a backlogged order of about RM500mil to deliver until the third quarter.

“About half of the orders for semiconductor testers come from the EV segment, which will generate about 40% of the group’s revenue, overtaking the smartphone business which is expected to contribute less than 15% this year,” he said.

Pentamaster manufactures semiconductor testers to check chips, sensors and power components used by the electronics, automotive and medical device industries.

According to the international research house Statista, the revenue of the EV segment will hit US$457.6bil (RM1.98 trillion) in 2023.

The EV market will grow at a compounded annual growth rate of 17% between 2023 and 2027, resulting in a market size of US$858bil (RM3.72 trillion) by 2027.

EV market’s unit sales are expected to reach 16.2 million vehicles in 2027.

Global smartphone shipments are estimated to reach 1.18 billion units in 2022, a 10.7% year-on-year (y-o-y) decrease compared to 1.32 billion units in 2021, according to Digitimes data.

“Digitimes forecast global smartphone shipment will increase slightly to 1.2 billion units in 2023, a y-o-y growth of 2.3%,” Chuah said.

He added that high inflation and the drop in purchasing power will cause the decline.

“Negative factors from 2022, like the high global inflation caused by the Russia-Ukraine war and a strong US dollar generated by the Fed’s aggressive rate increases, have resulted in a significant drop in purchasing power, especially among emerging markets.

“Their impact will still linger, limiting how much the smartphone market can bounce back. More major growth is likely only in 2024,” he added.

Chuah said Pentamaster would tender out the construction of its RM200mil plant this month.

“We are targeting the completion of the first phase in late 2023,” he said.

For the nine months of 2022, the group posted RM59.6mil in after-tax profit on RM453mil turnover compared to RM53mil profit on RM385mil turnover in the previous year’s corresponding period.

According to Chuah, the group is optimistic about concluding the financial year by achieving another record year of growth.

“During the financial period under review, except for the group’s electro-optical segment, all other industry segments witnessed encouraging growth, which has contributed positively to its automated test equipment and factory automation solutions segments.

“The group particularly finds the automotive and the medical devices segments having strong positive momentum heading towards next year, barring any significant deterioration in the global economic situation and geopolitical risk,” he said.

Underpinned by the rapid growth and intensifying trends in automotive electrification, the group’s automotive segment will be the central strategic pillar that will pilot performance and development in the mid to immediate term.

“Given the volatility and having learnt from the past, we will continue to leverage on our internal supply chain strategies to secure critical parts and long lead material items to smoothen its project delivery while delivering its orders on hand as scheduled,” he said.

Source: The Star

EV segment to drive Pentamaster growth


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Artroniq Bhd is venturing into the electric vehicle (EV) industry together with US-based Beno Inc.

The companies today signed a memorandum of agreement (MOA) to assemble Beno’s Reevo series of electric bicycle products in Malaysia.

“Artroniq will cooperate with Beno Inc, with the help of the latter’s technology and expertise in the field of electric vehicles, to fully enter the electric vehicle industry, starting with electric bicycles.

“The total value of this MOA is expected to exceed RM100 million by 2025 and create more than 100 job opportunities for Malaysian citizens,” Artroniq chief executive officer Kent Liaw Wei Gian said.

According to Liaw, the company targetef to assemble 2,000 units of e-bikes per month from March this year

For the first stage, he said Artroniq would take over the existing production plant to produce these e-bikes before exploring new locations to set up a new production plant.

“We plan to have a plant in Batu Kawan, Penang involving an investment of RM5 million,” he added.

Within the scope of the agreement, more than 95 per cent of e-bikes will be exported to the US and Europe.

Beno is a fast-rising company in the field of EVs, focusing on innovative two wheelers.

“They are well known as the creators of Reevo, the world’s first hubless e-bike with a growing market reach in the US and EU,” said Liaw.

This MOA marks the beginning of a partnership that Artroniq believes will be of great benefit to both organisations.

Under the terms of the agreement, Beno will grant Artroniq full assembly rights for the highly successful Reevo range and upcoming e-bike products for a period of two years.

Liaw said there was a huge opportunity in the electric bicycle market, with a compound annual growth rate of 10.5 per cent over the next seven years, and will reach US$40 billion by 2030.

“We believe that this partnership will not only be mutually beneficial but will also bring significant value to our customers and stakeholders,” he added.

Source: NST

Artroniq to assemble US-based Beno e-bikes in Malaysia


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The Ministry of International Trade and Industry (MITI) aimed to attract RM20 billion in investments in electric vehicle (EV) by 2025.

Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the ministry also targeted the investments to rise to RM40 billion by 2030.

“We need to look at the EV ecosystem and the supply chain as a whole and we will also discuss efforts to further strengthen the EV industry through further discussions with the task force,” he said after witnessing the memorandum of agreement (MoA) signing ceremony between Artroniq Bhd and United States (US)-based Beno Inc here today.

He said the EV industry must be viewed holistically, including factors such as software, technical, equipment, engineering and others.

Meanwhile, through the MoA, Artroniq obtains full installation rights for a range of electric bicycle products under the Reevo brand for a period of two years.

The deal is worth more than RM100 million by 2025 and will create more than 100 new job opportunities for Malaysians.

Artroniq chief executive officer Kent Liaw Way Gian said the MoA involved three phases — installation of electric bicycles for the US and European markets; distribution of Reevo products in the Southeast Asian market; and collaboration with Beno in the aspect of research and development of electric motors that would start in the second half of this year.

He said over 95 per cent of the electric bicycles produced by Beno were exported to the US and Europe.

“For the first phase, Artroniq has identified a facility located in Batu Kawan, Penang for the assembly process of the product and we have allocated RM5 million to set up the factory in addition to labor hiring,” he said.

He said the company is expected to produce about 2,000 units of electric bicycles per month, starting March this year, after receiving approval from the company’s shareholders through the annual general meeting to be held in February.

On prospects, he said the ACE Market-listed Artroniq is aiming for the manufacturing segment to contribute as much as 50 per cent to the company’s profits within two-year and reduce its dependence on the information and communication technology (ICT) segment, which is its main activity.

“In the future, we will separate the company’s activities into two, namely ICT and manufacturing, whereby the joint venture with Beno is categorised under the manufacturing branch,” he said.

Artroniq has been actively diversifying its business activities since last year when the company collaborated with Cambodia’s digital bank, Panda Commercial Bank PLC, to provide services and consulting in the research and development of blockchain-based financial services for the bank. 

Source: Bernama

MITI aims RM20 billion EV investments by 2025


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Barry Callebaut, the world’s leading manufacturer of high-quality chocolate and cocoa products supplying ingredients for about RM2 billion worth of consumer goods sales by Malaysia to 57 countries, is cautiously optimistic about company growth.

Managing director in Malaysia Robert Kotuszewki said it will continue to invest on its expansion based on the strong demand here and in the region.

“The market is growing. The average (annual) industrial growth is between two and four per cent and we have always been above that. We need to invest in order to grow,” he told reporters at the official opening of its Asia Pacific Business Excellence Centre (APAC BEC) here yesterday.

Kotuszewki said Barry Callebaut has been in Malaysia for more than 30 years with investments of about RM1.3 billion here. It is also confident about the country’s political stability and talent pool.

The company has more than 600 employees in two manufacturing sites and research and development (R&D) centres in Pasir Gudang and Port Klang. The APAC BEC is a significant investment with over 100 employees with plans to scale up to 150 in the coming months.

“Malaysia is an important hub for Asia Pacific and the first country the company has chosen to establish the APAC BEC, thanks to its solid manufacturing base, cultural diversity, and multilingual talents to help connect across regional markets.

“The APAC BEC will provide support across the company’s financial and accounting services, information management and technology, customer service, and other corporate and shared service functions. It will also help to improve customer experience through standardisation and scalability of processes,” he said.

Malaysians’ annual consumption of chocolate per capita is about 0.5 kg with room for growth, he said.
Kotuszewki said its market includes confectioneries and food manufacturers. It is also the outsourcing partner for a growing number of Malaysian food manufacturers seeking high-quality products.

Sales volume of chocolate confectionery in Malaysia grew 12.7 per cent in 2021 with a compound annual growth rate of 3.4 per cent between 2016 and 2021, he said.

Close to 85 per cent of its employees, including those indirectly employed, suppliers and service providers, are Malaysians.

“The company provides significant working opportunities to over 500 small and medium enterprises,” he said.

Source: Bernama

Barry Callebaut supplies ingredients for RM2b consumer goods sales in Malaysia


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Malaysia’s industrial production growth is expected to normalise in 2023 on the back of a dampened outlook among the country’s major trading partners, like the United States, United Kingdom and Europe, says AmBank Research.

“Moving forward, we expect growth in production to slow down. The latest manufacturing Purchasing Managers’ Index number also has been on the downward trend throughout the second half of 2022,” said the research house in a report yesterday.

Nevertheless, AmBank Research is optimistic the reopening of China’s economy can boost the global and local economy as 15% of Malaysia’s exports go to China.

According to the statistics released by the Statistics Department yesterday, the industrial production index (IPI) for November 2022 rose by 4.8% year-on-year (y-o-y) on expansion in the manufacturing and electricity sectors which surged by 4.8% and 1.2% y-o-y respectively.

On the other hand, the mining sector saw a sharp contraction to 6.1% from 8.5% in October, due to lower production in both crude oil and condensate as well as natural gas.

On a whole, IPI for the manufacturing sector rebounded to 0.7% in November from minus 1.8% in October 2022. The electrical and electronic sector continues to be the main growth catalyst for the manufacturing sector.

Other sectors like the food and beverage, tobacco, transport equipment and other manufactures subsectors also contributed to the growth.

Moreover, export-oriented industries have increased by 5.1% led by the manufacture of computers, electronics and optical products, as well as chemicals and chemical products.

Domestic-oriented industries expanded by 4.3% in November underpinned by the production of food processing products, motor vehicles, trailers and semi-trailers.

AmBank Research noted distributive trade sales are on a decline to 13.9% y-o-y in November from 14.9% y-o-y in October.

While wholesale and retail have slowed down to 5.6% and 22.8% y-o-y respectively, motor vehicle sales are still on an uptrend, having increased by 17.2% y-o-y in November.

“Despite the unemployment rate staying at 3.6%, which is the lowest level since the pandemic, wage growth in key sectors, including the manufacturing and the services sector have been tapering down which could explain slower growth in the wholesale and retail segments over the same period,” said the research house.

AmBank Research added the school holidays and festive seasons in December 2022 and in the first quarter of financial year 2023 (1Q23) could boost the growth of distributive sales.

However, growth is not expected to be the same for all components within the wholesale and retail trade.

“Our preliminary estimate shows gross domestic product for 4Q22 would hover around 6.5% to 7% which is slower than the 3Q22 gross domestic product (GDP) growth of 14.2% but such a situation is not unexpected as favourable base effect dissipates.

“We maintain our 2022 GDP growth between 8.5% and 9%, and 4.5% for 2023,” said the research house.

Source: The Star

Industrial production growth expected to normalise


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