Emerging technologies such as artificial intelligence (AI), machine learning, and automation are rapidly reshaping the global workforce, and in this new landscape, Malaysia’s ability to stay ahead of these trends will be key to maintaining its competitive edge on the world stage.

Deputy Prime Minister Datuk Seri Fadillah Yusuf emphasised that for the country to succeed, it must not only adapt to these changes but also take a leadership role in shaping them by fostering a workforce equipped with the skills that will define Malaysia’s future economy.

“As we prepare for the future, we must cultivate a mindset within our workforce that embodies the principles of learning, unlearning, and relearning.

“This is the key to thriving in an ever-evolving environment where upskilling and reskilling must remain at the forefront of our efforts,” he said in his speech at the Human Resources Development Awards 2024 (HRD Awards), here yesterday.

Also present at the ceremony were Human Resources Development Corporation (HRD Corp) chairman Datuk Abu Huraira Abu Yazid, Malaysian National News Agency (Bernama) chief executive officer Nur-ul Afida Kamaludin and Bernama deputy editor-in-chief (News Service) Nasriah Darus.

Fadillah expressed his satisfaction that many organisations that have have risen to the challenge by investing in their employees’ development, and in doing so, strengthening Malaysia’s economic resilience and enhancing its global standing.

He highlighted that Ministry of Human Resources (KESUMA), through HRD Corp, has played an instrumental role in facilitating this transformation and was proud of the initiatives rolled out in 2024 that further support industries in enhancing their human capital development efforts.

“Notably, the enhancements to HRD Corp’s Allowable Cost Matrix (ACM) reflect our commitment to providing high-quality and accessible training.

“With more flexible course formats and higher claimable rates, these will better align Malaysia’s training ecosystem with global best practices,” he said.

On the awards, he said that they provided an opportunity to recognise organisations that have led the charge in human resources innovation.

These companies are not only improving their workforce capabilities but also setting new standards for talent development, and in turn, demonstrates Malaysia’s leadership within the ASEAN region, he added.

A total of 36 awards celebrating excellence across diverse categories including the prestigious Human Resources Minister Awards, HRD Corp Awards, Excellence Awards, and one very special Recognition Award in Learning and Development were presented to celebrate the dedication, innovation, and impact, where each recipient represents the future of Malaysia’s human resource landscape.

Source: Bernama

Malaysia to stay ahead of emerging technologies to maintain workforce competitiveness – Fadillah

Huawei has provided hundreds of mobile network sites as well as cloud services and intelligent operation centres in Sarawak, which have helped improve wireless network coverage in remote areas, accelerating the country’s digital transformation, said Prime Minister Datuk Seri Anwar Ibrahim.

Through his visit and high-level meeting with the Huawei delegation earlier on Thursday in Beijing, the prime minister said he was informed about several Huawei technologies being utilised to address certain issues in Malaysia, particularly in bridging the digital divide.

“I was impressed by the technological progress and solutions developed by Huawei, which include 5.5G, cloud computing, and artificial intelligence (AI) that have catalysed digital transformation in government and industry sectors,” he said in his official Facebook post.

Earlier, Anwar, who is also the finance minister, visited the Huawei Executive Briefing Center in Beijing and was welcomed by Huawei’s senior leadership, who guided him through the company’s various technological advancements. He then led the Malaysian delegation in a high-level meeting with the Huawei delegation, headed by Liang Hua, chairman of the board of Huawei Technologies Co Ltd.

Anwar ends his four-day working visit to China on Friday, which kicked off on Nov 4.

Accompanying him during the China visit were Foreign Minister Datuk Seri Mohamad Hasan, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Aziz and Human Resources Minister Steven Sim Chee Keong.

Source: Bernama

Huawei helps to accelerate country’s digital transformation — PM

The Sarawak government is taking strategic steps to develop the digital economy and green energy sectors in the state, said Deputy Premier Datuk Amar Douglas Uggah Embas.

The Universiti Malaysia Sarawak (Unimas) pro-chancellor stated that embracing digitalisation and environmental sustainability are vital to the state

“In this era of digital transformation, the state government has taken strategic steps to boost its digital economy; we see this as a key driver for job creation within the technology and creative sectors.

“It is hoped that Unimas will continue to drive digital research, foster digital literacy, and produce highly skilled graduates who are well-prepared for roles in the technology sector,” he said when speaking at the university’s 28th Convocation Ceremony today.

With Sarawak’s potential to become Malaysia’s hub for renewable energy, particularly in hydrogen and other renewable resources such as hydropower and solar energy, Uggah said that through Unimas’ support in green energy research, the state could position itself as Malaysia’s main supplier of clean hydrogen.

He emphasised the need for not only technical expertise in energy systems but also the wisdom to develop policies that support sustainable energy industries.

“With growing awareness around the impact of climate change, Sarawak is prioritising carbon footprint reduction and environmental protection.

“As part of this commitment, the state is taking decisive measures to conserve forests and natural ecosystems, which are essential in mitigating climate change.

“Through strategic collaboration with Unimas, the government aims to enhance research and awareness programmes centred on environmental conservation and sustainable practices,” he added.

Uggah encouraged graduates to play an active role in Sarawak’s development, urging them to use the knowledge and skills gained to build a brighter future for the state, their families, and generations to come.

A total of 1,073 students graduated during today’s convocation session. Over the three-day event, a total of 3,100 students will graduate from Unimas.

Source: Borneo Post

Uggah: Sarawak advances digital economy, green energy initiatives

Kenanga Investment Bank Bhd anticipates a rise in demand for cloud services, including graphics processing units-as-a-service pioneered by Maxis Bhd locally, as global cloud service providers continue to invest heavily in data centres, cloud, and artificial intelligence (AI) infrastructure in Malaysia.

In a research note yesterday, the investment bank noted that contrary to perception, the data centre boom is not creating an oversupply situation, and the power supply is not a constraint, as Tenaga Nasional Bhd (TNB) has sufficient capacity to meet demand.

“Thus, we believe players involved in various roles within the cloud industry, such as cloud service providers (CSP), distributors for global CSPs, managed-cloud service providers, software vendors and system integrators, stand to benefit, pointing the spotlight on Telekom Malaysia, Maxis, CelcomDigi, and OCK Group as well as Time, Dagang NeXchange, Vstecs and SNS Network,” it said.

Kenanga Investment Bank recently held a Data Centre and Cloud Day conference featuring spokespersons from YTL Power, Maxis, Telekom Malaysia, and TNB.

Meanwhile, the bank stated that TNB will be a long-term beneficiary, given the expected resilience in electricity demand from data centres.

“YTL Power does not expect delays in AI chip delivery to be delivered on schedule in the first quarter of 2025, while names to watch out for transmission and distribution include Southern Cable Group,” it said.

Kenanga Investment posited that local players involved in various roles within the cloud industry stand to benefit from higher adoption and demand for cloud services.

Additionally, it said these players may further boost earnings and differentiate their offerings by bundling connectivity solutions, including last-mile fibre and private 5G networks, with their integrated cloud offerings.

According to the note, TNB has received over 70 data centre project electricity supply applications in Johor and Klang Valley, with a total maximum demand exceeding 11,000 megawatts (MW).

“As of June 2024, 26 projects have signed energy supply agreements (ESA), with a total maximum demand of 4,000 MW.

“Of these, 16 projects (1,700 MW) have already been completed, and 190 MW of data centre capacity was operational as of June 2024, up from 150 MW in March 2024,” Kenanga said.

The bank said that after accounting for the schedules of expiring independent power producers and new plants coming online, TNB still has sufficient capacity to meet this high demand, assuming all 11,000 MW applications are approved.

Currently, Peninsular Malaysia’s total installed capacity is 27,385 MW, with grid demand at around 18,000 MW.

“On the other hand, TNB guarantees power supply once the ESA is signed.

“It has implemented a fasttracked green lane process for high-voltage (HV) data centre connections, reducing the timeframe to 12 months compared to the typical 36 months for normal HV bulk supply processes,” said the bank.

It said TNB needs to upgrade the transmission and distribution system to accommodate data centre demand.

Sosurce: Borneo Post

Rise in demand for cloud services expected thanks to more data centres

Malaysia’s assumption of the Asean chairmanship next year will be a catalyst for the country’s adoption of advanced technologies, especially in digitalisation, and make it more appealing to foreign investors.

The CEO of German software company TeamViewer, Oliver Steil, said the company could be interested in investing in Malaysia in the next five years.

“No concrete plans at the moment, but we keep investing in different countries, so I would not be surprised if we build a presence (in Malaysia) over the next five years,” he told Bernama recently.

TeamViewer is known for its remote control software, which claims to connect everything from oil rigs to technology companies and even Formula One teams. Headquartered in the southern German city of Goppingen, the company’s remote control software is traditionally used by information technology support teams.

Steil said that against a backdrop of Malaysia’s push towards digitalisation both domestically and regionally, he sees Malaysia as having huge potential in the digitalisation of the economy.

“There is probably a lot of digitalisation (process and technology) coming to (Malaysia). The economy is strong in Malaysia, and there are some big companies that will drive technological advancements.”

Steil said TeamViewer, as a technology giant, was still focused on its business in Singapore and could serve Malaysia from the country. From a regional perspective, he added, Asean is an interesting growth area in which TeamViewer has put additional focus and investment.

Asean’s push towards digitalisation is amplified by the region’s Digital Economy Framework Agreement.

The agreement’s purpose is to provide an overarching framework for greater clarity on digital elements of Asean’s ongoing and future activities and to support a clearer ownership structure for sectoral bodies of issues and outcomes.

Asean’s digital economy is reportedly estimated to grow from US$300 billion to almost US$1 trillion (RM4.36 trillion) by 2030. The regional bloc is one of the world’s fastest-growing economies, with the International Monetary Fund forecasting its average real gross domestic product growth (GDP) to reach 4.6% in 2023 and 4.7% in 2024.

Concurring with Steil, TeamViewer Asia-Pacific president Sojung Lee said Asean holds huge opportunities for the technology industry as the region’s population of more than 670 million is double that of the United States.

“With an ageing workforce and the need to train the younger population no matter where they are, the only way to do this is by scaling up quickly with technological support. With Malaysia leading Asean via its chairmanship in 2025, it stands well positioned to effect this change.”
Lee said the need to shorten worker training times is a challenge many countries face. She said this is especially vital in Malaysia, where the service industry accounts for 50% of the country’s GDP.

“Therefore, the need for excellent customer service is critical. Integrating technology such as AI and AR into training and providing an immersive customer experience will be crucial for the region to continue to grow,” Lee said.

Source: Bernama

Malaysia’s chairmanship of Asean will catalyse country’s digitalisation, attract foreign investors: TeamViever

The influx of multinational companies seeking regional headquarters in Kuala Lumpur (KL) is contributing to a more competitive office landscape, according to Knight Frank.

Knight Frank Malaysia executive director of office strategy and solutions Teh Young Khean said the global property consultancy remained positive on the office market outlook, with notable multinational companies expanding and setting up business in Malaysia, especially Kuala Lumpur.

In a statement, Teh attributed the trend to Kuala Lumpur’s competitive real estate costs and welcoming business environment.

“Despite higher vacancy rates among Asia-Pacific region, KL city continues to show steady signs of improved occupancy rate and rental rates of prime grade buildings from quarter-to-quarter (q-o-q),” he said.

The Knight Frank’s Asia-Pacific Prime Office Rental Index for the third quarter of 2024 (3Q 2024) revealed that prime office rents in Asia-Pacific are stabilising, falling 0.1 per cent q-o-q, suggesting a potential bottoming out of the market.

It noted that the trend is supported by growth in the Indian markets, which exhibit strong and sustained demand from offshoring operations and domestic businesses.

According to the report, 16 out of the 23 monitored cities reported stable or increasing rents year-on-year (y-o-y), up from 15 in 2Q 2024, with rents declining 2.5 per cent y-o-y, an improvement from the 2.8 per cent drop observed in 2Q 2024.

Global head of occupier strategy and solutions Tim Armstrong noted that global economic uncertainties have led to more cautious capital expenditure strategies among occupiers, favouring renewals and consolidating office footprints.

“When relocations do occur, companies are opting for smaller, higher-density spaces, aligning with cost mitigation needs and the growing acceptance of hybrid work models.

“While the business sentiment may improve as the United States Federal Reserve eases monetary policy, demand will continue to be tempered by prudent spending and workplace strategies focused on maximising space utilisation,” he said.

However, he said that as the region’s development peak subsides, any significant uptick in leasing activity could rapidly tighten the availability of prime spaces.

He added that the scenario may accelerate the flight-to-quality trend as tenants seek to upgrade their portfolios in a potentially more competitive market.

Source: Bernama

Influx of MNCs boost Kuala Lumpur’s office market competitiveness: Knight Frank

During the National Investment Council meeting in June, Prime Minister Datuk Seri Anwar Ibrahim requested the Ministry of Investment, Trade and Industry (Miti) together with its agencies including Sirim, the Malaysian Investment Development Authority (Mida) and all rele­vant agencies to work on guidelines to regulate the data centre industry.

To start with, we are developing the guidelines on power usage effectiveness (PUE) and water usage effectiveness (WUE). We are also taking it one step further to deal with carbon usage effectiveness (CUE) to improve energy efficiency and sustainability.

This is just at the beginning. The government, the multiple agencies within the government, data centre operators and other stakeholders are all learning how to manage and deal with data centres and how to grow the industry sustainably. I describe this as “building the ship as we sail it”.

More importantly, the government’s focus is not solely on data centres. Instead, it is about growing the businesses and creating the jobs that are powered by data centres, including the local equipment suppliers, building a robust technology ecosystem and creating the services jobs in Malaysia.

Data centres are not exactly a new industry. However, we entered a new phase in 2024 with the advent of generative artificial intelligence (AI). The demand for data centres increased exponentially to accommodate its intense computational demands.

The market size of AI is expected to quadruple within the next six years and it will drive 15% annual growth in global data centre energy demand over the same period of time.

I have been told that a ChatGPT search consumes about 10 times more energy than a conventional Google search. The energy consumption of AI data centres is immense and will have a significant impact on the net zero aspirations of many organisations and even countries.

The generative AI boom is presenting the same set of challenges to data centres everywhere in the world.

Anwar, in his Budget 2025 speech on Oct 18, mentioned this: “The country, as in Malaysia, must embark on a new paradigm shift to attract more meaningful investments. We can no longer sustain the outdated approach of offering incentives and support to investors without considering the broader economic benefits. For instance, investment in data centres should not be pursued unless they bring tangible added value to the Rakyat, such as high-paying job opportunities and knowledge transfer. A fresh shift in focus is now essential, ensuring that the support provided uses a multiplying effect that directly benefits the Rakyat and the nation, rather than merely serving the profit motive of the investor companies.”

The five questions to consider

Now, this is a challenge for everyone. When we grow the data centre business, not just the infrastructure, we must be thinking about multiple challenges that we have to deal with. Let me outline five of the challenges that I think we can work on together.

First, how to create jobs and, more importantly, high-value jobs in this industry. I understand that the data centres on-site do not create a sufficient number of jobs. But how do we generate the multiplying effect of creating jobs in operations, maintenance and along the entire supply chain?

The job opportunities may not be on-site, but the industry will have to articulate that they are growing jobs at all levels. While developing the data centres in Sedenak, Kulai and Iskandar Puteri in Johor, which have now become the focal points of data centres, how do we create higher-skilled maintenance, engineering and services jobs in Kuala Lumpur or Johor Bahru? It has to come as a package. We will have to start thinking about how to create jobs that pay well.

I had this conversation with Datuk Onn Hafiz Ghazi, the menteri besar of Johor, and he has made this public as well. He said he had a conversation with data centre operators, so he asked them, “How much do you pay your workers in Singapore?” They said, “S$4,000.” Then he asked, “How much do you pay in Malaysia?” “RM4,000,” they replied.

This is why he advocated for industry players to pay at least 50% of what they pay in Singapore, especially after benefiting from the low cost of utilities, land and labour, which are 70% cheaper than in neighbouring countries.

Now, this is the question we have to ask: how do we create jobs that pay well? How do we benchmark pay? My advice to the Malaysian industry, whether you are in a data centre or other industry, is to not benchmark Malaysian pay against pay in countries with a lower skill capacity.

Benchmarking has to be done differently. Malaysia should be understood as a Singapore at a discount. When we think about jobs, we need to think about pay. There is no talent problem in Malaysia — the only problem is that Malaysian talents are working in Singapore. When you offer two-thirds of Singapore pay, they will come back to work in Malaysia.

The second question is water consumption. The data centre industry will have to invest in creating alternative water sources instead of competing with the people for water. For instance, Southern Johor has many rivers, most of which are very dirty. Should investment be put into cleaning them up and reclaiming water from the rivers, apart from other solutions?

The third challenge is energy consumption. Two years ago, the Malaysian government made a commitment to reach net zero as soon as 2050. This year, Anwar made a firmer commitment that Malaysia is to achieve net zero in 2050. Energy-intensive industries, including data centres, will have to look into technologies — existing and new — to achieve this national target.

Investments into renewable energy are imminent to allow for the data centre industry to grow while minimising their impact on sustainability.

The fourth question is localisation. This is, again, mandated by the prime minister to Miti. He requested Miti and Mida to look into mechanisms for the data centre industry to localise. One stark example is server racks. Over the past few months, the import of server racks has been quite significant.

How can the government work with industry players to create Malaysian equipment for domestic consumption of data centres as well as potentially for export? We must remember that Malaysia has very strong metal fabrication and equipment industries that have been serving the semiconductor industry.

Now, this is the fifth and final challenge — the nation will also have to work with the data centre industry to prevent speculative building. AI is going to power a lot more demand for data centres but, at the same time, we need to ensure there is no speculative building which could result in a glut.

Finally, I highly encourage data centre industry players to form an association, to build a collective voice and a common policy platform, as well as to advocate for good and solid policies for the common good of the industry and the nation.

The data centre industry is at a new phase globally. Everyone is facing the same challenge, and this is the best time for us to come together and work together — the government, the industry players, the users, and the wider stakeholders — to look at how to build this industry and how to deal with the challenges that I outlined above. I hope we can work together so that this industry can flourish and, at the same time, Malaysians benefit from the industry.

---

Liew Chin Tong is the deputy minister of Investment, Trade and Industry. This article is based on his speech at the Malaysia Cloud and Datacenter Convention 2024 on Oct 24.

Source: The Edge Malaysia

Navigating the challenges and opportunities of the data centre industry

IT is no secret that Malaysia has high potential to be the region’s next tech hub, with large tech companies investing billions in the country. Amazon Web Services (AWS), the cloud computing unit of tech giant Amazon, launched the AWS Asia Pacific (Malaysia) Region in August 2024, with plans to invest more than US$6.2 billion (RM29.2bil) in Malaysia through 2038.

In line with Malaysia’s digital transformation agenda, AWS Global Data Centers vice president Kevin Miller said that AWS is dedicated to building reliable and highly available infrastructure in Malaysia, enabling local innovation and the development of applications with global potential.

“In supporting Malaysia’s national priorities around AI development and digital infrastructure, we believe AWS can be a valuable partner. With one of the largest investments among cloud providers and as the first to launch a Region here, the conditions are set for impactful digital transformation results.”

“AWS has decades of experience in AI applications, spanning all layers from high-level software to data centre infrastructure. As generative AI has gained momentum, AWS is well-equipped with 12 years of GPU infrastructure and data centres built in the last 15 years that are designed to meet the increasing demands for AI. This capability underscores the need for more energy and infrastructure to drive innovation and growth in various aspects of society.” he told The Star in an exclusive interview at AWS Cloud Day Malaysia 2024.

With over 3500 attendees, AWS Cloud Day Malaysia is one of the country’s largest technology events, designed to empower businesses and leaders to harness the full potential of cloud technology and the latest advancements in AI through detailed tech sessions, customer success stories, hands-on workshops, and innovative solutions presented by AWS experts and partners.

Advancing sustainability

Amazon is a pioneer in sustainability in the technology industry and has been the largest corporate purchaser of renewable energy each for the last four years.

Exemplified by the corporation’s co-founding of the Amazon Climate Pledge to achieve net-zero carbon by 2040, AWS matched 100% of its electricity use with renewable sources in 2023—seven years ahead of schedule.

“We acknowledge that the energy demands of generative AI is significant due to its high computing power requirements, so we are continuously scrutinising our operations to improve energy efficiency and reduce our carbon footprint while serving millions of customers globally.”

“We are enhancing sustainability in our data centres by using lower-carbon concrete and steel, which saved over 22,000 tons of carbon emissions in 2023—equivalent to charging 2.6 billion smartphones. Additionally, we’re focusing on the circular economy, having reduced carbon emissions by over 65,000 metric tons through the use of cargo ships instead of airfreight, and diverted 14.6 million hardware components from landfills for recycling or reuse.

“We are also investing in alternative fuels, such as transitioning to hydrotreated vegetable oil to power our data centre backup generators, which is a renewable diesel made from waste cooking oil. This is only just the beginning of what we can achieve,” said Miller.

Elevating Malaysia’s tech capabilities

To address the talent gap in the tech sector, AWS launched Tech Alliance Malaysia, a public-private partnership initiative aimed at reaching 25,000 learners to develop digital talent in collaboration with Malaysia Digital Economy Corporation (MDEC) and their Premier Digital Tech Institutions (PDTIs), and employers such as CIMB, Deriv, PayNet, and PETRONAS.

AWS Malaysia country general manager Peter Murray said that the move was in line with the organisation’s intent to achieve three goals—developing skills, expanding partnerships, and assisting its Malaysian customers to reach global markets.

“We are focused on becoming a hub for local and global software companies looking to deploy and scale their technology in South-East Asia. Malaysia’s customer ecosystem is eager for top-notch software tailored to local needs, and we are dedicated to helping Malaysia provide these services to customers across the region.

“We’re very proud of what we’ve done to help our customers expand regionally and globally. For instance, Aerodyne, a Malaysian born drone tech-as-a-service platform built on AWS, is now solving big problems for customers in Latin America, Australia, and other regions which have vast spaces and limited infrastructure.”

Noting that the partner community in Malaysia is incredibly strong, Murray added that there is a very bright future ahead for Malaysia to thrive in the tech space.

Source: The Star

AWS is building local, and going global

Top Swedish firms that have been investing in Malaysia’s industrial development since the nation achieved its independence are lending their expertise to the country’s green economy transition by focusing on the sustainability agenda.

The collaboration aligns with both nations’ commitment to environmental protection, forming the core for enhanced mutual trade and investment linkages, said Sweden’s ambassador to Malaysia, Niklas Wiberg.

He noted that Malaysia’s policy shift towards a green economy is expected to attract more foreign investors, especially Swedish firms with expertise in renewable energy (RE) and circular economy practices.

He highlighted significant contributions by Swedish firms in Malaysia towards RE and innovative solutions, saying that sectors such as green energy and telecommunications offer further opportunities for Swedish investment in sustainable practices.

“Swedish companies drive the grid transition here in Malaysia through RE and energy innovations, and promoting circular economy practices in a very clear way,” Wiberg told Bernama in an exclusive interview following his posting about two months ago. He officially began his tenure as Sweden’s ambassador to Malaysia on Aug 15.

Wiberg said leading Swedish companies, such as Atlas Copco (energy solutions), Alfa Laval (water and waste treatment), SKF (automotive and industrial engineering) and Sandvik (multinational engineering) have incorporated sustainable practices in their Malaysian operations, with a focus on RE and innovative energy solutions.

Automotive giants Volvo and Scania, which have been operating in Malaysia since 1967, are also focusing on green mobility, producing electric and hybrid vehicles and promoting biofuels.

“Similarly, retail giant IKEA integrates sustainability into its operations, offering energy-efficient products including their renowned furniture using RE,” he said.

Swedish telecommunications leader Ericsson, too, is making strides, partnering with Digital Nasional Bhd (DNB) to develop Malaysia’s 5G network while prioritising energy efficiency in the telecommunications sector.

“DNB and Ericsson’s collaboration in rolling out one of the world’s best 5G networks in record time is incredibly impressive. I think a lot of governments are looking at the Malaysian model with great interest,” Wiberg said.

Turning to electric vehicles (EV), he said that in Sweden and the countries where he has served, the tipping point for increasing EV usage was having strong supporting infrastructure in place.

This includes vehicle-charging facilities at workplaces and at homes, making it possible for consumers “to go electric if they wish to do so”, Wiberg said, adding that Sweden provides subsidies for electric cars, trucks and buses.

To support Malaysia’s green goals, the Swedish Embassy and Business Sweden introduced the “Pioneer the Possible” platform in 2023, showcasing Swedish innovation in sustainable practices.

“Through this platform, we have continued to make significant progress by building partnerships with our partners here in Malaysia, focusing on sustainable innovation and resource efficiency,” Wiberg said.

Wiberg said his mission as Sweden’s envoy to Malaysia is to strengthen these partnerships and explore new opportunities for joint initiatives in line with the common sustainability goals and efforts for a greener future in Malaysia as well as for the wider region.

He noted that Malaysia has ambitious plans when it comes to digital and green transition, as evidenced by the National Energy Transition Roadmap, the New Industrial Master Plan 2030 and the Malaysia Digital Economy Blueprint.

He said Malaysia has not only clinched free trade agreements with regional economies but also expanded trade and investment with countries outside the region.

There are government incentives to invest in Malaysia, particularly in the technology and green energy sectors. An even stronger demand for sustainable products goes a long way towards making Malaysia an appealing destination for Swedish firms,” said Wiberg.

As such, he said, Sweden hopes to build further on the sustainability agenda and provide the competency that Malaysia is keen to acquire, based on the areas identified in the government’s national development plans.

Commenting on competition between China and the European Union (EU) in the EV Industry, Wiberg said, “China is also making great electric cars, but it’s essential to foster initiatives for a truly competitive market.”

He stressed the need for fair practices that encourage innovation while promoting sustainability.

Along with the United States and Canada, the EU has imposed countervailing duties on imports of battery electric vehicles from China after its investigation concluded that the EV value chain in China benefits from unfair subsidisation.

“Sweden always supports a competitive market that is fair to producers and consumers,” Wiberg said.

He highlighted that the automotive sector is going through a pivotal transformation, adding that Swedish automakers are rapidly advancing towards full electrification, with ambitious plans to produce nearly 100% EV by 2030.

Source: The Sun

Swedish companies supporting Malaysia’s transition to green economy: Envoy

PRIME Minister Datuk Seri Anwar Ibrahim has cautioned against rushing to build data centres (DCs), especially if they do not add value to Malaysians in terms of high-income jobs and knowledge sharing.

The cautionary note was issued by the premier in his budget speech on Friday as he emphasised the need for a new shift to attract more high-quality investments into the country. “The traditional approach of providing support and incentives to investors without taking into account the economic spillover achieved is no longer sustainable,” he said.

While not directly saying the government would relook at the rapid development of DCs in the country, he points out that DC investment shouldn’t be a priority in attracting more foreign direct investment (FDI) unless it directly benefits the people through job creation, higher incomes and knowledge transfer.

This raises questions of whether the government is stepping back from attracting FDI through new DC development, as these facilities require high consumption of water and electricity and huge amounts of land.

“Some may misconstrue [his remarks] as the government wanting to relook at data centre development in the country. But the government can’t just suddenly pull a handbrake on data centre development,” Socio-Economic Research Centre (SERC) executive director Lee Heng Guie tells The Edge.

“Maybe, at this point, the government is looking at the cost-to-benefit analysis of data centre development in the country. But this is not unique only to data centres. As a matter of fact, since last year, the government has been looking at the impact of all new FDI coming into Malaysia’s economy.”

Lee points out that while it is acknowledged that DCs would not create many jobs, they do build a digital ecosystem that spills over into other sectors. “From construction to property to semiconductors and artificial intelligence, they are all correlated.”

Over the past year, Malaysia has become a sought-after destination for DCs in Southeast Asia, especially hyper-scale ones.

The recent spike in DC capacity can be attributed to the boom in cloud services, big data processing and advanced technology adoption that is driving the demand for hyper-scale DCs.

A Sept 24 report by Maybank Investment Bank shows that 766mw of DCs have already been committed, which is three times the current capacity of 280mw. The report also states that the future of 2,016mw still in the early stages is uncertain.

A market observer says Malaysia appears to be at a stage at which it is still accessing DC development. If it is not properly managed, it could result in oversupply.

“It is risky to focus on data centres alone. The country also needs to manage its resources and attract other FDIs that will complement the data centre development,” he adds.

Having said that, many analysts and renewable energy (RE) developers say DCs’ huge appetite for clean energy will drive demand.

As such, the government announced last month a third-party access (TPA) system to open up the national grid to the green energy sector.

Anwar, who is also the finance minister, said the government will also introduce carbon tax on the iron and steel as well as energy industries by 2026. The proposed tax is aimed at promoting the use of low-carbon technologies.

“Revenue generated from this tax will be used to fund green research and technology programmes,” he said.

SERC’s Lee says the two-year timeline for the country to adopt this carbon tax gives high-carbon industries time to work on decarbonisation.

“To decarbonise their operations, companies will be required to invest in RE and other initiatives to be ESG-compliant, which will be capital-intensive,” he says.

Local manufacturers hope the proposed carbon tax will not translate into higher electricity tariffs for the industrial sector.

In a statement on Friday, the Federation of Malaysian Manufacturers says: “Given the coverage of the proposed carbon tax on the iron and steel and energy sectors, it is crucial that the government has in place the emission-trading scheme, which is the preferred mechanism by the industry, to drive more cost-effective emission reductions.”

In Budget 2025, the government also announced a slew of additional initiatives for the RE sector, which is seen as a new economic engine, as the country aims to be net zero by 2050.

The government has raised the allocation to the National Energy Transition Facilitation Fund to RM300 million, from RM100 million in 2024. The Green Technology Financing Scheme has been extended, with an additional RM1 billion allocation until 2026. An e-rebate allocation of RM70 million for consumers and industries to purchase energy-efficient equipment should prioritise small and medium enterprises, in particular, to replace inefficient motors or boilers. The government will also extend the current Net Energy Metering 3.0 (NEM 3.0) programme to June 30, 2025, from Dec 31, 2024, to continue incentivising rooftop solar installation.

Anwar also announced that UEM Lestra and Tenaga Nasional Bhd would invest RM16 billion to increase the transmission and distribution network capacity as well as decarbonise industrial areas. 

Source: The Edge Malaysia

PM urges caution amid data centre buzz

Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg has urged OM Sarawak to continue exploring new products and processes that embrace green technology in their production.

Speaking at the OM Sarawak 10th anniversary gala dinner last night, he emphasised the importance of expanding their business for a sustainable future, given their status as the largest ferroalloy smelter in the region outside China.

“There must be a roadmap using ferroalloys manganese as a base to develop downstream products that will be sustainable and perhaps one day we can export your by-products overseas.

“Now people are talking about circular economy, and I understand that your ferroalloy production, there (is a) lot of waste from the process that could be further processed to produce other products.

“One such product is calcium silicon cored wire, a tough material that can be turned into screws for use in shipbuilding, steel-based products, and perhaps even airplanes,” he explained.

Abang Johari also highlighted the potential use of production waste for road construction in Sarawak.

“We are constructing many roads, including the Pan Borneo Highway and the coastal highway, and in the next 5 to 10 years, we will be building feeder roads to connect all longhouses and villages.

“We may need raw materials to harden the roads, and as gravel becomes scarcer, perhaps the waste can be used as part of the construction materials,” he said.

Abang Johari added that the supply and value chains for ferroalloy will be in place, allowing OM Sarawak to go downstream and be part of Sarawak’s circular economy.

He noted that he had launched the sustainable blueprint for Sarawak’s economy yesterday, which includes 10 thrusts, one of which focuses on manufacturing sustainability.

He congratulated OM Sarawak on their 10th anniversary and their contribution to the development of Sarawak.

“Ten years ago, you started in Bintulu after the completion of Samalaju Port and became a client to the port, exporting ferroalloys manganese from Sarawak, the largest outside China,” he said.

Abang Johari addressed two critical global issues: climate change and food security.

“To combat climate change, we need to reduce carbon emissions as much as possible. Any product that comes from green energy will have a better place in the market.

“OM Sarawak benefits from our green energy from hydro, which should give your products a premium price in the market,” he said.

He noted that OM Sarawak’s ferroalloys reduce the content of sulfur and oxide in steelmaking, making their products eco-friendly.

Also present at the event were Minister of Food Indsutry, Commodity and Regional Development Dato Sri Dr Stephen Rundi Utom, Minister of Utility and Telecommunication Dato Sri Julaihi Narawi, Deputy Minister of Infrastructure and Port Development Dato Majang Renggi, Deputy State Secretary (Economic Planning and Develoment) Dato Sri Dr Muhammad Abdullah Zaidel, Sarawak Energy Berhad chairman Dato Ibrahim Baki, OM Holdings chairman and chief executive officer Low Ngee Tong, Resident of Bintulu Division Datu Nyurak Keti, OM Holdings board members Zainul Abidin Rasheed, Datuk Abdul Hamid Sh Mohamed, Tan Peng Chin and Tan Ming Li as well as OM Sarawak managing director Chen Xiao Dong.

Source: Borneo Post

Premier urges OM Sarawak to embrace green technology for sustainable future

Malaysia is on track to become the third-largest data centre market in Asia, after Japan and India with key sector beneficiaries being utilities, renewable energy (RE), property, and telecommunication, among others, said Hong Leong Investment Bank Bhd (HLIB).

In a note today, the research bank said the future of Malaysia’s data centre industry appears bright as global demand for digital infrastructure continues to grow and its role in the data centre ecosystem is likely to expand.

The data centre space in Malaysia is experiencing significant growth, with approved investments totalling RM114.7 billion between 2021 and 2023.

HLIB said the electricity and water are relatively affordable and abundant in Malaysia, attracting data centres which consume large amounts of these resources, and the country also appeals to international data centre operators by enabling them to source RE.

As data centres are electricity guzzlers, it is crucial that the significant rise in energy consumption be met with an increase in RE generation capacity to ensure that Malaysia’s net-zero objectives are met.

“We roughly estimate that 35-40 gigawatts (GW) of RE is needed (assuming solar) to power up 7.2GW of data centres,” it added.

Meanwhile, the research bank opined that besides electricity and water, high bandwidth connectivity has become the third critical utility in the data centre industry.

“Connectivity here refers specifically to fibre and not only with domestic coverage, but extensive reach to international shores as well.

“Fibre that transmits and receives data at the speed of light has become the prerequisite to network between data centres, corporates, developers and end users,” it said.

In addition, HLIB noted that the surge in data centre investments has opened up new opportunities for property developers.

Developers who have land suitable for data centre development can sell the land directly, build and lease data centres to operators or even participate in operating the data centre, it said.

Additionally, the bank said under the construction sector, sophisticated engineering, procurement, construction and commissioning (EPCC) contracts are essential for modern data centres, which require advanced configurations and cybersecurity measures.

“We estimate there is RM130-228 billion worth of data centre construction value (based on an IT load pipeline of 4.5-5.1GW) and this will be a boon for reputable data centre builders,” it said.

Source: Bernama

Malaysia On Track To Become Third Largest Data Centre Hub In Asia – HLIB

Malaysia has received a further push from global technology players as it seeks to become a key regional hub for data management and digital infrastructure.

Having secured investments totalling US$16.9 billion from tech giants such as AWS, Microsoft, Google and Oracle, the domestic data centre landscape gets extra boosts from Bridge Data Centres (Bridge DC) and GDS Holdings.

Bridge DC on Monday signed a second collaboration agreement with local partner Mah Sing Group Bhd to expand Mah Sing DC Hub@Southville City with an extra 200 megawatts (MW) of power capacity.

This agreement builds on an initial partnership established in May 2024 for a 100MW development.

Earlier on Sunday, China’s data centre firm GDS International announced a RM1 billion investment and 5,000 potential job openings in Johor. This was after it signed a memorandum of understanding with five companies from China and Japan.

They were EPG Data Center Module, Longmotive, CoolTech Solution, Wasion Energy and Morimatsu Dialog.

GDS has already invested RM14.33 billion in local tech parks in Nusajaya and Kempas, both in Johor, generating over 300 jobs predominantly for Malaysians.

The new partnerships are expected to significantly expand this impact, providing ample employment opportunities and fostering economic growth in the region.

Meanwhile, Mah Sing said 36 acres, valued at around RM311 million, will be allocated for the latest Bridge DC expansion within Mah Sing DC Hub@Southville City.

Bridge DC will provide a forfeitable deposit as both parties finalise the joint venture agreement, which includes setting share ratios and completing the sale and purchase agreement for the land.

Tan Sri Leong Hoy Kum, Mah Sing’s founder and group managing director, said the collaboration aligns with the 2025 Budget emphasis on digitalisation and AI development.

“Malaysia has successfully secured investment totalling US$16.9 billion from global technology giants such as AWS, Microsoft, Google and Oracle, and the timing of this collaboration is particularly advantageous, given the growing global demand for data centres driven by the rise of AI and cloud computing,” he said in the statement.

Bridge DC, with strong financial backing, is targeting hyperscale and AI data centre customers, according to Leong.

He said Mah Sing DC Hub could play a pivotal role in establishing Malaysia as a key regional hub for data management and digital infrastructure, with the capacity to support up to 500MW.

The data centre’s first phase is expected to go live by 2026.

Leong added that the presence of Bridge DC at Mah Sing DC Hub@Southville City would likely attract more data centre operators, solidifying the hub’s position as a top regional data centre destination.

“This collaboration underscores Mah Sing’s commitment to building cutting-edge digital infrastructure. Our 30-year track record of rapid project execution makes us the ideal partner for data centre players seeking speed to market and scalability,” he said.

Mah Sing also has 42 acres of land in its Meridin East township in Johor Bahru, supporting an additional 300MW of future capacity, offering significant growth potential.

Eric Fan, chief executive officer of Bridge DC, affirmed that the partnership reflects its commitment to investing in Malaysia’s digital infrastructure as a leading regional data centre provider.

Bridge DC will oversee the design, construction, and infrastructure development to meet high-capacity clients’ specific needs, ensuring alignment with digital economy demands.

Source: NST

Data centre players pour in investments

Johor will receive a major foreign direct investment boost as GDS Holdings announces RM1bil in investment and 5,000 potential job openings with the signing of memoranda of understanding (MoU) with five foreign companies.

Johor Mentri Besar Datuk Onn Hafiz Ghazi said GDS Holdings was a leading data centre company that had invested over RM14.3bil in Nusajaya Tech Park and Kempas Tech Park and created over 300 new job opportunities with 86% being Malaysians.

He added that he witnessed the signing of the MoUs during the GDS Data Centre Supply Chain Ecosystem Summit held at a hotel here on Sunday (Oct 27).

The Machap assemblyman said the ceremony witnessed the MoUs between GDS and five companies from China and Japan such as EPG Data Center Module, Longmotive, CoolTech Solution, Wasion Energy, and Morimatsu Dialog.

“This is GDS commitment to bringing its supply chain into Johor.

“I am pleased to note that through this GDS supply chain, it has opened more than 5,000 new job opportunities directly and indirectly to locals, with a total investment of up to RM1bil,” he said in a Facebook post.

Onn Hafiz also added that he hopes that the collaboration between both state and federal governments and industries in Johor will continue to be strengthened.

“This will ensure the state’s economic development to continue and ultimately benefit Johoreans and Malaysians as a whole,” he said.

Source: The Star

Data centre company signing with foreign firms injects RM1bil FDI into Johor, says MB Onn Hafiz

Stellantis, the world’s fourth-largest automaker and leading mobility solutions provider, plans to set up a regional parts hub in Malaysia.

The new hub is a crucial component of Stellantis’ broader strategy to deepen its localisation efforts and bolster its long-term presence in the India & Asia Pacific region, including Malaysia. 

“India and Asia Pacific region is the third growth engine for Stellantis, and the regional parts hub is anticipated to become a key asset in our regional supply chain strategy,” Stellantis Asean chief operating officer Daniel Gonzalez said.

He said the investment underpins Stellantis’ long-term commitment in strengthening our footprint and growth not just in the region, but more importantly in contributing towards solidifying Malaysia’s position as a regional automotive hub.

“We are here to stay and are dedicated to enhancing customer experience, service delivery and operational efficiency with this new hub that will serve both Malaysia and the wider region,” he added.

Set to be operational by the first quarter of 2025, the new regional parts hub is designed to meet and cater to the growing demands of around 20 countries in the region, including key markets such as Malaysia.

The hub is also part of Stellantis’ strategy to enhance its aftersales service by reducing downtime and ensuring efficient access and availability of automotive parts and components to dealers and customers.

It will house automotive parts and components of all Stellantis brands including Peugeot, Citroën, Alfa Romeo, Jeep, RAM, Leapmotor and more.  

“The opening of our regional parts warehouse in Malaysia marks a significant milestone in our dedication to customer-centricity as we continue to better serve our customers across the India and Asia Pacific region.

Strategically located in a Free Trade Zone in Malaysia, this regional warehouse will allow us to improve parts availability, reduce lead time and enhance the overall service efficiency.

It will also enable us to respond quickly to the growing needs of our customers while ensuring they receive the highest level of aftersales support,” Stellantis India & Asia Pacific head of parts & services, Olivier Torchet said.

Since 2021, Stellantis has been building the foundation of the “Built in Asean for Asean” roadmap in Malaysia.

It began with the 100 per cent ownership acquisition of the Stellantis Gurun plant in Kedah, which will be maximised as a regional manufacturing hub for both domestic and export markets in Asean.

In March this year, Stellantis Malaysia was established as the official entity directing and managing marketing, sales, distribution, and after-sales of all Stellantis brands in Malaysia.

Source: NST

Stellantis to set up regional parts hub in Malaysia

The green energy sector has major potential to attract more foreign direct investment (FDI) to Malaysia as the world moves toward sustainable energy sources.

Member of Parliament Dr Mohammed Taufiq Johari (PH-Sungai Petani) said the government should realise that world demand is now moving towards greener and more environmentally friendly solutions.

He cited that programmes like RE100, where international companies pledge to use 100 per cent renewable energy, can be a major driver for countries that can provide clean energy sources.

“This gives Malaysia the opportunity to become a leader in the green sector in the ASEAN region.

“Through an investment strategy that is aligned with environmental and social needs, the government can ensure fair economic growth and benefit future generations,“ he said at the debate session on the Supply Bill 2025 in the Dewan Rakyat today.

Source: Bernama

Green energy sector can attract foreign direct investment to Malaysia

DHL Express has increased its investment in Malaysia with the launch of its RM300 million Kuala Lumpur Gateway (KL Gateway) – its largest investment in the country to date – as part of its strategy to enhance connectivity across Asia.

Previously, the company invested RM13 million to set up its Prai Service Centre in Batu Kawan Industrial Park, Penang, and RM11 million in Malaysia Southern Gateway.

DHL Express Malaysia and Brunei managing director Julian Neo Poh Choon said KL Gateway will support Malaysia’s booming import and export activities, in line with the increase in international trade.

“This new facility is three times larger and can handle four times the shipments compared to the previous premises. With this upgrade, we’re better equipped to support small and medium enterprises as well as multinational companies with their import and export activities in Malaysia,“ he said in his welcoming speech at the opening ceremony of the DHL Express Kuala Lumpur Gateway today.

The launch was attended by Transport Minister Anthony Loke Siew Fook, DHL Express Asia-Pacific chief executive officer Ken Lee and Raya Airways Group managing director Mohamad Najib Ishak.

Neo highlighted that the new facility is DHL Express’s first gateway facility in Southeast Asia with a fully automated sorting system. “This facility can process up to 10,000 shipments per hour, speeding up transit and delivery times compared to the previous capacity of 2,400 shipments,“ he said.

Neo said DHL Express aims to leverage Malaysia’s position as a regional logistics leader, adding that enhancing the nation’s role in global trade is part of KL Gateway’s planning strategy.

“Alongside four other gateways forming our local network, this facility enables seamless connectivity with major global trade flows, including the United States, China, Hong Kong, Japan, Singapore, Australia, Germany and the United Kingdom.

“It represents a critical component in our international network, spanning over 220 countries and territories,“ he said.

Neo noted that the facility’s development comes at an opportune time amid Malaysia’s positive trade outlook, with KL Gateway expected to become the main trade operations hub for DHL Express in central Malaysia.

“Kuala Lumpur and Selangor collectively contributed RM3.3 billion in export value and RM7 billion in import value as of August this year. Malaysia is a key player in the electronics and electrical manufacturing sectors, and the industry’s shift toward omni-sourcing is expected to drive continuous growth,“ he added.

Located at KLIA’s Terminal 1 Air Cargo Facility, L Gateway is one of five similar facilities in DHL Express Malaysia’s air and ground network. KL Gateway serves as a critical link for facilitating goods movement between the Klang Valley and international markets, with two flights connecting it to the Central Asia Hub in Hong Kong and the South Asia Hub in Singapore.

DHL Express has 20 service centres, approximately 170 retail locations, over 300 delivery vehicles, more than 60 weekly flights, four aircraft, and a workforce of 1,300 people.

Source: Bernama

DHL Express launches RM300m KL Gateway – its largest investment in Malaysia to date

Malaysia continues to serve as a logistics hub for solar panels amid the United States’ (US) tariff hike on solar equipment from Southeast Asia, said Transport Minister Anthony Loke.

He assured that several major US companies based in Malaysia are re-exporting solar panel equipment, including microchips, semiconductors and electronics, among other products, back to the US.

“I am not that pessimistic when it comes to this. As far as our policy is concerned, we want to continue improving and encouraging trade within Asean… inter-Asean trade is important. That’s why I believe the logistics hub is essential for Malaysia,” he said.

Loke was speaking to the press on the sidelines of the new DHL Express Kuala Lumpur Gateway’s opening ceremony today.

He emphasised that Malaysia should not rely solely on a single market and should continuously seek new opportunities.

Commenting on Malaysia’s recent inclusion as a BRICS partner country, Loke said this development opens up new market opportunities for Malaysia.

“I also believe that all relevant ministries, including the Ministry of Investment, Trade, and Industry, are taking the necessary steps to ensure that Malaysia’s exports and businesses are not affected,” he said.

The minister emphasised that besides solar panel exports, Malaysia is also strong in the E&E sector and should consider expanding into other consumer products.

Previously, the US announced a tariff hike on solar equipment exported from Southeast Asia to protect its domestic industry.

Its Commerce Department announced increased duties on solar equipment exported by Cambodia, Malaysia, Thailand, and Vietnam, following its initial findings of unfair government subsidies used to produce solar equipment sold by companies in these four countries.

Source: Bernama

Malaysia continues serving as solar panels’ logistics hub amid US tariff hike

Johor’s economy is expected to experience a boost following GDS Holdings’ announcement of a RM1 billion investment and 5,000 potential job openings.

This was after it signed a memorandum of understanding (MoU) with five notable companies from China and Japan during the GDS Data Centre Supply Chain Ecosystem Summit in Johor Baru.

Johor Menteri Besar Datuk Onn Hafiz Ghazi, in a post on his Facebook page, said he attended the GDS Data Centre Supply Chain Ecosystem Summit and witnessed the signing ceremony himself.

“I am pleased to learn that through GDS’s supply chain, more than 5,000 new job opportunities — both direct and indirect — will be created for the people of Johor and Malaysia, with total investments reaching up to RM1 billion,” he said.

Onn Hafiz said he hoped the collaboration among the state government, federal government, and industries in Johor will continue to strengthen, supporting the state’s economic development and ultimately benefiting the people of Johor as a whole.

The companies which signed MoUs with GDS were EPG Data Center Module, Longmotive, CoolTech Solution, Wasion Energy, and Morimatsu Dialog.

These partnerships signify GDS’ commitment to establishing its supply chain in Johor.

GDS Holdings, a leader in the data centre industry, has already invested RM14.33 billion in local tech parks, Nusajaya and Kempas, generating over 300 jobs predominantly for Malaysians.

The new partnerships are expected to significantly expand this impact, providing ample employment opportunities and fostering economic growth in the region.

Source: NST

Johor economy set for boost with RM1bil data centre investment

Demand for green buildings in Malaysia is projected to surge significantly in the coming years, potentially reaching around 10 million square feet annually.

However, this demand is currently unmet, according to JLL Appraisal & Property Services Sdn Bhd (JLL Malaysia).

JLL Malaysia’s head of research and consultancy, Yulia Nikulicheva said that an adequate supply of green buildings could be achieved either by upgrading the existing inventory or by constructing new structures.

“I believe this is a complex issue because many older buildings have the potential to be upgraded with green features.

“However, currently, the financial aspects are quite challenging, and some buildings may also be repurposed for other uses,” she said at a press conference for the third-quarter (3Q) 2024 Office Market Dynamics Report.

JLL Malaysia is a unit of Jones Lang LaSalle IP Inc, a global commercial real estate and investment management company listed on the New York Stock Exchange.

Nikulicheva noted that the green building market in Malaysia is performing well, although it still lags behind Singapore, which has a higher proportion of green space.

“Compared to Hong Kong, where the ratio of green space is relatively low, we are performing quite well,” she said.

Nikulicheva pointed out that some older office markets, such as those in Japan and Hong Kong, face greater challenges in transformation.

“In Malaysia, we are quite well-positioned because many of the buildings have been constructed recently. Even though they may not have green features, we see that the landlords of these buildings can implement green transformations.

“Starting this year, we have seen more landlords undertaking customer initiatives in green practices, and next year will probably be significant for these developments. I believe that in the coming years, we will see considerable progress,” she added.

Source: Bernama

Malaysia’s green building demand to reach 10mil sq ft annually: JLL Malaysia

Since the opening up of the economy after the lifting of border controls enforced during the pandemic, Malaysia’s logistics warehousing sector has grown by leaps and bounds. The concern is whether there will be an oversupply of such facilities that the market cannot absorb. To help understand the situation better, City & Country spoke to property experts for an overview of the sector, insights into what developers should pay attention to and the sector’s outlook.

Savills Malaysia group managing director Datuk Paul Khong says: “Logistics and warehousing have been the ‘darling sector’ of the entire market, and demand for e-commerce … peaked during the Covid-19 pandemic in 2020 to 2022, which caused the rapid spike in the development of the industry.

“With the reopening of international borders on April 1, 2022, total cargo volumes in 2023 increased significantly, with total container throughput rising 3.5% year on year to 28.24 million TEUs (twenty-

foot equivalent units) in Malaysia, indicating strong growth.”

Savills Research data for Greater KL in 1H2024 shows that 55.3 million sq ft of warehousing or logistics space is available, especially in Klang and Shah Alam. These two locations take up 80% of market share with their strategic locations and proximity to the key transport hubs of Port Klang and Kuala Lumpur International Airport. Furthermore, there is an expected supply of 11.28 million sq ft coming into the market until 2027.

According to JLL Research, high-quality logistics spaces are located in three regions — the Klang Valley, Penang and Johor.

“At least 45 million sq ft of high-quality logistics space has been built so far in Malaysia. More than two-thirds of the total existing stock is located in the Klang Valley. Johor is the second largest market and Penang comes third,” says JLL Malaysia head of research and consultancy Yulia Nikulicheva.

“About 25 million sq ft of space is expected to be delivered [in the Klang Valley]. This represents a 40% increase in stock expected in Kuala Lumpur. We expect Johor and Penang’s share in new supply to remain stable around 30%.”

Knight Frank Malaysia executive director of land and industrial solutions Allan Sim concurs with his fellow experts and highlights how the use of the property differs from region to region.

“The majority of existing logistics warehouses in Penang and Johor are built for own occupation and end-users, whereas in the Klang Valley, they are developed more for rental or investment purposes,” he says.

According to Sim’s research, in 1H2024, the existing supply of logistics space in the Klang Valley was about 56.7 million sq ft, following the completion of two logistics warehouses in Bandar Bukit Raja Industrial Gateway.

“An additional 8.5 million sq ft of logistics space is expected to enter the market within the next two years, with about four million sq ft anticipated in 2H2024 and the balance of 4.5 million sq ft by 2025. In the pipeline are about 16.6 million sq ft of logistics space with projected completion between 2026 and 2028. This translates into an average of 5.5 million sq ft of incoming space annually,” says Sim.

Is there an oversupply?

With the expected increase in the supply of logistics warehouses, will there be an oversupply in the sector? The experts highlight some concerns but, overall, they seem optimistic that supply will be absorbed provided certain strategies are in place.

According to Savills’ Khong, “There are some slight concerns on oversupply, with 11.28 million sq ft of new warehouse space potentially increasing the current supply by 20%. Many of these new spaces are not leased yet; thus, absorption may take some time. In addition, businesses are moving towards larger, integrated warehouses by consolidating smaller spaces, driving demand for these solutions. This shift is likely to make new, high-quality warehouses perform better and stay appealing in the changing market.”

For JLL’s Nikulicheva, the issue of oversupply has to be looked at from two perspectives — market drivers and demand dynamics.

For market drivers, she highlights that the occupiers of logistics space in the Klang Valley are logistics and third-party logistics players (45.2%), followed by manufacturing (31.5%), retail (14.6%), e-commerce (6.2%), transport (2.1%) and information storage (0.4%). All of these occupiers are expected to see growth in their individual sectors, she says. As such, there will still be demand for logistics warehouses.

From demand dynamics, she says, data from JLL Research shows that new supply coming in 36 months is close to 25 million sq ft, which has raised concern of oversupply. A closer look shows, however, that the situation is not as dire as it may seem.

“Zooming into the coming supply at project level, we see that many projects scheduled for delivery in the coming 18 months have already secured a 50% occupancy rate prior to delivery,” Nikulicheva says.

“This trend has been persistent in the past two years. It demonstrates that the market is unsaturated. Vacancy rates are well below 5%, confirming that the logistics and industrial segment remains a landlord’s market.

“On the supply side, the market has been dominated by professional players experienced in delivering projects nationwide and internationally and, so far, they were not [observed to have made] bold decisions in their expansion strategy.”

Knight Frank’s Sim concurs, saying that the oversupply of logistics warehouses is not something to be concerned about, as there is strong leasing demand for Grade A warehouses and that trend looks set to continue. According to research data from Mordor Intelligence, he adds, the Malaysia freight and logistics market is expected to reach US$38.28 billion (RM165 billion) by 2030, which could result in an increase in demand for logistics warehouse space.

He says: “For projects that are ongoing and under construction, the pace of pre-lease activities may tend to be gradual or slower. The reason is that in Malaysia, end-users and occupiers often tend to wait until industrial projects are either near completion or fully completed before committing to pre-lease or lease agreements. This cautious approach is driven by a desire to ensure that the finished product meets specific needs, expectations and the timeline.

“Meanwhile, as the global supply chain adjusts to new global factors and recovery on industry sectors such as semiconductors, this would affect the supply and demand dynamics — providing a boost to demand for warehouse spaces in key regions such as Penang, Kedah, Melaka and Selangor. The rental performance of warehouse spaces will be subject, however, to investment activities, such as trends of foreign direct investment and domestic direct investment, in the coming year.

“As such, the logistics warehouse market is expected to remain stable and we do not foresee an oversupply, at least for the next two to three years.”

Managing expectations

With the logistics warehouse sector looking stable, how should developers manage their output of the product?

The first thing, Savills’ Khong suggests, is to lease out unsold stock so that the industrial park looks vibrant, and this could lead “to improved saleability and occupancy rates”. Moreover, it will help reduce holding costs such as property taxes and maintenance fees.

For products under construction, he says: “Developers should focus on securing pre-leasing agreements to ensure a steady income stream with their completion and thereby minimise vacancy risks and reduce speculative construction.”

For warehouses that have yet to be built, he advises: “Developers may consider built-to-suit options, which creates facilities tailored to specific tenant requirements with pre-agreed lease terms and at discounted rentals. This aims to reduce the risks associated with speculative development.”

Khong adds that sustainable construction practices are also crucial. “Adopt ESG (environmental, social and governance) elements, such as energy-efficient systems, renewable energy sources and green technologies including solar panels and cool roof systems, which aligns with modern sustainability standards and appeals to environment-conscious tenants.”

Nikulicheva says a logistics warehouse is easy to plan and build, taking a developer up to 25 months from planning to delivery. Still, she adds: “Even though market prospects are quite positive, developers should take a cautious view when developing larger-scale projects. Current headwinds in the global economy that anticipate a contraction of exports and reduction in global logistics volumes may have a negative impact on the Malaysian market.

“Even though in the coming two years, market balance is expected to be favourable for landlords, the overall market size is still quite vulnerable to larger volumes of supply delivered simultaneously and it may have a negative impact on vacancy rates and rent levels.”

Knight Frank’s Sim believes the products require maintenance if they are to stand the test of time. “Most industrial developers and real estate investment trusts specialising in logistics warehouses are experiencing near-full occupancy rates for their premises or assets. Despite the high occupancy rates, these stakeholders must continuously perform maintenance and occasional upgrades to ensure that their logistics premises or assets remain competitive with newer or upcoming buildings.

“We also observed that many outdated industrial assets were being phased out because they could not meet today’s demands. As such, developers or owners should consider undertaking a regeneration process to cater for newer requirements which are driven by automation and the ESG agenda.”

Planning ahead

To ensure that the products do not end up as white elephants, the property experts believe awareness of the latest trends and knowing what potential tenants are looking for are essential.

Sim highlights that sustainability and innovation are essential components to include in the construction of logistics warehouses, which will have several benefits.

“Occupiers are increasingly looking for warehouse spaces that align with their own sustainability goals. High-quality, or MNC (multinational corporation), tenants or occupiers are willing to pay a premium for warehouse spaces that meet this requirement,” he says.

This will logically lead to a reduction in operational costs when systems are energy-efficient and come from renewable sources in the form of energy-efficient lighting, insulation and solar panels.

Sim adds: “Developers should build warehouses with automation-readiness. As e-commerce and logistics continue to grow, the demand for automated solutions will increase. Designing warehouses with automation in mind ensures that they can scale up and adapt to future needs without requiring a major overhaul, which will eventually help the tenant or occupier to enhance efficiency and productivity, have better space utilisation and a more competitive advantage as well as improve safety, to name a few.”

On top of all this, there is also the issue of compliance. “Governments and regulatory bodies are implementing stricter environmental regulations and standards. Sustainable buildings often comply with these requirements more easily and, thus, they may also benefit from certain incentives.”

Nikulicheva’s advice follows the adage of “location, location, location”, but positioning logistics warehouses near major “thoroughfares linking seaports, airports and larger urban agglomerations” is essential.

Khong believes in offering practical and functional products. “Ensure that floors are durable and can support heavy equipment and stacking. Design large floor plates to enhance space efficiency and accommodate high product volumes. Include high ceilings to maximise vertical storage and support advanced automation systems. Implement the latest technologies and energy-efficient practices to boost efficiency and attract sustainability-focused tenants,” he says.

In terms of outlook, the property experts believe the sector still has legs.

Nikulicheva says: “As the macroeconomic drivers of the growth of logistics are expected to remain strong, we expect further market expansion in the medium term. A high level of space being pre-let before completion gives confidence to developers about their future investments. We anticipate continued rental growth in this segment, as new properties entering the market are often built with higher specifications.”

For his part, Sim says: “Despite some external challenges, the outlook for the logistics warehouse segment in Malaysia remains optimistic. The demand for prime logistics warehouses in key locations or regions such as the Klang Valley, Johor Bahru and Penang will remain stable, with moderate rent increases anticipated.

Khong adds: “Value-added services such as security, asset management and facilities management have become an expected norm and custom-built warehousing or built-to-suit models, particularly in smart logistics, are becoming popular.

“Overall, the logistics warehouse sector is set to continue its pace of growth with these trends and technological improvements.”

Source: The Edge Malaysia

Logistics warehousing holds steady despite imminent new supply

The exhibition highlights the country’s dedication to climate action and biodiversity conservation, emphasising the role of green technology

The 15th edition of the International Greentech & Eco Products Exhibition and Conference Malaysia (IGEM 2024) underscores Malaysia’s commitment to sustainability and green technology. 

Held from Oct 9 to 11, 2024, and themed “Race Towards Net Zero: Regional Leadership for Climate Urgency,” the event served as a platform to promote Malaysia’s efforts to harmonise socio-economic progress with environmental stewardship. 

IGEM 2024 highlighted the country’s dedication to climate action and biodiversity conservation, emphasising the role of green technology in achieving these goals. 

The event fostered collaborations and encouraged the exchange of knowledge among policymakers, investors, industry leaders and thought leaders, helping to generate sustainable, solution-driven ideas. 

It served as a dynamic hub for innovation and collaboration. It aimed to further Malaysia’s ambition to become a regional and global leader in sustainability efforts, especially with the country’s upcoming chairmanship of ASEAN in 2025. 

The exhibition focused on five key pillars: Empowering Cities, Electrifying Mobility, Decarbonising Energy, Accelerating Circularity and Conserving Biodiversity. 

This year’s edition also introduced new features such as a specialised industry zone focused on hydrogen and carbon technologies, the Central Energy Transition Asia (CETA) and a multi-venue exhibition on connected autonomous shared electric mobility. 

Additionally, IGEM 2024 showcased a Green Job booth, providing opportunities for individuals interested in joining the sustainability movement. 

Since its inception in 2010, IGEM has generated RM53.1 billion in business leads, attracting 600,000 visitors from 122 countries to its 4,000 exhibition booths. 

Last year, IGEM continued its successful run with RM11.17 billion in business leads and 55,594 visitors, solidifying its position as a key platform for green innovation. 

IGEM 2024 drew around 48,000 visitors, with 480 exhibition booths featuring innovations from 48 countries, including China, Singapore, Finland and Canada. 

The event aimed to generate RM4.8 billion in potential business opportunities, reinforcing its role as a significant driver of green technology development and partnerships. 

Leading Regional Green Technology Efforts

Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad called for immediate action to address climate challenges and emphasised the pivotal role IGEM plays in fostering green technology and international collaboration. 

“IGEM has significantly advanced the integration of diverse industries and global experts. It has progressed beyond just an exhibition, becoming a symbol of our shared resolve to achieve a more sustainable future,” he said at the opening ceremony. 

He also stressed the severe impact of extreme heat on Malaysia’s agriculture, warning that rice yields could drop to 62% of last year’s figures due to rising temperatures. 

Nik Nazmi underscored the severity of the temperature crisis, referencing the heatwave warnings, bordering on 45, issued by the Malaysian Meteorological Department between January and September this year. 

“Addressing these challenges requires more than awareness; it demands the mobilisation of resources, strategic investments and collaborative efforts,” he said. 

He also outlined key government initiatives to strengthen environmental protection, including the National Climate Change Bill and enhanced climate financing strategies. 

He highlighted carbon credits as a key tool to support low-carbon projects. 

“Carbon credits will provide opportunities for corporations to demonstrate their climate actions by efficiently allocating capital to support forest conservation and low-carbon technologies,” he added. 

Nevertheless, Nik Nazmi affirmed that Malaysia will continue to take an active role on the global stage, including at COP29 in Azerbaijan later this year, as the country works toward achieving its net-zero target by 2050. 

On the other hand, Economy Minister Rafizi Ramli highlighted Malaysia’s unique position to harness both its natural resources and progressive policies to drive sustainability in South-East Asia. 

“Malaysia is poised to be a regional leader in renewables due to our rare ability to harness both natural resources and sound policy at a high level,” he said at the event. 

He emphasised that despite Malaysia contributing less than 1% of global emissions, the country is committed to playing a significant role in regional climate action. 

“We are committed to leading the way in South-East Asia to secure a sustainable future for the region,” he added. 

Govt Initiative and Climate Policy Focus

Nik Nazmi and Rafizi announced several key government initiatives during IGEM 2024, showcasing Malaysia’s significant strides in its climate policy and green technology efforts. 

Nik Nazmi highlighted the government’s focus on fast-tracking the National Climate Change Bill (RUUPIN), describing it as a crucial step toward achieving the country’s climate goals. 

He also announced the launch of the National Climate Change Policy 2.0, which complements the National Adaptation Plan and the National Carbon Market Policy. These policies will foster a coordinated approach to climate action, incorporating adaptation, mitigation and market-based solutions. 

“These initiatives provide a framework for Malaysia to better align our efforts with global standards while addressing our unique Rafizi further described the bill as a “microcosm of our ambition” to demonstrate that Malaysia can effectively combine policy with its natural resources to reach its climate targets. 

Business and Industry Participation

Businesses are crucial in driving Malaysia’s progress towards its emission reduction goals. 

At the event, Nik Nazmi urged businesses and industry players to take a more active role in the country’s climate action efforts, particularly through participation in the carbon credit market. 

He emphasised that carbon credits offer an opportunity for companies to demonstrate their commitment to sustainability by supporting initiatives such as forest conservation and low-carbon technologies. 

“Carbon credits provide opportunities for corporations to take meaningful climate actions by efficiently allocating capital to support forest conservation and low-carbon projects. 

This is vital for us to achieve our target of reducing emissions by 45% by 2030,” he said. 

A prominent example of corporate participation is the Kuamut Rainforest Conservation Project in Sabah, which is part of the voluntary carbon market. 

The project is expected to reduce carbon emissions by an estimated 800,000 tonnes of CO2 annually, further underscoring the role of businesses in supporting national and global climate goals. 

“Businesses have a critical role to play in our climate strategy and through initiatives like carbon auctions and green investments, they can significantly contribute to our collective sustainability efforts,” Nik Nazmi said. 

Apart from that, the Malaysian Green Technology and Climate Change Corp (MGTC) Group CEO Ir Shamsul Bahar Mohd Nor said IGEM has served as a platform for showcasing green technologies and driving public awareness about the green economy while generating RM53 billion in green business leads over the years. 

When IGEM began, the focus was on the energy sector, which accounts for nearly 80% of Malaysia’s carbon emissions. 

Shamsul Bahar highlighted the importance of introducing RE technologies, particularly solar power, which can be easily installed even in households. 

The event not only displayed technologies but also fostered engagement through conferences, seminars and programmes aimed at educating the public and promoting green lifestyle behaviours. 

He emphasised the role of community involvement in accelerating the adoption of sustainable practices.

“We believe that community engagement can drive faster behavioural changes toward a green lifestyle,” he said.

On the other hand, IGEM has also focused on creating green jobs and building capacity in the green industry. Universities showcased innovations, while financial institutions and investors offered insights into green financing options.

“We want the public to know the types of jobs available in the green sector and to understand the financial incentives and support available,” Shamsul Bahar said.

He added that the impact of IGEM extends beyond Malaysia, as the event aimed to expand its influence across ASEAN, promoting green economic growth through-out the region.

MGTC’s incentivisation programmes have also helped spur the green economy, making IGEM a highly impactful platform for Malaysia’s transition to sustainability.

Among the sponsors and partners of IGEM 2024 included the Malaysian Investment Development Authority (MIDA), The CO-LAB Pte Ltd and Petroliam Nasional Bhd, as well as OCBC Ltd, Tenaga Nasional Bhd and Solar First Co Ltd.

Meanwhile, Solar First Energy Technology Co Ltd won Best Interactive Booth and OCBC Bank (M) won Best Informative Booth.

Powerway Renewable Energy Co Ltd claimed the Best Display Booth award while Solarvest Energy Sdn Bhd was awarded Best Creative Booth and Itrama Technology Sdn Bhd took home Best Sustainable Booth award.

Finally, Petronas was honoured with the Best Appreciation Award.

Collaboration and Partnership

Collaborations and partnerships were inked at the event, reflecting the growing commitment of both local and international players to collaborate on advancing green technology and sustainability initiatives in Malaysia.

These memoranda of understanding (MOUs) enable the exchange of expertise, technology and investment opportunities, driving the growth of RE, energy efficiency and low-carbon solutions that are crucial for Malaysia’s energy transition and environmental goals.

MIDA unveiled seven MOUs at the event valued at over RM1 billion in potential investments for the green sector.

These represent nearly half of MIDA’s RM2.5 billion investment target for the event and aim to drive Malaysia’s green innovation and support its net-zero goals.

Among the key partnerships, Solarvest Holdings Bhd signed five MOUs with companies such as Greenrock Energy Co Ltd and Vista Contracting & Investment Global Pte Ltd (Samsung), focusing on battery energy storage systems, solar farm development and green financing.

Meanwhile, Wezmart International Bhd and Green Quarter Sdn Bhd collaborated on sustainability reporting, ESG audits and carbon reduction services.

MIDA CEO Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid expressed strong interest from local and international investors, with ongoing efforts to secure the remaining RM1.5 billion in investments.

He also highlighted that four green projects, totalling RM1.8 billion, were approved in the first half of 2024, focusing on RE and green mobility.

Sikh Shamsul further emphasised Malaysia’s commitment to its Green Investment Strategy, which aims to attract RM300 billion in green investments by 2030, focusing on RE, energy efficiency, hydrogen, bioenergy, green mobility, carbon capture and the circular economy.

This strategy aligns with Malaysia’s efforts to reduce carbon emissions by 45% by 2030 and achieve net zero by 2050.

In addition to MIDA’s efforts, MGTC announced several strategic collaborations to advance Malaysia’s green transformation.

One key partnership between MGTC and Sarawak Energy Bhd (SEB) aims to reduce carbon emissions through three greenhouse gas assessments, targeting indirect emissions across SEB’s value chain.

This collaboration is expected to support low-carbon businesses through knowledge-sharing and capacity-building.

MGTC also signed a letter of intent (LOI) with Perbadanan Teknologi Hijau Melaka to enhance green technology initiatives in Melaka, focusing on RE projects and sustainable urban development as part of the state’s low-carbon economy transition.

Additionally, a memorandum of collaboration between MGTC and SAE-A STX Entech Co Ltd will focus on developing solutions to reduce carbon emissions and improve energy efficiency.

This partnership includes the construction of solar power systems across Malaysia and the transfer of SAE-A’s solar technology through MGTC’s subsidiary, Greentech Catalyst Sdn Bhd.

Shamsul Bahar highlighted that these partnerships not only support technological advancement and economic growth but also reflect MGTC’s commitment to creating green jobs and ensuring sustainable solutions are accessible to all Malaysians.

Further strengthening Malaysia’s green sector, Itramas Corp Sdn Bhd partnered with global solar manufacturers CMEC Wuxi and Longmax to enhance the country’s solar supply chain.

This collaboration includes setting up a 500MWp solar module manufacturing facility in Malaysia with CMEC Wuxi and producing solar combiner boxes with Long-max for both Malaysian and international markets.

The partnership will promote technology transfer, knowledge-sharing and local engineer training, contributing to Malaysia’s growth as a regional RE hub.

Challenges Ahead and Roadmap to Net Zero Malaysia faces significant challenges in its journey toward achieving net-zero emissions by 2050. However, the country remains committed to its climate goals.

Nik Nazmi said Malaysia’s vulnerability to climate change is a primary challenge.

He stressed that the country, like many ASEAN nations, is highly exposed to extreme weather events such as heatwaves and floods, which threaten food security, infrastructure and economic stability.

Additionally, the financial burden of achieving net zero is substantial. Nik Nazmi noted that the transition to a low-carbon economy will cost hundreds of billions of ringgit, a burden the government cannot shoulder alone.

“The road to net zero will not be easy or cheap, but it is a necessary investment in our future,” he said, adding that innovative financing mechanisms such as carbon pricing will be crucial in sharing the responsibility with private sector partners.

Balancing economic development with sustainability is another challenge. As a developing nation, Malaysia must continue to grow economically while reducing emissions.

Nik Nazmi also pointed out that developing the carbon market further is essential, with more local projects needing to meet international standards like the Carbon Offsetting and Reduction Scheme for International Aviation.

Lastly, he said decarbonising key industries such as power generation and heavy manufacturing will be difficult without the right regulatory frameworks and technologies like CCUS.

Despite these challenges, Nik Nazmi outlined a clear roadmap to net zero, starting with the fast-tracking of the National Climate Change Bill and the National Climate Change Policy 2.0. These legislative measures will provide a comprehensive framework to guide Malaysia’s climate actions.

“The National Climate Change Bill will serve as a crucial backbone for our efforts to achieve net zero by 2050,” he said.

A key part of Malaysia’s strategy is exploring carbon pricing instruments, such as a Carbon Tax or a Domestic Emission Trading Scheme, to create financial incentives for reducing emissions.

“Carbon pricing will play a pivotal role in driving investments into low-carbon technologies and encouraging businesses to adopt greener practices,” he explained.

The carbon credit market is also a critical component of Malaysia’s plan. By allowing companies to offset their emissions through investments in forest conservation and RE projects, Malaysia can tap into international carbon markets to support its emissions reduction goals.

Nik Nazmi also highlighted the importance of expanding RE, particularly solar power, to support Malaysia’s transition to a low-carbon economy.

“We are investing heavily in solar manufacturing and partnerships with global solar players to build a robust RE sector,” he said.

The introduction of the CCUS Bill will be another key element of the roadmap, providing a regulatory framework for implementing carbon capture technologies in industries that are difficult to decarbonize, such as power plants and heavy manufacturing.

“CCUS will be crucial in helping us meet our decarbonisation targets, especially in sectors where electrification is not a viable option,” Nik Nazmi said.

Finally, he stressed the importance of a whole-of-nation approach. “Achieving net zero will require the participation of everyone — businesses, workers and citizens alike. We all have a role to play in building a sustainable future,” he said.

Shamsul Bahar added that one of the key challenges in scaling up RE is attracting the necessary private-sector investment.

“The roadmap has been set by National Energy Transition Roadmap (NETR), but the private sector needs to step in. While Malaysia has created spaces and sources, the private sector must provide the investments,” he said.

The NETR also outlines several regulatory changes and incentives to drive RE adoption.

Among these is the introduction of third-party access, which allows energy producers to generate and sell energy directly to their customers, bypassing the single-buyer system.

“Malaysia has set the platform to create an easier path toward achieving net zero and 70% RE by 2050,” he added.

In addition to regulatory changes, financial support is a critical aspect of scaling up RE.

Not all investors have immediate access to the necessary funds and MGTC has been working with financial institutions to facilitate green financing.

These incentives are designed to attract more private sector participation in Malaysia’s green energy transition.

In conclusion, despite the challenges of achieving net zero, Malaysia’s robust regulatory framework, financial incentives and clear roadmap provide a solid foundation for success.

With strong policies, innovative financing and collaboration between the public and private sectors, Nik Nazmi remains optimistic that Malaysia will meet its RE and climate goals by 2050.

Source: The Malaysian Reserve

IGEM 2024: Malaysia strengthens commitment to sustainable future

Six electric vehicles from China will be distributed to Technical and Vocational Education and Training (TVET) institutions in the country to be used as practical training material for students.

Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi, who is also National TVET Council chairman, said the vehicles were a gift from Beifang Automotive Education Group to Malaysia.

“We plan to distribute a vehicle each to the Perda High Skills Institution’s Automotive Centre in Penang and the Centre of Technology Excellence Sarawak (CENTEXS).

“The remaining four will go to TVET institutions under Majlis Amanah Rakyat (MARA), including GiatMARA, IKM (the Malaysian Skills Institute) and others,” he told reporters after attending a Deepavali related gathering at the Bagan Datuk UMNO Complex here today.

He said the initiative will allow students to be exposed to the latest electric vehicle technology, and that over 100 lecturers have been sent to China to undergo training and automotive courses.

“They will spend three to six months there as the field is already familiar to them,” Ahmad Zahid said.

He added that through the increased TVET allocation in the MADANI Budget 2025, he would hold discussions with Beifang to increase the number of students undergoing training at the Beifang International Education Group, which currently has 2,000 Malaysians students sent over.

Source: Bernama

Six Chinese electric vehicles to be distributed to TVET institutions – Zahid

The government, multiple agencies within the government, data centre operators and other stakeholders are learning how to manage and deal with data centres and how to grow the industry sustainably.

Deputy Investment, Trade and Industry Minister Liew Chin Tong said that more importantly, the government’s focus is not solely on data centres.

“Instead, it is about growing the businesses and creating jobs that are powered by data centres, including the local equipment suppliers, building a robust technology ecosystem and the services jobs in Malaysia,” he said at the Malaysia Cloud and Data Centre Convention 2024.

He said as Malaysia entered a new phase in 2024 with the advent of generative artificial intelligence (AI), the demand for data centres increased exponentially to accommodate its intense computational demands.

“The market size of AI is expected to grow by four times within the next six years and it will drive 15% annual growth in global data centre energy demand over the same period of time,” said Liew.

He noted that for a start, to work on guidelines to regulate the data centre industry, the government is developing the guidelines on power usage effectiveness (PUE) and water usage effectiveness (WUE).

He said the government is taking one step further to deal with carbon usage effectiveness (CUE) to improve energy efficiency and sustainability.

Meanwhile, Liew said investments in data centres should only be pursued if they bring tangible added value to the people, such as high-paying job opportunities and knowledge transfer.

A fresh shift in focus is now essential, ensuring that the support provided uses a multiplying effect that directly benefits the people, he said.

This is because the country could no longer sustain the outdated approach of offering incentives and support to investors without considering the broader economic benefits.

He also outlined five challenges that must be dealt with when building the infrastructure and growing data centre business, namely creating jobs, water consumption, energy consumption, localisation and preventing speculative build that could result in a glut.

“I highly encourage data centre industry players to form an association to build a collective voice and a common policy platform, as well as to advocate good and solid policies for the common good of the industry and the nation,” Liew added.

Source: Bernama

Liew: Govt learning to manage data centres, grow industry sustainably

DATA centres are not exactly a new industry. However, we entered a new phase in 2024 with the advent of generative artificial intelligence (AI). The demand for data centres increased exponentially to accommodate its intense computational demands.

The market size of AI is expected to grow by four times within the next six years, and it will drive an annual growth of 15% in global data centre energy demand over the same period of time.

I have been told that a CHATGPT search consumes about 10 times more energy than a conventional Google search. The energy consumption of AI data centres is immense and will have a significant impact on the net zero carbon emissions aspirations of many organisations and even countries.

The generative AI boom is presenting the same set of challenges to data centres everywhere in the world.

Prime Minister Datuk Seri Anwar Ibrahim, in his Budget 2025 speech on Oct 18, mentioned this:

“The country … must embark on a new paradigm shift to attract more meaningful investments. We can no longer sustain the outdated approach of offering incentives and support to investors without considering the broader economic benefits.

“For instance, investment in data centres should not be pursued unless they bring tangible added value to the rakyat, such as high-paying job opportunities and knowledge transfer.

“A fresh shift in focus is now essential, ensuring that the support provided has a multiplying effect that directly benefits the rakyat and the nation, rather than merely serving the profit motive of the investor companies.”

Now, this is a challenge for everyone, that when we grow the data centre business, we must think not just about the infrastructure but also about the multiple challenges that we have to deal with. There are five such challenges that we must work on together.

First, how to create jobs, and more importantly high value jobs, in this industry. I understand that data centres on site don’t create a sufficient number of jobs. We must think of how to generate the multiplying effect of creating jobs in operations, maintenance, and along the entire supply chain.

The job opportunities may not be on site, but the industry will have to articulate that it is growing jobs at all levels.

While developing the data centres in Johor’s Sedenak, Kulai, and Iskandar Puteri, which have now become the focal point of data centres, how do we create higher-skilled maintenance, engineering, and services jobs in Kuala Lumpur or Johor Baru? It has to come as a package.

Johor Mentri Besar Datuk Onn Hafiz Ghazi has said he asked data centre operators about pay rates, and they pay S$4,000 (RM13,150) in Singapore and RM4,000 in Malaysia. This is why he advocated for industry players to pay Malaysians at least 50% of what they pay Singaporeans, especially after benefiting from the low cost of utilities, land, and labour in Malaysia, which are 70% cheaper than in neighbouring countries.

How do we create jobs that pay well? How do we benchmark pay? My advice to the Malaysian industry, whether you are in a data centre or other sector, do not benchmark Malaysian pay against pay in countries with a lower skill capacity. Benchmarking has to be done differently. Malaysia should be thought of as a “Singapore at a discount”. When we think about jobs, we need to think about pay. There is no talent problem in Malaysia – the only problem is that Malaysian talents are working in Singapore. When you offer two-thirds of Singapore pay, they will come back to work in Malaysia.

The second question is water consumption. The data centre industry will have to invest in creating alternative water sources instead of competing with the people for water. For instance, southern Johor has many rivers but most of them are very dirty. Should investment be put into cleaning them up and reclaiming that water, apart from other solutions?

The third challenge is energy consumption. Two years ago, the Malaysian government made a commitment to reach net zero carbon emissions as early as 2050. This year, the Prime Minister reaffirmed that target. Energy intensive industries, including data centres, will have to look into technologies – existing and new – to help achieve this national target.

Investments in renewable energy is imperative to allow for the data centre industry to grow while minimising impact on sustainability.

The fourth challenge is localisation. This is, again, mandated by the Prime Minister to Miti (Inter-national Trade and Industry Ministry). The Prime Minister requested that Miti and Mida (Malaysian Investment Develop-ment Authority) look into mechanisms for the data centre industry to localise.

One good example is server racks. Over the past few months, the import of server racks has been quite significant. How can the government work with industry players to instead create Malaysian equipment for domestic consumption of data centres as well as potentially for export? We must remember that Malaysia has very strong metal fabrication and equipment industries that have been serving the semiconductor industry for a while.

The fifth and final challenge – the nation will also have to work with the data centre industry to prevent speculative build. AI is going to power a lot more demand for data centres, but at the same time, we need to ensure there is no speculative build which could result in a glut.

Finally, I highly encourage data centre industry players to form an association, to build a collective voice, and a common policy platform, as well as to advocate for good and solid policies for the common good of the industry and the nation.

The data centre industry is in a new phase globally. Everyone is facing the same challenges, and this is the best time to come together and work together – the government, the industry players, the users, and the wider stakeholders – to look at how to build this industry and how to deal with the challenges outlined above. I hope we can work together so that this industry can flourish, and at the same time, Malaysians benefit from the industry.

LIEW CHIN TONG Deputy Minister International Trade and Industry Ministry

Excerpt from a speech delivered at the Malaysia Cloud and Data Centre Convention 2024 on Oct 24.

Source: The Star

Challenges and opportunities of the data centre industry