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Paper and
Paper-products
Malaysia’s paper industry attracts prominent players with advanced production processes and high technology automation machines to provide greater opportunities within the supply chain. This industry’s performance remains steady in recent years due to substantial injection from the People’s Republic of China’s (PRC) pulp and paper companies setting up their overseas operations in the country. Using Industry 4.0 technologies, their operations feature environmentally-friendly production, as well as efficient monitoring and maintenance. By having their Malaysian facilities adopt the same technologies and processes, the hope is that the local industry will develop further with modern techniques of production.
The three main sub-sectors within this industry in Malaysia are pulp manufacturing, paper & paper products, and printing & publishing. The production of paper is dominated by packaging paper activities such as kraft paper, testliner and medium paper. Prominent existing producers include GS Paper & Packaging, Muda Paper Mills and Pascorp Paper Industries.
Apart from waste paper and virgin pulp sourcing, biomass is increasingly being used as a raw material to produce paper. Eco Palm Paper is a pioneer company in producing paper from empty fruit bunches (EFB).
The prospects in this industry are encouraging as Malaysia is attracting much interest from top global players looking to expand their business. It is estimated that Malaysia’s paper production capacity could jump exponentially from the involvement of such investors. Malaysia is expected to be a substantial exporter in the region for paper packaging products.
For more statistics, please click here.
Opportunities abound for investors in this industry as new applications and production techniques for paper and its components are emerging. For example, apart from virgin pulp and wastepaper, paper can also be produced through the use of biomass.
Malaysia, which has oil palm plantations spanning 5.8 million hectares, offer a competitive and comparative advantage for companies producing paper from empty fruit bunch (EFB). Notably, paper production via biomass has garnered significant interest from large foreign industry players.
The paper, printing and publishing industry is moving into an interesting decade as many parts of the industry are advancing due to the rise of new technologies. This include:
Companies involved in producing corrugated medium paper, testliner, kraft liner, kraft paper or paperboards are eligible for the following tax incentives:
Although paper manufacturing in Malaysia is already highly-automated, there are still many potential areas for upgrading/modernisation. Local players are encouraged to upgrade and explore new and emerging technologies in order to sustain their operations. As an incentive, the Government introduced the Automation Capital Allowance (Automation CA) incentive and Industry4WRD initiatives to assist industry players in upgrading their machinery and equipment.
The Government also highly encourages local players to practice a zero waste policy by adopting environmentally friendly practices in their operations such as better waste management. This refers to waste water and solid waste that should be treated up to the national standards or repurposed towards contributing to the circular economy.
MITI is working together with MIDA, other relevant government ministries and agencies, as well as standards/technical agencies including industry associations to produce the best possible solutions. In 2020, the Malaysian government reviewed the policies that affect the industry, which includes strengthening the guidelines for importation of waste paper into the country and revising the policy on exporting domestic waste paper overseas.
