Electric vehicle (EV) sales in Malaysia are expected to grow exponentially this year, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

He said that the projection is in line with the rising number of EVs sold last year, which ballooned 200% compared to 2022, and based on industry players’ confidence in the rising interest in high-tech vehicles. 

Malaysia recorded more than 100,000 registered EVs as of December last year.

“This projection hinges on holistic efforts to ensure that the EV ecosystem is ramped up and complete, such as charging stations, besides sales,” he told the media after officiating the launch of the EV assembly plant owned by Tron Bradbury Energy (Malaysia) Sdn Bhd, here on Friday.

Meanwhile, Zafrul said the country has more than 1,500 EV charging stations and that number needs to be increased to provide comfort to people, especially those living in multi-storey residences or high-rise buildings, to ensure there is no “range anxiety” for long-distance driving.

The minister also said that the Electric Motorcycle Use Promotion Scheme (MARiiCas), which offers a rebate of up to RM2,400 for the purchase of electric motorcycles that was launched last December, has been fully taken up.

“We will apply to the Ministry of Finance to continue the MARiiCas scheme and increase its allocation because many people are now open to buying electric motorcycles,” he said. 

Source: Bernama

Zafrul: EV sales to see rapid growth in 2024

Smart-factory integrator unveils world’s first 11-metre tall Autonomous Case-handing Mobile Robot system

XTS Technologies Sdn Bhd, an integrator of smart factories, has unveiled “Haipick”, the world’s first 11-metre tall Autonomous Casehandling Mobile Robot (ACR) system, in collaboration with Sinma Digital Commerce Sdn Bhd.

This groundbreaking system, leveraging Automated Casehandling Technology (ACT), is set to revolutionise industrial efficiency and precision, aligning seamlessly with the demands of Industry 4.0.

XTS Technologies, known for its Automated Sorting Conveyor, Automated Storage and Retrieval System, and Dimensioning, Weighing and Scanning solutions, reinforces the commitment to innovation with Haipick AGV Picking Robot.

Haipick, along with XTS’s suite of technologies, plays a vital role in elevating global warehousing and logistics capabilities. The company’s global presence in the US, Europe and Japan solidifies its position as a key player in international automation and ecommerce sectors.

XTS Technologies founder and managing director Xteven Teoh said, “XTS Technologies leads in robotics solutions and warehouse logistics automation in Malaysia, rooted in a commitment to Beyond Industrial 4.0. Our focus extends

beyond technological innovation to encompass environmental stewardship, social responsibility, and strong governance. In projects like our AGF Forklift and AGV Sorting Robot automaton project in collaboration with Padini Holdings, we emphasise sustainability through automation, reducing carbon footprint and enhancing energy

efficiency towards the nation’s carbon neutral goals.

“We are excited about a future where our innovations in technology play a crucial role in fostering a sustainable and efficient industrial landscape, epitomising the essence of Beyond 4.0,” he said.

Sinma Digital CEO Lee Kia Shen said, “Sinma Digital’s strategic growth is enhanced by our excellent financial health, a trajectory that will be further accelerated through collaboration with XTS Technologies.

“XTS’s innovative solutions bring superior efficiency and precision, which is crucial for our expansion and operation excellence. This partnership minimises human error and optimises space use, reinforcing our confidence in a promising future.”

Sinma Digital is the first ecommerce warehouse in Malaysia to utilise the Haipick system, where the automation allows Sinma to handle incoming spike in volume by multiple folds with the growth in the industry.

Chung Dao, director of XTS Technologies and Sinma Digital, said, “The launch marks a milestone for XTS Technologies and Sinma Digital with the introduction of Haipick, the world’s first Autonomous Casehandling Mobile Robot system. This event underscores our commitment to technical and service excellence, innovation, and exceeding market expectations.

XTS Technologies and Sinma Digital’s partnership marks a significant milestone in their journey, blending technological innovation with strategic foresight. Their combined efforts are setting new standards in the industry, driving progress and efficiency in the Malaysian and global digital landscapes.

Source: The Sun

XTS Technologies raises the bar in industrial automation

Uzbekistan Ambassador Karomidin Gadoev, accompanied by representatives from the Uzbekistan Embassy, recently visited Proton Tanjong Malim and discussed opportunities for cooperation with the national carmaker in the automotive industry.

In a statement today, Proton deputy chief executive officer Roslan Abdullah said the company is always looking for partners to expand its reach and being an international original equipment manufacturer (OEM) is one of its brand pillars.

“Therefore, we are thankful for the visit from the ambassador of Uzbekistan and his delegation, and hope there will be some positive developments to report on in the future,” he said.

Following the visit to Tanjong Malim, Gadoev said Malaysia is a long-term and dependable friend of Uzbekistan, connected by centuries-old trade and cultural ties, friendship, and spiritual closeness.

He said that in the last few years, bilateral economic relations between Uzbekistan and Malaysia have been steadily developing, and currently, 36 Malaysian companies are successfully operating in Uzbekistan, and there is one Uzbek company in Malaysia.

“By the end of 2024, three Malaysian companies will start their activities in our country and currently, negotiations with several Malaysian industry players on establishing joint investment projects are well underway,” he said.

“There is a huge untapped potential between Uzbekistan and Malaysia in terms of bilateral economic relations,” he added.

Source: Bernama

Uzbekistan ambassador visits Proton Tanjong Malim, explores cooperation in automotive industry

Ferrotec Holdings Corporation, a global supplier of materials, components, and precision system solutions, has opened its manufacturing facility at Kulim Hi-Tech Park, Kedah.

The Tokyo-listed company has invested about RM850 million in the project and created more than 800 job opportunities mostly for local talents, according to a joint statement issued by the Malaysian Investment Development Authority (Mida) and Ferrotec.

Ferrotec Holdings and Ferrotec Manufacturing Malaysia Sdn Bhd vice president Takeru Yamamura said the state-of-the-art production facility has been strategically designed to meet growing demand for its products and services in the dynamic Asian market.

“As Ferrotec’s first manufacturing location in Southeast Asia, the Kedah plant integrates the culmination of 44 years of engineering expertise gathered from our operations in the United States, European Union, China and Japan,” he said in the statement.

Yamamura said the establishment of the Kedah plant would propel Ferrotec to new heights as a globally recognised international supplier in the semiconductor industry.

Ferrotec held its opening ceremony on Monday to kick off production at the plant, which will be undertaking electromechanical assembly and advanced material fabrication for semiconductor equipment.

The ceremony was attended by Kedah Menteri Besar Datuk Seri Muhammad Sanusi Md Nor, Mida deputy chief executive officer (investment development) Lim Bee Vian, and Ferrotec Holdings president and group chief executive officer He Xian Han.

Lim commended Ferrotec for its unwavering trust and support in establishing its manufacturing facility in Malaysia.

She said Ferrotec, with its extensive manufacturing footprint, symbolises the diversification of supply chains, reinforcing Malaysia’s strategic standing as a location for semiconductor operations.

“By choosing Malaysia, Ferrotec positions itself to leverage untapped opportunities, foster innovation and contribute substantially to the ever-evolving semiconductor landscape in our region,” she said.

Lim said Mida will continue to partner with leading companies to anchor high value-added manufacturing, adopt advanced manufacturing technologies, and equip its people with the requisite skill sets.

“Our partnership with Ferrotec is a good example of how we are doing this,” she added.

Meanwhile, Muhammad Sanusi said that Kedah is an excellent investment destination, not only known for tourism and agriculture, but also manufacturing.

He said the state offers a strategic location, skilled workforce and a supportive environment for companies to flourish.

“With the E10 initiative set up to ease investors’ journey and a strong track record with multinationals already present here, Kedah is no doubt a preferred state for investment,” he said.

Source: Bernama

Ferrotec’s new facility in Kulim opens for production

NexV Manufacturing Sdn Bhd (NMSB), a joint venture (JV) company between Careplus Group Bhd and GoAuto Group Sdn Bhd, will commence the construction of the country’s first green technology facility dedicated to the manufacture and assembly of new energy vehicles (NEVs), including electric vehicles (EVs), in Chembong, Rembau, Negeri Sembilan.

The healthcare group, which received the green light from the Ministry of Investment, Trade and Industry to manufacture and assemble energy-efficient vehicles in October last year, said the facility is expected to begin operations in the first quarter next year. 

The plant will have a capacity of 30,000 vehicles per year, in which one-third will comprise the assembly of Neta models through the JV between Careplus and Intro Synergy Sdn Bhd (a GoAuto subsidiary), Careplus said in a statement on Friday. 

It will also not only assemble Neta vehicles, but be open to working with other NEV brands intending to carry out completely knocked-down assembly of passenger and commercial EVs or electric motorcycles. 

“The Malaysian Investment Development Authority (Mida) applauds NMSB for its commitment to innovation, green energy and industry leadership, advancing Malaysia’s status as a major player in the EV industry, while placing the nation at centre stage as a pivotal global impetus.

“We stand ready to offer our full support and facilitation to local businesses, ensuring a seamless journey for businesses aiming to thrive in our dynamic and competitive market,” according to Mida chief executive officer Datuk Arham Abdul Rahman. 

Meanwhile, Careplus group CEO Lim Kwee Shyan said the group hopes that with the assembly of the Neta V model, more Malaysians will be able to accept and support products produced in Chembong.

Phase 1 of the project involves the development of an assembly plant, expected to begin in the first quarter of 2024. Meanwhile, Phase 2 will begin in 2026, and Phase 3 in 2028, expanding to an even bigger production capacity of 50,000 units per year. 

The group highlighted that total investment in the plant development is about RM600 million. 

At Friday’s market close, shares in Careplus traded half a sen or 1.23% lower at 40 sen, giving the group a market capitalisation of RM240.93 million.

Source: The Edge Malaysia

Careplus-GoAuto JV to build green tech facility for EV manufacturing in Rembau

The construction of the country’s first green technology new energy vehicle (NEV) manufacturing and assembly factory located in Chembong here will create a new wave of ecosystems in the industry in Negeri Sembilan.

Menteri Besar Datuk Seri Aminuddin Harun said the new factory, which is open today in stages until 2028 can also attract more electric vehicle (EV) or commercial vehicle brands that require the local assembly (CKD) format.

“The impact of the construction of this factory is the sustainable generation of Negeri Sembilan’s economy that can be implemented at the same time offering 600 skilled job opportunities to the people of this state.

“It is hoped that this project can boost the marketing network of EVs with the NETA brand throughout the country and local socio-economic development, especially in Rembau,“ he said when officiating at the groundbreaking ceremony for the factory here today.

Also present were NexV Manufacturing Sdn Bhd chief executive officer Lim Kwee Shyan and GoAuto Group chairman Datuk SM Azli SM Nasimuddin Kamal.

Aminuddin said the construction of the factory by Careplus together with GoAuto through NexV Manufacturing Sdn Bhd was on ​​29.68 hectares involving an investment of RM840 million in phases.

The first phase of the project involves the development of the assembly plant in the first quarter of this year while the second and third phases will start in 2026 and 2028 respectively.

He explained that the process of building the factory also signals to all sectors of the chain related to the manufacture of EVs that Negeri Sembilan is an alternative location for any firm that wants to invest in Malaysia.

Aminuddin also said the state government always practises an open policy in welcoming the entry of investors, especially high-tech industry players.

Meanwhile, Lim said the production capacity of the factory is around 30,000 units per year and is designed to reach a maximum production capacity of 50,000 units per year.

He said the factory is not only able to assemble its own brand vehicles such as NETA but is open to other NEV brands whether passenger vehicles, commercial vehicles or CKD electric motorcycles.

He explained that the factory is constructed using an environmentally friendly system with zero water waste, no water and noise pollution and all solid waste materials will be sent for recycling.

Lim said the roof of the factory will be installed with solar panels where most of the electricity can be generated from the technology in line with the goal of expanding and exploring business potential in the field of green technology and new energy.

He also said that in order to increase the marketability of graduates, especially for Technical and Vocational Education and Training (TVET) graduates, his company also offered highly skilled job opportunities for local young people working in the green mobility industry.

“We expect the recruitment and training of manpower to be done in the third quarter of this year or as early as August.

“In addition, discussions with Institut Kemahiran Tinggi Belia Negara (IKTBN) Chembong were also held to collaborate to produce trained graduates who will then be employed with us,“ he said.

During the event, NexV Manufacturing also signed a local assembly agreement with HOZON, a NETA brand EV company from China, to make NETA V the first product to be assembled by this factory in the first quarter of 2025.

Apart from that, Zambry said that the leadership of higher education institutions (HEIs) must be bold in making changes to handle bureaucratic issues by shifting paradigms, and therefore, more flexibility should be given to the HEI leadership.

He said the aspirations will also emphasise the strengthening and empowerment of Technical and Vocational Education and Training (TVET) in line with the best industry practices that are competent and relevant to current industry developments.

“We (also) need to strengthen curriculum development and delivery in line with the Global Sustainability Agenda, particularly the Sustainable Development Goals by the United Nations and the Education for Sustainable Development agenda by UNESCO,” he said.

However, the minister said the five focus areas and 20 aspirations outlined are not permanent as amendments or changes can be made from time to time according to the needs and appropriateness that should be prioritised towards enhancing the performance of higher education.

On the Malaysia Education Blueprint 2015-2025 (Higher Education) ending next year, Zambry said it is high time for a new or a continuation of the blueprint to be formulated this year.

In realising this, Zambry said the country does not need a special commission to be established to scrutinise the achievements of higher education in Malaysia compared to regional countries such as Vietnam, Thailand, and Indonesia, and then to map out the direction of higher education for a long-term period.

“It is sufficient to establish a group of experts to study this matter. In this regard, I give the ministry 12 months to diagnose the level of achievement of our higher education comprehensively.

“We need to conduct an in-depth analysis to identify the real issues and causes of the problems that occur. This way, we will get accurate information to formulate a long-term strategy for the country’s higher education, which will be incorporated into the new national higher education blueprint,” he said.

Meanwhile, Zambry said MOHE will organise the MADANI Campus Roadshow to all public and private higher learning institutions across the country, aiming to personally observe the actual situation at the institutions and to ensure that the wellbeing of students and staff is given priority.

Source: Bernama

First new energy plant in Rembau creates new wave ecosystem of EV industry

Malaysia, which has attracted leading American multinational Tesla to set up its regional headquarters here last year, plans to woo more companies like the electric vehicle (EV) giant to set up assembly plants here.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the endgame is to have the likes of Tesla build their plants in the country.

Currently, many electric vehicle (EV) makers are procuring components from Malaysia “in the billions”, he said, adding that Malaysia is doubling down on the semiconductor industry to tap the growing EV market.

“They want to realign the supply chain to ensure that the security and resiliency of their supply chain, so they are coming closer to Malaysia, and we are inviting many EV makers,” he said during an exclusive interview with CNBC’s “Squawk Box Asia” aired today.

He told the business news channel that the goal is for EV makers to expand their presence in the country, pointing out that Tesla is already one of Malaysia’s major charging station providers, while some of the largest Malaysian companies are also Tesla’s suppliers.

Last month, Tengku Zafrul said Malaysia has seen exponential growth in EV sales yearly and the government is optimistic the positive momentum would continue strongly, with more than 100,000 registered electrified vehicles recorded.

The minister said he believes that EVs would be the catalyst for the growth of Malaysia’s manufacturing industry exports.

Elaborating further, he said electrical and electronics products (E&E) is a vital part in the EV supply chain.

“Hence, there is a lot of potential in the new generation vehicles wherein more components, for example, semiconductor composites, chip components in a typical car today or even a hybrid car, (are needed at) around 1,500 chips in one car,” he said.

The National Investment Council (MPN), at its meeting recently, decided to set up the National Semiconductor Strategic Task Force (NSSTF) to allow the country to move up the value chain in the chips industry.

In a statement, Tengku Zafrul said the decision was arrived at in light of the importance of the semiconductor industry, which contributed 45.4 per cent (or RM593.5 billion) to Malaysia’s manufacturing industry export revenue.

“It is a platform specifically to develop the semiconductor ecosystem to attract strategic investments in the sector,” he said.

NSSTF, to be chaired by Tengku Zafrul, is expected to further strengthen the sector which currently contributes 13 per cent to the assembly, testing and packaging activities of chips globally and 10 per cent to the global semiconductor market.

During the interview with CNBC, Tengku Zafrul also said that the taskforce highlights the importance of the country’s semiconductor sector — which accounts for seven per cent of the country’s gross domestic product and half of its exports.

He said that the team will not only be looking at growing the semiconductor industry in Malaysia but will also seek to ensure there’s a “talent supply chain” in the country.

“Malaysia needs 50,000 electrical and electronics engineers every year, of which we (have) a shortage,” he said.

However, Malaysia is still in a good position to achieve the goal of growing its semiconductor industry.

“The good thing about Malaysia is this industry started in early ‘70s. So, it’s been here 50 years. And the foundation is strong for us today to move up the value chain,” he added.

Source: Bernama

Malaysia to continue wooing global EV brands — Tengku Zafrul

PENANG’S Bayan Lepas Free Trade Zone is a significant hub of industry and commerce in Malaysia. Established in the 1970s, it was one of the first of its kind in the country and played a pivotal role in Penang’s economic transformation. The zone is home to numerous multinational corporations, especially in electronics and engineering, making it a cornerstone of Malaysia’s export-driven manufacturing sector.

A CATALYST FOR ECONOMIC GROWTH

Bayan Lepas Free Trade Zone’s establishment marked a turning point in Malaysia’s economic strategy, shifting from agriculture to manufacturing. It attracted foreign direct investment, creating thousands of jobs and contributing significantly to the nation’s GDP.

DIVERSE INDUSTRIES AND GLOBAL IMPACT

Primarily known for its electronics and semiconductor industries, the zone hosts various multinational companies. These companies have not only boosted Penang’s economy but also placed Malaysia on the global map as a key player in the electronics manufacturing sector.

INFRASTRUCTURE AND DEVELOPMENT

Over the years, the Bayan Lepas Free Trade Zone has seen substantial infrastructure development. It is well-equipped with facilities and amenities that support large-scale industrial operations, contributing to the efficiency and productivity of the businesses located there.

FUTURE PROSPECTS AND CHALLENGES

As the world economy evolves, the Bayan Lepas Free Trade Zone faces new challenges and opportunities. It continues to adapt, with a focus on innovation and sustainability, ensuring its continued relevance and contribution to Malaysia’s economic landscape.

This zone stands as a testament to Malaysia’s successful industrialisation strategy and continues to play a crucial role in the nation’s economic narrative.

Source: NST

From local to global: The impact of Bayan Lepas Free Trade Zone

Sabah is on its way to fully adopting green technology with an RM20 billion green steel project at the Sipitang Oil and Gas Industrial Park (SOGIP).

Hajiji said the state welcomes investments in products that harness renewable energy, improve waste management, and promote sustainable solutions.

Investing in green technology-based products not only aligns with global sustainability goals but also taps into a rapidly growing market for eco-friendly solutions,” he said.

Hajiji said this after witnessing the Heads of Agreement handing over ceremony from Sabah Energy Corporation Sdn Bhd (SEC) to Esteel Enterprise Sabah Sdn Bhd (Esteel Sabah) for the supply of 150 million standard cubic feet per day (mmscfd) of natural gas at Menara Kinabalu today.

Under the agreement, SEC will supply 100 million standard cubic feet per day (mmscfd) of natural gas to Esteel Sabah’s steel manufacturing plant and an additional 50 mmscfd for the plant’s power generation over the next 20 years.

He said the project was part of the few key industry areas identified that not only promise substantial returns on investment, but also contribute to a more sustainable and prosperous future.

The green steel project is a three-phase project that opts for natural gas as a reducing agent instead of coke and coal, reducing carbon emissions by 70 per cent and making it low carbon, efficient, and environmentally friendly.

Esteel Enterprise Sabah Sdn Bhd, a subsidiary of Singapore’s Green Esteel Pte Ltd, had signed the land-lease agreement with the Sabah Oil and Gas Development Corporation Sdn Bhd (SOGDC) to set up the manufacturing plant at SOGIP in Sipitang in November 2022.

Phase One of the project, with an estimated cost of US$1.93 billion (RM8.97 billion), is expected to commence this year and be completed by 2026.

This project is anticipated to create approximately 2,795 job opportunities during its operational phase.

Representing SEC at the Heads of Agreement handover ceremony was its chief executive officer Datuk Adzmir Abd Rahman, while Esteel Sabah was represented by managing director Xu Yihang.

Also present were state Minister of Industrial Development and Entrepreneurship Datuk Phoong Jin Zhe, SEC chairman Datuk Annuar Ayub, state secretary Datuk Seri Safar Untong, and SOGDC Sdn Bhd chief executive officer Datuk Harun Ismail.

Source: Malay Mail

Hajiji: Sabah’s first green steel project expected to take off by end 2024

The Investment, Trade and Industry Ministry (Miti) will formulate a strategic plan to increase green investment and make Malaysia a major regional green investment hub and destination.

Its Minister, Tengku Datuk Seri Zafrul Tengku Abdul Aziz, said the plan aims to achieve net zero carbon as early as 2050 in line with the New Industrial Master Plan 2030 (NIMP 2030) and the National Energy Transition Roadmap (NETR).

Earlier, the National Investment Council (MPN) at its meeting today (January 9) agreed to formulate a plan specifically to enhance green investment in Malaysia and form a special task force to strategically develop the semiconductor industry.

In tandem with the emphasis on green investment, the meeting also decided to rebrand the Federal Government project that was announced in the 2024 Budget, namely the Kerian Integrated Industrial Park as the Kerian Integrated Green Industrial Park.

“It is hoped that this will be the catalyst to the complete transition to Renewable Energy (RE) by industries that will be developed in the industrial park,” Tengku Zafrul said in a statement today.

Looking at the importance of the semiconductor industry which contributes 45.4 per cent (or RM593.5 billion) to Malaysia’s manufacturing industry export revenue, equivalent to 7.1 per cent of the nation’s gross domestic product, the meeting also decided to establish the National Semiconductor Strategic Task Force (NSSTF).

“It is a platform specifically to develop the semiconductor ecosystem to attract strategic investments in the sector,” he said.

NSSTF will be chaired by the Miti Minister and it is expected to further strengthen the sector which currently contributes 13 per cent to the assembly, testing and packaging activities of chips globally and 10 per cent to the global semiconductor market.

The task force will also involve the participation of various ministries, members of the academia as well as domestic and global industry players to empower the direction of the semiconductor industry which is the mainstay of the country’s electrical and electronics sector as well as various other sectors such as electric vehicles and technology-based sector.

“This is important to ensure that the nation’s semiconductor industry is more competitive and future-proof in line with the technology development, legislation, current trends and latest policies at the global level,” said Tengku Zafrul.

He added all these efforts would ensure that the implementation of investments into the country will achieve the Madani Economy’s objectives, including placing Malaysia in the world’s top 30 largest economies and the top 12 in terms of global competitiveness within 10 years. 

Source: Bernama

MITI to formulate strategic plan to increase green investment

Sabah is well on its way to fully adopting the green technology revolution with the RM20 billion green steel project at the Sipitang Oil and Gas Industrial Park (Sogip), said Chief Minister Datuk Seri Hajiji Noor.

Hajiji said the state welcomes investments in products that harness renewable energy, improve waste management and promote sustainable solutions.

“Investing in green technology-based products not only aligns with global sustainability goals but also taps into a rapidly growing market for eco-friendly solutions,” he said in a statement in conjunction with the heads of agreement exchange ceremony at Menara Kinabalu here on Tuesday.

The heads of agreement exchange was between Sabah Energy Corporation Sdn Bhd (SEC), a state-owned natural gas supplier and transporter, and Esteel Enterprise Sabah Sdn Bhd (Esteel Sabah) for the supply of 150 million standard cubic feet per day (mmscfd) of natural gas. 

Representing SEC at the ceremony was chief executive officer Datuk Adzmir Abd Rahman, while Esteel Sabah was represented by managing director Xu Yihang. 

Under the agreement, SEC will supply 100 mmscfd of natural gas to Esteel Sabah’s steel manufacturing plant and an additional 50 mmscfd for the plant’s power generation over the next 20 years.

Hajiji reiterated the point he raised at the Global Chinese Economic and Technology Summit in Shenzen, China last November that Sabah has identified a few key industry areas that not only promise substantial returns on investment but also contribute to a more sustainable and prosperous future.

“This marked Sabah’s confidence in the green steel project, which is among investments that represented the foundation of the state’s economic growth and development strategy,” he said. 

Hajiji added that SEC’s significant contribution to this project highlights its crucial role in promoting sustainable initiatives and fostering regional development.

According to the statement, the green steel project is a three-phase project which opts for natural gas as a reducing agent instead of coke and coal, reducing carbon emissions by 70% and making it low carbon, efficient and environmentally friendly.

Esteel Sabah, a subsidiary of Singapore’s Green Esteel Pte Ltd, signed the land-lease agreement with the Sabah Oil and Gas Development Corporation Sdn Bhd to set up the manufacturing plant at Sogip in Sipitang in November 2022.

Phase one of the project, with an estimated cost of US$1.93 billion ((approximately RM8.97 billion), is expected to commence this year and be completed by 2026, creating approximately 2,795 job opportunities during its operational phase. 

Source: Bernama

Sabah set to fully adopt green technology with RM20 bil green steel project

Pentamaster Corp Bhd will spend RM200mil in 2024 and 2025 to complete its third plant and set up two design and development centres in the United States and Europe.

Executive chairman Chuah Choon Bin told StarBiz that the group had already invested RM80mil into the third plant.

“The third plant will design and manufacture automation solutions for medical technology devices, consumer electronics and semiconductors. The plant should be ready in early 2025,” he said.

Chuah said the group planned to set up design and development centres in California and Munich this year to serve electric vehicle (EV) and medical technology customers.

According to the Korea Automotive Technology Institute, global automobile sales are estimated to increase by 10.4% to 90.1 million units in 2023 compared to the previous year. But the global automobile sales growth will likely slow to 2.4% year-on-year to 92.2 million units in 2024.

According to Chuah, the share of EVs will sharply increase.

Research house Gartner projects the shipment of about 15 million electric cars (battery electric and plug-in hybrid) in 2023, to increase by 19% to 17.9 million units this year.

Chuah believed the semiconductor market has reached a bottom and is expected to grow on a quarter-on-quarter basis starting in the first half of 2024.

“With the introduction of artificial intelligence-powered personal computers and smartphones, the demand for consumer electronic products will grow between 2024 and 2026.

“The group continues to focus on making testers used for checking power and semiconductor components of EVs.

“We will also concentrate on producing factory automation systems for medical technology products,” he added.

Chuah said the global smartphone market was expected to increase in the second quarter of 2024.

“The smartphone market used to generate 50% of our revenue but its contribution contracted over the past few years.

“We expect the smartphone sector to pick up in the second quarter of 2024,” Chuah said.

Global technology market analyst firm Canalys expects the smartphone market to contract by 5% in 2023 and that 1.13 billion smartphones would be shipped out.

The firm projects a 4% growth in 2024 in the smartphone market that would see a shipment of 1.17 billion smartphones.

After recording a remarkable double-digit revenue growth for the nine months ended on Sept 30, 2023, Pentamaster is confident of posting a record-breaking result in the full financial year (FY23).

According to SEMI, the global sales of total semiconductor manufacturing equipment by original equipment manufacturers are forecast to reach US$100bil 2023, a contraction of 6.1% from the industry record of US$107.4bil posted in 2022.

SEMI is a global industry association that provides a platform to unite the semiconductor ecosystem.

“Semiconductor manufacturing equipment growth is expected to resume in 2024, with sales forecast to reach a new high of US$124bil in 2025, supported by both the front-end and back-end segments,” it said.

Meanwhile, Phillip Capital Research expected the demand for insulated gate bipolar transistors (IGBT) and silicon carbide (SiC) batteries in EVs to drive Pentamaster’s growth.

“Both IGBT and SiC offer enormous opportunities for Pentamaster to grow the automotive segment further.

“While SiC is still at a relatively infant stage of adoption, we expect SiC to gain momentum in the years ahead,” Phillip Capital said.

Pentamaster provides comprehensive and customisable solutions for IGBT and SiC batteries, covering component assembly to final inspection and testing.

Phillip Capital also sees further upside from medical sector expansion.

Pentamaster entered into the medical business after acquiring TP Concept in 2019. It is completing a third plant with an area of 720,000 sq ft, partly for the expansion of its medical segment.

The expansion of the existing customer base in Penang and the rising demand for healthcare products will serve as the other avenues for earnings growth.

Phillip Capital is forecasting a three-year profit with a 17% compound annual growth rate till 2025 on its ability to capture more automated test equipment and medical orders for the factory automation solutions segment, capacity expansion and recovery in the automotive and semiconductor industries.

“We expect the medical business to contribute about 10% of the group’s revenue by 2025,” the research house said.

Pentamaster has consistently generated positive operating cash flows since 2019 and has invested in capital expenditure with little borrowings.

“There is no official dividend policy but Pentamaster has historically distributed around 10% of its annual after-tax profit for the past two years.

“We project a similar payout moving forward,” Phillip Capital added.

Pentamaster is among the top four global manufacturers of this proprietary SiC wafer burn-in system. Phillip Capital expects SiC adoption to gain more robust traction in the years ahead, driving Pentamaster’s growth.

Source: The Star

Pentamaster commits RM200 mil for expansion

Perak State Development Corp (PKNPk) has inked a joint venture agreement with subsidiary Perak Corp to develop Silver Valley Technology Park (SVTP) on the former’s industrial land in Kanthan with an estimated gross development value (GDV) of RM1.03 billion.

They also welcomed earthworks and engineering specialist Advancecon Holdings Bhd as the joint developer of SVTP. 

PKNPk chief executive Datuk Redza Rafiq Abdul Razak said Advancecon will be a great sparring partner for Perak Corp to take SVTP forward.

“With the support of the Perak state government and the joint developers, we aim to secure RM14 billion of private investment and hope to contribute to Perak’s gross domestic product (GDP) in return,” said Redza. 

SVTP is located among industrial parks such as Kanthan Industrial Park and PKNPk’s pride, Bandar Meru Raya.

To this end, Perak Corp looks at the project as a key initiative to drive investments into the state. 

Perak Menteri Besar Datuk Seri Saarani Mohamed is upbeat about the future of SVTP. 

He said as the state gains prominence from the Perak Sejahtera 2030 development agenda, the addition of a state-of-the-art industrial park presents substantial opportunities for domestic and foreign direct investment (FDI) and development.

“We are incredibly excited about the potential creation of 13,000 employment opportunities that will be available to the people of Perak. 

“One of the most outstanding pulls of this joint development is the synergy between industry players in Perak and the location itself.

“Hence, we must ensure that SVTP is delivered at the highest level, so we are not compromising on quality, safety, and all other factors that make Perak enticing to investors,” he said.

Source: NST

Perak Corp, Advanceon to develop technology park with over RM1bil GDV

The total industry volume (TIV) for the automotive sector is predicted to trend higher in the first quarter of this year (Q1) and to slow down in Q2 and Q3, according to research by Hong Leong Investment Bank (HLIB).

The firm said that the 200,000 units in the order backlog that are scheduled for delivery during that time are the reason for the high volume early this year.

“However, we expect TIV to slow down in Q2–Q3 2024 due to declining new orders, softer consumer sentiment, and brought-forward purchases. 

“Hence, original equipment manufacturers (OEMs) will have to leverage attractive new models and sales programs in order to sustain sales. Subsequently, TIV will likely recover towards 4Q24 due to more aggressive year-end sales,” it said. 

Nevertheless, it said there is still upside potential from exciting new model launches in late 2023 and 2024 and more aggressive sales and marketing activities to sustain sales by the various OEMs.

TIV registered a growth of 11.3 per cent year-on-year (YoY) to 718,600 units in the first 11 months of 2023, driven by high order backlogs of 300–350,000 units during the start of the year and continued strong demand on the back of attractive new launches since 2022. 

“For 2023, we expect TIV to hit a new record high of 790,000 units (up 9.6 per cent YoY). However, for 2024, we expect TIV to normalise back to 720,000 units (down 8.9 per cent YoY), mainly due to declining order backlogs,” it added. 

The firm also expects Bank Negara Malaysia to maintain the overnight policy rate at 3.00 per cent in 2024, as the central bank will adopt a “wait and see” stance to ascertain the durability and strength of underlying economic demand.

“In any case, we estimated a 25 basis point increase effect on monthly instalments of +RM15 per month (based on the RM80,000 car price, with a 90 per cent loan application and a nine-year loan period).”

It also foresees the ringgit to appreciate in 2024 to an average of 4.44 against the US dollar, ending the year at 4.30. 

“Stronger ringgit will lower the effective input costs for imported completely built-up cars, completely knocked-down packs, and raw materials, and subsequently improve OEMs’ margins. OEMs that have major exposure to the US dollar include Toyota (Sime Darby Motors Bhd and UMW Holdings Bhd) and Nissan (Tan Chong Motors Holdings Bhd).”

HLIB maintained “neutral” on the sector and expects earnings for the sector to drop in 2024 due to lower sales volume and higher operating costs. 

Its top picks are DRB Hicom Bhd (Buy, TP: RM2.00) and MBM Resources Bhd (Buy, TP: RM5.40) for their strong leverage over the national OEMs, Proton and Perodua, which have more sustainable sales volume and potential export growth in the longer term.

Source: NST

Total industry volume for auto sector to trend upward in Q1: HLIB

Just like a well-oiled machine, the manufacturing industry thrives on efficiency and optimisation. Data acts as the lubricant that keeps everything running smoothly.

Without data, manufacturers would be operating blindly, unaware of potential issues and opportunities for improvement. It is the key ingredient that allows them to fine-tune their processes, minimise costs and deliver high quality products to customers.

Similarly, while manufacturing now accounts for nearly a quarter of Malaysia’s gross domestic product (GDP), technologies such as the Internet of Things (IoT), automation as well as artificial intelligence (AI) and machine learning (ML) will only boost industrial growth and efficiency if they can count upon accurate, actionable and timely data.

To maximise the value of structured and unstructured data from all sources at scale, having the right infrastructure is crucial. It is the key to achieving complete visibility over supply chains and workflow, which ultimately enables businesses to become lean in the face of significant disruption.

With the ability to call on actionable and timely data, businesses can quickly identify and remove bottlenecks in the supply chain, which leads to shorter transit times and lower costs. Additionally, data from IoT sensors within consumer products can provide valuable insights to product development teams, allowing them to better understand customer preferences and issues, and ultimately leading to improved product design and customer satisfaction.

Addressing challenges

When it comes to data challenges in the manufacturing sector, businesses encounter various complexities that require careful consideration. One pressing concern is data residency, which encompasses the storage, management and protection of personal data and communications.

As part of the broader issue of data sovereignty, complying with local data protection laws is important for businesses, especially now that the government is looking to increase the fines for violations of the Personal Data Protection Act (PDPA) in its review of the latter.

Furthermore, the aggregation of data from diverse sources presents a significant challenge for many manufacturers.

Data is generated across various functional areas, such as sales, marketing, finance and human resources. Bringing these disparate data sources together and consolidating them into a unified repository, such as a data lake, is essential for extracting meaningful insights.

By aggregating data, manufacturers can gain comprehensive visibility into their operations, unlock correlations and leverage intelligent analytics to support informed decision-making.

This process of aggregating and harmonising data sets lays the foundation for generating actionable insights and driving innovation throughout the manufacturing value chain.

Overcoming silos and fuelling data-driven innovation

One commonly observed fact is that challenges in data modernisation often arise from the presence of data silos.

When striving for innovation across business units or multiple countries, enterprises should begin by indexing the existing data rather than starting from scratch. This helps pinpoint use cases and outcomes, which are indicators of returns on investment (ROI).

Organisations need to be truly data-driven and have quick access to all relevant information. However, many organisations have large amounts of unused and underutilised data. Data is the backbone of businesses, and it is necessary to align the entire organisation with data to make it more effective.

Providers of managed cloud services can help organisations seamlessly bridge this gap and facilitate the secure dissemination of valuable business insights across teams.

One way to start this transformation journey is to leverage the existing data that is already available in the organisation. Doing so can save time and resources, as well as provide insights into the current performance.

Data can be collected from databases, reports and surveys, and can be cleaned, integrated and analysed using cloud native tools to drive analysis and decision-making. This provides manufacturers with the tools and insights to withstand risks and navigate business challenges adroitly.

Hemanta Banerjee is  vice-president of public cloud data services at Rackspace Technology, a provider of expertise and managed services across all the major public and private cloud technologies

Source: The Edge Malaysia

Unlocking innovation in manufacturing through data

Evergreen, HeveaBoard and Homeritz have taken steps to reduce reliance on the US 

MALAYSIAN furniture exports continued to decline, largely due to continued weak demand from Malaysia’s largest furniture export destination — the US. 

Even as the US Federal Reserve (Fed) has indicated potentially three rate cuts in 2024, we do not believe that it will spell the end of US housing issues as it is not so much a demand but rather a supply issue. 

We note that the companies under our coverage have taken steps to reduce reliance on the US, with Evergreen Fibreboard Bhd focusing on the Middle East and Indonesia, HeveaBoard Bhd on Japan and Homeritz Corp Bhd increasing exports to Asia and Oceania. 

Furniture exports for 10M23: 10M23 wooden furniture exports declined to RM7.4 billion (YoY: -22.9%) from RM9.5 billion in 10M22. The lower export value was primarily dragged by the US market which makes up a majority 49% of the total export market. 

The decline for the US market was largely due to continued weak furniture demand as the US housing market continues to be negatively impacted by elevated interest rates, resulting in US housing becoming increasingly unaffordable and in turn resulting in declining transactions in home sales. One of the main reasons Malaysian furniture exports to the US have declined significantly in 2023 was due to US homebuyers facing an unaffordable housing market caused by the Fed’s interest rate hikes. 

The hikes resulted in two main issues, namely: (i) Creating a “lock-in” effect among existing homeowners locked in at much lower mortgage rates, encouraging them to stay put rather than sell and purchase a new property at much higher rates; and (ii) increasing the cost for home builders to build new homes. 

Consequently, this has resulted in a supply constraint on US housing inventory, causing a surge in US home prices as there are a limited number of homes on the market, and invariably also negatively impacting furniture demand as home sales decline. 

Having mentioned the issues the US housing market is facing, it is inevitable that the companies under our coverage would also be negatively impacted. For the panel board makers, Evergreen and HeveaBoard, despite the US not being their main export market, they do still have exposure there via their ready-to-assemble (RTA) segment. Homeritz also exports substantially to the US and European Union (EU) (although they have been increasing their focus towards Asia and Oceania). 

Should the US housing market issues remain unresolved and unaffordability continues to increase despite lower mortgage rates, we think that furniture METS, HUB Research exports to the US will continue to remain bleak and thus result in unexciting performances for the RTA segment for Evergreen and HeveaBoard and also offset any stronger export numbers to Asia/ Oceania for Homeritz. 

As the US is the largest export market for Malaysian-made furniture, we believe that the issues faced by the US housing market will continue to dampen furniture demand. 

We do not think that things will turn around until and unless US home prices start to fall and affordability improves. With that said, we do note that the companies under our coverage have been reducing reliance on the US. Maintain ‘Neutral’. 

Source: The Malaysian Reserve

Wood manufacturing exports hit by US housing woes

The technology sector is set to recover in the second half of this year driven by the increase in demand for memory and integrated circuits (IC).

Kenanga Research said it doesn’t expect the sector to experience a turnaround immediately given the year-end peak demand for electronics and vehicles was slightly underwhelming and the upcoming Chinese New Year break that will have some impact on demand.

According to the research house, the Americas and Asia-Pacific will lead the recovery this year, with the latter forecast to command 53% of global sales.

“The year-on-year (y-o-y) decline in semiconductor sales has been gradually shrinking from the high teens two quarters ago to low single digits in recent months.

“The trade body World Semiconductor Trade Statistics (WTS) moderated its contraction forecast of global semiconductor sales in 2023 to 9.4% in November, from 10.3% in June,” the research house said.

Kenanga Research said Malaysian Pacific Industries Bhd (MPI) proved to be one of the more resilient outsourced semiconductor assembly and test companies under its coverage. But it noted that customers were hesitant to commit to large orders and MPI foresees a delayed breakeven timeline for its China operation in Suzhou, now expected in April 2024 instead of November 2023.

Similarly, Unisem (M) Bhd fell short of its guidance twice in a row but anticipates a pickup in the second half of this year.

Kenanga Research favours Inari Amertron Bhd as it demonstrated an ability to turn around faster than its peers.

“Inari’s positive outlook is supported by solid order visibility from a customer, and it anticipates a 5%-8% surge in radio frequency (RF) content per device. The increased RF utilisation, surpassing 90% from the recent 80%, indicates robust performance in the upcoming quarter,” it said.

The research house said automotive semiconductors have seen a structural shift with increased usage in vehicles, but also pointed out more cautious spending from consumers on high-priced tech items.

Despite the China Association of Automobile Manufacturers reporting stable car sales in August (plus 6.9%), September (plus 6.6%), and October (plus 7.6%) last year, and the European Automobile Manufacturers’ Association observing robust growth of 21%, 9.2%, and 14.6% for the same months, Kenanga Research said projections signalled otherwise.

“Forecasts for automotive demand among Western customers are signalling an early slowdown, leading to more frequent revisions and reduced visibility.

“Consequently, we anticipate that the recovery in China, starting from a low base, may face dampening effects due to the early slowdown among Western automotive customers,” the research house said.

These factors result in a mixed outlook for companies like D&O Green Technologies Bhd and JHM Consolidation Bhd.

On the other hand, companies with diversified portfolios in industrial products are set to outperform electronics-manufacturing services that rely mostly on consumer electronics.

“We maintain a positive outlook on PIE Industrial Bhd as the group anticipates an increase in orders in its seasonally stronger year-end quarter,” it said.

Kenanga Research added that the group signed up four new customers in sectors such as servers, medical care, smart homes, and drones, and is going through the qualification and sampling stages.

“Upon commencement of mass production in 2024, these four projects are expected to contribute meaningfully to group revenue as it has also completed the renovation of one plant and will have another ready this year,” it noted.

Kenanga Research also said it remained positive on NationGate Holdings Bhd based on its long-term prospects even as its immediate-term earnings will likely be unexciting due to a delayed ramp-up in optical transceiver products as a key customer is busy with relocating their offices and plant from China to Malaysia.

Overall, the research house said it will maintain its “neutral” stance on the sector as it expects a gradual recovery in demand.

“There may be quarter-on-quarter improvement in subsequent quarterly earnings due to a low-base effect but we deem it premature to warrant a sector-wide upgrade.”

Source: The Star

Tech sector set to rebound in second half of 2024

There is light at the end of the tunnel for Malaysian manufacturers that have been scaling back their production for nearly one-and-a-half years.

The country’s factory activity, which has contracted for 16 straight months up until last December, is expected to stage a rebound this year despite persistent risks in the global economy.

The major catalysts for the expected reversal are China’s recovery, improved trade, a potential upswing in the technology sector and a resilient domestic economy.

In December 2023, Malaysia’s S&P Global Purchasing Managers’ Index (PMI) was unchanged at 47.9, indicating that business conditions remained challenging for manufacturing firms.

A PMI reading below 50 points indicates contraction in factory activity.

It is noteworthy that Malaysia’s PMI reading has remained below the 50-point threshold since August 2022.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid, however, said there is a “chance” for Malaysia’s PMI to turn around in 2024.

The rebound in activities will be seen more in semiconductor-related sectors, he told StarBiz.“The latest World Semiconductor Trade Statistics has projected that the Global Semiconductor Sales (GSS) would grow 13.1% in 2024 from the previous forecast of 11.8%.

“For 2023, it is estimated that GSS contracted by 9.4%.

“Perhaps, the anticipation for lower interest rates could also help improve business sentiment because lower interest rates would reduce their cost of borrowings and also show the government’s commitment to support growth,” he said.

Bank Muamalat, in its 2024 outlook report, had projected the manufacturing sector to grow by 4% in 2024 from an estimated 1.5% in 2023.

The stronger growth is expected as recovery in the semiconductor-related sectors will help to lift the export-oriented industries’ performance.

As highlighted in the latest PMI report, Malaysian manufacturers are also confident about an upcoming rise in production over the next 12 months.

MIDF Research, in its economic brief, foresees demand outlook to gradually pick up and provide support to regional trade recovery.

“We believe this explains the continued optimism indicated by the local manufacturers,” it said.

Meanwhile, TA Research opined that new orders will rebound in the local manufacturing sector.

“The existing subdued demand environment has kept optimism levels relatively steady since September, though concerns persist regarding the speed and timing of the anticipated recovery,” it said.

Referring to the S&P Global PMI report, TA Research said manufacturers scaled back production but the moderation was the slowest recorded since August.

Meanwhile, stocks of finished goods were wound down at the fastest pace since September, as firms used existing stocks to fulfill orders.

On a positive note, TA Research said Malaysian manufacturers exhibited resilience in the face of challenging market conditions by increasing employment levels for the first time in eight months.

“Simultaneously, companies managed to reduce their outstanding business at a marginal rate, marking the slowest pace since August 2022.

“Although the most recent PMI data indicates subdued demand conditions in the Malaysian manufacturing sector as of the close of 2023, S&P Global affirms that the findings align with modest growth in official statistics,” it added.

Malaysia was not the only country in the region to face a contraction in factory activity in December.

Among the seven Asean nations under observation, manufacturing conditions were weak as well in four other countries, namely Myanmar (42.9), Thailand (47.9), Malaysia (47.9) and Vietnam (48.9).

Nevertheless, some countries showed an improvement in their operating conditions, led by the Philippines (51.5), Singapore (52.0), and Indonesia (52.2).

In summary, the Asean manufacturing sector concluded the year on a subdued note, scoring 49.7, a decline from the previously recorded 50 points.

In Malaysia, new export orders fell for eight consecutive months, but the pace of decline at the softest rate since May.

Kenanga Research noted that although manufacturers remained concerned about the pace and timing of a recovery, the degree of optimism remained broadly stable since September.

“The manufacturing PMI is expected to gradually improve in the near term, attributed to the potential upswing in the technology sector and China’s gradual recovery, both of which are expected to contribute to an improvement in Malaysia’s export performance moving forward.

“Nevertheless, our outlook remains cautiously optimistic, as rising geopolitical tensions could disrupt the global supply chain and potentially impact global trade activity,” it said.

Against this backdrop, Kenanga Research retained its gross domestic product (GDP) growth forecast for the fourth quarter of 2023 (4Q23) at 3.7%, as compared to 3.3% in 3Q23.

The stronger sequential growth is likely to be supported by a resilient domestic demand, bolstered by year-end festive spending and a continued increase in tourist arrivals.

“Hence, we expect 2023 GDP growth to align with our projection of 3.5% to 4.0% (2022: 8.7%) and anticipate it to expand to 4.9% in 2024,” it said.

Source: The Star

Optimism for manufacturers

PGF Capital Bhd plans to develop a self-sustaining integrated township with an estimated gross development value (GDV) of RM3 billion adjacent to the Automotive High-Tech Valley (AHTV) in Proton City, Tanjong Malim, Perak.

In a statement on Wednesday, the company said the strategic development with over 6,000 residential and commercial units would take place over 10 to 15 years on 161.87 hectares (ha) of land.

PGF Capital said the comprehensive project also includes 99.27 ha for agriculture plantations, 21.61 ha for aquaculture activities, 119.58 ha for eco-tourism, 23.55 ha for an eco-retreat, and 29.02 ha for lifestyle communities, including a retirement and wellness village.

“This comprehensive initiative reflects PGF Capital’s commitment to creating not just a township, but a harmonious and sustainable living environment,” it said.

PGF Capital said it was leveraging AHTV’s potential as China’s automotive powerhouse Zhejiang Geely Holding Group Co Ltd is investing RM46.8 billion to develop the AHTV as Malaysia’s next-generation vehicle hub.

Group chief executive officer Fong Wern Sheng commented that the master plan for the land envisions a self-sufficient and vibrant community, integrating residential and commercial spaces with thoughtfully designed amenities and infrastructure.

“Geely has proposed the construction of a university, and we are delighted that the Perak state government is exploring suitable locations for such a facility.

“Our property development plan is currently undergoing review and awaiting approval from the Perak state government. We aim to launch our first phase by 2024,” he said.

Fong said that PGF Capital had signed a joint venture agreement with Malvest Properties Sdn Bhd, a property developer based in Penang, to jointly develop Phase 1 with an estimated GDV of RM600 million, which will offer 1,808 units of residential and commercial properties tailored to different market needs.

“The development plan includes the integration of technology for sustainable living, which encompasses initiatives such as electric vehicle shuttles for a greener transportation option, artificial intelligence-enhanced security systems for a safe living environment and the adoption of solar energy to mitigate carbon emissions and reliance on traditional power sources,” PGF Capital added.

Source: Bernama

PGF Capital plans RM3 bil GDV development near Automotive High-Tech Valley

Oliver Healthcare Packaging (Oliver), a leading supplier of sterile barrier flexible packaging solutions to the global healthcare market, has commenced construction of its new manufacturing facility in Johor – the first plant in Malaysia, and the largest in Asia.

In February last year, the company broke ground on their 122,000-square-foot manufacturing facility, which is located within the i-Tech Valley, an integrated industrial park in the established economic zone of Iskandar Puteri, Johor. The plant, expected to begin operations by end-2024, will help develop Malaysia’s medical devices ecosystem through the supply of innovative flexible packaging solutions for Asia-Pacific’s rapidly growing healthcare industry.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said, “Oliver Healthcare Packaging’s choice of Malaysia for its inaugural presence in Asia stands as an unequivocal testament to our attractiveness not only as an investment destination, but also as a thriving and dynamic hub for companies wishing to establish strategic access to the region. The commencement of their facility’s construction sends a strong signal on Malaysia’s efficient facilitation of investments to other investors. To us, timely implementation of committed investments is equally key, because it means that jobs and opportunities for SMEs can be quickly realised to benefit the Malaysian economy.”

Meanwhile, Malaysian Investment Development Authority CEO Datuk Wira Arham Abdul Rahman said Oliver Healthcare Packaging’s decision reflects confidence in Malaysia’s business-friendly environment and the resilience of their medical devices supply chain.

He added that Mida is fully committed to collaborating with the company to bring this project to fruition, extending a warm welcome to similar initiatives.

“Malaysia plays an important role as a strategic hub for the many pharmaceutical and medical devices companies in Southeast Asia. We look forward to working closely with Mida to further the growth and development of Malaysia’s medical devices ecosystem. It’s a critical investment that will support the ever-evolving healthcare needs of this region and beyond,” said Kenneth De Muynck, general manager, Asia-Pacific, Oliver Healthcare Packaging.

The new manufacturing facility will create employment opportunities with positions in engineering, manufacturing, plant management, and more. It will also boast the latest state-of-the-art manufacturing equipment housed in ISO-7 and ISO-8 clean rooms, meeting the stringent regulatory standards for medical packaging.

Source: The Sun

Oliver Healthcare Packaging starts construction of Johor factory

Manufacturers should be more objective when asking the government to be transparent and clear about the implementation of the Imbalance Cost Pass-Through (ICPT) mechanism as they should practise what they preach with their consumers.

This is not only limited to the energy sector but all sorts of investment, training, and business activities under the Madani government.

The Federation of Malaysian Manufacturers (FMM) recently said it was disappointed with the government’s decision to maintain the ICPT mechanism surcharge for the first half of 2024 at 17 sen per kilowatt hour (kWh).

The manufacturers also called for more clarity on the mechanism while hoping for more details to be made available on why it made such a decision as industry players were aiming for a reduction in the ICPT surcharge following the overall declining trend in global fuel prices in 2023 and the six-month lag.

On a complaint made by FMM, Malaysia University of Science and Technology economics professor Geoffrey Williams said that since the surcharge has not changed, it would not disadvantage businesses.

“The bills for high users are determined in the same way as before and will adjust in the same way so there should be nothing to complain about. Provided cheaper global fuel prices eventually feed into lower prices, there is no particular issue here,” he told Bernama.

Implemented in 2015, the ICPT mechanism helps protect the industry against fluctuating fuel costs by reviewing fuel prices and generation costs every six months.

The mechanism also allows the utility company, Tenaga Nasional Bhd, to reflect changes in fuel and other generation-related costs in the electricity tariff as these costs are set based on benchmarked prices in the base tariff.

Williams said the ICPT surcharge was cut to 17 sen/kWh from 20 sen/kWh in July last year, therefore industry players have already benefited.

They are also enjoying a subsidised rate based on US$79 per tonne of coal to generate electricity when the actual price is US$110 per tonne.

“Global gas prices are similarly higher than those used to calculate the costs to industry, therefore they are benefiting quite a lot but we do not see them passing on lower costs to consumers when that happens,” he said, urging the manufacturers to be more objective on the matter.

Changes are part of subsidy rationalisation

He stressed that these changes are part of the subsidy rationalisation programme that industry players have been calling for.

They will save money, reduce the subsidy to richer people, and reduce market distortions and this is what is expected and what stakeholders want, he said, adding that the government is delivering on its promises.

“As the subsidy bill is reduced, the government has more fiscal space to help industry players more directly with tax cuts for example, or indirectly by putting more money into the hands of their customers.

“This is a win-win and industry players should support the subsidy rationalisation that they have been calling for. They can also work proactively to reduce energy consumption and switch to renewable energy or more efficient business models,” Williams said.

He also called on manufacturers to work with the government on many green economy schemes and the Green Investment Tax Allowance on green assets for example.

From July to December 2022, the government allocated RM5.4 billion for electricity subsidy. This amount rose to RM10.8 billion from January to June 2023 and RM5.2 billion from July to December 2023.

The government, on implementing its subsidy reforms, planned to give subsidy to targeted consumers only as it moves away from the inflating allocation for all subsidies which reached RM80 billion in 2022 – the highest in history.

Pro-business government

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the government has always been pro-business when it comes to economic policies.

This is proven via the various incentives to promote investment namely the pioneer status, investment and reinvestment tax allowance which would essentially help companies to upgrade their production capacities.

Besides, there is also a financing programme administered by various agencies namely the SME Bank, Bank Pembangunan, BSN, et cetera, that can assist the financing needs among the micro, small and medium enterprises.

Not to mention matching grants provided by government agencies to promote certain activities such as automation.

“While the government has been forthcoming to help businesses in managing their cost and investment, prices are still high.

“This would mean businesses have not really passed the benefits that they have procured from the government incentives and instead continue to charge prices as per normal to gain better profit margins,” Mohd Afzanizam said.

Sharing an economics term, he said this is called prices sticky downward whereby prices tend to remain high even though the businesses may have been experiencing a decline in their input cost.

Citing an example on a menu cost, he said business operators are likely to keep their prices unchanged on the menu even though their input prices have gone down (subsidies and price control).

“This is given the fact that it is a costly affair for businesses to reprint a new set of menus despite market prices having gone down. More importantly, it is profitable for business to maintain their prices,” he concluded.

Source: Bernama

Be more objective on ICPT, industry representatives told