Chemical Advance Materials – Chemical and Chemical Products

Globally, the chemical industry in 2025 was affected by trade shifts arising from tariffs and geopolitical tensions, deglobalisation trends, slower energy transition progress due to funding constraints, and evolving regulations on hazardous materials. Although early 2025 was optimistic, the industry entered a downturn, with forecasts revised to around 2 per cent growth in 2026.

Malaysia’s chemical industry reflects this global trend, resulting in a shift towards speciality chemicals and advanced materials in line with the Chemical Industry Roadmap 2030 (CIR 2030). The roadmap emphasises higher-value downstream activities, sustainable production, and circular economy practices, driving the country’s transition from commodity-based activities towards more innovation-driven chemical clusters.

This shift is already reflected in growing investments in specialty chemicals for the automotive sector, particularly electrolytes, anode and cathode materials for electric vehicles and energy storage, as well as emerging renewable and green chemicals such as Sustainable Aviation Fuel (SAF) and Hydrogenated Vegetable Oil (HVO). At the same time, momentum in electronic chemicals continues to grow, driven by demand from semiconductor fabrication and high-precision manufacturing.

Guided by the New Industrial Master Plan 2030, Malaysia is targeting key missions to strengthen innovation, support sustainable growth, and build a more resilient industrial ecosystem. The government continues to support automation and digitalisation to help local manufacturers modernise operations, improve productivity, and adopt advanced technologies, thereby strengthening capabilities across the chemical value chain and enhancing competitiveness in regional and global markets.

Overall, the outlook for 2026 remains cautiously optimistic for Malaysia, supported by strategic efforts to diversify the chemical industry and strengthen resilience against global economic headwinds