DXN Holdings Bhd, a global manufacturer of nutraceutical products, sustained its growth momentum in the first quarter of its financial year ending Feb 28, 2025 (Q1’25), delivering consolidated revenue of RM475.1 million, a 12% year-on-year (y-o-y) jump compared to RM424 million recorded in the same quarter of FY24.

The group’s organic expansion in key markets such as Peru, Bolivia, Mexico and India continued to be the primary driver of its sustained growth. The growth resulted from a combination of independent initiatives, high impact events organised by leadership groups, innovative product introductions and effective marketing campaigns.

DXN’s profitability strengthened with earnings before interest, tax, depreciation and amortisation reaching RM151.9 million, representing an 11% y-o-y increase from RM136.8 million in Q1’24. Profit before taxation grew to RM136.3 million from RM124.1 million in Q1’24, reflecting a 9.8% y-o-y improvement.

Meanwhile, net profit expanded by 10.3% y-o-y to RM85.6 million from RM77.6 million in the previous corresponding quarter, underscoring DXN’s continued financial strength.

DXN executive chairman and founder Datuk Lim Siow Jin said, “Building on our exceptional performance in FY24, fuelled by sustained growth in Latin America and India, we are strategically positioned to enter key markets such as Brazil, Argentina and Chile. Drawing on our successful marketing strategy, combined with our established foothold in

the Latin America region, we aim to replicate success in these promising markets.”

In FY24, DXN invested RM119.2 million in capital expenditures (capex) to establish new manufacturing facilities in China, India, Dubai and Mexico, he said.

“These facilities began commercial production in calendar year 2023, significantly enhancing our production capabilities across a diverse range of products including coffee, tea, carbonated juice and spirulina. Our recently established manufacturing facilities in Nepal and Bangladesh, which will produce a range of our bestselling coffee-related products, are progressing well, with commercial production expected to commence by the end of 2024.:

This year, Lim said, it intends to allocate more than RM125 million in capex to expand their manufacturing capacity. The expansion aimed to accommodate the anticipated demand from new markets like Zambia and Ghana.

“It is part of our initiative to support the growing demand for our products from our global members,” he added

Moving forward, Lim said DXN will continue to prioritise new market expansion, the launch of new innovative products, optimisation of production efficiency and business resilience. By capitalising on the diverse growth avenues, DXN is confident of delivering sustained value to shareholders.

DXN maintains a robust financial position, with cash and cash equivalents of RM609.2 million exceeding total borrowings of RM140.1 million as of May 31. Additionally, a healthy net operating cash flow of RM137.8 million was generated in the quarter under review.

In line with its quarterly dividend policy, the board of directors has declared a first interim dividend of 0.9 sen per ordinary share for Q1’25, totalling RM44.8 million, a 52.3% payout ratio based on its net profit for the quarter.

Source: The Sun

DXN sustains growth momentum, driven by expansion in key markets

FSBM Holdings Bhd’s wholly owned subsidiary, FSBM MES Elite Sdn Bhd, has entered into a strategic partnership with Federation of Malaysian Manufacturers (FMM) on Mission-Based Project 2.1 (MBP 2.1) to build a strong technology ecosystem, accelerate technology adoption among manufacturers and facilitate the transition to advanced manufacturing practices.

The collaboration is a pivotal part of National Industrial Master Plan 2030 (NIMP 2030), focusing specifically on MBP 2.1. The goal of this project is to establish 3,000 smart factories by 2030 through the adoption of Industry 4.0 and digital technologies.

NIMP 2030 is designed to elevate Malaysia’s manufacturing industry to new heights, capitalising on emerging global trends and fostering collaboration between the government and the private sector.

SMEs are the backbone of the Malaysian economy, accounting for more than 97.5% of Malaysian businesses, with 87% being micro SMEs. Recognising their critical role, the initiative emphasises nurturing local technology solution providers and supporting various technology adoption initiatives.

By enhancing the ecosystem, the partnership will encourage businesses to leverage digital transformation as well as 5G technology to improve connectivity and operational and connectivity efficiency, thus reducing reliance on low-skilled labor, improving overall business competitiveness and fosteringg technological innovation.

FSBM Holdings managing director Pang Kiew Kun said: “At FSBM, our MES or smart manufacturing-related solutions are customised according to customer needs and developed entirely by our local talent. Therefore, we believe that these solutions not only solve pain points for the local manufacturing industry, but also aim to make the local manufacturing industry smarter, more competitive, more efficient, and able to respond to rapid technological changes in real time. Our collaboration with FMM is to accelerate the pace of local industries towards Industry 4.0.”

Through the collaboration, he added, they hope to provide advanced technical support and solutions to the local manufacturing industry to help companies improve production efficiency and market competitiveness.

FSBM MES Elite has been selected as one of the 29 strategic partners for FMM’s MBP 2.1 journey. This collaboration leverages the strengths of both organisations to drive advancements in Malaysia’s manufacturing sector. By integrating automation and innovative technologies into new manufacturing environment Licenses, this partnership aims to enhance manufacturing capabilities, drive productivity, and spur technological innovation.

“Our goal is to build a smarter, more efficient, and interconnected manufacturing ecosystem to promote the sustainable development of the entire industry. We firmly believe that driving intelligent transformation will not only enhance the overall level of the manufacturing industry but also position Malaysia as an attractive prospect for high-tech, innovative, and high value-added industries in the future, attracting quality foreign direct investment.” said Pang.

Source: The Sun

FSBM, FMM collaborate to enhance tech ecosystem, adoption in manufacturing industry

Plexus Corp, a US-based global leader in partnering with companies to create products that build a better world, held a groundbreaking ceremony for its sixth facility in Bandar Cassia Technology Park, Penang, recently.

The state-of-the-art facility, named Plexus Bridgeview, spans 20 acres, encompassing 560,000 sq ft of cutting-edge infrastructure.

Plexus estimates investing RM1 billion over the next three years, signalling its commitment to growth in Malaysia and the Asia-Pacific region.

Plexus established a footprint in Malaysia more than 20 years ago. It has more than 10,000 employees across five manufacturing sites and one design centre in Penang.

The new upscale facility will enable the expansion of its semiconductor capital equipment business, supporting Malaysia’s New Industrial Master Plan 2030 (NIMP 2030), and the ongoing growth of its business supporting leading healthcare and life sciences companies. The expansion will create opportunities for about 1,800 high-skilled jobs in the region.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said, “Plexus’ RM1 billion expansion clearly affirms Malaysia’s position not only as a preferred investment destination for tech-based MNCs, but also as a country that is serious about the swift implementation of investors’ commitments. In line with the targets of the New Industrial Master Plan 2030, this project will create a ripple effect by generating high skilled job opportunities and developing our E&E (electrical and electronics) supply chain ecosystem to serve a growing global semiconductor, and healthcare device markets. This also supports our efforts in positioning Malaysia as a regional manufacturing and services hub for Asean and Asia.”

Malaysia Investment Development Authority (Mida) CEO Sikh Shamsul Ibrahim Sikh Abdul Majid said, “Mida is thrilled to see Plexus’ trust and commitment to expanding its operations in Malaysia with the establishment of its sixth manufacturing plant. Our country’s robust electrical and electronics ecosystem, the exceptional capabilities of our local talent, and our well-developed semiconductor supply chain provide the perfect foundation for investors like Plexus. We are buoyed by the opportunities this investment will bring for Plexus, the local community, and the industry, and we look forward to Plexus’s continued advancement in Malaysia.”

Victor Tan, Plexus’ regional president Asia-Pacific, stated “The establishment of the new Plexus Bridgeview facility demonstrates our commitment to growth within the region, and provides a strong opportunity to meet the growing needs of our valued customers. We are grateful for the facilitation and continued support of Miti, Mida and Invest Penang to help enable these important milestones on Plexus’ growth journey.”

As part of its commitment to being a sustainable and responsible business partner, Plexus contributes to non-profit causes within Malaysian communities and encourages employee volunteerism through charitable giving initiatives, and science, technology, engineering and mathematics education sponsorships and collaborations. Notably, Plexus has installed solar panels at the Plexus Islandview and Seaside facilities and plans to continue this effort across all remaining facilities to reduce its carbon footprint.

Source: The Sun

Plexus breaks ground for facility in Penang, its sixth in Malaysia

Malaysia has the right manufacturing landscape and enablers to capitalise on the global medical devices industry’s bright prospects.

Investment, Trade and Industry Minister, Tengku Datuk Seri Zafrul Abdul Aziz said the global medical devices industry is projected to grow to US$887 billion by 2032 from US$542 billion projected for 2024.

“Malaysia has what it takes – a solid foundation, a thriving ecosystem, strong political will – to engineer the rapid growth of our manufacturing industry by engaging key stakeholders, particularly industry members themselves.

“The nation can be a manufacturing hub for medical devices, allowing global brands to serve the ASEAN market, with its 670-million population or even the Asian market, with its 4.7-billion people,“ he said at the groundbreaking ceremony of Plexus Corp’s sixth manufacturing facility, Plexus Bridgeview, in Penang.

Tengku Zafrul said today’s event is another step towards bringing New Industrial Master Plan 2030’s (NIMP2030) action plans to life.

He added that Plexus’ focus on Semiconductor Capital Equipment, as well as the Healthcare and Life Sciences sector, aligns with the priority sectors under NIMP2030.

“This will create a strong manufacturing ecosystem, driven by dynamic partnerships between leading global companies and Malaysian firms, powered by world-class talents.

“This is what will make Malaysia a manufacturing and services hub for Asia,“ he added.

Plexus regional president, Victor Tan said the establishment of the new Plexus Bridgeview facility demonstrates its commitment to growth within the region and provides a strong opportunity to meet the growing needs of its valued customers while simultaneously elevating the local small and medium industries.

He said the state-of-the-art facility, located on a sprawling 8.09 hectares-plot, will encompass an impressive cutting-edge infrastructure, with an estimated investment of RM1 billion over the next three years.

“This expansion will also create an estimated 1,800 new employment opportunities of high-skilled jobs in the region,“ he added.

Since its establishment in Malaysia over 20 years ago, Plexus has grown to employ more than 10,000 team members.

Source: Bernama

Malaysia poised to capture medical device manufacturing market

National carmaker Proton has recently kicked off its RM253 million expansion project, adding new stamping facilities in Tanjong Malim, which will be known as Stamping E and F-Lines.

In a statement today, Proton said the project will increase the volume of parts stamping at Proton Tanjong Malim as the company prepares to relocate production of the Proton Saga from Shah Alam by 2026.

The expansion is also expected to accommodate growing production volumes and any new models to be introduced in the near future.

“This is the second planned expansion to Proton’s parts stamping capabilities in recent years after the inauguration of the D-Line stamping plant on March 14, 2023 by Perak Menteri Besar Datuk Seri Saarani Mohamad,” the company said.

Proton chief executive officer Li Chunrong said the addition of the parts stamping E and F-Lines is critical to the company’s future volume expansion plans, as it provides more flexibility to ramp up production and meet market demand.

“For the whole of 2023 and up to June 2024, our Tanjong Malim plant has stamped out 6.067 million components, of which 395,211 are from the new D-Line. This number will grow exponentially when production of the Proton Saga is relocated here in 2026,” he said.

The new E-Line will feature a four-stage stamping process with a 1,600-tonne stamping machine and three 800-tonne machines. 

The F-Line, meanwhile, will have a five-stage stamping process utilising a 2,000-tonne, 1,200-tonne and three 1,000-tonne stamping force machines.

In addition to the stamping machines, Proton said robots will be used to transfer parts between workstations, while IR 4.0 technology will be implemented using real-time data and machine learning to improve the quality of parts produced.

Furthermore, the new stamping lines will reduce Proton’s reliance on imported parts, insulating the company against potential disruptions to global trade and improving the local parts supply.

“At the same time, the investment builds on competencies available in Tanjong Malim and will contribute towards the ongoing development of the Automotive High Tech Valley,” Proton said.

Source: Bernama

Proton begins half billion ringgit expansion in Tg Malim

French semiconductor manufacturer Weeroc plans to invest about RM20 million and start operations in early 2025 at the Puchong Financial Corporate Centre in Selangor.

Weeroc has signed a letter of intent with the Selangor Information Technology & Digital Economy Corporation (Sidec) during the Selangor International Business Summit 2024 on Thursday. Under the collaboration, Sidec will assist in Weeroc’s operational launch in Malaysia.

There is a strong demand for chips, particularly with the growing need for artificial intelligence-related semiconductors, Sidec chief executive officer Yong Kai Ping told The Edge after the signing ceremony. However, the challenge lies in attracting local talent.

Based in Villebon-sur Yvette, a town just outside of Paris, the company is a start-up founded by Dr Salleh Ahmad from Selangor employing about 10 engineers. Weeroc specialises in developing chips for satellites, drones, and Airbus planes.

The signing ceremony was witnessed by Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Tengku Abdul Aziz, Selangor Menteri Besar Datuk Seri Amirudin Shari, Selangor state executive councillor for investment, trade, and mobility Ng Sze Han and Invest Selangor Bhd CEO Datuk Hasan Azhari Idris.

Selangor recognises Weeroc’s potential in the fabless semiconductor industry, particularly in precision-analog and radiation-hardened integrated circuit (IC) design for the aerospace and photodetection sectors, according to Sidec, a Selangor government agency to develop the state as a digital hub.

“Currently, we don’t have enough engineers specialising in this area,” Yong said. “We need to highlight Malaysian talent and focus on attracting and training them.”

As the world’s sixth largest exporter of electronics and semiconductors, Malaysia plays a critical role in the global electrical and electronics supply chain. Malaysia is responsible for 7% of the semiconductor trade flows as well as 13% of back-end operations globally, including chip testing and packaging.

Prime Minister Datuk Seri Anwar Ibrahim announced in May that the government aims to attract at least RM500 billion in investments for chip design, advanced packaging, and semiconductor chip manufacturing equipment through the National Semiconductor Strategy.

The plan also involves training and upskilling 60,000 highly-skilled Malaysian engineers. Additionally, the government aims to establish at least 10 Malaysian companies specialising in design and advanced packaging, with revenues between RM1 billion and RM4.7 billion.

Source: The Edge Malaysia

French semiconductor firm Weeroc to start ops by 2025 with RM20 mil investment

The Malaysian Industrial Development Finance Bhd (MIDF) has approved soft loans totalling RM103.54 million to automate and modernise 29 companies up to June 2024.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said these soft loans represent the government’s stance on incentivising local industries to embrace smart manufacturing using Industry 4.0 (IR4.0) technologies that allow for efficient production in manufacturing.

In terms of talent, he noted that these new technologies will require workers with the right skill sets and the government has undertaken multiple initiatives to ensure a robust talent pipeline.

“The success of the New Industrial Master Plan (NIMP) 2030 and the National Semiconductor Strategy ultimately rests on developing the right industry-relevant talent pool to ensure businesses like yourselves can truly leverage IR4.0 technologies for future sustainable growth,” Zafrul said in his keynote address at the Malaysia Smart Manufacturing Awards 2023, here on Wednesday.

MIDF is an agency under the Ministry of Investment, Trade and Industry (Miti).

The minister also said that Malaysia aspires to be a smart manufacturing hub in the region, as outlined in NIMP 2030.

One of its mission-based projects is to establish 3,000 smart factories by 2030, he said.

“One way we can do this is by facilitating foreign direct investment (FDI) with hi-tech manufacturing capabilities while integrating domestic companies into multinational companies’ supply chains,” he said.

On another note, the minister said from 2021 until the first quarter of 2024, about RM162 billion worth of digital investments were approved, creating over 49,108 job opportunities.

“We expect these digital investments to also facilitate the transfer of technology to domestic or smaller companies,” said Zafrul.

He said advanced estimates for gross domestic product (GDP) growth in the second quarter of 2024 is 5.8%.

Zafrul attributed the stronger-than-expected GDP growth to a 4.7 % expansion in the manufacturing sector and an 8.4% increase in total trade for the first half of 2024, reaching almost RM1.4 trillion.

“The link is clear to me that tech-based investments will enable our manufacturing capacity to benefit from outcomes such as maximised plant efficiency, better risk management, better safety and quality control, and better energy efficiency.

“These will result in higher value exports that will contribute to GDP growth,” he said.

Source: Bernama

Tengku Zafrul: RM103m in soft loans greenlit to help companies automate, modernise as of June 2024

South Korea-based energy and chemical company OCI Holdings Co is considering listing its Malaysian polysilicon unit in a RM1.5 billion initial public offering on the local stock echange, Bloomberg reported citing sources.

It said the deal could value OCI Malaysia up to RM6 billion and may happen in the second half of next year.

In April this year, it was reported that OCI plans to increase the manufacturing capacity of the polysilicon for solar panels and expand its product portfolios into the polycrystalline silicon for semiconductors in Malaysia.

It had committed to spend 850 billion won by 2027 to raise the capacity of polysilicon for solar panels of its wholly owned subsidiary OCIM Sdn. Bhd to 56,000 tonnes a year from the current 35,000 tonnes.

In April it also opened its regional office here consolidating the functions of OCI in Japan, China, the Philippines and Malaysia in terms of the setting of financial budgets, development of business plans and establishment of a new growth investment initiative.

Source: NST

South Korea’s OCI considering RM1.5b IPO in Malaysia – report

Nefab, a sustainable packaging and logistics solutions company, opened a packaging manufacturing plant in Batu Kawan, Penang, to revolutionise the semiconductor equipment industry with innovative, safe, and environmentally conscious packaging solutions.

The new 25,500 sq ft facility is anticipated to generate up to 50 new jobs, including opportunities for highly skilled engineers.

The Batu Kawan plant offers a wide range of services tailored to meet the semiconductor sector’s rising demands. A dedicated cleanroom facility within the site will enable the production of high-quality cleanroom films and bags.

The facility also includes an engineering design centere and an International Safe Transit Association-certified laboratory equipped with the region’s most advanced packaging testing capabilities. The cleanroom facility and testing labs are scheduled to become fully operational in 2025.

Nefab Asia-Pacific executive vice-president Fred Hapiak said the expansion in Malaysia not only highlights their strategic importance in the Asia-Pacific region but also demonstrates their deep understanding and commitment to the growing demands of the semiconductor industry in this area.

“By integrating global resources and local expertise, we are dedicated to providing our customers with the most advanced packaging solutions while ensuring environmental sustainability,” he added.

Nefab’s new site is set to significantly boost the manufacturing of sustainable packaging, including customisable export-compliant wooden crates and foldable nail-less plywood boxes. The Batu Kawan facility complements the fully automated thermoforming production setup at its Perai site, which manufactures thermoformed trays and cushioning applications made primarily from recycled plastics and 100% recyclable materials.

Nefab Southeast Asia vice-president Dennis Cheong said,“ As a global company, we collaborate with our offices worldwide not only to ensure consistent service quality but also to transfer technological expertise to our design and testing center. Our investment in engineered packaging designs allows us to innovate and create safe and environmentally conscious solutions that optimise supply chains.”

The new site represents a significant expansion in Asia-Pacific region, adding to Nefab’s presence in two locations in Malaysia, and in Singapore, Thailand, the Philippines, and with future business investment into Indonesia.

Source: The Sun

Nefab expands, opens packaging manufacturing facility in Penang

SARAWAK Petchem Sdn Bhd’s RM7 billion methanol complex in Bintulu, Sarawak, is set to position Malaysia as a leading methanol producer in Asia Pacific, according to Minister of Investment, Trade, and Industry (MITI) Tengku Datuk Seri Zafrul Abdul Aziz.

This development aligns with the Chemical Industry Roadmap (CIR) 2030, enhancing Malaysia’s chemical industry capabilities, creating jobs, and stimulating the economy by benefiting surrounding industries and SMEs, he said in a release from the Malaysian Investment Development Authority (MIDA).

Located in Tanjung Kidurong, the plant boasts an annual production capacity of 1.75 million metric tonnes, and is the first mega methanol complex to be developed and built by Sarawak’s entity (Sarawak Petchem).

MIDA noted that this establishes Sarawak Petchem as Malaysia’s second-largest methanol producer after Petronas Chemical. 

It added that the plant’s commissioning solidifies Malaysia’s status as the top methanol producer in the Asia-Pacific region and is expected to attract further investments and boost downstream product production.

Methanol is a critical raw material for producing chemicals like acetic acid and formaldehyde, which are crucial in industries such as adhesives, solvents, and foams.

Datuk Patinggi Tan Sri Abang Johari Tun Openg said during the launch of the complex on Monday that it serves as a catalyst for more economic development in this region.

This methanol plant project, which is one of six catalytic projects that will help Sarawak generate an additional RM34 billion in Sarawak’s gross domestic product by 2030, will contribute significantly to the state’s economy by bolstering the manufacturing sector and its value chains, he said.

Meanwhile, MIDA chief executive officer Sikh Shamsul Ibrahim Sikh Abdul Majid hailed Sarawak Petchem’s achievement as a testament to Malaysia’s appeal for large-scale, high-impact investments.

“As we move forward with the New Industrial Master Plan (NIMP) 2030 and CIR 2030, we are committed to driving high-value addition and diversifying into higher value-added products that will propel our economy forward,” he said.

He added that MIDA will support Sarawak Petchem’s journey to becoming a global petrochemical industry leader.

“We are confident that this project will encourage further growth and investment in the region. Rest assured, we will continue rendering the necessary facilitation to Sarawak Petchem in their journey to become a leading entity in the global petrochemical industry,” he said.

Sarawak Petchem chairman Tan Sri Amar Abdul Aziz Husain highlighted the project’s role in driving regional economic development, job creation, sustainable growth, and positioning Sarawak as a key player in the global petrochemical industry. 

“The establishment of Sarawak Petchem has also provided a platform for Sarawak to develop and attract a skilled workforce to come and work in Sarawak. In fact, some Sarawakians have returned to work with Sarawak Petchem to complete this project,” he said.

Source: NST

RM7b plant to place Malaysia as key methanol producer in Asia Pacific: Tengku Zafrul

Sarawak has marked its entry as a significant player in the global methanol market with the launch of the RM7 billion Sarawak Petchem Methanol Complex in Tanjung Kidurong here Monday.

Sarawak Premier Tan Sri Abang Johari Tun Openg said the project was another major investment in the state, and serves as a catalyst for more economic development, sustainable growth and social inclusivity.

“With this achievement, we can be proud that Sarawak will be one of the global methanol producers, capable of producing up to 1.75 million metric tonnes per annum,” he said at the launch of the complex here.

He noted that the methanol project is one of six catalytic projects identified to boost Sarawak’s gross domestic product (GDP) by an additional RM34 billion by 2030.

“I look forward to other big projects that can bolster our manufacturing sector such as the H2ornbill and H2biscus projects in Bintulu. I have high hopes for these two projects to materialise before 2030,” he said.

Abang Johari said the methanol plant project provides a platform to develop a skilled workforce while creating more employment opportunities.

He highlighted the return of Sarawakian talents from overseas and peninsular Malaysia to join Sarawak Petchem, noting that demand for highly skilled workers will continue to be a pressing need over the next 10 years.

“Education and human capital development are critical components in increasing workers’ efficiency and helping the economy to move up the value chain. On this note, I would like to call upon our talents abroad to come back and actively engage in this ‘nation-building’ endeavour,” he said.

He added that the economic ripple effect will be felt across various sectors, fostering economic resilience and prosperity, in line with the aspiration to achieve a high gross national income (GNI) per capita.

Source: Bernama

Sarawak enters global methanol market with launch of RM7 bil methanol complex

At the recent Semicon Southeast Asia 2024 conference in Kuala Lumpur, while launching the National Semiconductor Strategy (NSS), Prime Minister Datuk Seri Anwar Ibrahim made an ambitious remark about wanting the country to attract RM500 billion worth of semiconductor investments.

The lofty plan could be made possible through the establishment of 10 local design and advanced chip manufacturing champions with annual revenues of between US$210 million (RM980 million) and US$1 billion, plus 100 semiconductor-related companies with revenue of up to US$210 million.

To illustrate the magnitude of the prime minister’s ambition, the approximately US$107 billion target is more than that announced by various governments across the world: the European Union’s €43 billion (RM218 billion), the US CHIPS Act’s US$52 billion, and the third phase of China’s RMB340 billion (RM218 billion) National Integrated Circuit Industry Investment Fund (commonly known as the “Big Fund”).

To support the agenda, the Malaysian government will offer RM25 billion worth of incentives to attract foreign investors and train up to 60,000 Malaysian engineers to help meet industry demand.

But let’s take a step back to assess the current circumstances and how these goals can possibly be achieved. First of all, the world is definitely not flat — contrary to the argument of The New York Times columnist Thomas Friedman, who observes that technological advancements have “flattened” the world we live in.

Amid geopolitical shifts that span from East to West, we are seeing an unprecedented shift in global supply chains as a seemingly invisible economic cold war takes place. This has been happening since 2017, when former US president Donald Trump pulled the plug on the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP) while, at the same time, reigniting the North American Free Trade Agreement (Nafta).

This created a domino effect and spurred various levels of economic retaliation across the world. Such new-wave protectionism is sweeping the globe, threatening trade liberalisation, as predicted by scholars Sebastian Krapohl, Václav Ocelík and Dawid Walentek in 2021.

Riding that global shift

What could Malaysia, as one of the countries affected, do? What are our comparative advantages and economies of scale that would allow us to stand out in the international trade arena?

To begin with, Malaysia accounts for 13% of global semiconductor testing and packaging — playing a pivotal role in supporting the global supply chain of semiconductors. But as our neighbouring countries across Southeast Asia are also throwing their hats into the semiconductor ring, time is of the essence here for us to grow Malaysia’s market share in the space.

The global artificial intelligence (AI) industry has progressed and grown at staggering speed in the last 18 months, putting tremendous pressure on supply chains to meet the demand for chips production.

While the global semiconductor market grew about 3.3% in 2022, Malaysia’s semiconductor export value grew nearly a whopping 30%. Penang alone attracted RM60.1 billion in foreign direct investment in 2023, more than the total it received from 2013 to 2020 combined.

The vast share of the investments received are presumably in the core semiconductor components space.

From a portfolio perspective, this represents the equivalent of our fixed-income allocation and should be an area we double down on. Further investment into more frontier markets should be akin to the equity portion of how we would normally think of asset allocation, considering the flexibility of risk-adjusted returns across both asset classes and time.

The key point of strengthening our core is simple: We benefit as a country as we continue to focus on our comparative advantage of being the neutral trusted trading partner for economies along the global supply chain.

As long as we are doing everything in our ability to further facilitate this initiative, capital will continue to flow — hopefully in an accelerated manner — towards the path of least resistance.

But we need to really ask ourselves if the country is set up for success to facilitate these growing manufacturing needs? From a policy standpoint, as protectionism grinds international trade to a halt, are we greasing the wheels that allow slowing gears to follow?

Does our corporate and international legal framework provide the assurance for further trade flows to pass through our borders? Have sufficient tax elasticity curves been mapped out to maximise trade flows and thus trade income and surplus into the nation?

As bits continue to play catch-up with bytes, the global semiconductor market is devoting plenty of resources to ensuring that innovation and production of cutting-edge chips allow for the intellectual progress that follows. It should be no exception for Malaysia.

Malaysia’s robust back-end semiconductor ecosystem will make strong economic sense for it to continue to build its beachhead in the global supply chain. This is because costs are simply lower when the distance and logistics between different parts of the value chain are smaller in nature.

The semiconductor space has spawned several “unicorns” in the past, such as Inari Amertron Bhd (KL:INARI) (RM14 billion market capitalisation), Pentamaster Corp Bhd (KL:PENTA) (RM3.6 billion market cap) and Vitrox Corp Bhd (KL:VITROX) (RM8.7 billion market cap). These are cases in point of significant economic value organically generated by virtue of having semiconductor “clusters” emerge in the northern region of Malaysia — largely catalysed by the early days of Intel in Penang.

But it has been over five decades since that catalyst. For now, how do we reverse-engineer and accelerate a similar outcome of another 10 Intels that would generate much more returns for the economy?

By clearing the path for such transitions to take place.

Five P framework

Just as one would have a certain set of criteria in picking a new home, businesses would do the same. We could start with a basic 5P framework: place, price, promotion, product and people.

Place: Alongside our existing clusters of industrial parks, tenants first and foremost wish to ensure that they are in a stable neighbourhood that has all the available amenities and infrastructure. Proximity to their suppliers and customers, cheaply available utilities such as water and electricity, and sufficient facilities for their teams. Being based in the same area also offers access to competitors for knowledge exchange, intelligence gathering and talent acquisition.

Price: From the perspective of economic policies and reforms, Malaysia stands out as a particularly cost-effective business centre. But perhaps we can do more. With a public and private capital base at the national level that rivals that of other countries, we need to ensure an adequate capital allocation that will be put to good use. This is because the returns from such strategic investments could have a multiplier effect on a direct and indirect monetary level. Malaysia should be top of mind when it comes to decisions on shifting the global supply chain.

Promotion: We herald the motherland as the Silicon Valley of the East — and arguably the numbers say so. Does the world think so, though? In today’s world of lightning-paced information and availability of insights, have we done enough to be top of mind of the very top companies we so wish to vie for? Have we made a dedicated concerted effort to do so, not just on a national but also global scale?

Product: It has now become a mainstream approach to product development, but Apple most famously preached user-centric product development and has gone on to dominate global markets. This focus on user experience drives the development of intuitive interfaces and seamless interactions — but could this be translated from the design of a smartphone (which is also part of the semiconductor value chain) into an offering of a country?

How do we take such learnings and incorporate them at a national scale? Fundamentally, from a basic-needs perspective, we probably already fit the vast majority of requirements. Thinking that way, however, would be akin to the likes of Nokia and Blackberry debating a young upstart like Apple back in the early 21st century — something corporations nowadays strive not to take for granted.

People: We have heard it all before — talent deficit, brain drain, imprecise skill sets. Yet, Malaysia remains a global talent hub for the most competitive markets in the world such as Singapore, Hong Kong, Taiwan and the UK. So, there is no doubt that talents exist in the country. Schools and syllabuses set a core foundation, but take years if not decades to materialise. Training does help, but it is also a function of pedigree and quality. Could we arrange the variables against time, cost and opportunity and optimise for solutions that work for both today and tomorrow?

Malaysia, your move now

Malaysia and its people continue to make great strides in this market. In a global paradigm where powerhouses across the world spark a tit-for-tat strategy to shore up resources and defences, outcomes will depend on the different parties and how they interact with one another. In such a once-in-a-lifetime opportunity, we should really swing for the fences.

We recommend, first, focusing on increasing Malaysia’s competency over the last few decades as a key facilitator in the global supply chain. The country needs to continue to beef up this muscle as we already have a core base there. This is mainly because, as supply chains constrict, international companies will be incentivised to be closer to their core partners and suppliers — to enable these movements of goods, services and talents by utilising Malaysia as a platform for global trade.

As the centre of gravity of innovation increasingly shifts onshore, just like the early days of Intel setting up shop in Penang, there will be massive spillover effects, enabling the acceleration of Malaysia towards that global arena.

But again, time is of the essence here. Ambitious? Perhaps. Possible? Definitely.

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Raja Hamzah is a director of TalentCorp, and an avid investor and adviser in the technology space. Y C Ng has been a venture capital/private equity investor and operator in Europe and Southeast Asia for over a decade and was previously an early pioneer of Sequoia’s early-stage Surge programme.

Source: The Edge Malaysia

Malaysia’s final push to support its semiconductor dreams

THE valuations of Bursa Malaysia-listed semiconductor and semiconductor-related companies have been notably higher than those in other sectors, and even global giants, since the outbreak of Covid-19 in 2020.

At the height of the chip shortage between March 2020 and December 2021, local tech stocks were trading at an average price-earnings ratio (PER) of 48.3 times, above the average of 35.9 times for their counterparts overseas.

Today, Malaysian semiconductor stocks are trading at an even higher trailing PER of 64.4 times, but below global multinational corporations’ (MNCs) historical average PER of 70.3 times.

This gap could be partly due to local technology stocks’ lack of exposure to the artificial intelligence (AI) sector. Whereas in the US, chip giants like Nvidia Corp and Advanced Micro Devices Inc are seeing their share price skyrocket due to the AI hype.

In terms of forward PER, however, Malaysian semiconductor stocks are trading at 34 times earnings, higher than the global average of 26.3 times.

Unisem (M) Bhd (KL:UNISEM) and Malaysian Pacific Industries Bhd (KL:MPI) are currently trading at more than 80 times historical earnings, while ViTrox Corp Bhd (KL:VITROX) is trading at 70 times and Oppstar Bhd (KL:OPPSTAR) and Frontken Corp Bhd (KL:FRONTKN) are above 50 times. Even the relatively cheaper counters like Pentamaster Corp Bhd (KL:PENTA) and Greatech Technology Bhd (KL:GREATEC) are trading above 40 times historical earnings.

For comparison, the stocks of MNCs like Taiwan Semiconductor Manufacturing Co Ltd, Intel Corp, Semiconductor Manufacturing International Corp, Texas Instruments Inc, Lam Research Corp and Qualcomm Inc are trading between 20 and 35 times earnings, while Nvidia and Broadcom Inc are trading at about 70 times.

So, what factors should investors pay attention to when choosing between local semiconductor firms and the more established players abroad with their comparatively lower valuations? Will the higher price-earnings multiples of homegrown companies alone drive them to invest in these foreign firms?

It would seem that there are a number of investors who still think local chip stocks are worth investing in. Most Bursa Malaysia-listed semiconductor stocks have posted gains of 10% to 40% year to date. The rally is seen as a rotation to laggards since the tech sector underperformed in the first four months of 2024.

Investors may well be reacting to reports of inventory restocking, the China Plus One (C+1) strategy of diversifying supply chains, the spillover from the US-China trade war and influx of investments from global players setting up plants in Malaysia.

Malaysia, being the sixth largest exporter with 13% of the global chip testing and packaging market, is anticipated to benefit from these geopolitical structural trends. In 2023, the country’s electrical and electronics (E&E) exports stood at RM575 billion, which was 40% of total exports and more than the next nine export segments combined.

According to the Malaysia Semiconductor Industry Association’s inaugural MSIA E&E/Semiconductor Quarterly Pulse Survey for 2Q2024, some 39% of the companies surveyed reported better business performance during the quarter compared with 1Q2024.

A notable 58% of respondents said they were planning to invest in new technologies, expand into new markets and develop new products. Some 72% of the companies had an optimistic outlook for the next 12 months, indicating sustained confidence in the sector’s long-term prospects.

Although a generally cyclical industry means there will continue to be periods of weakness in capital expenditure or demand slowdowns due to various factors — such as inventory destocking, replacement cycles, shifts in the global supply chain and geopolitical issues — longer-term investors may see these bouts of weakness as buying opportunities to capitalise on the long-term structural growth trend in the coming years.

Notably, Wall Street’s semiconductor index lost more than US$500 billion (RM2.33 trillion) in stock market value last Wednesday in its worst session since 2020. This drop followed a report that the US is considering stricter controls on the export of advanced semiconductor technologies to China.

What could serve as the next rerating catalyst for these stocks and what potential downside risks should investors be mindful of as we move into the second half of the year?

Scarcity premium

Nixon Wong Gok Hey, chief investment officer at boutique fund house Tradeview Capital Sdn Bhd, opines that the current high valuations of local tech stocks are “somewhat harder to justify” in terms of sustaining their positive momentum, especially given the limited exposure to AI tech at this juncture.

Nevertheless, he acknowledges that the high valuations — while subjective and open to various opinions and perspectives — can be “somewhat explained” by the solid earnings growth, backed by a degree of order flow certainty from end-clients, as indicated by foreseeable order books.

“This is in contrast to the giants’ business models which, despite being front-end and trend-setting, require high capital expenditure to expand capacity and maintain technological capabilities. This can lead to cyclical performance and make it relatively harder to predict outcomes in the global market competition … But again, the difference lies in the shareholders’ composition and stock liquidity,” Wong tells The Edge.

He says the relatively higher price-earnings multiples could be due to the limited free float, relatively smaller market capitalisation and low earnings base but there is a scarcity premium owing to the high earnings growth profile compared to other sectors with lower growth prospects.

“Indeed, high valuations imply high expectations built into a company’s share price, emphasising the importance of the company’s execution and ability to meet investor expectations,” he elaborates.

“In this era, data is the new oil, indicating a healthy growth trend as people use more data, driving the need for technology upgrades and capacity expansion, which benefits the entire supply chain. Expectations for the sector are reasonably high.”

Wong points out that it is essential to consider forward valuations to determine whether expecting similar earnings growth in the coming years is sensible and justifiable.

“We should account for the expected growth of selected companies rather than merely focusing on historical valuations, as the growth profile demonstrates the importance of a company within the supply chain. In Malaysia, another factor could be the limited free float of the sector, leading to a scarcity premium compared to other sectors with limited earnings growth, also with the strong support of GLC (government-linked companies) funds,” he says, referring to the existence of large local institutions with sizeable mandates.

Wong observes that higher expectations are placed on the tech and industrial production sectors for positive structural reasons. “If there were a choice, global leaders — mostly in front-end businesses — would still be trendsetters and prioritised by foreign fund managers over Malaysian stocks,” he reckons.

Having said that, he warns that a pullback is possible, especially after the recent rally, as the upcoming US presidential election may pose a risk to the sector due to increased volatility and profit-taking.

“However, prices may quickly find support as many investors view weaknesses as buying opportunities. Factors supporting this include recovery driven by inventory restocking, a rebound in China demand, anticipated US interest rate cuts by the end of 2024, growth in data centre investments and exposure to the booming AI theme,” he adds.

Earnings recovery

Phillip Capital head of research Tan Jian Yuan concurs that the local technology sector has been trading at elevated valuations due to the scarcity premium for growth stocks. This is expected to keep valuations high, he says.

“Despite the limited exposure to AI, the anticipated recovery in global demand, the street’s low earnings expectations and potential earnings upgrade in the coming quarters could spark a further rally in the sector,” he tells The Edge.

The World Semiconductor Trade Statistics forecasts a 16% rebound in global semiconductor sales in 2024, fuelled by robust demand for memory and logic chips.

“Malaysia’s E&E export recovery over the past few months supports a positive outlook on the Malaysian technology sector. After several quarters of inventory digestion and anticipated global demand recovery, particularly with the introduction of AI-enhanced products, we believe earnings have bottomed out and are poised for recovery, serving as a strong catalyst for a sector rerating,” says Tan.

“We believe investors may focus on companies with front-end exposure, which will likely experience quicker earnings recovery and have a larger total addressable market, before the back-end recovers. We prefer companies with exposure to strong secular growth trends such as AI, 5G, data centres and solar.”

For sector exposure, Phillip Capital likes Frontken and TT Vision Holdings Bhd (KL:TTVHB), with a target price of RM6.29 and RM1.50 respectively.

TA Securities tech analyst Tony Chan Mun Chun believes there are two main reasons for the high valuations of local tech stocks. First, the scarcity premium and, second, the expectations of earnings recovery going forward — in line with the global semiconductor sales recovery — which will bring down the high PERs.

“Earnings growth is something that investors should always prioritise. The share price has a strong correlation with earnings, and earnings will directly influence the valuation. Personally, I have no particular preference for local or global tech stocks, as long as the forward PER is reasonable,” he tells The Edge.

Chan expects the bullish sentiment to be supported by an anticipated healthy recovery in global demand, rising trade diversion opportunities as a result of the C+1 strategy, as well as fiscal support from the National Semiconductor Strategy.

TA Securities’ top picks are Inari Amertron Bhd (KL:INARI) and SKP Resources Bhd (KL:SKPRES), with a target price of RM4.43 and RM1.43 respectively.

Preference for local stocks due to familiarity

The domestic equities team of Nomura Asset Management Malaysia points out that Malaysian semiconductor firms tend to trade at a premium to global leaders due to captive domestic liquidity, along with the scarcity premium. Furthermore, the technology sector offers structural earnings growth potential that has been lacking in other sectors in the local market.

“Being at the forefront of technology development, it is certainly compelling to invest in global tech leaders, where they have also proved to be multi-year compounders. However, there could be a preference to invest in local tech names due to familiarity and home currency considerations,” the asset manager tells The Edge.

Furthermore, there are global leaders among the local tech companies that investors can have a position in.

“Local tech companies could also tap domestic investor support for fundraising activities to fund expansion plans, helping them to emerge as more formidable players in the sector. A diversified selection providing a balance of global and domestic exposure would be a good approach to building investments for longer-term returns,” the firm suggests.

Nomura expects local tech stocks to remain buoyant in the second half of this year as AI-driven technology spending and applications broaden out and drive growth in servers, smartphones and personal computers that benefit the domestic tech ecosystem. Catalysts to watch out for include the positive earnings revision trend for local tech companies in 2H2024 as expectations have largely been reset over the past year, it adds.

The asset manager highlights that while valuations for local tech stocks are at a premium to those of global tech players, the forward PERs are at a discount to the peak levels in 2021, prior to the inventory correction that plagued the sector in 2022/23.

“Going forward, with the emergence of the AI secular trend, the valuations of local tech stocks could trade back up to previous peak levels. Intermittent consolidation would be healthy as well to serve as a check on any exuberance,” it says.

“Meanwhile some risks that should be monitored include the potential escalation of the US-China trade war, an unexpected prolonged inventory normalisation and a general economic slowdown.”

Tech stocks, both local and global, are expected to remain on investors’ radar screens so long as the demand for chips remains strong, driven by megatrends such as AI. Relative to stocks in the older economy, the price-earnings multiples may continue to stay elevated despite the geopolitical uncertainties.

As Malaysia and its local chip champions continue to show robust earnings prospects as they deepen their strategic position in the global supply chain, their stocks should not be overlooked purely because of their high valuations.

Source: The Edge Malaysia

How local semiconductor players measure up against global giants

Sik Cheong Bhd, a key player in the repackaging and distribution of refined bleached and deodorised (RBD) palm olein oil, is preparing to raise RM17.8 million through its upcoming IPO on Bursa Malaysia’s ACE Market. 

Scheduled for listing on Aug 13, 2024, the IPO is set to bolster the company’s strategic expansion and operational capabilities. 

A significant portion of the proceeds, RM7.2 million, will be allocated to expanding Sik Cheong’s packaging facility. 

The investment will fund the redevelopment of Factory No 9 and the purchase of new machinery. 

An additional RM900,000 is designated for acquiring new delivery trucks, aimed at enhancing the company’s distribution network. 

The remaining RM6 million will be used for working capital to support ongoing operations, while RM3.8 million will cover the costs associated with the IPO process. 

Sik Cheong, which has built a strong reputation in the industry for more than 30 years, focuses on repackaging and distributing RBD palm olein oil, a staple cooking ingredient in Malaysia. 

The company’s customer base exceeds 500 annually, including notable clients like The Chicken Rice Shop Restaurant Sdn Bhd and the NSK group. 

“The demand for RBD palm olein cooking oil products will continue to grow due to its essential role as a daily food ingredient. We see substantial market potential, as palm oil remains the most widely consumed vegetable oil in Malaysia, accounting for 76.7% of the total vegetable oil volume sold in 2023. 

“In fact, the RBD palm olein oil repackaging industry in Malaysia is projected to grow at a compound annual growth rate (CAGR) of 20.9% to reach RM12.8 billion in 2026. 

“With the expected proceeds from the IPO, we can accelerate our strategic expansion plans and capture a bigger market share in the industry,” MD Wong Hing Ngiap said in a press statement. 

The IPO proceeds are expected to enhance Sik Cheong’s packaging capabilities, increasing operational space by 88.1% to approximately 38,525 sq ft (3,579 sq m). 

The expansion will facilitate the introduction of high-oleic soybean oil into its product range and address current space constraints. 

Furthermore, Sik Cheong plans to extend its market reach beyond Kuala Lumpur and Selangor to neighbouring states such as Perak, Negri Sembilan, Melaka and Pahang. 

The acquisition of new delivery trucks will support this geographic expansion and ensure prompt and reliable product deliveries. 

Financially, Sik Cheong said its revenue climbed from RM42.6 million in the financial year of 2021 (FY21) to RM79.6 million in FY24, reflecting a three-year compound annual growth rate (CAGR) of 23.2%. 

The company’s profit after tax grew at a CAGR of 50.6%, reaching RM6.3 million in FY24. 

Sik Cheong’s gross profit margin also improved to 16% in FY24, driven by a higher volume of non-subsidised RBD palm olein oil products. 

Sik Cheong’s IPO will involve the issuance of 66 million new shares, representing 24.8% of its enlarged share capital. 

Of these, 13.3 million shares will be available to the Malaysian public through balloting, four million shares will be allocated to eligible directors, employees and contributors, while 48.7 million shares will be reserved for private placement to selected investors. 

With an IPO price set at 27 sen per share, Sik Cheong’s market capitalisation upon listing is projected to be approximately RM71.8 million. 

Applications for the public issue are open until July 30, 2024. 

TA Securities Holdings Bhd is serving as the principal advisor, sponsor, sole underwriter and placement agent for the IPO.

Source: The Malaysian Reserve

Sik Cheong to raise RM18m in IPO for facility expansion, market reach

The government has no objections to allowing foreign car manufacturers to bring in more electric vehicle (EV) models for local assembly, said Deputy Minister of Investment, Trade, and Industry (MITI), Liew Chin Tong.

He said EVs assembled in Malaysia are not subject to the minimum price limit of RM100,000 imposed on imported EVs and this move is supported by the existing direction and initiatives of the government, which is in line with the National Automotive Policy 2020 (NAP 2020).

Liew noted that the government is also focusing on several strategic approaches to strengthen the overall electrified vehicle (xEV) ecosystem.

To support the development of the EV industry and its ecosystem, he said the government has introduced various initiatives, including non-financial initiatives.

Liew said that given the high cost of developing EV technology, it is a challenge for local car manufacturers to produce EVs at competitive prices compared to internal combustion engine (ICE) vehicles, which have long-established technology.

“Therefore, to help local car manufacturers produce EVs at more competitive prices, the government has offered more attractive tax incentives compared to ICE vehicles.

“Specifically, locally assembled Battery Electric Vehicles (BEV) and Fuel Cell Electric Vehicles (FCEV) can enjoy full exemptions from import duties, excise duties, and sales tax until Dec 31, 2027,” he said during a special chambers session in Parliament today.

Liew was responding to a question from Khairil Nizam Khirudin (PN-Jerantut) regarding efforts to enhance the capability of local car manufacturers to produce affordable zero-emission vehicles for all segments of the population.

To encourage technology providers to support EVs, Liew said the government also offers income tax exemptions through Pioneer Status or Investment Tax Allowance of up to 100 per cent for up to 10 years to promote investment in the production of EVs and related critical components such as batteries, motors, and others.

He added that the incentives offered by the government are not limited to manufacturing or assembly activities and completely built-up (CBU) imported EV models.

The government also offers the Green Investment Tax Allowance (GITA) to technology providers supporting the EV industry, such as companies providing EV charging services, Liew said.

Source: Bernama

Govt backs move for more locally-assembled EV models – MITI

Stronger earnings are in store for Malaysian outsourced semiconductor assembly and test (Osat) players in the second half of 2024 (2H24), as global chip sales in May charted on-year growth for the seventh straight month.

The same applied for semiconductor production equipment and engineering (SPE) firms, said UOB Kay Hian (UOBKH) Research.

Typically, the Osat and SPE segments lag behind in a cyclical recovery.

Some of the listed firms in the segments that UOBKH Research has “buy” calls were Coraza Integrated Technology Bhd, Inari Amertron Bhd and SFP Tech Holdings Bhd.

The research house also has a “buy” call on the only chip design company listed on Bursa Malaysia, Oppstar Bhd.

UOBKH Research said local Osat players’ sales are expected to improve 12% year-on-year (y-o-y) in 2024 after a sales contraction of 9% in 2023.

While the smartphone market is not completely out of the woods from its past two years of turbulence, global smartphone shipments in the first quarter of 2024 mark the third consecutive quarter of shipment growth of 7.8% y-o-y to 289.4 million units, according to the IDC worldwide quarterly mobile phone tracker.

“On the other hand, the automotive market could see ongoing demand sluggishness from the electric vehicle (EV) segment, particularly from China, on excess inventory. “In the local market, providers of smartphones and automotive-related Osat players are guiding for a more meaningful recovery in 2H24, with the common view that the worst could be over, which is leading to positive sales growth again in 2024.”

On local equipment makers, despite 2024 sector earnings kicking off on a sluggish note, UOBKH Research said they are buttressed by a refreshed investment cycle for medical devices, renewable energy (RE), and a demand pick-up for EV or autonomous driving.

“Notably, 2024 sales growth of 21% is expected to outperform global benchmarks due to the US-China trade diversion and the entrenchment of manufacturing capabilities, with RE and medical-centric equipment makers championing the order book record,” it added.

The electronic manufacturing services (EMS) firms are also back to growth trajectory after a long overcast.

“Our recent Johor EMS trip suggests that the worst is over for consumer-centric EMS, with key customers replenishing orders after sharp inventory adjustment.

“We also discovered dark horses from our channel checks, which are discreetly nurturing new business opportunities that could see phoenix-like recovery in the medium term.

“Meanwhile, industrial EMS players are seeing stronger traction from supply chain reconfiguration,” stated UOBKH Research.

Looking ahead, the research house said sector-friendly policies introduced by the government would supercharge prospects further.

Prime Minister Datuk Seri Anwar Ibrahim recently announced various key strategies to enhance the global footprint of Malaysia’s semiconductor industry.

Among the initiatives are the establishment of a national semiconductor strategic task force aimed at leading improvements in three key areas – incentives, talents and other essential elements – to nurture the growth of the semiconductor industry.

The government also planned to establish at least 10 Malaysian companies in design and advanced packaging with revenues of RM1bil to RM4.7bil, and more than 100 companies in the sector with revenues of close to RM1bil.

With the positive developments, UOBKH Research expects further growth in the technology sector with the technology index having outperformed FBM KLCI year-to-date.

The growth, moving forward, will be backed by an early cycle of recovery, stronger earnings momentum, ample trade diversion opportunities and supply chain entrenchment.

Source: The Star

Robust global chip sales a boon for tech players

MALAYSIA’S semiconductor industry has been a source of national pride since Intel opened its first overseas assembly plant in Penang in 1972.

Since then, Malaysia has captured a 13% share of global testing and packaging, building a semiconductor industry that now accounts for 25% of gross domestic product.

The vibrant state of Penang is again at the top of the list for semiconductor investments, with dozens of major expansion projects underway.

There is a sense, though, that we are only scratching the surface.

With semiconductors only becoming more important to modern life, Malaysia’s chip sector is not just a business opportunity; it is an opportunity to put the country firmly at the centre of future supply chains in South-East Asia and around the world.

The government’s new National Semiconductor Strategy aims to do just that.

Backed by an initial RM25bil of public funding, the plan provides a clear roadmap for the country’s move up the global technology value chain.

The ambitious targets are a sign that Malaysia understands what’s at stake.

The government aims to attract RM500bil of investment into the sector, train 60,000 chip engineers and establish at least 10 Malaysian companies in design and advanced packaging.

None of this will be easy.

Chip factories and research hubs do not appear overnight.

Just putting a new chip design into production can take up to four months, involving hundreds of steps, including oxidation, photolithography, and etching.

Major new fabs or testing facilities can cost billions of dollars.

But while the new strategy will take time to show results, the stars are aligned in Malaysia’s favour. Businesses must look to seize this moment.

Building on strong foundations

For the best chance of meeting its semiconductor goals, Malaysia can call on a number of tried and tested ingredients.

The first is to acknowledge the power of free trade.

While semiconductor technology is in the geopolitical spotlight, Malaysia’s neutral position on global tariffs is a key part of its appeal to international businesses.

The country’s chip sector has a distinct advantage of being able to attract investment from both the United States and China – as well as many other countries.

Free trade zones are also a powerful pull for semiconductor companies that focus on re-exporting to overseas markets, such as in the outsourced assembly and test segment.

The concentration of skilled labour, specialised logistics and raw materials create an attractive ecosystem for new entrants.

Penang’s Bayan Lepas Free Industrial Zone, home to hundreds of multinational companies, has succeeded because it offers everything these businesses need in one convenient location.

Consistent policies

Consistent and coordinated policies are also critical in giving businesses the confidence they need to make long-term investment decisions.

The new semiconductor strategy ties in with Malaysia’s New Industrial Master Plan 2030, which emphasises the country’s digital infrastructure.

And, of course, sustainability will be a powerful enabler.

International technology companies demand access to clean energy to meet their own emissions objectives, so additional investment in renewable capacity and upgrades to the electricity grid will be needed to sustain the country’s competitiveness.

Collaboration between industry, government and utilities has produced encouraging signs: Intel’s rooftop solar installation in Malaysia is its biggest outside the United States.

Micron’s Malaysian facilities were the first in its global network to be powered by 100% renewable energy.

A historic opportunity

Demand for more advanced processing is also transforming the chip sector, as customers look for specialised hardware to support new technology, including artificial intelligence.

We see across the wider region that high-tech ecosystems generate valuable ancillary business opportunities – such as data centres, services, and advanced materials.

In Penang, a new crop of advanced semiconductor facilities from the likes of Infineon, Intel and ASE Tech will require new materials, new workers and new services.

The new semiconductor strategy recognises the historic opportunity ahead.

We must also acknowledge that it is a complex, globally connected industry, and that international competition for a share of higher-value front-end processes is more intense than ever.

That said, the success of hi-tech hubs like Penang – where HSBC opened its first office in Malaysia in 1884 – is a great example of how a diverse community, strong logistics and a supportive policy framework can facilitate the growth of a multi-billion-dollar industry.

The rewards of getting this right are tantalising.

In the new area of digital technology, semiconductors are only becoming more essential for businesses.

While the prize is significant, achieving it will require a deep partnership between industry and policymakers – underpinned by strategic planning, investment in skills and a commitment to free trade.

With all that in mind, Malaysia’s chip strategy could not have come at a better time.

Noor Adhami is HSBC’s international banking global head and Karel Doshi is HSBC Malaysia’s commercial banking head. The views expressed here are their own.

Source: The Star

Time for Malaysia to keep its edge in global chips

Glove manufacturers are expected to deliver sequentially stronger earnings in the coming quarters, predominantly underpinned by the commencement of an inventory-replenishment cycle.

Other positive factors include the potential diversion of trade by the United States away from China to Malaysia as a result of US Food and Drugs Administration (FDA) alerts over some medical supplies from China and higher import tariffs on Chinese goods in 2026.

According to Hong Leong Investment Bank (HLIB) Research, the overall operating environment for glove makers is improving.

“The recovery thesis for 2025 is fairly priced-in, after the recent share price rally driven by positive sentiment from the Us-tariff increases announced back in May 2024.

“Furthermore, most glove makers still have not delivered any meaningful earnings at the moment,” the research house said in a report yesterday.

In Malaysia, sales volumes improved 15%-25% quarter-on-quarter in the first three months of 2024 (1Q24) versus the volatile growth trajectory for the whole of 2023.

However, the average selling price (ASP) trajectory is still mixed, said HLIB Research.

For instance, Hartalega Holdings Bhd’s ASP in ringgit improved by 2%-3% in 1Q24, while that of other manufacturers deteriorated by 2%-5%.

“We conclude that the deviation of 1Q24 sales volume and ASP trajectories compared with global peers was mainly due to price competition among local companies given that some players still have excess capacity,” the research house noted.

Going into 2Q24 and beyond, HLIB Research believe that sales-volume recovery in Malaysia will continue to gain momentum.

“In terms of ASP, we believe it bottomed in 1Q24 and the cost-pass-through mechanism will be progressively reinstated, albeit at a marginal rate, as there is still local competition in the nitrile segment,” it said.

Notably, the research house forecasts glove demand-supply dynamics will reach equilibrium in 2025, which could see the global plant utilisation rates likely to hit about 85% and the ASP for generic nitrile rubber medical gloves will be about US$20-US$21 per 1,000 pieces.

Based on the Red List for manufacturers obtained from FDA import alert number 80-04 for Surveillance and Detention Without Physical Examination of Surgeon’s and Patient Examination Gloves, HLIB Research also observed that the number of Chinese glove makers restricted by US FDA hit a recent high in 1Q24.

“We believe rising quality awareness in the United States could continue to trigger distributors of medical rubber gloves in the region to diversify away certain portions of their orders from China to prevent future order detentions,” the research house added.

Furthermore, President Joe Biden recently announced higher tariffs on Chinese medical and surgical rubber gloves from the current 7.5%, to 25% effective 2026.

“Based on our scenario analysis, we find that this event will not have a material negative effect to our forecast for 2026.

“However, we do believe that the decision of Chinese manufacturers to gradually shift their target markets from the United States to European and Asian markets, will result in a near-term trade diversion to Malaysia,” added the research house.

This will benefit most Malaysian players, especially Hartalega and Kossan Rubber Industries Bhd .

HLIB Research noted that Kossan’s 1Q24 cost structure was 12% lower at US$17.50 per 1,000 pieces compared with Hartalega’s US$19.90 per 1,000 pieces.

Kossan registered a higher 5.5% core pre-tax profit margin for its gloves and cleanroom segments in 1Q24 compared with Hartalega’s 1%, despite the latter having higher interest income.

This may be due to a more cost-effective structure and also Kossan been selling more specialised rubber-glove products, said the research house.

Kossan also had a net cash position of Rm2.1bil in 1Q24 (33% of market cap) compared with Hartalega’s Rm1.4bil (12% of market cap).

HLIB Research, which maintained a “neutral” call on the overall sector, has a “buy” call on Kossan given its possible re-rating.

Source: The Star

Glove makers to benefit from more US orders

Semiconductor and computer chip powerhouse Taiwan is keen on working with Malaysia on new opportunities.

“Malaysia is well-equipped with semiconductor capabilities, especially in packaging and testing,” said Taiwan’s Foreign Affairs Deputy Minister Tien Chung-kwang.

“It’s one of the most advanced countries in this field,” he said in a briefing with the press from countries that are part of Taiwan’s New Southbound Policy.

Introduced in 2016, the NSP aims to boost cooperation and talent exchange between Taiwan and Southeast Asian, South Asian and Australasian countries.

Tien said Taiwan is committed to leveraging its technology talent and resources from the government and private sector to reshape supply chains and industries.

In the past eight years, Taiwan had seen a significant increase in trade volume with the 18 NSP countries.

“It took Taiwan 46 years to achieve advanced expertise in computer chips and semiconductors and we want to continue offering capacity-building opportunities to interested nations,” he said.

In this area, Tien said Taiwan was looking to work with Malaysia, because of its semiconductor capabilities, highly skilled workforce and stable hydroelectric power supply.

Already, Taiwanese officials have engaged their Malaysian counterparts, including Julau member of Parliament Datuk Larry Sng.

Sng, when contacted by the New Straits Times, said Malaysia, with its strategic location, could become a hub for expansion and collaboration with more advanced countries such as Taiwan.

He said various multinational companies have already invested in Penang and Klang, and that he also hopes to draw investors to Sarawak.

In the case of Taiwan, Sng said there was potential for collaboration in engineering education.

“Instead of sending students abroad, a Taiwanese university campus in Malaysia could be established to meet the growing demand for engineers,” said Sng.

Meanwhile, Sng acknowledged that many Malaysians moved abroad to countries like Taiwan for better opportunities and higher salaries.

However, this was not necessarily a negative as the Malaysians could contribute back to the country when they returned.

“Malaysians in Taiwan gain invaluable experience in a highly competitive industry. The work ethics in Taiwan and Japan are notably similar, providing a unique professional environment that’s challenging to replicate,” he said.

Source: NST

Taiwan looking to work with Malaysia on semiconductors, computer chips

Malaysia must capitalise on the full potential and opportunities in Asean’s manufacturing sector and ensure that the ecosystem is well-developed to support and equip youths with the skills, resources and capacity to navigate the complexities and challenges.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said that for more than a decade, the manufacturing sector has served as the main catalyst for economic growth in many Asean countries, particularly Malaysia, where manufacturing contributed over 23% to the country’s gross domestic product (GDP) in 2023.

He said the manufacturing sector was also the largest contributor to Asean’s GDP in 2022, with a contribution of US$767 billion, or 21.2% of the total.

“With over 213 million youths aged 15-34 in the region, projected to reach a peak of 220 million by 2038, these young demographics provide Asean with an edge to move higher in the global value chain,” Tengku Zafrul said in his speech at the Asean Manufacturing Youth Conference 2024 (AMYC 2024) today.

He said with Asean currently at an inflexion point, the domestic manufacturing sector must maximise the opportunity to expand exponentially.

Meanwhile, Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said young entrepreneurs in the domestic manufacturing sector must collaborate and expand regionally to bring the next generation of Malaysian manufacturing to greater heights.

He advised young entrepreneurs to create strategic partnerships, engage in mergers and acquisitions, and explore Asean market opportunities to position Malaysia as a leader in the manufacturing sector.

“First, be bold. Dream big and set ambitious goals, achieved by aiming high and taking decisive actions. Believe in your ability to make a difference and take risks.

“Second, embrace innovation. As digital natives, use technology and explore how digital tools and new technologies can advance manufacturing.

“Third, create value through collaboration. Connect and develop business links through organisations like FMM. Our Youth Committee provides a platform for young business leaders to exchange updates, share experiences, and forge connections,“ Soh

He said FMM has been entrusted with the important role as the champion for mission-based Project 2.1 under the New Industrial Master Plan 2030 to create 3,000 smart factories.

“I do hope many Youth companies will come join us onboard and join us on this transformation journey,“ he said.

FMM, supported by its corporate partners Tec D Malaysia, Dell Technologies, and Microsoft, organised the inaugural AMYC 2024 with the theme Empowering Asean Youths in Manufacturing: Transformation for Sustainable Growth.

AMYC 2024 aims to foster productive engagement among stakeholders to discuss the evolving landscape of the manufacturing industry. It emphasises the significant role of youth in driving innovation and competitiveness, formulating creative strategies for talent development, and providing sustainable direction for the future through environmental, social, and governance practices.

Source: The Sun

Malaysia must capitalise on Asean’s manufacturing potential: Tengku Zafrul

The palm oil industry should explore repurposing residuals as a crucial feedstock for sustainable aviation fuel, moving beyond traditional uses of palm oil, said Deputy Investment, Trade and Industry Minister Liew Chin Tong.

He emphasised the need for the palm oil industry, alongside other non-aviation sectors, to contribute to positioning Malaysia at the forefront of the sustainable fuel landscape.

“This is also an opportunity for us to connect Malaysian industries horizontally, so that not only are we supplying the global supply chain, but also creating more domestic innovations and products that will eventually be of relevance globally,” he said during his opening remarks at the MyAero Sustainable Aviation Symposium 2024 on Tuesday.

Liew highlighted the importance of both vertical integration within Malaysian industries and horizontal linkages between sectors to shape the aviation industry’s future.

He also referenced the Malaysia Aerospace Industry Blueprint 2030, detailing 41 initiatives expected to generate RM55.2 billion annually and create 32,000 high-tech jobs by 2030.

“We hope to establish Malaysia as the aerospace hub in the region and the global community, and to build synergy with neighbouring states through promoting supply chain development, and the use of sustainable alternatives such as sustainable energy fuel, electricity and hydrogen-based energy,” he said.

Meanwhile, National Aerospace Industry Corporation Malaysia chief executive officer Professor Shamsul Kamar Abu Samah highlighted Malaysia’s industry environmental, social and governance (iESG) framework as pivotal for aerospace firms transitioning to sustainable practices.

“This includes initiatives such as developing cleaner technologies, improving fuel efficiency and investing in sustainable manufacturing processes.

“Collaborative partnerships between governments, aerospace companies and research institutions are essential for driving these innovations forward and achieving shared ESG goals, while maintaining economic viability and competitiveness in the global market,” he added.

Source: Bernama

Liew urges palm oil industry to repurpose residuals for sustainable aviation fuel

The outlook for Malaysia’s electrical and electronics (E&E) companies appears positive, as indicated by the latest survey conducted by the Malaysia Semiconductor Industry Association (MSIA).

The survey, which is also MSIA’s inaugural E&E and semiconductor quarterly pulse survey, found that 39% of companies reported better business performance in the second quarter (2Q24) compared with 1Q24, highlighting a positive industry sentiment.

However, talent shortages and market competition remain the biggest challenges faced by companies in the sector.

Despite these hurdles, 60% of the surveyed companies are optimistic about 3Q24, driven by demand for consumer electronics, automotive and artificial intelligence.

Additionally, 85% of companies are planning to hire engineers and technicians in 3Q24 and 58% have an optimistic investment outlook for the same period.

The survey also revealed that companies are looking to expand into new markets, invest in new technology and develop new products, with 72% expressing an optimistic overall outlook for the next 12 months.

Notably, 74% of companies have a positive sentiment towards the adoption of generative AI, anticipating its impact across their operations and strategies.

MSIA, in a statement, emphasised the significance of the E&E industry as one of Malaysia’s bellwether sectors.

It said that in 2023, Malaysia’s E&E exports amounted to RM575bil, accounting for 40% of the country’s total exports.

Source: The Star

Poll: Positive outlook for Malaysia’s E&E companies

Malaysia should focus on making energy-efficient vehicles and parts and components, says analyst

THE focus on producing energy-efficient vehicles, including electric vehicles (EV), together with parts and components, could give Malaysia a push to become an automotive hub in Asean, an industry analyst said.

This requires more high-tech components for production, hence it is not labour intensive.

Simultaneously, Malaysia should start focusing more on research and development (R&D).

“Malaysia used to be at the forefront of the industry but Thailand has surpassed us by developing more vendors for the crucial parts,” independent automotive analyst Hezeri Samsuri said.

“Tyre companies have built regional R&D facilities in Thailand. We are still ahead of Indonesia but we should be prepared for its growing appetite for automotive. We need to see what the industry requires. For the time being, we can see that Chinese companies are making inroads into Asean.”

He said with labour cost higher than its neighbours, Malaysia needs to focus on high-tech components for EVs, among others.

“There is no shortcut to this,” Hezeri told ‘Business Times’.

In June, Geely chairman Li Shufu said the competitiveness of Malaysia’s automotive industry was being restricted by its automotive supply chain, whose costs were 30 per cent higher than China’s and 10 per cent costlier than Thailand’s.

Hezeri said assembling cars for export to Asean markets is no longer an option because every country wants to have its own completely knocked down factories.

“Hence if we focus on EV components, we can export the parts and, later, technology to these countries. Australia is a good example where they have shut down their car factories and turned the country into an R&D centre for Asia-Pacific car companies.”

He said the talent that the nation has grown, thanks to Proton and Perodua, should not be wasted.

The challenge the country faces is focusing too much on domestic sales.

“With a small market, we do not have the volume to make local assembly plants ‘sexy’ anymore. We are also not really heavy into R&D, and with EV technology being so new, investment in R&D will be rewarding in the future.”

Hezeri added that more should be done to turn Malaysia into an automotive R&D hub in Asean.

“For example, Proton’s old test track facility should be turned into an R&D facility for any car brand to use.

“Battery tech for Asean climate and usage should be looked into further. In fact, we should push Asean to ‘protect’ the market by making it compulsory for certain EV components to be produced here.”

He said Asean must protect its market by compelling foreign car brands to use local tech or components if they want to get incentives.

Malaysia should start focusing more on R&D or else its talent would be driven away.

“Perodua has been working to develop products for Toyota and Proton’s engineers have moved out from Malaysia as their talent is no longer required here. Our engineers are scattered all over the world when we should be using them to develop our country,” said Hezeri.

AmInvestment Research said EVs made up 2.6 per cent of Malaysia’s new vehicle sales in the first four months this year, up marginally from 1.7 per cent in 2023.

Although Malaysia offers generous incentives and tax holidays to EV buyers until the end of 2025, these benefits are primarily accessible to affluent consumers due to the minimum price of RM100,000 for an EV.

“Essentially, Malaysia’s EV policy encourages affluent consumers as early adopters, and for the main

stream market to catch on.

“This strategy, also used in North America and Europe, has yielded unfavourable outcomes as EV sales declined once the incentives expired,” it said, adding that Malaysia will face a similar situation in 2026.

According to AmInvestment Research, Malaysia should consider adopting policies like China’s, which is the most successful large-scale adopter of EVs where it focuses first on lower-income individuals.

The firm, quoting China Association of Automotive Manufacturers, said China banned internal combustion engine motorbikes and mandated electrified two-wheelers in 2017, resulting in over 350 million e-scooters zipping across the country in 2023.

It added that diesel public buses were phased out and replaced with electric versions at the same time, and now 80 per cent of public buses are electrified nationwide.

“As a result of these policies, the average Chinese commuter has become familiar with the EV and its merits. Air quality has improved significantly and cities have become noticeably quieter,” it said.

AmInvestment Research said China’s EV sales in May accounted for 43.5 per cent of total vehicle sales, a significant increase from about seven per cent in January 2021 before the incentives for private EVs were introduced.

The firm said the policies clearly worked, which is no small achievement given that it is the biggest car market globally and the third largest country in terms of geographical size.

Source: NST

High-tech approach to becoming an automotive hub in Asean

A new holistic and futuristic industrial park will soon be seen in Senawang, Negeri Sembilan. Combining cutting-edge technology, flexibility and sustainability, SPD Tech Valley by Seri Pajam Development Group will offer a wide range of amenities and facilities for the convenience of its future users.

Strategically situated within Malaysian Vision Valley 2.0, the freehold 523-acre industrial park has excellent access to the North-South Expressway (PLUS) and Kajang-Seremban Highway (LEKAS). It is also near major transportation hubs such as the Kuala Lumpur International Airport (KLIA) and Port Klang, which facilitate seamless logistics and supply chain operations. Moreover, the industrial park is located 70m above sea level, which provides natural protection against flooding.

Comprehensive and modern industrial park

Besides the main industrial buildings, SPD Tech Valley integrates office spaces, commercial areas and green spaces. It will be divided into nine major zones: detached factories, heavy industrial land, medium industrial land, intelligent warehouse, commercial hub, centralised labour quarters, centre of excellence, solar power generation centre and recreational area.

Tailored solutions for diverse business needs

A diverse range of products is offered to suit the requirements of different businesses. SPD Tech Valley will allocate medium and heavy industrial plots measuring from three acres, where factories can be built to suit individual designs. These lots will come with future-proof infrastructure, which will cater for buyers’ current and future demands.

Ready-built detached factories will also be available, with lot sizes from 1.14 acres and built-ups starting from 26,000 sq ft. Each factory will have GreenRE certification and come equipped with electric-vehicle chargers, rainwater harvesting systems and solar panels. The design of the factories allows for upgrading options and customisation of space, and they will be able to accommodate larger machines, giving businesses the flexibility they need to grow their operations.

As it will be the first managed industrial park in Negeri Sembilan with integrated smart technology, businesses need not worry about a lack of facilities. Storage will not be a concern with the inclusion of a one million sq ft intelligent warehouse. It will be equipped with AI-driven logistics and real-time tracking for optimal inventory and distribution management. It will also offer a cost-saving pay-as-you-use model where extra stock can be kept during peak season without the financial burden of constructing another warehouse for businesses in the industrial park.

To cater for the workforce in the industrial park as well as the surrounding vicinity, the commercial hub will provide amenities. Located at the entrance of SPD Tech Valley, the commercial hub’s prime spot will ensure consistent foot traffic and is set to be a vibrant and dynamic business hub that caters for the area’s growing demand.

The Centralised Labour Centre will provide a comfortable place for workers to live while ensuring their well-being is taken care of. The space will have a capacity of 5,000 beds and offer the necessary services such as a canteen, automated laundry shop, grocery shop, multi-purpose hall, F&B vending machine, mineral water vending machine and first aid room. Shuttle service and 24-hour security will be provided to ensure convenience and safety.

SPD Tech Valley also offers lifestyle facilities for work-life balance. The Business Support & Leisure Centre will feature a business hotel, business lounge, business centre, fitness centre, spa and wellness centre, cinema room, game room, restaurant and café, swimming pool and bike racks, among others. A sustainable recreation park with facilities such as an outdoor gym, jogging track, multipurpose court, picnic areas and compost area will be the green lung of the industrial park. There will be solar-powered lights to illuminate jogging tracks and rain-harvesting systems to sustain the greenery.

Pioneering sustainability and smart technology

SPD Tech Valley aims to be the first industrial park in Southeast Asia to receive the LEED Gold certification for Cities and Communities. Moreover, the developer is committed to the sustainability movement by getting GreenRE certification for the development’s facilities, ensuring the park buildings and infrastructure meet high environmental standards. The design of the industrial park follows international and national guidelines and takes reference from United Nations Industrial Development Organisation (UNIDO) standards, Sustainable Development Goals, environmental, social and governance (ESG) principles, the 1 National Energy Transition Roadmap (NETR) and New Industrial Master Plan 2030 (NIMP 2030).

Green energy initiatives that will be integrated into the industrial park include the implementation of solar farming and rainwater harvesting, provision of EV charging stations, and development of bicycle paths to promote greener commuting options.

The facilities are built with a focus on ESG principles that include using sustainable materials, implementing energy-efficient systems and ensuring the operations support social and environmental responsibilities. The developer believes a sustainable ecosystem will bring many benefits such as an increase in operational efficiency and positive profit as well as the security of long-term property value.

Meanwhile, the government’s NIMP 2030 is pushing towards a digital economy and smart cities. Thus, there is increasing demand for industrial parks that support high-tech industries and innovation-driven enterprises. As such, the developer is aiming to stay ahead of industry trends by future-proofing SPD Tech Valley with Industrial 4.0 features such as automation support, data exchange and connectivity, making it ready for the future.

Other features that make the industrial park present and future-ready include a 100ft road reserved to ease traffic flow as well as accommodate heavy machinery and cargo transportation, fibre-optic infrastructure with 5G to facilitate real-time data sharing and cloud computing, and ample parking along the main road for the convenience of the workforce and clients.

The industrial park will be located next to Malaysia’s National Grid, which will provide operators with easy, reliable options for ample power, and there will be up to 65MW of estimated solar energy. Moreover, a two-million-gallon reservoir and industrial-grade water supply will be in place to ensure adequate water supply. Natural gas supply will be available through the nearby Malaysian Natural Gas pipeline connection.

Source: The Edge Malaysia

Industrial park embraces cutting-edge technology and sustainability

Furniture manufacturers in the state need to intensify efforts to increase the country’s furniture exports, said Sarawak Furniture Manufacturers Association (SFMA) president Kapitan Kong Kim Hong.

He said despite challenges faced particularly post-Covid-19, industry players should focus on delivering quality products and targeting international markets.

“According to Deputy Prime Minister Datuk Seri Fadillah Yusof, who spoke at the Malaysia International Furniture Expo last year, the global industry report released in 2019 indicated that the global furniture market value is expected to reach US$550 billion by 2027.

“After the Covid-19 pandemic, our country’s total export of furniture has remained above RM100 billion in 2021, and in 2022 it reached RM115 billion.

“These figures show that Malaysia holds a significant share in the global furniture market, making it the second-largest furniture exporter in the world,” said Kong in his speech at SFMA Miri branch’s commemoration of Lu Ban’s birthday anniversary, here on Saturday.

Therefore, he encouraged industry players in the state to seize the opportunity to develop their brands and introduce their products to the world.

“Although this is vast potential for furniture exports in the country, Sarawak’s furniture export is relatively small as compared to other regions. I suggest local manufacturers to diversify their product ranges,” he said.

Meanwhile, on the celebration of Lu Ban, who is revered as the Chinese deity of builders and contractors, state Transport Minister Dato Sri Lee Kim Shin emphasised the importance of the spirit of craftsmanship, acknowledging Lu Ban’s inventions and contributions to carpentry which have provided valuable knowledge for future craftsman.

“We should carry Lu Ban’s spirit of craftsmanship, embodying a love for work and the pursuit of perfection.

“We must continuously learn new knowledge and master new skills, while also emphasising teamwork to progress together,”said Lee, whose speech was read by councillor Jeffrey Phang.

Source: Borneo Post

Sarawak furniture manufacturers urged to boost exports