Players in the industry have begun upgrading their facilities and acquiring technologies to meet the stringent requirements of OEMs for parts and components, as well as precision engineering services.
Leading Malaysian ESI companies that are capable of providing such solutions to meet ever-growing and sophisticated global demand include Alpha Master Sdn. Bhd., Atasmi Precision Machinist Sdn Bhd., UWC Holdings Sdn. Bhd., Lypometal Sdn. Bhd. and Kobay Technology Sdn. Bhd.
These companies develop and produce high value-added modular components, machine structures, precision engineering parts, sheet metal fabrication, and sub-assemblies, as well as undertake surface finishing for high growth industries such as medical devices, aerospace, and E&E (especially the semiconductor sub-sector).
Malaysia is encouraging companies to position themselves as ‘one-stop centres’ in providing total manufacturing solutions, as well as parts and components for high-applications in E&E, automotive, M&E, medical devices, O&G, aerospace, defence, and solar/photovoltaic. These one-stop centres would then offer integrated services, from product conception to serial production, and manage all the relevant processes, including procurement, logistic, packaging, and testing and certification.
Future ESI development will take place in the strengthening of the industry’s services, and enhancing its capabilities and production quality to provide complete solutions. To that end, the industry as a whole is working towards meeting international certification standards for the supply of parts and components.
There is room for investment into the production or procurement of higher grade and exotic materials, such as Hastalloy, Inconel, Super Duplex, and Titanium, which are not available locally but are required by ESI companies. In order to reduce lead time and logistics costs, there must be easy access to these materials in the country. The presence of stockists for such materials is critical to sustain the growth of the industry.
A total of 36 ESI projects were approved in 2017, with investments totalling RM504.5 million. Of these, 18 were new projects worth RM357.3 million (70.8%), and another 18 were expansion/diversification projects totalling RM147.2 million (29.2%). Domestic investments were in the majority, amounting to RM358 million (71%) and foreign investments totalled RM146.5 million (29%). Projects approved in 2017 generated employment opportunities for 1,630 people.