Due to the intensified global competition, Malaysia textile manufacturers are moving up the value chain by diversifying into the production of higher value-added textiles, implementing automation and computerised manufacturing, processes, seeking business collaboration with foreign companies to acquire new technologies and undertaking research and development activities to develop new processes, new applications and value-added products. The industry currently employs more than 68,000 workers.
In 2015, the textiles and textile products industry was the ten largest export earner with RM13.2 billion, contributing approximately 1.7 per cent to Malaysia’s total exports of manufactured goods. The USA, Japan, People’s Republic of China, Singapore and Turkey were Malaysia’s top five export destinations. The USA remained the leading export market for Malaysian textiles products taking to 18.3 per cent of the industry’s total exports.
New growth areas in textiles industry have been targeted for promotion under the Third Industrial Master Plan (IMP3). The growth areas for the industry include: industrial and home textiles; functional fabrics; high-end fabrics and garments; ethnic fabrics; and key support facilities and services such as design houses and fashion centres, specialized dyeing and finishing facilities, etc.
Six strategic thrusts have been set for further development of the industry during the IMP3 period. The thrusts include:
(a) Intensifying the promotion of investment in higher value-added textiles and apparel, including key support services
(b) Sustaining the market share in textiles and apparel and promoting exports of the targeted growth areas
(c) Intensifying regional integration of the industry
(d) Enhancing domestic capabilities and facilitating the utilisation of ICT and new technologies
(e) Enhancing the skills of the workforce in designing production and marketing
(f) Strengthening the institutional support for the further development of the industry
To encourage investments in the textiles and textile products industry, several textile products/activities have been gazetted as promoted products/activities under the Promotion of Investment Act, 1986 and could be considered for tax incentives in the form of Pioneer Status or Investment Tax Allowance. They are:
a) Natural or man-made fibres
b) Yarn of natural or man-made fibres
c) Woven fabrics
d) Knitted fabrics
e) Finishing of fabrics such as bleaching, dyeing and printing
f) Non-woven fabrics
g) Specialised apparel
h) Technical or functional textiles and textile products