Under the leadership of JPDC, the PIPC has been meticulously planned and executed, with a focus on sustainability, innovation and operational excellence 

The Pengerang Integrated Petroleum Complex (PIPC) stands as a significant oil and gas (O&G) development initiative situated in Pengerang, Johor, spearheaded by Johor Petroleum Development Corp Bhd ( JPDC). 

The complex is strategically designed to become a world-class integrated refinery and petrochemical hub, to propel Malaysia’s downstream O&G sector while solidifying its position as a regional industry hub. 

For the record, JPDC is a federal agency reporting to the Economy Ministry and a subsidiary of Malaysia Petroleum Resources Corp (MPRC). 

Spanning a vast area in Pengerang, the PIPC is designed to encompass various facilities, including refineries, petrochemical plants, storage terminals and supporting infrastructure. 

This comprehensive approach underscores the complex’s ambition to emerge as a world-class integrated hub for O&G activities, serving as a catalyst for industrial development and job creation. 

Under the leadership of JPDC, the PIPC has been meticulously planned and executed, with a focus on sustainability, innovation and operational excellence. 

Leveraging Malaysia’s strategic geographical location and abundant natural resources, the complex is poised to attract significant investments and propel the country’s energy sector into a new era of growth and prosperity. 

Moreover, the development of the PIPC is not merely confined to economic considerations. 

Environmental sustainability and safety remain paramount priorities, with stringent measures in place to minimise ecological impact and ensure the well-being of local communities. 

Through collaborative efforts with government agencies, industry stakeholders, and the community, JPDC is committed to fostering responsible and sustainable development practices within the complex. 

According to a statement from the Malaysian Investment Development Authority (MIDA), JPDC has achieved success in securing committed investments exceeding RM5 billion for the second phase of the PIPC. 

This achievement signifies a resurgence in investments following the Covid-19 pandemic. 

As of April 6, 2023, investments in the second phase of PIPC totalled RM5.05 billion, surpassing JPDC’s 2021 target of RM5 billion for investments spanning 2020 to 2025. 

JPDC acting CEO Izhar Hifnei Ismail highlighted the agency’s efforts in facilitating and supporting prospective investors in their feasibility studies for establishing downstream O&G and petrochemical businesses within PIPC. 

In this phase, the focus has shifted towards the development of new industrial areas like the Pengerang Industrial Park by Johor Corp (JCorp). 

Additionally, collaborations with international players such as LG Chem Ltd from South Korea, in a joint venture (JV) with Petroliam Nasional Bhd (Petronas), are being pursued. 

Completion of Phase 1 

The PIPC, scheduled for a 25-year development between 2013 and 2037 in four phases, witnessed the completion of phase one (2013-2019) which included two catalytic projects. 

These projects include the Pengerang Deepwater Terminals (PDT), a storage facility for oil and petroleum products with a capacity of up to five million cu m, developed by Dialog Group Bhd, and the Pengerang Integrated Complex (PIC) consisting of refinery and petrochemical facilities developed by Petronas. 

Critical infrastructure and social amenities worth over RM3 billion have been developed by the federal and Johor state governments to support industrial growth within PIPC. 

JPDC is now emphasising sustainability in the second phase, urging new investments to have robust sustainability plans, in line with the growing focus on green technology. 

Investments are expected to adhere to environmental, social and governance (ESG) standards, with financiers scrutinising project proposals accordingly. 

The majority of new investments originate from Europe and Asia, reflecting a global interest in the development of PIPC with a sustainability-driven approach. 

In a recent interview with The Malaysian Reserve (TMR), Izhar shed light on the current status and future prospects of the PIPC. 

Development of PIPC began in 2013, guided by the PIPC Development Master Plan 2013-2037, he shared. 

On Oct 13, 2023, Prime Minister cum Finance Minister Datuk Seri Anwar Ibrahim announced that the PIPC is designated as a hub for petrochemical and chemical activities, to be supported by incentives for investments in selected activities and for the development of industrial parks. 

Izhar unveiled that the PIPC has made significant strides in its development, as of Dec 31, 2023. 

As an overview of the progress achieved, he said a total of 22,904ha have been designated for industry development. 

“Of this, 10,415ha, accounting for 45.5% of the total land area, have been committed to industry development. 

“Notably, development has already been completed on 6,256ha, representing 60% of the committed area,” he elaborated. 

In terms of investments, he said the targeted total investments in PIPC by 2037 amount to RM330.6 billion and as of Dec 31, 2023, he declared that committed investments have reached RM139.66 billion, constituting 42.2% of the targeted total investments. 

Job Creation and Refining Capacity

On job creation, PIPC aims to create a total of 30,095 direct and indirect jobs by 2037. 

As of Dec 31, 2023, 7,549 jobs have been generated, marking 25% of the targeted total. “The planned total liquid storage capacity from 2013 to 2037 is set at five million cu m. “Currently, as of Dec 31, 2023, the available liquid storage capacity stands at 4.1 million cu m, achieving 82% of the planned total,” he disclosed.By 2037, he shared that the planned total refining capacity is projected to reach one million barrels per day. 

“As of Dec 31, the available refining capacity is at 300,000 barrels per day, reaching 30% of the planned total capacity,” he told TMR. 

Moreover, the planned total petrochemical production capacity by 2037 is aimed at 11.3 million tonnes per annum. 

At the end of last year, he revealed the petrochemical production capacity stands at 3.6 million tonnes per annum, achieving 31.9% of the planned total production capacity. 

“In 2022 and 2023, the government introduced several economic development policies, ranging from macroeconomic policies to sector- and industry-specific policies, including those on energy, manufacturing and chemical industries that have bearing on the activities that are being promoted in PIPC,” he noted. 

Meanwhile, the current PIPC Development Master Plan emphasises on preparing an integrated downstream O&G environment, and for the past 10 years, the two key investors in PIPC have been diligently developing facilities that serve as the backbones for the industry to grow. 

Dialog Group Bhd has developed deep water jetties for the transportation of crude oil and liquid petroleum products as well as liquid natural gas, together with more than three million cu m of liquid storage capacity in Pengerang Deepwater Terminals (PDT), he commented. 

He also pointed out that Petronas has developed oil refineries, petrochemical processing plants, a regasification facility and other supporting facilities within its PIPC, the biggest such industrial complex in Malaysia. 

However, the development policies and plans launched in 2022 and 2023 have introduced new dynamics, as well as set new economic aspirations and targets. 

For example, Izhar said the Ekonomi Madani plan calls for the creation of new economic opportunities through strategic industries, to improve the economic wellbeing of Malaysians through high-paying jobs and business participation. 

“The National Energy Policy 2022-2040 and the National Energy Transition Roadmap set targets for a sustainable energy sector, including increasing use of renewable energy and managing the levels of greenhouse gas emissions into the environment,” he said. 

On top of it, the New Industrial Master Plan 2030 and the Chemical Industry Roadmap 2030 chart the paths of promoting petrochemical- and chemical-related manufacturing activities in Malaysia without compromising on the sustainability agenda. 

Key Priorities 

On key priorities and objectives for JPDC regarding the future phases of the PIPC, its development is guided by the PIPC Development Master Plan 2013-2037, which is divided into four phases, namely Phase 1 (2013-2019), Phase 2 (2020-2025), Phase 3 (2026-2031) and Phase 4 (2032-2037). 

In Phase 1, the main activities were the construction of PDT Phase 1 and Phase 2, and the PIPC from 2015 to 2019, with a total committed investment of RM120.67 billion. 

In Phase 2, two industrial parks were opened in PIPC, namely OASIS@Pengerang (developed by Perisind Samudra Sdn Bhd) and Pengerang Industrial Park (developed by JCorp), offering site options for companies involved in downstream O&G, petrochemical and chemical activities. 

“JPDC is currently reviewing the PIPC Development Master Plan to ensure that Phases 3 and 4 can accommodate and support industrial activities that need to comply with sustainable development objectives and net-zero goals,” Izhar said. 

These include aligning the PIPC master plan with the country’s sustainable economic development plans, especially those relating to the future growth of the energy and manufacturing sectors. 

With Pengerang being designated as a hub for petrochemical and chemical activities, supported by a set of investment incentives, as announced by Anwar in the 2024 Budget, the JPDC CEO said the company will be emphasising inbound investments in petrochemicals and chemicals. 

“We have also gained immense experience and know-how in facilitating and guiding industry growth in PIPC, and we believe that we can share and apply that knowledge at the national level, by advising and assisting government, business and community stakeholders in managing similar activities in their respective areas,” he explained. 

He also shared that since the beginning of PIPC development in 2013, JPDC has been focusing on three main mandates, which are to plan and coordinate the physical development of PIPC, including public infrastructures and industrial plants and facilities; to promote and facilitate investments in downstream O&G, petrochemical and chemical activities in PIPC; and to facilitate and guide members of the local communities to participate in the economic growth taking place in PIPC. 

The construction of new highways and upgrading of roads have allowed for improved traffic access into and from Pengerang, and opened up new areas of development, including commercial and residential areas. 

The increased presence of industry personnel also contributed to higher levels of commercial activities in Pengerang. 

For example, in a joint study conducted by JPDC and Petronas Refinery and Petrochemical Corp Sdn Bhd (PRPC) in 2019, commercial and retail activities in areas surrounding the PIPC construction were found to have increased fivefold in terms of value during the project construction period from 2014 to 2018. 

Furthermore, the main beneficiaries were food and beverage outlets, hotels, retail shops and supermarkets. 

Also in 2013, JPDC organised training programmes for local manpower, enabling them to gain certification in skillsets and job competencies required by the downstream O&G industry. and secure employment with companies or contractors serving the industry in Pengerang. 

These cover the construction and operational phases of the industrial facilities, as well as the plant turnaround and maintenance jobs. 

From 2013 to Dec 31, 2023, JPDC trained 6,898 Malaysian workers in new skills or to upgrade their current skill sets, with 95% of the trainees able to secure jobs with employers in the industry right after completing their training. 

This contributes towards the setting up of a community of highly paid skilled and competent industrial manpower in Pengerang, ready to serve the industry. 

In 2024, JPDC has embarked on a Contractors Development Programme, aimed at facilitating and supporting competent and qualified local contractors to enhance their business scale, capabilities and readiness to serve the downstream O&G, petrochemical and chemical industry. However, to reiterate, land area development has fallen slightly behind, achieving only 45% of the targeted projection, with 10,415ha currently utilised out of the planned 22,904ha. 

Core Activities and Development Areas

To reflect, PIPC’s core activities revolve around six key components, which are oil refinery, naphtha cracker, petrochemical, liquid storage, deepwater terminal and specialty chemical. 

The development areas identified by JPDC are the PDT, Pengerang Industrial Park (PIP), and OASIS@Pengerang, in addition to PIPC. 

There is also PIC, occupying 6,242ha and it is an integrated refinery and petrochemical complex featuring a cogeneration power plant, air separation unit, dedicated water supply, and common utilities. It is operated by PRefChem, a JV with Saudi Aramco. 

PDT, spanning 1,200ha, includes storage terminals with a total capacity of five million cu m, supporting the efficient handling of O&G products while the PIP is a 786ha integrated industrial park connected to PIPC and PDT, targeting heavy, medium and light industries. 

OASIS@Pengerang encompasses 678ha and it is a mixed development featuring commercial and industrial spaces, including ready facilities and a resource recovery complex for scheduled waste. 

Lastly, Pengerang Deepwater Terminal 2 (PDT2) is under development, including storage capacity of 1.3 million cu m and a liquefied natural gas (LNG) regasification terminal owned by Petronas Gas Bhd, Dialog LNG Sdn Bhd and Permodalan Darul Ta’zim Sdn Bhd. 

PIPC’s Vision for the Future 

PIPC Phase 2 is poised to focus on strategic investments to further enhance its position in the downstream O&G sector. 

Key focus areas include completing the product chain by producing final products from intermediate products, such as plastics and synthetic fibres. 

Additionally, the company is focusing on new integrated projects with enhanced technology, embracing technologies like crude oil to chemical (COTC), plastic waste to chemicals and methanol to olefins (MTO) to improve competitiveness, efficiency and sustainability. 

There will also be initiatives toward a low-carbon energy system, including accelerating the solar energy industry, leveraging bio-energy resources, exploring full hydrogen potential, and developing new energy technologies. 

Lastly, JPDC is utilising the industrial land available for downstream oil, gas and energy hub development. 

Investment Opportunities and Support Services

JPDC offers a range of investment facilitation services, including pre-investment consultation, investment execution assistance, and post-investment support. 

PIPC also presents investment opportunities in integrated logistic facilities, waste management centres and maintenance repair overhaul and support services. 

As PIPC continues to evolve, it not only contributes significantly to the economic landscape but also becomes a beacon of innovation and sustainable development in the downstream O&G industry. 

Source: The Malaysian Reserve

Pengerang Integrated Petroleum Complex shaping global energy markets

The Federation of Malaysian Manufacturers (FMM) on Friday inked a memorandum of understanding (MoU) with the Hungarian Chamber of Commerce and Industry (HCCI) to establish a framework for collaboration to support industrial development in Malaysia and Hungary, and to strengthen mutual understanding and cooperation between the business communities.

The MoU was signed by FMM president Tan Sri Soh Thian Lai and HCCI president László Parragh, in conjunction with the HCCI delegation’s visit to Malaysia from Feb 21 to 23. The signing was witnessed by Hungarian ambassador to Malaysia Dr Petra Ponevács-Pana.

According to Malaysia’s Department of Statistics, trade between Malaysia and Hungary amounted to US$644 million (RM3 billion) in 2023 with exports of US$498 million and imports of US$146 million.

“I believe the MoU will provide more opportunities for Malaysian businesses in exploring potential trade opportunities in Hungary and we welcome investments from Hungary to Malaysia given the strategic location of Malaysia in Asean coupled with the most recent signed free trade agreements, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, which is the world’s largest free trade area in terms of combined gross domestic product and market size, accounting for almost one-third of the world’s population,” said Soh.

Parragh said: “Malaysia, being Hungary’s second largest trading partner from Asean, is welcome to tap on Hungary as a gateway to the European Union’s market of close to 500 million population and I believe there are ample opportunities for future cooperation between our members.”

Source: The Sun

FMM, HCCI in pact to support industrial development in Malaysia, Hungary

SK Nexilis Co Ltd, the world’s largest copper foil producer, has set up for its subsidiary SK Nexilis Malaysia Sdn Bhd its first green syndicated term loan facility (green loan) in Malaysia to finance the construction cost of its first overseas copper foil manufacturing facility in the Kota Kinabalu Industrial Park, Sabah.

In a recent statement, the company said the RM2.3 billion manufacturing facility would have an annual production capacity of 50,000 tons, increasing SK Nexilis’ global production capacity by two times.

It said the copper foils produced will be exclusively used in electric vehicle batteries, enabling sustainable, low-carbon mobility solutions in various locations, including South Korea, Malaysia, Poland and North America.

OCBC Bank (Malaysia) Bhd acts as the green loan structuring adviser, playing a pivotal role in structuring the green loan and advising on the underlying green financing framework to adapt to SK Nexilis’ environmental, social and governance (ESG) objectives.

OCBC Bank also acts as the mandated lead arranger, facility and security agent, and a joint lender, alongside AmInvestment Bank Bhd as the other mandated lead arranger, and AmBank (M) Bhd as a joint lender.

SK Nexilis also appointed Moody’s to issue a second party opinion report.

The report certifies the green loan framework to be in compliance with the green loan principles.

SK Nexilis Malaysia chief executive officer Shin Dong Hwan said the electrification of motor vehicles is essential for the decarbonisation of the transport sector, which currently contributes approximately one-fifth of greenhouse gas emissions globally.

“Our new manufacturing facility will not only facilitate the decarbonisation initiative, but also create job opportunities for the local talent network, and provide traction for more investments to enhance the local supply chain development for electric vehicles,” he said.

OCBC Bank managing director, senior banker and head of investment banking Tan Ai Chin said that as a major electrical and electronics hub, Malaysia is well positioned to develop a thriving local electric vehicle manufacturing base and ecosystem.

“SK Nexilis’ presence reinforces this ecosystem, and supports the nation’s decarbonisation efforts,” she said.

Source: The Edge Malaysia

Copper foil producer SK Nexilis sets up RM2.3b manufacturing facility in Sabah

The manufacturing industry operated at 79.8 per cent capacity in the fourth quarter of 2023 (4Q 2023), edged down by 0.4 percentage points from a rate of 80.2 per cent in 4Q 2022, said the Department of Statistics Malaysia (DOSM).

In a statement today, Chief Statistician Datuk Seri Mohd Uzir Mahidin said a lower capacity utilisation of the manufacturing industry was primarily attributable to decreases in the sub-sector of petroleum, chemical, rubber, and plastic products (-4.2 percentage points) and electrical and electronic products (-0.5 percentage points).

The manufacturing industry operated at 79.4 per cent capacity utilisation in 3Q 2023, down 1.9 percentage points year-on-year (y-o-y) while expanding every quarter.

He said the utilisation rate in the manufacturing industry exceeded 80 per cent for two consecutive months, operating at 80.4 per cent in October 2023 and 80.1 per cent in November 2023, while the capacity utilisation rate for December 2023 dropped to 78.9 per cent.

“The decline in the capacity utilisation rate in 4Q 2023 mirrored the trend of the manufacturing industrial production Index, which slipped by 0.2 per cent (3Q 2023: -0.1 per cent).

“The decrease in production capacity was primarily influenced by low demand, insufficient supply of materials, as well as the repair and maintenance of machinery and equipment,” Uzir said.

Five sub-sectors posted a capacity utilisation rate above 80 per cent in the 4Q 2023, with the highest rate of 83.2 per cent recorded by the manufacture of non-metallic mineral products, basic metals, and fabricated metal products sub-sector, with a y-o-y increase of 4.5 percentage points.

This was followed by transport equipment and other manufactures with 82.2 per cent.

Meanwhile, the manufacture of petroleum, chemical, rubber, and plastics sub-sector operated at the lowest capacity with 77.9 per cent, reducing by 4.2 percentage points.

In comparison with the preceding quarter, all sub-sectors posted an increase except for the electrical and electronic products, which declined by 0.7 percentage points to 79.2 per cent.

As for the capacity utilisation in export-oriented industries, he said it continued to decline for four consecutive quarters, dropping by 2.1 percentage points y-o-y to 8.4 per cent in this quarter.

“The manufacture of coke and refined petroleum products recorded a substantial deterioration of 9.6 percentage points, reaching 76.1 per cent, followed by the manufacture of textiles, which shrank by 7.7 percentage points to 76.9 per cent,” Uzir said.

In comparison with the previous quarter, the capacity utilisation rate in export-oriented industries increased slightly by 0.02 percentage points.

The capacity utilisation rate of domestic-oriented industries remained vibrant, registering 82.8 per cent in 4Q 2023 (+3.3 percentage points), with all industries in this segment posting an upward trend except for the manufacture of leather and related products, which decreased by 10.9 percentage points to 81.9 per cent.

At the state level, he said that in 4Q 2023, the manufacturing industry in six states operated at a capacity exceeding the national rate, namely Labuan (95.6 per cent), Negeri Sembilan (83.8 per cent), Pahang (83.7 per cent), Selangor (82.1 per cent), Melaka (81.9 per cent), and Johor (81.8 per cent).

Six states experienced a y-o-y decrease in capacity utilisation: Kedah, Kelantan, Melaka, Perlis, Terengganu, and Sarawak.

Perlis continued to record the lowest capacity utilisation rate at 72.3 per cent.

The manufacturing industry’s overall performance in 2023 operated at a lower capacity rate of 79.3 per cent, which fell by 1.1 percentage points as against 2022’s 80.4 per cent.

“Almost all sub-sectors posted a decline except for the non-metallic mineral products, basic metal and fabricated metal products (+1.5 percentage points at 80.7 per cent) and transport equipment and other manufactures (+0.5 percentage points; 82.1 per cent),” Uzir said.

Export-oriented industries decreased by 2.1 percentage points to 78.3 per cent in 2023 (2022: 80.4 per cent).

Domestic-oriented industries posted 81.4 per cent, improving by 1.1 percentage points (2022: 80.3 per cent).

Source: Bernama

Manufacturing industry nearly 80 pct operating capacity in fourth quarter last year

In a strategic move to underscore Malaysia’s growing prominence in the global aerospace sector, National Aerospace Industry Corporation Malaysia (Naico Malaysia) is set to showcase its expertise and capabilities at the ongoing Singapore Airshow 2024 (SA24).

The airshow, renowned as a premier platform for the aerospace and defence industries, will witness Naico Malaysia’s efforts to propel the nation’s aerospace capabilities to new heights.

“Participation in SA24 marks a significant milestone for Malaysia’s aerospace industry,” said Naico Malaysia CEO Shamsul Kamar Abu Samah at the opening of the Malaysia Pavilion at the airshow, which runs until Feb 25, at the Changi Exhibition Centre in Singapore.

The Malaysia Pavilion was officially opened by Malaysia’s High Commissioner to Singapore Datuk Dr Azfar Mohamad Mustafar in the presence of Malaysian Investment Development Authority (Mida) chairman Tan Sri Dr Sulaiman Mahbob.

Shamsul Kamar said SA24 is an opportunity to demonstrate Malaysia’s advancements, forge global partnerships, and attract investments that will propel it towards its goal of becoming the aerospace hub of Southeast Asia.

“Through strategic initiatives and the unwavering spirit of innovation that defines our industry, we are not just participating; we are setting the stage for the future of aerospace in Malaysia and beyond,” he said.

Shamsul Kamar said Naico Malaysia will engage with several international companies, including those from Japan, China, Canada, France, the United States, and the United Kingdom, as well as numerous original equipment manufacturers and Tier 1 suppliers.

“These interactions are pivotal in expanding our global footprint and enhancing our industry’s capabilities through strategic partnerships,” he said.

The Malaysia Pavilion, featuring 10 of the country’s leading aerospace companies and three government agencies, represents the nation’s commitment to excellence and innovation.

In line with the Malaysian Aerospace Industry Blueprint 2030, several memoranda of understanding are scheduled to be held at the Malaysia Pavilion to emphasise the country’s aerospace industry’s dedication to collaboration and innovation.

A mini-investment seminar will also be organised by Mida and a roundtable meeting will be hosted by Invest Selangor to highlight the lucrative opportunities within Malaysia’s aerospace sector, inviting global investors and industry stakeholders to explore potential collaborations.

Naico Malaysia, an agency under the Ministry of Investment, Trade and Industry, was formed to lead the overall development of the aerospace industry and oversee the implementation of strategies and initiatives in the Malaysian Aerospace Industry Blueprint 2030.

The agency serves as the focal point in linking the aerospace industry players, relevant government ministries and agencies, and academia to collectively work together in strengthening the capability and capacity of Malaysia’s aerospace industry.

Source: Bernama

Naico Malaysia to elevate country’s aerospace profile at Singapore Airshow

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz has encouraged electric vehicle (EV) auto makers with Malaysian facilities to consider making Malaysia their hubs to supply and service the fast-growing EV market in Asean.

He said this is because the EV market in Asean is expected to grow at a compound annual growth rate of about 33 per cent from around US$500 million in 2021 to US$2.7 billion (RM11.77 billion) by 2027.

“Malaysia has many positive factors that make its investment landscape highly conducive to supporting multinationals’ regional hub ambitions.

“Apart from our strategic location, good infrastructure and rule of law, we also have a highly-established electrical and electronics industry which has been reliably feeding the other industries, including aerospace, renewable energy and EVs,” he said in his keynote address at the launch of UMW Toyota Beyond Zero here, today.

Commercially, the automotive industry registered a strong performance in 2023, achieving total industry volume (TIV) close to 800,000 units while the adoption of electrified vehicles (xEV) also increased from 2.77 per cent of TIV in 2022 to 4.12 per cent in 2023.

New registered passenger battery electric vehicles (BEVs) jumped from around 3,000 units in 2022 to more than 13,000 units in 2023.

In preparing for the zero-emission vehicle transition, through the National Automotive Policy (NAP 2020), Tengku Zafrul said the Ministry of Investment, Trade and Industry (MITI) is targeting to empower local automotive industry players through various investment incentives for the assembly or manufacture of hybrid and EVs.

“We also encourage collaboration with global industry leaders to bring the production of clean energy vehicles to Malaysia and begin their research and development facilities in the country so that we can develop more highly skilled local workers and support more domestic vendors,” he said.

The National Net Zero goal is also supported by NAP 2020, and, among others, the Hydrogen Economy and Technology Roadmap (HETR) 2023-2050.

On the industry’s high demand for skilled talent, he said MITI will continue to collaborate with the Ministry of Human Resource and Ministry of Higher Education to ensure that the industry’s requirements for skilled workers will be fulfilled.

“We have already started by suggesting a short-term solution, which is to open up our job market selectively to foreign graduates with the targeted qualifications to address the talent gap, while also working on long-term measures to increase domestic students’ enrolment in science, technology, engineering, and mathematics (STEM) subjects and the technical and vocational education and training track,” he said.

As far as energy-efficient vehicles and EVs are concerned, the government set up the National EV Steering Committee last year, which is a Cabinet Committee comprising key ministries such as the Ministry of Finance, Ministry of Transport, Ministry of Science, Technology and Innovation, and the Ministry of Housing and Local Government.

In building the necessary infrastructure to achieve the target of having 20 per cent of TIV for EVs (including hydrogen fuel cells) by 2030, 50 per cent of TIV by 2040, and 80 per cent of TIV by 2050, the Steering Committee will, among others, address a few key concerns.

“The top concerns are firstly, the availability of charging stations to address customer range anxiety, and secondly, ensuring the supply to power up the charging ecosystem, so owners can charge any form of EV quickly, easily and reliably in an urban or rural setting,” he said. 

Source: Bernama

EV auto makers urged to consider making Malaysia their EV hubs in ASEAN – Tengku Zafrul

MIDF Research expects Malaysia’s external trade to likely recover in 2024, backed by a turnaround in electrical and electronics (E&E) trade.

In a research note today, it said the country’s export performance is set to rebound and grow at +5.2 per cent this year compared to 2023’s -8.0 per cent.

“Although the E&E exports remained below a year ago, the expected turnaround in the E&E trade will be one of the factors to support external trade recovery,” said MIDF Research.

Increased demand for petroleum products and palm oil could also support export growth this year.

Malaysia stands to benefit from the pick-up in regional production activities and improvement in global demand as the stronger-than-expected rebound in January 2024 was also in line with improving regional trade performance.

The nation’s total trade rebounded to +13.3 per cent year-on-year (y-o-y) in January 2024, marking the first growth in 11 months.

The better performance was due to increases in both exports (+3.4 per cent) and imports (+5.3 per cent) and the lower base effect.

Meanwhile, trade surplus amounted to RM10.1 billion and marked the 45th consecutive month of trade surplus since May 2020 due to the relatively stronger rise in imports.

“We still expect a pick-up in E&E trade, which will support the overall trade recovery and will continue to anchor for the continued trade surplus.

“We reiterate the reduced trade surplus mainly reflected dependency on imports for products such as transport equipment, machinery, chemicals, agriculture products and even crude petroleum,” it said.

Nevertheless, several downside risks could disrupt the trade outlook, including worsening geopolitical and trade tensions, lower demand from major trading partners, and prolonged weakness in global production activities.

MIDF Research also foresees Malaysia’s imports to rebound to +4.4 per cent this year from -6.4 per cent in 2023 on the back of expanding domestic demand and improvement in manufacturing activities.

“We believe the continued rise in imports of intermediate goods and capital goods is consistent with the better purchasing managers’ index (PMI) reading in January 2024, which pointed to stabilisation in the manufacturing sector activities and optimism that demand outlook will improve.

“Going forward, imports will continue to be driven by increased investment and business activities, including inventory restocking and sourcing of raw materials. In addition, imports of consumption goods will also expand on the back of growing domestic spending,” it said.

Source: Bernama

MIDF Research: E&E exports to pivot Malaysia’s external trade in 2024

Malaysia, with a credible and meaningful presence in aviation material and aircraft parts and components manufacturing, hopes to play a more important part in the global supply chain.

Deputy Investment, Trade and Industry Minister Liew Chin Tong said the aerospace sector plays an important role in advancing the four key missions outlined in the New Industrial Master Plan 2030 (NIMP 2030), this being advance economic complexity, tech up for a digitally vibrant nation, push for net zero and safeguard economic security and inclusivity.

“With NIMP 2030 in place, it could transform Malaysia into a global hub for aerospace manufacturing and services,” he said in his keynote address at the opening ceremony of the Malaysia-China Aviation Forum 2024.

Based on the Malaysian Aerospace Industry Blueprint 2030, Malaysia aims to be the main aerospace nation in Southeast Asia as well as an integral part of the global market by 2030, with an expected annual revenue of RM55.2 billion and over 32,000 high-income jobs created.

The blueprint encompasses five key subsectors in the aerospace industry, which include maintenance, repair and operations (MRO), aero manufacturing, system integration, engineering and design services and education and training.

The forum underscores a collaboration that brings together Chinese expertise and Malaysia’s aspiration to be an indispensable part of the global aerospace industry supply chain.

The forum is organised by the National Aerospace Industry Corporation Malaysia in partnership with the China Society of Aeronautics and Astronautics, International Association for Green Aviation, Volar Air Mobility, supported by Galleon (Shanghai) Consulting, Malaysia Autonomous Intelligence and Robotics Association, Malaysia Productivity Corporation and powered by Tahira Group.

“The collaboration between Malaysia and China in making this forum a success can be considered as part of the efforts to mark the 50th anniversary of diplomatic ties between both nations.

“I hope that this forum will evolve into a robust platform fostering commercial opportunities, forge new partnerships and explore new horizons together in the aerospace industry, especially in green aviation,” he said. 

Source: Bernama

Malaysia eyes bigger role in global aviation supply chain – MITI

Sarawak’s first industrial microalgae production project led by Japan’s Chitose Group is set for a major expansion.

Known as Chitose Carbon Capture Central Sarawak (C4 Sarawak), the project, which also involves partners Sarawak Energy Bhd (SEB) and Sarawak Biodiversity Centre (SBC), was launched in Sejingkat near here in May 2023.

The Chitose Group, which is a family of biotechnology companies leading in the global bioeconomy space, is the primary contractor for the microalgae research project which is fully funded by New Energy and Industrial Technology Development Organisation and managed by Japan’s Ministry of Economy, Trade and Industry.

SEB, which operates the Sejingkat coal-fired power plant, is providing the necessary exhausted gas containing carbon dioxide from the plant through a flue gas delivery system to cultivate microalgae.

SBC, on the other hand, offers qualified researchers and skilled manpower to assist with the cultivation and production of high-quality microalgae biomass.

C4 Sarawak is currently the world’s largest microalgae production facility.

Chitose chief bio-engineer-cum-executive officer Takanori Hoshino said the five-ha microalgae production facility has been completed and microalgae production has begun.

“We plan to expand the microalgae production facility to cover an area of 100 ha,” he said after a Chitose delegation headed by group chief executive officer (CEO) Yomohiro Fujita met recently with Sarawak Premier Tan Sri Abang Johari Tun Openg to discuss the expansion project which is expected to commence shortly.

Fujita has pledged to continue expanding the C4 Sarawak project to achieve 2,000 ha by 2030.

Based on the preliminary estimates of the pilot facility at SBC, an investment into a 2,000-ha commercial plant can produce up to 140,000 tonnes of algae biomass annually.

Sarawak, according to Hoshino, was selected as a preferred location for the microalgae farm due to the state’s ideal temperature throughout the year, abundance of fresh water and the state being safe from major natural disasters like typhoons and earthquakes.

In addition, Sarawak is strategically located to access major international markets like Singapore, Japan, Taiwan and China, and the availability of a qualified and skilled local workforce.

Microalgae biomass can be processed for various commercial applications, such as jet fuel, paints, surfactants, truck fuel, proteins, feed and food products as well as for pharmaceutical and cosmetic purposes.

Starting from 2027, Hoshino said it is going to be mandatory for all airline companies globally to have certain percentage of their jet fuels to be mixed with bio-jet fuel, otherwise known as sustainable aviation fuel (SAF), and there is currently not enough supply of bio-jet fuel.

Once bio-jet fuel can be mass produced from microalgae biomass, Sarawak plans to export the fuel not only to South-East Asian countries but also the United States and Europe.

At the launch of C4 Sarawak, Abang Johari said that depending on technology used, some researches show that algae biomass of 350 tonnes per year could be generated from a five-ha farm, and can be processed into 87 tonnes of lipid capable of producing about 45 tonnes of SAF.

At the same time, this amount of biomass can also produce 192 tonnes of protein and 52 tonnes of carbohydrates.

He said Sarawak is fortunate to have 600 strains of various algae species that are kept in the depository for research at SBC.

The premier said by using carbon dioxide, a by-product of electricity production from the coal-fired plant, for microalgae production, C4 Sarawak is reducing emissions while contributing to Sarawak’s decarbonisation targets and Green Energy Agenda.

Additionally, he said C4 Sarawak can drive carbon capture, usage and storage exploration, which is crucial to fulfilling Sarawak’s Post-Covid-19 Development Strategy 2030, aiming it as an essential step forward into the journey towards a sustainable future.

Meanwhile, the SBC microalgae production facility has attracted foreign interest with the visit of an European Union (EU) delegation on Feb 15.

The delegation, which was led by ambassador and head of EU delegation to Malaysia, Michalis Rokas, was briefed and gained an understanding of the growing and processing methods used for algae production and its various applications.

Source: The Star

C4 Sarawak poised for major expansion

Malaysia’s semiconductor sector is forecast to shine beginning in the second half of 2024 as the so-called ‘new oil’ in its recovery phase at a global scale post-2023’s downcycle.

Malaysia Semiconductor Industry Association’s (MSIA) confidence was based on World Semiconductor Trade Statistics (WSTS) prediction that the world semiconductor market would rebound by 13.1% this year to reach US$588 billion (RM2.8 trillion).

MSIA president Datuk Seri Wong Siew Hai said the global semiconductor sales dipped 8.2% to US$527 billion in 2023, but the Malaysian market was able to retain its strength throughout the year.

The evidence can be seen in last year’s electrical and electronics (E&E) sector, where exports decreased by only 3.0% to RM575.45 billion after 2022’s record year of 30% growth to RM593 billion, he told Bernama.

According to 2023’s full-year print, exports of semiconductor devices and integrated circuits (ICs) attained a growth of 0.03% to RM387.45 billion in 2023.

E&E products dominated Malaysia’s total exports in 2023, accounting for 40.4% share comprising products such as photosensitive semiconductor devices, batteries and electric accumulators, static converters, electric control panels, parts for switching apparatus and electric control panels as well as parts for diodes, transistors, piezoelectric crystals and other semiconductor devices.

The current prolonged geopolitical fragmentations are sending investors in search of new production homes or moving to trusted countries.

Wong said that following this many multinational companies in China diverted part of their production and supply chain as a mitigating strategy by selecting Malaysia as their “Plus One” location.

“The trend is likely to continue as many firms are currently evaluating Malaysia as their ‘Plus One’ location,“ he noted.

The “China Plus One” strategy emerged as a critical policy for companies to reduce their reliance on China by diversifying their supply chain activities to other markets.

He noted that the whole world is looking at enhancing supply chain resiliency.

“There are no simple solutions as the supply chain is very complex. Over the last two years, E&E companies have increased their productivity and acquired land to build factories to increase their capacities,” he added.

Hot competition in the electric car (EV) market is pushing local automakers to increase production and offer more affordable models.

In total, sales are expected to reach 14 million units by the end of 2023 after hitting the 10,000 mark a year before.

Following this everyone is keen on developing their domestic semiconductor ecosystem amid the full-speed race in the EV market, Wong said.

WSTS highlighted that all markets are poised for ongoing expansion in 2024 with the Americas and Asia-Pacific, in particular, forecast to demonstrate significant double-digit growth on a year-on-year basis.

In its December report, WSTS said the industry growth is expected to be primarily fuelled by the memory chip sector, which is set to soar 40% to around US$130 billion in 2024.

The majority of other principal segments, including discrete, sensors, analogue, logic and micro, are also expected to record single-digit growth rates.

Wong said Malaysia can play a critical role in the global supply chain, riding on its position as the 6th largest exporter of semiconductors in the world.

The country also controls 13% of the global market for packaging, assembly and testing services for semiconductors.

With the talent pool of more than 50 years of industry experience and the combined efforts of all stakeholders, Malaysia can succeed in this sector, Wong reckoned.

Given the importance of the E&E sector to the Malaysian economy and its place in the global supply chain, he emphasised the need for collaboration among all parties involved to optimise Malaysia’s potential in the E&E sector, given its significant economic contribution and pivotal position in the global supply chain.

“For a start, the country needs to improve its world competitive ranking, improve ease of doing business (some programmes already ongoing), enhance the E&E ecosystem and be ready to provide incentives in light of the global minimum tax implementation in 2025,” he said.

Wong believed Malaysia should continue to attract companies with state-of-the-art technology and encourage existing companies to go up the value chain.

He also recommended that the nation enhances its ecosystem by attracting more wafer fabs, establishing both local and foreign direct investments in IC design companies, advancing packaging in assembly and testing, and creating Malaysian global champions in automation.

Source: The Sun

MSIA: Local semiconductor sector to pick up in second half of 2024

Sibu, which has an established shipbuilding and ship repair industry that has successfully penetrated the international market, is able to play a role as a hub for bunkering facilities in Sarawak to supply green methanol to international shipping lines.

Premier Tan Sri Abang Johari Tun Openg said this is due to Sarawak’s efforts to produce green methanol which is in high demand internationally as the world is now turning to green energy.

According to him, shipping companies today are changing engines that use oil to those that use green methanol to power their ships while most banks at the international level take into account the use of green energy when approving loans.

“Nowadays, Sibu produces a lot of ships and (owners) want to change from an engine that uses fuel oil to a methanol engine; so, of course, they would need green methanol to run the ship.

“This means (the shipbuilding and ship repair industry in Sibu) will promote our port as the bunkering facility hub for international shipping lines,” he said in his speech at the SUPP Sibu Chinese New Year Open House 2024 last night.

He said Sarawak is making strides actively towards a green economy.

“It is indeed necessary to make an adjustable green economy policy that can be according to current needs and requirements,” he said.

Meanwhile, Abang Johari expressed confidence that Sarawak’s revenue in 2024 will continue to record an increase compared to last year, when the state collected RM13 billion — up from RM11 billion in 2022.

The Premier said that in comparison, Sarawak was only able to record an income of RM6 billion in the preceding six years.

Despite the higher income, he assured that Sarawak will not spend extravagantly, as part of it will be saved for future needs.

In fact, he noted, Sarawak is the only state in Malaysia that has a sovereign wealth fund.

Source: Bernama

Abang Johari: Sibu set to become green methanol bunkering hub

Penang, being the Silicon Valley of the East, is the breeding ground for successful stories of startups and large local companies (LLCs) that are at par with technology giants of the world.

One great example is homegrown industrial automation solutions provider Greatech Technology Bhd that was set up by Tan Eng Kee and Khor Lean Heng in 1997.

Prime Minister Datuk Seri Anwar Ibrahim visited Greatech’s factory in Penang during his visit to the state yesterday, accompanied by Bayan Baru Member of Parliament Sim Tze Tzin.

In his official Facebook post, Sim said Greatech produced the important machines to manufacture high tech products such as electric vehicle (EV) batteries, solar panel and artificial intelligence (AI) boards for global top high tech companies.

“Greatech is now the unicorn and success story of Malaysia’s high tech industry. All machines producing these high tech products are designed, manufactured and produced here in Greatech Penang.

“Greatech is at the forefront of AI, augmented reality, EV and green technology revolution. I am feeling so proud, I believe the Prime Minister feels the same too,“ he said.

He added that even more impressive is that all machine design and production are done by local Malaysian engineers.

Sim said this signifies that young people should take up science, technology, engineering and mathematics subjects because the future of jobs are in these high tech sectors and Malaysia has the capabilities in global high tech industries.

During his visit to Penang yesterday, Anwar attended the Madani Cheapest Sale event in Bandar Perda in the morning before attending the Penang Zakat International Conference at Universiti Sains Malaysia (USM).

He then performed Friday prayers and attended a community luncheon at Masjid Jamek Tengah Berapit in Permatang Pauh.

Following that, he officiated at the opening of the Penang Entrepreneurs Connectivity and Development Empowerment Carnival at Seberang Perai Polytechnic’s Dewan Seri Mutiara before concluding his visit with the groundbreaking ceremony of the Batu Kawan Industrial Park 3. 

Source: Bernama

Penang the breeding ground of successful startups, large local companies – MP

The National Semiconductor Strategic Task Force (NSSTF) will focus on several aspects, namely incentives, talent and ecosystem, to transform and improve Malaysia’s electrical and electronics (E&E) industry. 

When chairing the task force’s first meeting, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said among matters prioritised by the Ministry of Investment, Trade and Industry (Miti) and the NSSTF are the review and reform of the incentive policy. 

He said this is to ensure Malaysia remains competitive in attracting foreign direct investment, as well as domestic direct investment, to generate growth in the E&E sector. 

“Additionally, the development and production of quality talent will be prioritised to meet the dynamic demand of the industry, so that Malaysia’s position as a centre of innovation and excellence remains strong. 

“The task force will also identify appropriate sectors to form the basis of sustainable growth, for example, through a local vendor development programme, as we also need to open up opportunities for local companies and small and medium enterprises to receive benefits from the development of our E&E industry ecosystem,” he said in a statement on Friday. 

The NSSTF was established via the National Investment Council meeting on Jan 9, 2024, as a special platform to discuss and implement the development direction of the Malaysian semiconductor industry ecosystem, including efforts to attract strategic and quality investments.

In its first meeting, the NSSTF officially introduced 10 industry experts appointed as members of a special advisory panel to the task force, consisting of experts in several value and supply chains in the semiconductor industry in Malaysia, representing local companies, as well as multinational corporations.

“The special advisory panel has the role of providing insights and feedback to the NSSTF on strategies and policies to enable Malaysia to continue to grow and improve its position in the global semiconductor industry,” the ministry said.

Meanwhile, Collaborative Research in Engineering, Science and Technology (CREST) will function as a secretariat to coordinate knowledge-sharing and strategic planning activities via the NSSTF. 

Source: Bernama

Semiconductor task force to focus on incentive, talent aspects of transforming Malaysia’s E&E industry

Penang Development Corporation (PDC) is developing three industrial parks in the state involving a total investment of RM3.2 billion, including for infrastructure development, in a bid to stimulate the industrial sector’s growth.

Chief Minister Chow Kon Yeow (pictured), who is also the PDC chairman, said these industral parks in South Seberang Perai are expected to be fully completed in 2031, after development started in 2022.

“To continue its legacy of excellence, PDC is actively developing the three parks, namely the 154.6-hectare (ha) Bandar Cassia Technology Park, 251.7ha Batu Kawan Industrial Park 3 (BKIP3), and 70.5ha Penang Science Park South, with a total investment cost of RM3.2 billion.

“The three projects have been going on since 2022, and earthworks have been done prior to the infrastructure works. For the BKIP3, the ground-breaking ceremony will be officiated by Prime Minister Datuk Seri Anwar Ibrahim tomorrow (Friday),” Chow told a press conference here on Thursday.

He said PDC, which is currently seeking more land for industrial parks, had succeeded in making Penang a key investment destination that is dynamic and sustainable through its role in spearheading the development of industrial parks. 

Chow said that over the 54 years since the corporation was established, nine industrial parks measuring about 6,100 acres (2,469 hectares) had been developed, including the Bayan Lepas Industrial Park, Seberang Jaya Industrial Park, Perai Industrial Park, Bukit Minyak Industrial Park, Penang Science Park, and Batu Kawan Industrial Park.

He said these industrial parks accommodate 350 multinational and local companies as well as offering job opportunities.

Meanwhile, on Phase 1 of the BKIP2 spanning 226.22ha in Byram, South Seberang Perai, Chow said the development will be carried out via a strategic partnership on a parcel of private land acquired by PDC through the state government, hence it will not involve any land owned by Sime Darby Plantation Bhd in the vicinity.

He said the strategic partnership approach is implemented by inviting property industry players to participate with PDC in industrial park development through an open tender that is now being advertised in stages starting from the pre-qualification stage. The completion of the pre-qualification evaluation will be followed by a request for proposals via invitation.

“The BKIP2 development will be done through a collaboration with the private sector in order to achieve several main goals, including expediting the preparation of industrial lots to be offered to potential investors at choice locations that suit their types of enterprise to ensure competitiveness, and that Penang remains a destination of choice for investors.  

“The involvement of the private sector is expected to give rise to better industrial park development approaches and concepts on a par with those in developed countries, besides offering a conducive and diverse ecosystem at the international level,” he said.

Chow said the pre-qualification tender advertisements began appearing in major newspapers and the PDC website on Feb 8, and they will run for six weeks until March 21.

“We invite any experienced and interested company to be PDC’s collaboration partner by participating in the tender exercise,” he added.

Source: Bernama

Chow: PDC developing three industrial parks with total investment of RM3.2b

PLUS Malaysia Bhd (PLUS) and the Malaysian Highway Authority (LLM) have agreed to simplify the process of developing and growing the number of electric vehicle (EV) charging stations along the PLUS highway, said the Ministry of Investment, Trade and Industry (Miti).

In a statement today, Miti said PLUS and LLM would identify the strategic locations at rest and recreation (R&R) areas and highway lay-bys along the PLUS highway for the charging stations.

“Apart from this, the government has requested sufficient electricity supply at approved EV charging station sites at R&R and the development of new substations at required locations,” the ministry said following the first National EV Steering Committee (NEVSC) meeting in 2024.

Miti said that Tenaga Nasional Bhd (TNB) also briefed the NEVSC that the utility company is analysing the power supply sourcing methods and power use over time to encourage the utilisation of renewable energy (RE) when charging EVs.

Minister of Investment, Trade and Industry Datuk Seri Tengku Zafrul Abdul Aziz elaborated that apart from charging EVs using RE, the government has welcomed suggestions to encourage new business models to optimise EV charging when electricity usage is low.

According to the ministry, port operator Northport (Malaysia) Bhd has raised a safety risk concerning the handling of EV charging in the logistics sector, and the NEVSC has agreed that best practice guidelines on EV charging when conducting logistics dealings are to be ready in six months, to be used as a reference for the industry.

Meanwhile, the NEVSC meeting, chaired by Deputy Prime Minister Datuk Seri Fadillah Yusof, who is also the energy transition and water transformation minister, also discussed issues on improving the procedures and licensing of EV charging stations.

Fadillah said the government has acknowledged the challenges EV charging services operators are currently facing.

“I have instructed the government agencies involved to coordinate and facilitate the relevant regulations, including those concerning licensing matters.

“This is to ensure the development and operation of EV charging stations nationwide will function smoothly and also to holistically support the development of the EV ecosystem without jeopardising the safety aspects,” he added. 

Source: Bernama

MITI: PLUS, Malaysian Highway Authority agree to increase highway EV charging stations

Selangor attracted investments totalling RM41.56 billion for manufacturing and services sectors from January to September 2023, according to Selangor Exco for Investment, Trade and Mobility, Ng Sze Han.

The manufacturing sector attracted RM16.96 billion, with the electronics and electrical (E&E) being the largest sub-sector, followed by fabricated metal products, plastic products, machinery and equipment, and food.

“The most significant sub-sector for the manufacturing sector is E&E which was RM9.75 billion, the second was fabricated metal products at RM2.65 billion, the third plastic products at RM1.18 billion, fourth was machinery and equipment at RM865 million and the fifth is food manufacturing at RM697 million. These are the five main sectors under the manufacturing sector,” Ng told reporters at a press conference to announce the Selangor Chinese New Year 2024 celebration today.

For the manufacturing sector, Selangor targeted RM12 billion last year but it already surpassed the goal by September, with investments for the first nine months of 2023 totalling more than RM16 billion. Foreign direct investment (FDI) for the manufacturing sector edged ahead at RM12.5 billion while domestic direct investment (DDI) stood at RM4.4 billion.

However, Ng stated that FDI and DDI hold equal significance for Selangor’s economic growth.

“We don’t really set the target for FDI and FDI. We set the total target. FDI and DDI are equally important to us. It’s not just about taking care of foreign investors, domestic investors are also very important,” he said.

Meanwhile, the services sector attracted RM24.59 billion with real estate, information and communication, and utilities being the main contributors.

“For the services sector, the most significant was from real estate at RM13.48 billion followed by information and communication at RM5.41 billion and utilities at RM1.9 billion,” said Ng.

He reiterated that Selangor’s investment target for 2024 was increased to RM50 billion compared with RM45 billion for 2023.

“We set a higher target each year so that we can continue to bring more investments into Selangor. Like this morning, the Invest Selangor team, along with the related agency, conducted site visits with investors who entered Selangor state to resolve the issues they faced so that their applications could be processed more smoothly. This is the task and responsibility that Invest Selangor is currently undertaking,“ Ng said.

Meanwhile, the Selangor government will organise the state-level Chinese New Year celebration on Feb 24 at IOI City Mall, IOI Resort City in Sepang, which will be graced by the Sultan of Selangor, Sultan Sharafuddin Idris Shah and Tengku Permaisuri Selangor, Tengku Permaisuri Norashikin.

Source: The Sun

Selangor: RM41.56b manufacturing, services investments in Jan-Sept 2023

The medical device sector is projected to contribute RM20 billion to the country’s economy this year, supported by the increase in domestic and foreign investments in the sector.

Medical Device Authority Malaysia (MDA) chief executive Dr P. Muralitharan said the sector contributed RM15.1 billion last year which included foreign and domestic investments as well as business expansion and the procurement of related equipment.

“We found that there are several foreign countries which have pledged to invest and start their operations in Malaysia such as the Czech Republic and China.

“Hence, our projection is expected to reach close to RM20 billion this year,” he told the media after the soft launch of the Asian International Medical Technology Exhibition and Conference (Asian Medtec) by Health Minister Datuk Seri Dr Dzulkefly Ahmad here, today.

Muralitharan said Malaysia’s total market share in the medical technology and medical devices segment stood at around eight to 10 per cent of the global market worth €536 billion  in 2021.

“We aim to increase the market share to about 10 to 15 per cent within the next few years,” he said.

Asian Medtec plays a pivotal role in solidifying Malaysia’s position as a key hub for medical technology development in Asia, he added.

Meanwhile, Dr Dzulkefly in his speech earlier said the government has listed the medical device sector as one of the key sectors in the National Industrial Master Plan 2030 alongside other major sectors.

“Indeed, this is the first time this sector has been acknowledged at a national level as one of the economic contributors to boost the nation’s economy,” he said, adding that the sector has created about 80,000 jobs since 2010.

Source: Bernama

Medical device sector expected to contribute RM20 bln to economy this year

South Korea’s SK Nexilis Co Ltd, the world’s largest copper foil maker, has established the first green syndicated term loan facility through its Malaysian unit in order to fund the construction of the company’s first overseas factory in Sabah.

The RM2.3 billion copper foil plant, located at the Kota Kinabalu Industrial Park (KKIP), will have an annual production capacity of 50,000 tonnes, which will increase SK Nexilis’ global production capacity by twofold.

The copper foils produced will be exclusively used in electric vehicle batteries, enabling sustainable, low-carbon mobility solutions in various locations, including Korea, Malaysia, Poland, and North America.

SK Nexilis Malaysia Sdn Bhd chief executive officer Shin Dong Hwan said the electrification of motor vehicles is essential for the decarbonisation of the transport sector, which contributes about one-fifth of GHG emissions globally. 

“Our new manufacturing facility will not only facilitate the decarbonisation initiative but also create job opportunities for the local talent network and provide traction for more investments to enhance the local supply chain development for electric vehicles,” he said in a statement.

Shin said the company is deeply heartened to be part of this environmental, social, and governance (ESG) movement with our financial partners as it transitions towards a better, more sustainable future.

“The green loan is the culmination of efforts between SK Nexilis, SKC Co Ltd and SK Group and our relentless commitment towards ESG, as demonstrated by our Net Zero and RE100 initiatives,” he said.

OCBC Bank (Malaysia) Bhd will serve as the mandated lead arranger, facility and security agent, and joint lender.

The bank’s managing director, senior banker, and head of investment banking, Tan Ai Chin, said that Malaysia, being a significant hub for electrical and electronics, is strategically poised to cultivate a robust local electric vehicle manufacturing sector and ecosystem.

She said that SK Nexilis’ presence strengthens this ecosystem and contributes to the country’s initiatives towards decarbonisation.

Source: NST

SK Nexilis debuts green loan to fund RM2.3bil Sabah plant

The Economy Ministry acknowledges the necessity of a collaborative effort involving both the government and the private sector to leverage the potential “tsunami” of investment opportunities, particularly within the semiconductor industry.

Towards this end, its minister Rafizi Ramli invites venture capital (VC) firms and fund managers to contribute to Malaysia’s economic growth in the semiconductor sector by working with Malaysian entrepreneurs to stimulate greater productivity.

Rafizi said the move is timely as it can address concerns about the shortage of high-value and high-return projects in Malaysia, which has led domestic funds to seek investment opportunities abroad.

This trend, according to him, highlights the challenge of domestic direct investment over foreign direct investment (FDI).

Last week, Rafizi received a delegation from Blue Chip Venture Capital (BCVC), led by its chairman and founder Datuk Lai Pin Yong, at his ministry.

BCVC is a specialised fund to tech up and value up the semiconductor industry.

The 80-year-old Lai, a veteran in the semiconductor industry, said the fund aims to “move the needle” within the semiconductor industry, elevating the value chain of the Malaysian semiconductor industry.

Speaking to StarBiz, he said the decoupling of global supply chain from geopolitical events, particularly the China and US trade war, has triggered a wave of inward investment into Malaysia.

“Due to this geopolitical tension, not only Chinese companies but also foreign companies located in China are seeking to relocate outside of China to avoid sanctions from the United States.

“This is a golden opportunity for Malaysia to catch the wave of the industry’s relocation and get the industry going,” he said.

He believes that Malaysia, particularly Penang due to its strong roots in the semiconductor industry, is a preferred option for these companies looking to relocate.

Sharing some insights, he said the local semiconductor industry is witnessing robust interest in three key areas of the value chain — integrated circuit design, advanced packaging, and equipment manufacturing.

Coming back to BCVC, Lai said the fund aims to facilitate companies relocating from China, providing confidence through co-investing.

“The ultimate aim is to encourage these companies to localise and list on the local stock exchange,” he said.

According to him, this model represents a departure from traditional approaches, which often involve foreign companies operating somewhat independently from the local economy, using the host country’s land, water and electricity and cheaper labour to make products for export.

These are important but need to go further, he added.

“We need to deepen the collaboration where FDI becomes ingrained in the fabric of Malaysian business, committing to talent development and building up the local supply system, thereby contributing to long-term economic development and growth.”

Source: The Star

BCVC looks to elevate semiconductor industry

Productivity with the help of artificial intelligence (AI) will be a major trend in the coming year as industries see the amount of work being created exceeding the number of people able to do the job.

Corey Sanders, corporate vice-president of Microsoft Cloud for Industry, tells Digital Edge that AI presents an opportunity for workers to focus on their tasks and be more productive.

According to the Microsoft Work Trend Index 2023, some 62% of Malaysians are worried that AI will replace their jobs. However, 84% said they would delegate as much work as possible to AI to reduce their workload.

“The ability to bring productivity to every facet of work, whether it is things like email, sales, across manufacturing lines or construction efforts, productivity is possible to improve with AI in pretty much every line of work. I think Malaysia is an even more opportune location than other places in the world for that impact,” says Sanders.

“Customers and individuals in general are beginning to understand AI more and more every day, and our focus is to empower individuals and corporations to do more. AI is becoming a component of most, if not all, applications and people are seeing it in their daily life.”

Microsoft 365, a product family of productivity software and collaboration and cloud-based services, and GitHub, a software development and version control platform and cloud-based service, allow developers to store and manage their software code. These are significant tools that allow the Copilot experience and the companies’ customers have experienced a massive improvement in productivity, says Sanders.

Microsoft unveiled new products at the Microsoft Ignite event in mid-November last year, focusing on trying to get AI into smaller businesses and more organisations, in addition to enabling the technology in larger companies. The cloud is one way to democratise AI as it has the ability to build and deploy applications within hours, says Sanders.

“It doesn’t matter how big you are. As a company, you can benefit. But it will likely take time to be able to develop in smaller organisations,” he adds.

“This is where, when we look at opportunities, we look at skilling and enabling country-based skilling enhancements to train the broader population on these technologies, trends and solutions. I think a big area of focus is that we have to be able to try and push a more democratised solution.”

Talent will be the primary focus

Having the right understanding and skills to manage AI tools will be critical in the coming year. Sanders says while the AI revolution is exciting, it is a big change to what the current user experience is and how data is used.

This is why Microsoft is focused on enabling skilling at a country level. “Skilling and skill set development will be a big challenge, like any other technological trend,” he says.

Data scientist continues to be one of the hottest new jobs in this landscape because of AI development, and AI-prompt and developer experience will be critical factors. Sanders emphasises that data will drive all of the AI experiences.

“Being able to deliver data in a unified way [will be important] and Microsoft Fabric is geared towards that, which is going to take data experts [to operate]. Data engineers and data scientists will continue to be very sought after by corporations, perhaps even more.”

Microsoft Fabric is an all-in-one analytics solution for enterprises that covers everything from data movement to data science, real-time analytics and business intelligence.

AI ethics to be front and centre

Security and a focus on responsible AI to make sure companies secure their data and solutions are important and critical issues moving forward. Sanders says larger organisations already have more resources built in to support that but small organisations may not.

This is where the company focuses on its security product lines to be able to deliver easy-to-use security solutions for small and medium corporations. “Depending on the company, sovereignty may be an important area of focus. Certainly, government-based companies would have concerns or questions about data sovereignty, using the AI model and how that data is used as part of the AI model,” he says.

“This is where we try to be clear, from an AI perspective, that customer data is customer data and we don’t use it to train large foundation models. We focus on solutions to enable sovereignty and residency of data.”

A key aspect for organisations is about building the right principles and governance policy around this, making sure they understand what they are building and why they are building it. Sanders says the company shares with customers how it puts in place governance policies that they can use or borrow to build their own, including things like safety and inclusiveness.

“The organisations will then be able to apply these principles and policies when testing or building an AI solution. And it meets their expectations. That’s when it is truly inclusive,” he says.

“They also need good auditing and monitoring measures to make sure that once the solution is live, they are able to ensure it continues to live up to their expectations and requirements.

“In the next six months, I think we will see a massive outpouring of new solutions in the market that are built on Microsoft, that are not necessarily built by Microsoft.”

Source: The Edge Malaysia

Productivity and talent development will be key to the future of AI

The manufacturing sector may have bottomed out with the improvement in January signalling the start of a gradual recovery in Malaysia’s overall industrial production, industry observers said.

They said the country’s Industrial Production Index (IPI) is expected to gradually improve in the upcoming months, driven by semiconductor sales and a favourable comparison base.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid believes that the IPI will gradually improve, especially for semiconductor-related products, as this year’s global semiconductor sales are expected to increase by 13.1 per cent. 

However, he noted that the main factor dragging the IPI down in December 2023 is the manufacturing sector, which accounted for the lion’s share of 68.25 per cent of the total IPI.

“The manufacturing sector output fell 1.4 per cent year-on-year (YoY) in December (Nov: -0.1 per cent) with export-oriented industries (45.8 per cent of total IPI) declined 4.1 per cent from 2.7 per cent drop and it has been on negative print for seven months in a row.

“This shows that weak global demand has taken a toll on the IPI,” he told Business Times.

Going forward, Afzanizam said the risks for Malaysia’s IPI performance hinge upon the potential decline in global gross domestic product (GDP) and the risk of recession in the global economy, especially in major economies.

He said it seems that China is struggling to sustain its growth with deflationary risks have been growing given the recent the negative consumer price index (CPI) print which has been an ongoing affair for four consecutive months. 

“Not to mention disruption is supply chains following the heightened geopolitical risks. So, risks to lower IPI is very externally driven.  I believe that some strategies that Malaysia can adopt to boost its IPI performance include promoting domestic growth. 

“Therefore, implementing the 2024 Budget initiatives as soon as possible is crucial to offset weaknesses from abroad,” he added.

Echoing similar views, Tradeview Capital fund manager Neoh Jia Man believes that the IPI performance will gradually pick up towards the end of 2024, thanks to a low comparison base. 

The improvement in January’s manufacturing PMI also indicates that the manufacturing sector might have bottomed, he added.

“The recent decline in Dec 2023 IPI was due to lower manufacturing production, which was widely believed to be the result of waning export demand. 

“The figure was below consensus expectation and does not bode well for the outlook of Malaysia export-oriented counters, particularly those in the electrical and electronics, as well as petroleum and chemical products industries,” he noted.

Nevertheless, Neoh opined that the upcoming US presidential election could potentially pose challenges to Malaysian industrial players if there are any changes in US trade policy, alongside the persistent external headwinds arising from a weak Chinese economy. 

However, he believes that the New Industrial Masterplan 2030, launched by the Malaysian government last year, has already laid out the necessary routes toward strengthening the competitiveness of our nation’s manufacturing prowess. 

“Nonetheless, execution remains the key variable that will determine its success,” he said.

Meanwhile, KAF Investment Bank Bhd said looking ahead, ongoing robust domestic demand and a steady recovery in global demand is expected to lift industrial activities from its current low levels. 

The firm noted that the S&P Global Malaysia Manufacturing PMI, an early gauge of manufacturing performance, rose to a 16-month high of 49.0 in January 2024 (December 2023: 47.9), with the moderation in output, new orders and exports easing. 

“Overall, manufacturers’ sentiment in Malaysia has improved slightly from December, signalling that the worst of the slowdown seen in 2023 has passed,” it said in a note.

Likewise, Kenanga Research expects the manufacturing sector’s recovery to pick up pace, particularly in the second half of 2024, driven by the technology upcycle and China’s gradual post-pandemic recovery.

The firm also expects 2024 GDP growth to expand further to 4.9 percent, alongside a resilient services sector backed by an increase in tourist arrivals.

Source: NST

Industrial production on recovery

The Selangor economy is growing according to planned and is expected to continue to improve with the implementation of various initiatives by the state administration, said Ng Sze Han.

The state executive councillor for investment, trade and mobility said that some of the efforts include providing the on-demand transit van service or demand-responsive transit (DRT) and the development of the Selangor Aerospace Park (SAP), involving 2,000 acres of land in Sepang.

He said several programmes developed by the Selangor Information Technology and Digital Economy Corporation (Sidec) would also ensure high-income job opportunities.

“By connecting these three main elements, the Selangor economy will be guided in the right and better direction,” he said in a video on Facebook in conjunction with the Chinese New Year celebration.

This year, Selangor is targeting an investment value of up to RM50 billion, an increase of RM5 billion compared to the previous year, driven by economic development and the opening of all sectors.

From January to June last year, Selangor approved 657 investment projects in the manufacturing and services sectors involving a total investment value of RM29.72 billion.

Source: Selangor Journal

Aerospace park development, transit van service support state economic growth — Exco

Automation and digitalisation, along with Malaysia’s economic shift towards high value-added industries, continue to benefit Honeywell, an American multinational corporation with a Southeast Asian headquarters in Kuala Lumpur.

Lim Yeong Chuan, the country president of Honeywell for Malaysia and Singapore, said: “Honeywell is an integrated operating company serving a broad range of industries around the world. Our business is aligned with three powerful megatrends — automation, the future of aviation and energy transition — underpinned by our Honeywell Accelerator operating system and Honeywell Connected Enterprise integrated software platform.

“As a trusted partner, we help organisations solve the world’s toughest, most complex challenges, providing actionable solutions and innovations that help make the world smarter, safer and more sustainable.

“Honeywell has innovative technologies to support Malaysia’s National Energy Transition Roadmap and Hydrogen Economy and Technology Roadmap.

“We are excited that Parliament passed the Energy Efficiency and Conservation Bill 2023 last year. These ambitious decarbonisation targets will require the best technologies to track, control and abate carbon intensity while powering the growth of the economy.”

In 2022, Honeywell signed a memorandum of understanding (MoU) with Petroliam Nasional Bhd (Petronas) for strategic sustainability, digitalisation and carbon-neutral energy initiatives.

Their partnership aims to address key objectives across four domains: digital transformation, sustainability and emissions management, cybersecurity and leadership and capability development.

Lim said these solutions supported Petronas’ growth strategy and low-carbon agenda by employing Honeywell technologies for productivity, carbon capture and utilisation, energy storage and digital twins.

Honeywell has also signed an MoU of business exploration with UEM Edgenta Bhd to bring technologies and solutions to smart cities, renewable energy and energy efficiency across Malaysia.

Examples of technologies and digital solutions from Honeywell are battery and energy storage systems, supervisory control and data acquisition, energy management systems, smart city technologies, energy and waste management solutions, and sustainable and intelligent buildings.

Honeywell is a subsidiary of Honeywell International headquartered in North Carolina, with about 99,000 employees worldwide.

In financial year 2022, Honeywell International reported US$35.5 billion in sales.

Honeywell began operating in Malaysia in 1985 via MK Electric, with a facility in Shah Alam.

The company further strengthened its presence in the region by establishing its Asean headquarters in Greater Kuala Lumpur (Greater KL) in 2017.

It also operates two cutting-edge manufacturing facilities in Penang, supplying to local and international markets.

Greater KL was chosen as Honeywell’s regional headquarters due to its location in the centre of Southeast Asia and its multicultural environment.

InvestKL chief executive officer Datuk Muhammad Azmi Zulkifli said: “Honeywell’s decision to establish its presence in Greater KL speaks volumes about the strategic advantages this region offers. Our supportive government policies, forward-looking initiatives and a pool of diverse, highly skilled talents position Greater KL as a hub for innovative technology solutions. We are proud to have played a role in bringing Honeywell here, further enhancing Malaysia’s position on the global tech map.”

Honeywell also operates two specialised sites around Greater KL for staging and distributing aviation components.

“Our Southeast Asian operations are part of Honeywell’s high-growth region portfolio for emerging markets, which include China, India, Central and Eastern Europe, the Middle East, Central Asia, Africa and Latin America,” he said.

Through investments in education, the company is actively promoting diversity and talent development in Malaysia.

“We work with local suppliers, enhance the Malaysian workforce’s skills and advocate for the adoption of proven global technologies.”

Lim said Honeywell welcomed Malaysia’s growth agenda by collaborating with government entities, small and medium enterprises, suppliers and key stakeholders to address rising needs for energy efficiency, sustainability, safety and productivity.

He believes that Southeast Asia will continue to urbanise and require more sophisticated infrastructure.

These trends aligned with Honeywell’s growth themes in sustainability, digitalisation and green buildings, he said.

Source: NST

Honeywell benefits from strategic plans

Graphjet Technology Sdn Bhd, a green graphite producer, is eyeing a Nasdaq debut with a US$1.49bil pro forma enterprise value following the approval of its de-SPAC transaction by the Securities and Exchange Commission of the United States.

Graphjet said the development is a milestone in its journey towards becoming a publicly traded entity.

A de-SPAC is a process that enables a privately held operating company to become public by merging with an already-public shell company known as a special-purpose acquisition company or SPAC.

Following the merger’s completion, the operating company becomes public and can use the dissolved shell company’s capital.In a statement yesterday, its co-founder and chief executive officer Aiden Lee Ping Wei said the company’s success is rooted in continuous innovation especially in green technology. 

Source: Bernama

Graphjet Technology is eyeing Nasdaq listing

Malaysia’s manufacturing sector is expected to see a robust recovery in the second half of 2024 (2H24), and the manufacturing index is forecasted to expand 4.6 per cent this year, said Kenanga Investment Bank Bhd (KIB).

In a note, it said the manufacturing sector’s recovery will be driven by the technology upcycle in 2H24 and China’s gradual post-pandemic recovery.

“The bank also expects the gross domestic product (GDP) growth to expand further to 4.9 per cent this year.

“We maintain our GDP growth projection for the fourth quarter (4Q) of 2023 at 3.7 per cent compared to 3.4 per cent advance estimates by the Department of Statistics Malaysia (DOSM),” it said.

Meanwhile, in a separate note, Public Investment Bank Bhd anticipates improved growth prospects for the industrial sector in 2024.

The research said in 2023, the manufacturing and mining sectors demonstrated modest expansions of 0.7 per cent and 0.8 per cent, respectively, while the electricity sector experienced a growth rate of 2.5 per cent.

“The manufacturing sector declined to 1.4 per cent year-on-year in December compared to 0.1 per cent in November. Meanwhile, the electricity sector grew by 4.6 per cent in December compared to 4.3 per cent in November,” said the research house.

Source: Bernama

Manufacturing sector to see robust recovery in second half of 2024