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Global halal economy expected to reach RM22.34t by 2030

The global halal economy is estimated to reach US$4.96 trillion (RM22.34 trillion) by 2030, said Malaysia External Trade Development Corporation (Matrade) chief executive officer Datuk Mohd Mustafa Abdul Aziz.

Mohd Mustafa said considerations for the halal economy are reflected in the proposed Budget 2023, including an allocation to promote halal products in the global market via the Malaysia Services and Halal programme, and development initiatives to raise halal certification compliance and innovation.

“Leveraging on our 46 overseas offices, Matrade has primed the International Sourcing Programme (INSP) during the 18th edition of the Malaysia International Halal Showcase (MIHAS 2022) to connect Malaysian exporters and international buyers where high-value trade deals were closed.

“The physical event was conducted on Sept 6, 2022, whereas the virtual INSP was extended to Nov 15, 2022 due to an overwhelming response,” he said in a statement today.

Mohd Mustafa said Matrade is ready to help more businesses realise the vast opportunities available in international markets and make a move to capitalise on them.

Hosting exhibitors from over 30 countries and trade visitors physically and virtually, MIHAS, organised by Matrade, draws on its synergies with industry heavyweights to offer key lessons and tips to encourage more Malaysian enterprises to start exporting, such as Fraser & Neave Holdings Bhd (F&N).

Drawing from personal experience, export giant F&N encouraged businesses to work with relevant government agencies such as Matrade and participate in exhibitions such as MIHAS, Gulf Food and French trade fair and the Salon International de I’Alimentation for a greater level of exposure and promotion for respective brands, said the statement.

Matrade said F&N also encouraged small and medium enterprises to set a higher vision and target to propel themselves further in the export market.

Source: Bernama

Global halal economy expected to reach RM22.34t by 2030

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Petronas Dagangan Bhd (PDB) recently signed two tripartite memoranda of understanding (MoUs) with key industry players namely, Gentari Green Mobility Sdn Bhd (GGM), EP Blueshark Sdn Bhd (EBSB), Blueshark Holding Ltd (BHL) and Handal Indah Sdn Bhd (HISB) to accelerate the adoption of electric mobility.

These strategic partnerships will cement PDB’s critical role in the overall integrated electric mobility value chain by rolling out battery swap stations for electric two-wheelers and charging infrastructure for electric buses at Petronas stations.

Through this investment, PDB aims to support its customers’ decarbonisation efforts and meet their electric mobility needs, leveraging its capabilities and network of stations.

At the signing ceremony, PDB managing director and chief executive officer Azrul Osman Rani said that whilst the company continue to diversify its non-fuel business, and it is also intensifying efforts

into supporting electric mobility as it will allow realising the potential growth of the energy vehicle (EV) market.

“This is further solidified through the collaboration between PDB and GGM, along with EBSB, BHL and HISB, to create a more conducive ecosystem for EV users,” he said in a statement today.

The first MoU on the collaboration in the electric two-wheeler battery swapping business was signed by Azrul, EBSB executive chairman Hamidon Abdullah and BHL group chief executive officer Jeff Chong Chen Wai.

This MoU will see all parties collaborate in the business development, starting with installing battery swap stations at nine Petronas stations in two-stage pilot runs.

The parties will then explore further collaborations along the electric two-wheeler value chain.

“We are happy that PDB recognises our EV efforts and capabilities. Ours is a system-based approach to be rolled out with our key partners,” EP Manufacturing Bhd (EPMB) executive chairman Hamidon Abdullah said.

“This collaboration is about exploring the high-potential value chain ahead and how we can position ourselves and our partners to benefit from the evolving EV technology.

“We are very happy and honoured to be with PDB on this journey,” he said.

The second MoU on the collaboration in commercial electric bus charging infrastructure was signed by Azrul, GGM chief green mobility officer Shah Yang Razalli and HISB executive director Lim Chern Chuen.

Through this MoU, three Petronas stations in Johor will be installed with direct current (DC) fast EV chargers to provide opportunity charging for HISB’s electric buses serving the route and the public.

These pilot runs will provide PDB with better insights before scaling the solution into a viable business for PDB.

GGM chief operating officer M Haikal Zubir said tackling emissions from the transportation sector is an important step for Malaysia to become a low-carbon nation by 2040.

“Better and more connected public transportation will help to reduce cars on the roads.

“But equally important is for public transportation to be decarbonised. GGM is pleased to collaborate with PDB and HISB to explore the electrification of public transportation and the EV ecosystem developments required to support it.

Haikal believes this is a necessary course of action to make a meaningful impact on carbon emissions reduction for the country.

“We are excited about this partnership. These new developments will help us to explore new trends and opportunities for growth in the automotive sector, particularly in terms of electrification of mobility and primarily focusing on vehicle-based mobility solutions with a wide range of fleet management services,” Lim said.

Source: NST

Petronas Dagangan partners EPMB to roll swapping stations for two-wheel EVs

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EG Industries Bhd expecs its RM180 million Smart Factory 4.0 in Batu Kawan, Penang to create more than 1,000 high-value jobs for the local community upon its start in 2024.

The electronic manufacturing services (EMS) provider said its first fully-automated Lights-Out Smart Factory 4.0 would be situated on 2.43 hectares of industrial land in Batu Kawan, with a built-up area of more than 22,500 square metres for production floor area, office building and warehousing capacity. 

Upon targeted completion of the Batu Kawan facility in 2024, EG Industries’ total built-up area of its production, warehousing and offices, including its facilities in Sg Petani, Kedah, would increase by 45 per cent from 55,000 sq m to 80,000 sq m.

Group chief executive officer Datuk Alex Kang said the upcoming facility had recently attracted the attention of a few notable local and foreign customers.

Among them are US-based Cambridge Industries Group (CIG), to produce Advanced High Speed Optical Signal Transmitter and Receiver for 5G wireless network using photonics and semiconductor technologies for their global customers. 

This would be CIG’s first-ever pioneer technology transfer to Southeast Asia.

“With state-of-the-art technologies, this is not poised to be an ordinary facility, but a highly advanced fully-automated smart factory that will generate tremendous benefits for our customers, stakeholders and country.

“This milestone has been years in the making. Our Batu Kawan factory is an important piece of the puzzle and we are pleased to undertake this endeavour to accelerate our growth,” he said at the official groundbreaking ceremony in Penang today.

The groundbreaking ceremony for the Smart Factory 4.0 was officiated by Penang deputy chief minister Datuk Ir Ahmad Zakiyuddin Abd Rahman.

“Penang has been making significant progress in its industrialisation journey for the past decades,” Ahmad Zakiyuddin said.

“Celebrating the 50th anniversary of Penang’s industrialisation this year, I am particularly proud to see a new wave of strategic investments, anchoring the state’s position as a preferred investment destination.”

He added that Penang was the most important manufacturing base for electrical and electronic (E&E) products within Malaysia, and among the most vibrant hubs globally, accounting for more than five per cent of global semiconductor sales.

In 2021, Penang secured an all-time high of RM76.2 billion in total approved manufacturing investments. 

Penang is also among the top contributors to the country from January to June 2022, with RM7.9 billion in approved manufacturing investments, of which, 38 per cent was contributed by domestic direct investments.

Source: NST

EG Industries’ Batu Kawan “smart” plant expected to offer over 1,000 high-value jobs

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Lawas is a strategic location poised to become an economic and industrial hub that can serve Asia and the surrounding region, said Deputy Premier Datuk Amar Awang Tengah Ali Hasan.

He said plans are at different stages to improve land, air, and sea connectivity to transform Lawas into an investment destination and thriving economic hub.

“We are fortunate that Lawas is strategically located in the BIMP-Eaga (Brunei-Indonesia-Malaysia-Philippines East Asean Growth Area) region and it not very far from countries such as China and India,” he told a press conference yesterday.

The Minister of International Trade and Investment said the proposed Bukit Sari port will be a major component of Lawas’ development master plan with economic activities such as manufacturing, tourism, and agriculture.

He cited the northern coastal road project and phase one of the new Lawas Airport, which is expected to take off early next year, ongoing Sabah-Sarawak Link Road, road upgrading and proposed joint border development in Ba Kelalan, as well as the upcoming new Indonesian capital in Borneo.

He said the RM150 million new Bandar Lawas Bridge, which is expected to be completed by 2025, will become an iconic landmark that would increase the scenic appeal of Lawas to tourists.

Awang Tengah said both Limbang and Lawas districts are expected to be connected to the state grid by 2024, providing crucial power supply to both commercial, industrial, and domestic customers, while the authorities are also reviewing hydroelectric power potential for export to neighbouring Sabah and Kalimantan.

“We need to have all these in place to attract both FDI (foreign direct investment) and DDI (domestic direct investment), and there are already companies wanting to invest in the oil and gas industry and also manufacturing,” he pointed out.

Awang Tengah is in Lawas to campaign for Gabungan Parti Sarawak-Parti Bumiputera Bersatu (PBB) candidate Datuk Henry Sum Agong, who is defending the Lawas parliamentary seat.

He also welcomed the possibility of connectivity by railway services from Sabah, as Henry, who is also caretaker Deputy Minister of Transport, had said operator Sabah Railway had indicated interest in extending its line to Lawas.

This would open up another option of transportation for a substantial number of passengers and cargo traffic between Sarawak and Sabah, as well as lower transportation costs.

Awang Tengah added all these plans in Lawas call for Henry, with a proven delivery track record in serving the state and his constituents, to be re-elected.

Source: The Borneo Post

Awang Tengah: Lawas set to be economic, industrial hub with better connectivity

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Fraser & Neave Holdings Bhd (F&N) plans to allocate RM700mil to RM800mil for capital expenditure (capex) in the financial year 2023 (FY23), mainly to finance its dairy farm project in Gemas, Negri Sembilan.

“We expect to increase capex by three to four times from what we have invested in FY22, which was RM190mil. As of now, we have used RM240mil in acquiring land for the dairy farm project,” said F&N chief executive officer Lim Yew Hoe during the financial results briefing yesterday.

He added the newly acquired Cocoaland Holdings Bhd and the dairy project will be the food and beverage company’s focus in FY23.

F&N completed its acquisition of Cocoaland on Nov 4, 2022, after it bought out the remaining 72.4% stake for RM489.2mil.

The company will not only serve as a platform for F&N to expand into more halal food segments, but strengthen its halal packaged food pillar as the investment will add a range of established Malaysian confectionery and snack brands to F&N’s portfolio.

“We acquired Cocoaland because of our expansion plans for the halal food pillar with a wider product portfolio. Not to mention, the company has an identical route-to-market as our current beverages and dairies, as well as similar consumption occasions as our current beverages and dairies. Despite the rising interest rates environment, we expect Cocoaland to be accretive,” said Lim.

The group’s integrated dairy farm project in Gemas comes about after its move to buy land in Chuping, Perlis, for a similar project fell through. F&N then turned to Ladang Permai Damai in Gemas, which is situated nearer to F&N dairies plant in Pulau Indah.

“In terms of market access, the land in Gemas is a better location. It is much nearer to the Klang Valley and to Singapore as well. This will allow us to be able to export fresh milk to Singapore as our sister company is located there,” said Lim.

With the completion of Ladang Permai Damai acquisition, the group is also on track to resume its plans on the upstream fresh milk business for downstream production and distribution of fresh milk.

“This will enable us to own a vertical integration business and operations based on locally grown crops for feed to F&N’s dairy farm, which in turn will lower the value chain cost per litre. The move will also help us be less dependent on imported milk and will help to promote the local agricultural industry,” Lim added.

The group has ambitious goals; to make its dairy farm the most sustainable one in the world.

“We intend to produce our own cow feed in the farm. The milk produced by the cows will also be packed in the factory there before being distributed. We are also planning to create reservoirs that can collect rain water so that we can be self-sufficient in getting water for the cows to drink. The solar panels installed in our farm also serve to reduce evaporation of water so that it can be kept longer.

“In processing waste we are also considering options other than the biodigester system. While we would not say that the farm will achieve net-zero, we hope that it can be carbon neutral at least,” said Lim.

For the fourth quarter ended Sept 30, 2022 (4Q22), F&N’s revenue rose by 27% year-on-year (y-o-y) to RM1.14bil while net profit was up by 67% y-o-y to RM98.9mil.

“The solid growth recorded in 4Q22 reflects a stable recovery of economic activities, businesses returning to pre-pandemic levels and successful cost-management strategy.

“The increase in net profit is attributed to strong demand and margin recovery from price adjustments that largely offset the adverse commodity price impact,” the group said.

For FY22, F&N’s revenue grew by 8.2% y-o-y to RM4.47bil on the back of strong domestic demand in Malaysia and Thailand, supported by its price adjustment strategy and the first full-year contribution from the group’s food business. Net profits for FY22 declined 3.3% y-o-y to RM382.3mil.

Source: The Star

F&N to allocate up to RM800mil capex for FY23

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Sarawak is in a great position to supply what Singapore needs in terms of trade and investment opportunities, said Deputy Premier Datuk Amar Awang Tengah Ali Hasan.

He said this is especially in the areas of agriculture, aquaculture, reducing carbon footprints, and renewable energy.

He pointed out that since the launch of the Sarawak Trade, Investment and Tourism Office Singapore (Statos) in the neighbouring country in 2019, the state has seen an increase in collaboration, meetings and visits on a bilateral basis between Sarawak and Singapore.

“We believe there are still many more opportunities that can be uncovered, especially in increasing the number of export products being sold in Singapore.

“We are keen to expand this area to get to a level where economies of scale will bring down the transport and logistics costs of getting our products to the Singapore market,” said the International Trade, Industry and Investment Minister.

Awang Tengah said the upcoming Sarawak Fair 2022, which will be held at Singapore’s Suntec City East Atrium from Nov 21 to 27, has much to offer Singapore-based consumers.

“This fair is not only about showcasing Sarawak’s tourism products, but also includes the promotion of important longer-term trade and investment opportunities,” he said.

He said the business-to-consumer fair has attracted 31 exhibitors to date, with 17 booths focusing on tourism and 14 booths on trade and investment products.

Meanwhile, Statos chairman Tan Sri Datuk Amar Morshidi Abdul Ghani said the Sarawak Fair is a prelude to the Sarawak Mega Fair which is expected to be held by the end of 2023.

He said in addition to this one-week event, there will be a line-up of Sarawak Fair events next year as well where the focus will be on food and beverages, education and tourism (diving and adventure).

“We are working on a concept of holding a grand fair by the end of next year and this concept (of holding smaller fairs) is done all over the world.

“When you do many small events, the focus is there,” he said, adding that Statos hoped to organise the Sarawak Mega Fair biennially.

Morshidi said Sarawak has now become the focus of Singaporeans since Statos was established to promote the state.

“We have been in contact with over 2,000 businesses and engaged in almost 50 projects to be organised with various ministries.

“When we first started, nine out of ten people I met in Singapore had never been to Sarawak. Now probably, everyone knows Sarawak so I can say that Statos is a success story for the state,” he said.

Also present at the press conference were Tourism, Creative Industry and Performing Arts Minister Dato Sri Abdul Karim Rahman Hamzah, Statos chief executive officer Chew Chang Guan and deputy chief executive officer Putrie Rozana Soraya.

Source: The Borneo Post

Awang Tengah: Sarawak well-positioned to offer Singapore trade, investment opportunities

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Sarawak is poised to become a primary destination for the semiconductor industry and solutions provider for semiconductor technology.

In stating this, Sarawak Premier Datuk Patinggi Tan Sri Abang Johari Openg said the setting up of Sarawak Microelectronics Design (SMD) Semiconductors Sdn Bhd, a wholly owned state entity, would leverage Sarawak’s role in the semiconductor industry.

“As you know, we have a global player in Sarawak producing semiconductors through a company called X-Fab, and the company is going to expand their operation in Sarawak. The expansion is because of the good and successful marketing and also the demand of this analogue semiconductor produced in Sarawak.

“But then because of the changes of technology, the design of the chip is also proportionately changing due to the demand. So, Mr Syahriman (SMD chief executive officer), he is a Sarawakian who has a background in chip design and worked overseas.

“Now he is coming back to help us to get involved in this semiconductor industry,” he said to reporters when met after officiating the launching of SMD Semiconductor and the signing of the Framework Service Agreement (FSA) at Tegas Digital Village in Samajaya Industrial Park here yesterday.

Abang Johari said high demand from the consumer electronics and automotive industries during the height of the pandemic and geopolitical tension between Ukraine and Russia which caused global chip shortage had created opportunity for Sarawak to further develop and explore in the semiconductor and chip producing sector.

He said at the same time, the state is engaging with professionals with other chip designers including Sarawakian scholars currently working in Singapore as well as in the United States, to come back and help develop Sarawak’s chip design industry whilst supported by local universities.

“Because as you know, the chip design keeps on changing very fast and we have to keep track of that.

“This is the first step that we are looking into in participating in this semiconductor industry and it will create high-paying jobs for our locals if they are successful in their talent in creating new chip designs,” he added.

Earlier in his speech, Abang Johari said besides chip design, production, technology, knowledge transfer and talent development were highly viable and important for the development of the semiconductor industry.

To address the talent pipeline, he welcomed Melexis to work together with local technical institutions and universities to provide skills and knowledge for young graduates in Sarawak.

“I welcome Melexis to partner with technical institutions and universities in Sarawak to shape a new curriculum in semiconductors for undergraduates and postgraduates and industry certifications to enable our young graduates to acquire the necessary skills to be semiconductor professionals.

”The industry-academia platform can also promote industry-driven research collaboration in areas relevant to the semiconductor industry,” he added.

Source: The Borneo Post

Sarawak set to become semiconductor industry hub, says Premier

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The development of resources and infrastructure is vital to grow the electric vehicle (EV) market share in the country to 38% by 2030, said panellists of the Invest Malaysia Series 2 held on Wednesday (Nov 9) at Bursa Malaysia’s headquarters here.

One of the panellists, Tenaga Nasional Bhd (TNB) project director of project management office-EV Mohd Junaizee Mohd Noor said four challenges when it comes to proliferation of EV circulation are price and expenditure of EV, infrastructure, government policies, and support industries.

To address the challenges, the five major key areas to focus on are reskilling technicians on EV technology, electrifying TNB’s vehicle fleets, charging areas, partnerships, and EV research, said Junaizee during the event themed “The Road to EV”.

According to him, TNB saw opportunities to team up with other energy players in the EV market, such as Petronas, by offering more charging points in petrol stations, for example.

“At this early stage, we don’t see it as competition but as a collaboration, because we have the same goal which is to increase the number of EVs on the road,” he said.

TNB expects the EV market to generate an annual electricity revenue of RM1.25 billion and have 18,000 charging points for 524,409 battery EVs by 2030.

Meanwhile, at an earlier session, Green EV Charge Sdn Bhd’s chief operating officer Huzaimi Nor Omar also said the sector needed more charging companies and government incentives to attract investments to the sector.

Huzaimi added that the gaps in the sector included human capital, availability of power in the location and site acquisition.

He also said incentives for charging operators are needed, in addition to tax exemption for EV and EV charging operators.

Both Junaizee and Huzaimi noted that EV in the broader logistics market remained untapped in Malaysia, with interest for e-bikes as well as heavy vehicles.

Even in terms of commercial vehicles, Junaizee said there is not much choice for consumers.

“Fleet [vehicles] is a low-hanging fruit for us to increase [the] number of EVs,” said Junaizee. “There is a lot of logistics [companies] and the potential for it.”

The event was jointly organised by Bursa Malaysia and Macquarie Group.

According to a report titled Macquarie Research – Malaysia Mobility Jan 2022, the Malaysian EV market is estimated to grow at a compounded annual growth rate of more than 31% by 2030, compared to a total industry volume of 2%.

EV penetration is estimated to be 17% of new annual sales during that time period, the report said.

Source: The Edge Markets

EV resources, infrastructure sorely needed to grow EV market share in Malaysia to 38% by 2030

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National automaker Perusahaan Otomobil Nasional Bhd (Proton) is in the midst of strengthening its electric vehicle (EV) capabilities, and plans to launch and produce its own EV by 2027, said deputy chief executive officer Roslan Abdullah.

Roslan said Proton had been discussing with potential partners to embark on the venture, as it could not just jump into producing EVs without understanding how to sell and market the vehicles.

He said Proton’s EV road map started 10 years ago, but it was not pursued due to low market demand and technologies.

“The next five years (until 2027) will give us ample time to determine which technology is most acceptable, easy to maintain, and affordable for consumers and us,” he told reporters after a panel discussion at the Invest Malaysia Series 2 event titled “The Road to EV” here on Wednesday (Nov 9).

Before having its own EV, Roslan said Proton would gain more experience by collaborating with Smart Automobile Co Ltd as the latter’s distributor in Malaysia and Thailand.

“The collaboration with Smart Automobile and distribution of smart cars will teach us how to assemble EVs locally, and give us experience and knowledge of the assembly process,” he said.

Smart Automobile is a joint venture established by Mercedes-Benz AG and Zhejiang Geely Holding Group Co Ltd.

When asked about the challenges new energy vehicles (NEVs) face in penetrating the Malaysian market, Roslan said the solutions would require stronger support from the Government, better industry readiness, and a shift in customer preference towards EVs.

He said sales of NEVs had increased to 3.4% or 13,800 units year-to-date, with hybrid EVs being more popular than battery-powered EVs.

“There are major challenges to overcome, requiring time and collective effort.

“These challenges include Malaysia not having many affordable EVs, slow consumer adoption, lack of clarity of EV charging infrastructure development, talent development in the EV segment, and lack of investment in related technologies,” he said.

Roslan said further development and support for the EV industry is necessary for it to move forward.

“This includes research and development programmes, investment in the supply chain, technology, and providing better EV infrastructure,” he added.

Source: Bernama

Proton plans to produce EVs by 2027

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Ever since the Covid-19 pandemic hit, the world has rapidly ventured into the digital space.

This has led to a change in trends as many businesses, especially small and medium enterprises (SMEs) now digitising to remain competitive and equip themselves for the future.

At the fifth Star Outstanding Business Awards (SOBA) LAB, held at Menara Star last Friday, panellists from different industries gathered to contemplate and discuss “the way forward” for SMEs in the next year.

The event featured two panel sessions on how businesses can be more resilient and what trends businesses should look into to transform their organisations in 2023.

The first panel session, which focused on boosting economic resilience, was moderated by BDO Malaysia’s executive director of tax, David Lai, who said that while SMEs have been greatly affected by the pandemic and the recent war in Ukraine, there is still hope for a positive change next year, especially for businesses and business owners that are adaptable to change.

“The waters are choppy at the moment. We all have to be nimble and prepared to change our business models and not be stuck in one direction. We must be able to adjust.

“In the past, we would usually do our business models once a year and then stick to them. But now, we probably have to change the model every two or three months to keep up with the times.

“We have to look into new ways to modify not just the workflow, but our people and employees as well.”

SOBA 2022 sponsor RHB Bank Bhd SME Banking head Yip How Nang echoed Lai’s remarks, as he shared that although forecasts of the Malaysian economy for 2023 are not encouraging, there are still plenty of opportunities for businesses to grow.

“Every bank and institution in the country actually thinks that the economy will slow down, with continued pressure on inflation and the ringgit continuing to weaken.

“It’s not going to be a very good situation. It will be another year where all SMEs will have to consolidate and continue to persevere. But, if you are creative enough, there are always new opportunities.”

Bernard Yap, a partner at Ernst and Young Tax (EY) Consultants Sdn Bhd, maintained that positive vibe as he said that opportunities are rife and SMEs should use this chance to focus on how they can rebound in the endemic phase.

“We have to find new ways to be resilient and adapt to disruptions like the Covid-19 pandemic. Disruptions are always going to appear, so we have to know how to be receptive to them and how to embrace that disruption and move forward.

“I think it’s going to be a full year of opportunities in 2023, with liquidity in the market. So, you have to be bold and vibrant in coming up with changes to your business models, and

“I think a lot of development financial institutions and commercial banks will be there to support you in your development.”

He also added that there are multiple incentives from the government for businesses to adopt digitised and automated systems, with multiple grants in place to support businesses as they adapt to the digital economy.

PKT Logistics Group Sdn Bhd’s chief marketing officer Kuan Eu Jin said that the only way SMEs and businesses can make use of these opportunities is through proper diversification.

“If you see any opportunities for you to diversify, this would be the best time to do it, so that you can ride through one storm after another without being too dependent on a narrow segment where you don’t have any wiggle room to try to compensate when your main segment goes down.

“We are not talking about growing, but more about getting you through those trying periods. There are many segments in the economy for you to play in.”

Kuan also said that SMEs will have to put more emphasis on encouraging long-term employment of their workers, with a flux of employees occurring at blue-collar jobs and a significant labour shortage in the country.

The second panel session revolved around the topic of trends transforming the retail industry and was moderated by Asean Retail-Chains and Franchise Federation president Datuk Mike Loh, who said that SMEs will have to look at the bigger picture this coming year.

“Times have changed. Moving businesses onto a digital platform is the way to go, but we are not ready yet.

“We can’t keep focusing on our local markets alone, even though there are 33 million people in Malaysia. We have to look outward beyond borders to reach out to a much bigger consumer base by converting our businesses into digital platforms.”

Vanilla Mille Crepe Sdn Bhd chief executive officer and co-founder Nelson Liew agreed with Loh’s views as he shared that businesses should “update” themselves to the times and embrace digitalisation.

“The game has changed. The old rules are becoming more irrelevant now. So I think now is the best time to move into digital fields, reskill our employees, and make ourselves really adaptive.

“Digital payments online are definitely growing, and with the new norm of people making and paying for purchases online, you have to be open to tapping into these markets.”

Senz Marketing (M) Sdn Bhd managing director Datin Katherina Leong Hong Yin added that SMEs should learn to prioritise their digital and social media marketing efforts in order to see the best results.

“The market has been segregated into very niche markets. There are so many social media platforms available to target different demographics of consumers.

“So, brand positioning is very important because eCommerce is amazing. You have a chance to trade and sell your products all over the world.

“But you have to know what your brand is, what products you are trying to sell, and which target audience is your main target market because you cannot target everyone.”

She added that SMEs should not put all their eggs in one basket and expect immediate returns from venturing into social media platforms, as building business social media profiles usually takes time.

Digi business innovation and operations head Liew Kok Weng also said when moving towards digitisation, SMEs should take it one step at a time and focus on engagements with consumers as well.

“The basic fundamentals of the online world and eCommerce are connectivity. We even have businesses now that are mobile natives, they don’t even have an outlet or store.

“So, having a very stable and fast connection to do your business is key.”

“But eCommerce is not just about transactions online, it’s also about engagement and using the online space to engage with consumers on their shopper journey.”

SOBA 2022 is organised by Star Media Group with Credit Guarantee Corp Malaysia Bhd, Digi, PKT Logistics Group and RHB Bank as main sponsors, TalentCorp Malaysia as a co-sponsor and Matrade as the official trade promotion partner.

Supported by Bursa Malaysia, it is audited by BDO, with 988 and Suria as official media partners.

For more information on SOBA 2022, call SMG Events at 017-231-1789 or visit www.soba.com.my

Source: The Star

Adaptability and digitisation the way forward, SMEs told

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Enhancing domestic direct investment (DDI) is important for Malaysia’s sustainable growth given its huge contribution to the country’s economy, said the Malaysian Investment Development Authority (MIDA).

Chief executive officer Datuk Arham Abdul Rahman said DDIs play an important role in the local economy, especially against the backdrop of global uncertainties, and is essential to woo foreign direct investment (FDI).

He pointed out that FDI and DDI complement one another, arising from the same market conditions – a competitive, equitable, stable business and regulatory climate – and that both segments deserve equal attention.

“FDI is only one part of the equation in the economy, a strong domestic industry and ecosystem are also important.

“Strong domestic demand results in more DDI and a healthy DDI is essential for a successful FDI,” he said at a panel discussion titled “Shifting the Paradigm: Enhancing DDI for Sustainable Economic Growth” here today.

In 2012-2021, DDIs contributed 64.2 per cent, or RM1.364 trillion, of the total approved investment in Malaysia’s economy, while the remaining 35.8 per cent (RM761.7 billion) was FDIs.

In the services sector, 84.2 per cent or RM1.014 trillion of total approved investment in the country was dominated by DDI, while FDI amounted to RM190.4 billion.

As for manufacturing, 35.5 per cent, or RM290.8 billion, of approved investment was contributed by DDI while the bigger chunk was FDI, totalling RM527.6 billion.

Source: Bernama

MIDA calls for more domestic direct investment to sustain economic growth

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The Malaysian Investment Development Authority (MIDA) expects the total approved investments in 2022 to recover to the pre-pandemic level of over RM200 billion annually.

Chief executive officer Datuk Arham Abdul Rahman said on average, domestic direct investment and foreign direct investment made up 60:40 of the country’s yearly approved investments, mainly for the services sector.

He said investments in semiconductors and electrical and electronics (E&E) would continue to make up the largest contribution to the total investment this year.

“The global disruptions in the E&E and semiconductor supply chains globally during the pandemic saw many chips and semiconductors being utilised in mobile phones and PC productions, (causing a shortage) for the automotive industry.

“Now the demand for chips and semiconductors in the automotive industry is on an uptrend,” he told a press conference after a panel discussion titled “Shifting the Paradigm: Enhancing DDI for Sustainable Economic Growth” here today.

In the first half of 2022, MIDA approved RM123.3 billion in total investment, largely in the services sectors, including for the data centre projects in Johor.

He declined to reveal the latest figure of approved investments but signalled that the trend is increasing, in tandem with growing interest in Malaysia as a preferred destination for investment among domestic and foreign investors.

In 2021, MIDA approved a record RM309.4 billion (US$74.2 billion) in investments in the manufacturing, services, and primary sectors despite the unique global calamities, thanks to several big ticket projects secured, especially in the E&E and semiconductor industry, including from Intel and Osram.

Sumber: Bernama

Approved investments in 2022 to match pre-pandemic level of over RM200 billion yearly – MIDA

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Merely looking at the value of domestic direct investment (DDI) data alone would not give a full picture of the country’s local investment landscape, the Malaysian Investment Development Authority (MIDA) said.

Its senior executive director of investment policy advocacy Sikh Shamsul Ibrahim Sikh Abdul Majid said DDI numbers tend to be lumpy over the years due to major investments being cyclical in nature. 

In terms of the value of approved DDIs, the amount has been uneven but recorded a downward trend from RM150.6 billion in 2015 to RM125.5 billion in 2019. During the Covid-19 pandemic years, it continued to fall to RM103.2 billion in 2020 and further to RM97.9 billion in 2021, which was somewhat expected. 

Shamsul attributed the lumpy numbers to large-scale projects like Petroliam Nasional Bhd’s (Petronas) Pengerang project in Johor, where the investments tapered off close to 2018. 

“A foreign direct investment (FDI) can invest about RM30 billion in a project, something you will not see in a DDI. But in terms of the number of projects, DDIs are about two to three times more than FDIs. We cannot conclude based on the value alone that DDI is down. Over time, big domestic investments [like Pengerang] will come again,” he said during a panel discussion titled “Shifting the Paradigm: Enhancing DDI for Sustainable Economic Growth” on Tuesday (Nov 8). 

“Right now, what we really need to look at is how we can encourage domestic services companies to go into manufacturing, so that we can have more of that in the manufacturing sector,” he said. 

Notably, the services sector dominated DDI approvals, totalling about 70% each year. 

AmBank Group chief economist and head of research Anthony Dass, who was the moderator of the panel discussion, chipped in to say that DDIs are usually smaller in value than FDIs. 

“The value today may be small, but we hope that in five years’ time, it will grow bigger. But, even then, multinational corporations’ investments will still be bigger than DDIs. We have to move away from the traditional method of just looking at the value of the investment, and to include looking at value-adding and how much we have moved up the value chain,” he explained. 

During the panel discussion, Shamsul also pointed out that there is a common misconception among local companies that where incentives are concerned, FDIs are able to get things done more easily than local companies.

He added that incentives are readily available for both local and foreign companies, and even for smaller companies, like the pioneer status and investment tax allowance. 

But the incentives are not “free giveaways”, Shamsul said, as local companies would have to meet the criterias for the incentives. They would also need to approach MIDA directly to find out more, and apply for the incentives that can help to further their businesses and investments.   

Later at a press conference, MIDA chief executive officer Datuk Arham Abdul Rahman said MIDA is confident that total approved investments in 2022 will hit RM200 billion or more in value, which is consistent with the amount achieved each year before the pandemic. 

In the first half of the year, total approved investments amounted to RM123.3 billion. 

He is of the view that comparisons should not only be made between total approved investments in 2022 and what was achieved in 2021, given how 2021 was an exceptional year due to approvals for a few big projects in the electrical and electronics industry. 

In 2021, total approved investments totalled a record RM309.4 billion. 

Going forward, despite concerns over a possible economic slowdown, Arham is confident that the country will also be able to achieve RM200 billion in total approved investments in 2023, judging by the pipeline of projects that MIDA is working on.

Source: The Edge Markets

Value of approved domestic investments alone not the full picture — MIDA

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As the world faces a shortage of semiconductor chips brought about by several factors, the expected increase in demand has left investors wondering if buying pressure could return to the semiconductor sector.

The supply crunch has been brought about by developments over the past few years as global megatrends such as automation, electrification and connectivity propelled rising demand for semiconductors.

The lockdowns imposed globally over the past two years have also played a major role in hastening the adoption of online-based trends like remote working, eCommerce and virtual learning, leading to a significant demand surge for chips powering electronic devices.

The squeeze in supply may have also been exacerbated by the decision taken by the Biden administration last month to impose restrictions on the export of chip-making technology to China, with regulations obligating all United States-based tech firms to cease supply of chip-making equipment to Chinese chipmakers unless they obtain an approval licence.

abrdn Islamic Malaysia Sdn Bhd chief executive Gerald Ambrose, however, opined that the supply deficiency following the mandates imposed by the United States would be confined to more sophisticated chips, especially those which the United States government believes could have military applications.

Despite seeing a number of positive developments in the local electronics sector, such as growth in foreign direct investment that would indicate rising demand coupled with the attractive valuations of certain counters, Ambrose told StarBiz it would be optimistic to expect a buying fervour to return to the semiconductor market at present given the skittishness of the market.

“Western multinational companies would prefer Malaysia for manufacturing in view of the growing ‘taint’ of being based in China. Cost of qualified software, automotive and electrical engineers are also significantly lower here.

“However, we are seeing a rising number of branded end-users starting to downgrade future volume forecasts, especially in the phone segment,” he said.

As a number of lead indicators, such as book-to-bill ratios, purchasing managers’ index (PMI) and Asian export growth are also heading south, Ambrose said, Malaysia would not be able to buck the short-term downward trend, even if its own PMI and export numbers are relatively better among its regional peers.

Meanwhile Malaysian Semiconductor Industry Association president Datuk Seri Wong Siew Hai believes how semiconductor stocks will fare as a result of the supply jam will depend on how quickly industry demand recovers.

As to that, Wong told StarBiz that it is difficult to predict at the current juncture, but noted that a clearer picture could present itself in the second half of 2023.

“The International Monetary Fund has downgraded its global gross domestic product growth forecast to 2.7% for next year from 2.9% back in July, indicating it is seeing a slowdown which would definitely impact the semiconductor industry.

“How quickly demand would return would hinge largely on global events as well,” he said.

He also highlighted that there has been a correction in the consumer products sector, as has been reported by some research houses such as RHB Research that the 30-month consecutive growth in the global semiconductor sales has ended, with August posting slower figures.

“The concerns about the pending recession and inflationary fears could serve to dampen consumer demand over the near-term, and it has affected the stock prices of many multinational companies, although this appeared to have stabilised,” Wong said.

Wong is of the view that the United States restricted tech export to China would be something Malaysian semiconductor firms could take advantage of.

“US semiconductor and tech companies located in China may need to move some of their activities out of that country, and Chinese companies would also need to find ways to ship their products to avoid additional tariffs. This means there are opportunities for Malaysian firms to benefit,” he noted.

While maintaining a prudent stance on the sector in the near future, citing headwinds such as the US-China trade skirmishes as well as the Russia-Ukraine conflict, Wong is positive on semiconductors and believes prospects are bright over the next five years, as it is an industry that is in demand.

Echoing the cautious short-term but bullish longer term view of Wong and Ambrose for the semiconductor sector, fund manager Danny Wong feels its supply and demand dynamics have improved against the backdrop of slowing demand in consumer electronics, even in the face of the latest US-China trade restrictions.

Wong, who is chief executive of fund managing firm Areca Capital Sdn Bhd, said: “Currently, the semiconductor sector is in the stage of inventory adjustment. The buying fervor is unlikely to return in the near term but it could come back more strongly in the longer term.”

He projected that the industry should achieve supply and demand equilibrium in the next few years, with additional supply being provided by an increasing number of foundries coming online globally.

“We are positive on the growth of industry over the next few years. In the short term we are cautious on the sector and would be selective on those with strong fundamentals but value emerged with price weakness recently. We are broadly positive over the sector in the long-term,” he told StarBiz.

As industry experts and observers remain prudent over semiconductors at present, it is understandable that they are advocating investor patience before making impulsive jumps into any particular counter for the moment.

Source: The Star

Time for tech in 2023

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Telekosang Hydro One Sdn Bhd has reached its initial operation date (IOD) on Nov 5, 2022 to generate and supply electricity to Sabah’s power grid system.

In a filing with Bursa Malaysia, Telekosang Hydro chief executive officer and Jentayu Sustainables Bhd executive chairman Datuk Beroz Nikmal Mirdin said Telekosang Hydro is set to be one of Malaysia’s largest run-of-river (ROR) hydropower plants and is expected to generate 245,000 megawatt-hour (MWh) of electricity annually.

“It has provided 1,000 job opportunities and enabled knowledge transfer of green technology to Sabah,” he said in a joint statement today.

He added that the IOD paves the way for Jentayu Sustainables to conclude its acquisition of Telekosang Hydro, supporting the group’s aspiration to be a major green energy player in the country.

The acquisition of Telekosang Hydro would enable the group to also provide ancillary services under the banner of Integrated Sustainability Solutions, such as renewable energy certificate (REC), carbon advisory and carbon management, he said.

“As a group, we will continue to advocate sustainability as the pulse of our business and in all our undertakings – including preservation and rehabilitation efforts.

“We are finalising terms and conditions for Sabah Forestry Department (SFD) to lead our restoration and reforestation exercise to ensure preservation of biodiversity surrounding the area of Telekosang Hydro,” he said.

Source: Bernama

Telekosang Hydro reaches initial ops date, set to be Malaysia’s largest river hydro plant

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Auto parts maker EP Manufacturing Bhd is in talks with Petronas Dagangan Bhd and Blueshark Holding Ltd (BHL) to possibly collaborate in the electric mobility space in Malaysia.

In a bourse filing, EP Manufacturing said its wholly owned EP Blueshark Sdn Bhd (EPBSB) has inked a one-year Memorandum of Understanding with PetDag and BHL to engage in the discussions for the mutual benefit of the parties.

BHL is involved in two-wheeler electric vehicle manufacturing and distribution, as well as subscription ecosystem management and vehicle energy network management.

According to EP Manufacturing, the MoU is to set out the main principles of the collaboration, which is to develop a two-wheeler battery swapping business, if it is found feasible.

Pre-pilot and pilot phases will be carried out to explore the identified areas of collaboration, which, for PetDag, means it will have to identify suitable stations and provide the space for the battery, battery swap station (BSS) and installation, as well as provide technical support for the installation and operation of the BSS.
EP Manufacturing and BHL, meanwhile, will be responsible to supply, operate and maintain the hardware, BSS, spare parts, and service centre equipment, as well as the software, and to provide the technical know-how.

The two parties will also collect data and provide access to them during the pre-pilot and pilot phases, and fully fund the capital expenditure, operation and maintenance costs of the pre-pilot and pilot phases, including electricity for BSS.

If the pilot is successful, the parties agree to the following: “a. (use) Setel as the customer fronting app and main payment channel; b. to utilize Petronas leasing platform for B2B; c. potential JV for the leasing business; d. Petronas to have the option to invest in the BSS and vehicle ownership,” the filing read.

EP Manufacturing’s shares closed down one sen or 0.95% at RM1.04, giving the group a market capitalisation of RM228 million.

PetDag’s share price settled 40 sen or 1.82% lower at RM21.60, bringing it a market capitalisation of RM21.46 billion.

Source: The Edge Markets

EP Manufacturing in talks with PetDag, BHL for potential collaboration in electric mobility space

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Frontken Corp Bhd, winner of the coveted The Edge BRC Company of the Year award for 2022, is a low-profile net cash technology company that supports big names in the global semiconductor industry as well as Malaysia’s very own oil and gas giant Petroliam National Bhd (Petronas). 

Concerns over how a global chip shortage may have morphed into a global chip oversupply crisis have knocked down Frontken’s market capitalisation, which reached as high as RM6.6 billion when its share price was above RM4 in early April this year.

Yet, closing at RM2.48 on Oct 28 to reflect a market cap of RM3.9 billion, Frontken’s share price was still more than five times the 44.6 sen that it started 2019 with.

Frontken’s market cap was only RM738.8 million as at end-2018, but had soared to RM2.4 billion by end-2019. It did not stop there, rising further to RM3.72 billion by end-2020 and RM6.3 billion by end-2021 before peaking at RM6.57 billion on April 1, 2022. 

The gains came on the back of double-digit earnings growth as revenue charted new record highs because of strong demand from its global customers in the semiconductor as well as oil and gas (O&G) industries. Profit after tax grew at an enviable 44% compound annual growth rate (CAGR), from RM4.2 million in FY2012 to RM114.2 million in FY2021, even as revenue saw an 11% CAGR from RM181 million in FY2012 to RM450.2 million revenue in FY2021.

Shareholders were rewarded with higher dividends, with the payout ratio doubling to 60% in FY2021 from 30% in FY2018, as well as a warrant-sweetened 1-for-2 bonus issue in April 2021.

In addition, the group had been investing in its growth with internal cash rather than excessive borrowings. As at end-2021, it had RM302.4 million in cash and cash equivalents after spending RM82.8 million on capital expenditure.

There is no denying that sizeable amounts of the strong share price gains seen between 2019 and early 2022 have been given up in the past six months, with Frontken shares down 38% year to date and underperforming the local bellwether FBM KLCI, which is down just under 8% over the same period.

Part of the price pressure that Frontken has seen stems from news flow on Taiwan, where most of the world’s advanced chips are being manufactured but which has come under the spotlight as tensions between Washington and Beijing grow. Taiwan Semiconductor Manufacturing Co Ltd, which dominates the global supply of semiconductors by making chips for a host of global giants such as Apple Inc and fabless chipmaker Advanced Micro Devices Inc, has also dropped 39% year to date.

Frontken’s unit, Ares Green Technology Corp, has seen profits grow on the back of its ability to handle more complicated and sophisticated processes that are more sensitive to contamination and that have won the trust of larger global clients. In 2020, the company paid about RM53.3 million for an industrial building in Southern Taiwan Science Park (STSP), Kaohsiung (Plant 2), which Frontken says allows the company to position itself as “the leading advanced high-precision chamber parts service provider for the next few generations of leading-edge chips”.

STSP is one of the three main science-based industrial parks in Taiwan that have been “selected by the world’s leading integrated foundry for its 5nm and 3nm advanced manufacturing processes, making STSP the world’s largest IC industrial hub”, notes appended to Frontken’s 2021 annual report state. “The infrastructure and size of this plant will provide us with sufficient space to further expand our production capacity.”

“New Plant 2 is qualified by customer and will be receiving parts for test run,” Hong Leong Investment Bank Research (HLIB) says in a note dated Nov 2, following the release of Frontken’s earnings for the nine months ended Sept 30, 2022 (9MFY2022), which saw a net profit at RM93.45 million, up 25% from RM74.96 million in 9MFY2021 on the back of a 16% year-on-year growth in revenue to RM381.91 million.

“Despite the inventory adjustment and slower macroeconomic growth, a Taiwanese client expects these negatives to be balanced by sustainable ramp-up of its industry-leading advanced technologies. Frontken believes the persistent demand remains a growth catalyst and will lead to more chip research, design and manufacturing in the years ahead,” HLIB says in the note, reiterating a “buy” call on Frontken, with an unchanged target price of RM3.20, based on 30 times FY2023 earnings multiple.

“We like Frontken for its multi-year growth ahead on the back of a sustainable global semiconductor market outlook, robust fab investment, leading edge technology (7nm and below), and strong balance sheet (net cash of RM296 million, or 18.7 sen per share) to support its Taiwan and Singapore semiconductor expansions,” HLIB adds. It notes that 80% of revenue is from semiconductor and 20% from O&G. “Frontken is cautiously optimistic that business will be strong for the remaining months of FY2022, owing to increased orders under Petronas contracts,” the note says.

Frontken will continue to invest in bolstering its own core competencies to stay ahead, confident that the longer-term prospects for the industry in which it operates remain bright. 

Frontken chairman and CEO Nicholas Ng Wai Pin tells The Edge: “We are excited about what lies ahead for us. We believe that, in the long run, the semiconductor industry will continue to grow because of the heavy reliance on technology, which augurs well for our company. To that end, we are looking to expand our business further both regionally and globally.

“Through the continual support from all our customers and technology partners, we believe the long-term outlook for our company is good in spite of the many challenges that we face in the short term.”

Indeed, when the pandemic hit, Frontken had told shareholders in its 2021 annual report that its continuous research and development as well as investment in high-specification equipment and technology allowed it to help customers improve efficiencies and reduce operating costs without compromising on the quality of their end-product.

With chips being increasingly used in more things, Frontken should remain on the radar for some time.

“We are humbled to receive this award and appreciate the recognition bestowed upon us. This award means a lot to us and it is testament to the years of hard work and dedication by our amazing team. This award will motivate us to work harder and reach greater heights. We would like to thank everyone, especially our stakeholders, for believing in us and supporting us throughout the years. Lastly, our sincere appreciation to The Edge for this recognition,” says Ng.

Source: The Edge Markets

Company of the year: Frontken Corp Bhd – Growing well alongside global giants

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ARTIFICIAL intelligence (AI) is progressively being recognised as the new general purpose technology that will bring about revolutionary economic transformation similar to the Industrial Revolution.

However, the transformational value of AI for any country or economy can only be realised when the market begins to understand and trust the technology.

AI offers new revelations and solutions with government data that may not be achievable by traditional analysis and methods. Traces of AI are already appearing in the banking and manufacturing industries and even in simple daily things, such as the autocorrect features and chatbots that we often take for granted.

However, beneath the surface, AI is also playing a critical part in transforming the culture of the future.

Post-pandemic Malaysia, as one of the main manufacturing supply chains in the world, lags behind other countries in terms of worker productivity, R&D and a tertiary-educated labour force.

Malaysia has reported a sluggish adoption rate of Industry 4.0 with only 15% to 20% of businesses having really embraced it. Global management consulting firm McKinsey & Co found that 50% of work in Malaysia is repetitive actions that can be automated.

The government has set out frameworks for the incorporation of AI by numerous sectors of the economy. These comprise the Malaysia Artificial Intelligence Roadmap 2021-2025 (AI-Rmap) and the Malaysian Digital Economy Blueprint (MDEB), spearheaded by the MyDIGITAL Corporation and the Economic Planning Unit.

AI will double the rate of innovation and improve workers’ output by 60% in Malaysia (Digital News Asia, 2019). AI will also assist Malaysia’s economic growth by attracting international investments.

The National Industrial Revolution 4.0 (4IR) Policy is estimated to increase the country’s output by 30% across all sectors by the end of 2030, with AI playing a substantial role in attaining that target.

Government initiatives like MyDIGITAL under MDEB offer a digital upskilling platform for Malaysians across various social classes. This will need the support of the masses as government initiatives can only bear fruit with commitment from the public.

Hence, AI will gradually transform our education system and way of thinking, serving as an important force to narrow the inequality among various social classes and putting Malaysia more on par with advanced nations in the digital arena.

The AI-Rmap Survey conducted by the Science, Technology and Innovation Ministry last year revealed inadequate expertise and constraints in financing as the two top challenges faced by Malaysian companies in implementing AI.

Although Malaysia may not be ready to implement AI across the entire enterprise or big agencies in the government, we can see its presence in immigration projects, as well as biometric information or image analysis.

AI also curbs the threat of possible cyberattacks, allowing these to be headed off with speed and accuracy.

Malaysia can learn from the developments of AI technologies in China. China’s usage of AI in national intelligence will help government officials pinpoint tendencies and pressures in the country’s social delivery system.

AI tools can extract information from social media, satellite imagery, communication signals and other data sources in a more intelligible, comprehensible and actionable manner.

China synthesises a gigantic amount of data involving talent, companies, research and capital to shape the world’s foremost AI ecosystem.

Its government maintains the utmost strictness on AI integrity by certifying digital businesses such as Baidu, Alibaba and Tencent.

Moreover, the central government gazettes the locations for gathering and exchanging data among these corporations.

The results are encouraging, where China has the biggest capital marketplace for AI start-ups, publishes the greatest number of research documents on AI, introduces concrete data rules and trains the most AI talent.

In early 2019, the AI Organization revealed China’s strategies to empower Huawei’s role in the Belt and Road Initiative (BRI) by linking an AI digital brain to robotics and drones through the 5G network.

The cooperation with Huawei in 5G technology will hasten Malaysia’s implementation of Industry 4.0 technology and boost economic growth. Malaysia can also learn from China in the fields of robotics, cloud computing and AI.

The Kuala Lumpur City Council has decided to collaborate with the cloud computing arm of e-commerce giant Alibaba on “City Brain” systems via big data and AI to make management and transportation better organised in Malaysia’s capital.

Kuala Lumpur is the first city outside China to implement this technology, which may also be useful to other Malaysian cities.

Besides, there is a project to create an AI hub in Malaysia with the help of Chinese AI unicorn SenseTime. The US$1bil hub is aimed at helping local businesses create robots and speech recognition systems as well as nurture tech talent.

It is to be jointly developed by China Harbor Engineering Company, G3 Global Berhad and SenseTime.

SenseTime will provide technical expertise and technical support to G3 Global Berhad, while also working with the latter to develop educational materials for schools in the country.

Developers maintain that the AI park will foster local AI talents and develop a commercial AI ecosystem in Malaysia.

To conclude, Malaysia needs to overcome various challenges in order to advance in the development of AI. The Malaysian government has always been interested in China’s technological advancements in areas such as AI, big data and robotics and hopes to increase the investments in these areas.

Dr Cheong Jia Qi is Senior Lecturer at University Malaysia Sabah and Research Fellow at the Centre for Economic Development and Policy. The views expressed here are entirely the writer’s own.

The SEARCH Scholar Series is a social responsibility programme jointly organised by the South-East Asia Research Centre for Humanities (SEARCH) and the Centre of Business and Policy Research, Tunku Abdul Rahman University College (TAR UC), and co-organised by the Association of Belt and Road Malaysia.

Source: The Star

How AI can power economic recovery and overcome challenges in Malaysia

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Ni Hsin Group Bhd (NHG) will launch the first phase of its TAILG EBIXON electric bikes this month, with the target of producing 15,000 units a year.

The company has set aside RM5 million for the investment in EV bikes and plans to direct its sales efforts toward government agencies, government-linked companies (GLCs), universities, fleet management companies, last-mile delivery providers, and end users.

Managing director Khoo Chee Kong said approximately 500 units of e-bikes will be produced during pre-launching and 2,500 units from 2023 onwards, capturing about two per cent of the country’s 600,000 motorcycle registrations annually.

“We view the prospects for NHG in the energy vehicle (EV) business as very attractive.

“The transportation sector consistently remained the second largest greenhouse gas (GHG) emitting sector in Malaysia,” he told The New Straits Times.

Khoo said NHG found a formidable and well-established manufacturer from China, Dongguan Tailing Motor Vehicle Co Ltd (TAILG), established in China in 2004 and specialising in research and development (R&D), manufacturing, sales, and service of new energy electric vehicles.

The company’s products cover electric bikes, electric scooters, special electric bikes, electric tricycles and other vehicles.

Khoo pointed out that the TAILG EBIXON EV Bike was conceptualised by Ni Hsin EV Tech Sdn Bhd (NHEV), a wholly owned subsidiary of NHG, for the delivery industry, in particular, the food and beverage (F&B) sector, since 2021. 

To boost revenue, the NHG management team in the F&B division have developed the BLACKBIXON Mobile Coffee Machine (BBMCM) to be operated on an electric bike.

He said the idea of using the electric motorcycle for delivery services evolved from selling coffee out of a motorcycle in line with the company’s BLACKBIXON’s concept of [email protected] [email protected] [email protected].

“Brewing coffee from a coffee machine requires electrical power.

“The idea of using an EV bike was mooted, and a working model was successfully developed through a series of trials and experiments. That is our BLACKBIXON Coffee Bike,” Khoo said.

To recap, NHG diversified into the F&B business via Blackbixon Sdn Bhd (BLACKBIXON), a wholly-owned subsidiary, and obtained a direct selling license from the Ministry of Domestic Trade and Consumer Affairs in March 2021 for the retailing of the BLACKBIXON beverage products.

“We will expand on the [email protected] concept of business.

“Besides having more of our own BLACKBIXON Coffee Bikes, we offer entrepreneur programs to the B40 with financing packages in collaboration with various institutions, such as cooperatives and government agencies.

“We are also setting up a food delivery business using our proprietary Hot Box system,” said Khoo.

Touching on the industry, Khoo said the EV trend is fast catching on, but there are only a handful of players in the Malaysian market.

“We may not have the track record as an EV motorcycle manufacturer, but we have a formidable partnership with TAILG, which specialises in EV technology and has a proven track record.

“We anticipate a significant surge in demand for EV bikes in Malaysia and the ASEAN region.

“Our TAILG EBIXON EV Bike is attractive, offers a comfortable ride, is sturdy, and has more torque and power than most brands in the market.

“A unique feature of our EV bikes is the dual-swappable battery system, which enhances the range, charging flexibility, and convenience. Finally, our EV bikes are reasonably priced and affordable to our target customers,” Khoo said.

The TAILG EBIXON EV Bike will also be made available in East Malaysia.

Source: NST

Ni Hsin to launch electric bikes

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Tenaga Nasional Bhd (TNB) will begin repowering its power plants to green technology options starting 2035, partially relying on gas as transitional fuel when it scales up the new green technologies.

The 2030s will also see the coal plants, which have been operating for decades, being retired.

Concurrently, TNB will establish and grow initiatives in green hydrogen production and charging infrastructure for electric vehicles.

To achieve net-zero emissions, TNB’s strategy is to repower retired coal and gas plants with combined-cycle gas turbines (CCGTs) using hydrogen-ready technology, which requires a reliable and economically viable supply of green hydrogen, said chief executive officer Datuk Baharin Din.

CCGTs are a form of highly-efficient energy-generation technology.

TNB will commence research and development (R&D) on green hydrogen production with more efficient electrolysers that aim to reduce the levelised cost of energy – the average cost per unit generated – for green hydrogen.

Hydrogen is touted to be the replacement fuel of the future, especially green hydrogen that is produced from renewable energy and has zero greenhouse gas emissions.

Industries, transportation, petrochemicals and power generation are the main sectors that can utilise green hydrogen.

By 2050, Malaysia’s demand for hydrogen can potentially reach three million tonnes per annum (mtpa); the expected demand in Japan is 10 mtpa by 2050, according to its Economy, Trade and Industry Ministry.

TNB aspires to co-fire natural gas with green hydrogen for cleaner power generation in a re-powered project at the Sultan Ismail Power Station in Paka, Terengganu.

This plant is expected to be commissioned by 2030, and will be fired with 100% natural gas initially upon commissioning.

In parallel, TNB and Petroliam Nasional Bhd (PETRONAS) will be working to build the green hydrogen ecosystem, to be ready by 2030, to include the supply of green electricity, electrolysers, compression, storage and transportation.

Working together

TNB and PETRONAS have signed a memorandum of understanding (MoU) to strengthen collaboration in driving innovative solutions towards decarbonisation.

The policy and ecosystem to facilitate and encourage the use of green hydrogen is expected to be in place by 2035.

By then, it is envisaged that the Paka plant can be co-fired with up to 30% of green hydrogen, depending on the level of technology readiness and support from regulators.

The Sultan Salahuddin Abdul Aziz Power Station in Kapar, Selangor, is potentially the next power plant that can be re-powered like the one in Paka.

Following the Paka re-powering, TNB, through its wholly-owned subsidiary TNB Genco, will proactively develop new power plants with cleaner fuel and technology.

With the highly efficient and hydrogen-ready technology in the CCGT at the Paka re-powering, it is expected that the carbon emission avoidance will be around 3.2 million tCO2-e per year – a measure of carbon dioxide in several states.

This is equivalent to the impact of about 700,000 cars per year compared to typical ultra-super critical coal plants with similar capacity.

As for carbon capture and storage (CCS) technology, the aim is to reduce carbon emission by current thermal power plants, especially coal plants, that will only be retired beyond 2035.

CCS is a technology used to stop large amounts of carbon dioxide from being released into the atmosphere.

Feasibility studies

TNB’s feasibility studies will provide the details of how much carbon dioxide can be stored or sequestered per year.

As part of the MoU with PETRONAS, TNB is also exploring other potential technologies, such as CCS, for decarbonisation.

Initially, a joint study will focus on determining which CCS technology is likely to prevail, when the technology will become economically viable and when it can be deployed to TNB’s existing power plants.

TNB’s maiden large-scale solar (LSS) farm in Sepang, in operation since 2019, has exceeded its maximum annual energy declared for two consecutive years through smart-plant management as well as adoption of artificial intelligence and data analytics technologies.

For its first operational year, the solar power plant surpassed its maximum annual energy declared to the offtaker – TNB – by 6% or at more than 110,000 megawatt-hours (MWh).

In 2020, the solar farm generated 108,900MWh or 5% more than declared.

The 30MW LSS Bukit Selambau in Sungai Petani, Kedah, which started commercial operations in September, 2020, is equipped with 134,880 solar photovoltaic (PV) panels.

Renewable energy

In terms of technology for renewable energy, TNB is pursuing a deal flow pipeline of about 3.6 gigawatts (GW) across focused markets to support its growth targets.

In Britain, TNB’s pipeline of 1.6GW is currently 91% under development and 9% already in operation.

In the Asia-Pacific region, the pipeline of 2GW energy is 80% under development, with the other 20% already operational.

With these targets in mind, TNB’s technology focus areas include solar PV that converts sunlight into electrical energy, onshore and offshore wind energy as well as battery storage.

TNB will conduct feasibility studies to determine the best technology options to ensure that the expected cost of energy is competitive, said Baharin.

As TNB starts phasing out coal, and later gas, from its energy generation, consumers will enjoy greener energy consumption.

Modern technologies require investment in R&D; inevitably the average cost per unit generated will increase.

TNB is committed to ensuring that supply of electricity remains not only secure and affordable but also sustainable.

Yap Leng Kuen is a former StarBiz editor. The views expressed here are the writer’s own.

Source: The Star

TNB focuses on new technologies

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COUNTRIES around the world are turning to biogas and biomethane to enhance their energy and food security and jump-start their circular economies.

Biogas is produced by breaking down organic waste – agricultural, food, municipal or animal, including manure and sewage – through a process known as anaerobic digestion, while biomethane removes greenhouse gases via carbon capture. Digestate, the other by-product of anaerobic digestion, can also be used as fertiliser.

In mid-October Titan, a Netherlands-based independent supplier of low- and zero-carbon fuels, announced that it will build and operate the world’s largest biomethane liquefied natural gas export plant at the Port of Amsterdam, which is slated to come on-line in 2025.

Titan will source the biogas from BioValue, one of the largest biogas producers in the Netherlands, which is constructing a new biogas production plant adjacent to Titan’s export facility.

The Titan-BioValue project comes on the heels of the European Commission’s announcement in May that it will ramp up the EU’s biogas production from 3bn cu metres to 35bn cu metres by 2030.

The EU kicked off its biogas push earlier this month with the Biomethane Industrial Partnership, part of the REPowerEU plan launched in May as a strategy to end the EU’s dependence on Russian fossil fuels.

Global energy security

Europe and North America account for most of the current production of biogas and biomethane, and are home to some of the world’s largest producers of waste per capita, with Canada the largest producer in 2019 and the US the third largest.

With the global natural gas market having tightened in 2021, and the International Energy Agency (IEA) expecting this to remain the case into 2023, these countries are training their sights on biogas to address energy security.

Europe’s momentum is creating global opportunities for biogas trade as well as business models for emerging markets to launch their own biogas production facilities or scale up existing projects, allowing for wider penetration across their economies.

Argentina, Ethiopia, Ghana, Indonesia and South Africa are part of the Digital Global Biogas Cooperation project, in which emerging markets are partnering with EU countries including Germany and Austria to import sustainable biogas and biomethane technologies from Europe, and share knowledge and experience that can upgrade local markets.

The IEA estimates that the world could sustainably produce up to 730 million tonnes of oil equivalent (toe) of biomethane and cover 20 per cent of global natural gas demand; as of 2018 it was producing 35m toe.

Asian growth potential

The Asia-Pacific region is seen as having the greatest scope for future biogas production, with production potential estimated at more than 200m toe as of 2018, according to the IEA, including roughly 80m toe from crop residue and 50m toe from animal manure.

Whereas Europe has the highest biogas production costs, Asia’s are the lowest thanks to low-cost feedstocks, supportive government policies and experience, with India and Thailand already producing significant amounts.

New projects are being launched throughout the region, most notably in India, where last week Asia’s largest biomethane plant was commissioned in Sangrur, Punjab with a US$27 million investment by German bioenergy company Verbio.

The plant features eight digesters with a capacity of 10,000 cu metres and will be able to process 300 tonnes per day of paddy straw, with between six and eight locations within 10km of the plant providing 100,000 tonnes of supply.

It is the latest of 38 plants that the country has commissioned since 2018 as part of its Sustainable Alternative Towards Affordable Transportation scheme that seeks to harness the country’s biogas potential.

Thailand has launched a similar scheme that uses feed in tariffs to reach power-purchase agreements, with plans to add 335 MW of biogas capacity between 2026 and 2030.

Meanwhile, Indonesia has signed a cooperation agreement with three Japanese gas companies to conduct feasibility studies on producing local biogas from palm oil mill effluent.

The Philippines, for its part, announced in August that it would construct a new 20-cu-metre fixed-dome digester in Baler, Aurora, funded by the Department of Science and Technology, that will transform the manure of ruminant animals and pigs into biogas.

Agro-industrial waste management

By using waste to generate clean energy and fertiliser, biogas offers a prime example of a circular economy that can make direct use of the increasing amounts of carbon-emitting organic waste, especially for farmers in rural areas who do not have access to centralised waste-aggregating systems and often lack reliable power supply.

Agricultural, forestry and land use accounted for 18.4 per cent of global emissions in 2020, while waste contributed 3.2 per cent.

Food waste – much of which never leaves farms – accounts for 10 per cent of emissions due to the large amount land, water and energy required for food production, according to a 2021 study by the World Wildlife Foundation and Tesco.

Brazil’s National Bank for Economic and Social Development announced earlier this month that it is providing 44 million lira (US$8.9 million), or 80 per cent of the total investment, for a new biogas plant that will harness agro-industrial waste in the municipality of Elias Fausto. The facility is expected to produce 4.5 million cubic metres per year of biomethane.

In Argentina, where livestock farming accounts for the largest share of greenhouse gas emissions, at 21.6 per cent of the total, meat-processing firm Arrabeef installed a digester at its facilities in rural northern Buenos Aires province last year. The digester fed 4000 MW of electricity back into the province’s grid in the first six months of operation.

Through a programme at the School of Agronomy at the University of Buenos Aires, the country is also set to commission three digesters in Zárate with a capacity of 12,000 cu metres to process agro-industrial waste.

Micro-digesters for rural waste

Smaller-scale biogas digesters often offer a direct way to tackle rural waste and bring power and fuel to African farmers and residents not connected to the national grid. Kenya has 14,000 small-scale digesters, while Uganda has 11,000 and Ethiopia 10,000.

Some larger countries like South Africa, which has 300 small-scale digesters, have considerable room for growth. A study by the South African National Energy Development Institute recently drew attention to this deficit, estimating that the initial demand for micro-digesters was 21,000, with a potential yearly demand of up to 50,400.

Nigeria, which generates 32 million tonnes of solid waste per year, is also beginning to show greater interest in small-scale digesters but has yet to implement a national strategy to increase uptake.

This column was produced by the Oxford Business Group.

Source: Borneo Post

Biogas, biomethane could bolster green economy

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A Malaysia entrepreneur is moving from China to Malaysia manufacturing of electric bikes meant for the US market. The geopolitical tensions between the two economic giants have a lot to do with the decision.

The other reason, of course, is his familiarity with Malaysia. It helps that Malaysia is providing some tax benefits for relocation.

Sabah-born Kevin Vun Kiat Tham, who worked for Intel Corp before floating a start-up in China, found himself at the heart of the electric vehicle (EV) boom in China. The start-up did not make much headway, but he gleaned vital industry insight. Later, he had a chance to put to good use the intelligence and know-how when he started his own venture.

The China venture was made possible with funding from Mesnac Co Ltd, a China-based company now principally engaged in the research and development and manufacture of rubber equipment systems.

“We were into microchip design. From there, I started supporting clients in electric bicycles and scooters,” he said.

“I experienced the boom of EV in China. It was a critical moment for EV in China. The government provided all types of incentives. They had packages for research, marketing, sales, manufacturing, and end customers. It was complete. Today, they are the world’s No 1 market and manufacturers for EV vehicles,” he said.

China today has some 500 electric carmakers, including home-grown names like Nio, Xpeng and Li Auto, competing for what is certainly the world’s largest vehicle market.

In 2018, Vun came back to Malaysia. He saw an opportunity. South-East Asian had a population of 650 million and not many established EV players back then.

“In China, you have several hundred EV manufacturers. In South-East Asia, you can count them on one hand. So much less competition in this region,” he said. This prompted him to form a company providing technology to EV companies.

A year later, he joined Treeletrik, badged as the first Malaysian company to locally manufacture a fully electric bike. “Our sales were weak. There are many reasons for it — lacking awareness, infrastructure, vehicle pricing is expensive and electric bikes being considered a rich man’s toy,” he said.

Before the Covid-19 pandemic hit the world, Vun went to the US to establish his own brand to sell electric scooters in the US. This time, he believes he has found the niche that he had always been looking for in Thamlev USA Ltd.

“In the US, we sold 100-200 units per month in 2020 and 2021. Now, it’s 400 to 500 every month,” he said. The lower-end bikes are priced between US$1,500 to US$3,500, the mid-range ones between US$6,000 to US$7,000, while the race bikes can go up to US$30,000 (RM142,200).

But those electric bikes are manufactured in the US and China. Now, he is moving the manufacturing capability to Malaysia.

“We don’t do sales in Malaysia. We will focus on the US market. Our production used to be in Long Island, New York. Due to logistics, we moved some production

capabilities to Zhejiang Province in China. Now I want to move it to Malaysia,” he told The Malaysian Reserve in an interview. Vun is based in Washington, US.

“The US market gives us a higher profit margin. So, we are a US brand, manufactured in Malaysia,” he added.

Once the brand is established, Vun hopes to penetrate neighbouring Thailand and the Philippines in the leisure superbike segment.

Moving Plant

In October, the Arkansas, US-based Thamlev announced Malaysia as its manufacturing base in SouthEast Asia for the production of electric bikes outside the US. The new site will expand upon its existing manufacturing capacity and will help raise the profile and development of the EV sector in Malaysia, according to a statement released by Malaysian Investment Development Authority (Mida).

With a total investment project value of RM100 million in the light electric vehicle (LEV), the company’s capital investment is set to transform the country into a LEV hub such as eMoped, eMotorcycle, eMicrocar, for the global market and generating approximately 750 jobs opportunities in Malaysia, the statement added

Thamlev’s expansion into Malaysia was in line with our National Automotive Policy with the aim to position Malaysia as a regional leader in EV manufacturing, engineering, technology and sustainable development. Identified as one of the key sectors under the National Investment Aspirations, Malaysia is committed to driving the growth of EVs and its entire ecosystem which in turn helps to elevate the EV landscape in Malaysia to become more competitive in South-East Asia, according to the statement.

Vun said the RM100 million would go into the plant, research and development (R&D), production and manpower over the next five years.

The company has a plant in Balakong, Kuala Lumpur, which can support production of up to 500 units per month. In five years, they aim to ramp up annual sales to 100,000 units. “We will then need a larger place. Our strategy is to make Malaysia an EV hub for export,” he said.

In December 2021, the same statement noted that Thamlev has signed a memorandum of agreement with NanoMalaysia, the commercialisation agency under the Science, Technology and Innovation Ministry and Hyundai Kefico Corp on EV micro-mobility ecosystem amounted to US$30 million. The adoption of the EV micromobility ecosystem will be the catalyst for the company to advance into LEV, in line with the global technological revolution.

Thamlev is also teaming up with Curo Co Ltd, Hyundai Electric and Energy Systems Co Ltd Daegu Mechatronics and Materials Institute and Signet EV to form a Battery Swap Station (BSS) consortium in Malaysia. Through this new technological adoption, Thamlev is anticipating to increase its annual production target up to 100,000 units per year by 2025.

Thamlev’s new manufacturing base in Malaysia will serve as a central hub for the company’s R&D process department, including the development of its full vehicle system design and integration, Gallium Nitride-based Power Train R&D and BSS equipment. It will also become the main manufacturing hub to export the LEV to the high-potential export market such as the US and the European markets beginning January 2023. Meanwhile, China will supply a wide range of general parts and bike frames. Adding on to this, Thamlev is also committed to empowering the graduates by working closely with prestigious universities in enhancing research collaboration and technology transfer such as artificial intelligence in autonomous driving and big data analysis.

Strong Weapon

The ongoing trade war is not about to end anytime soon. One of the outcomes was the higher cost of doing business. There is now a hefty 25% duty tax when manufacturers import from China to the US. There is no such tax if they bring in the parts from China to Malaysia. More than 90% of the parts for Thamlev electric bikes are manufactured in China and South Korea.

“We will have a strong advantage against competitors if we move production to Malaysia. This 25% savings can go towards lowering prices or be reinvested in R&D in Malaysia for product development. This is a strong weapon,” he said.

From the marketing perspective, Vun also noted the US-China political tension have also dampened sentiment for products made in China. “They are becoming less welcoming. The same for Europe,” he said.

But the move is not without challenges. Taking their product capabilities away from China means a longer lead time from receiving and fulfilling orders. “Compared to producing in China and exporting to the US, it will now take an extra 15-20 days. A longer lead time equals to higher cost. We are discussing with the local authorities to smoothen the process,” he said.

Source: The Malaysian Reserve

Electric bike maker Thamlev moves production from China to Malaysia

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ELECTRIC vehicles, or EVs in short, are the buzzword the world over. Locally, a growing number of listed companies have announced plans to get involved in the sector (see sidebar). Some are looking at building charging points, while others intend to distribute imported EVs in the Malaysian market.

There are also listed companies indirectly involved in the sector via manufacturing components for EVs.

Globally and at home, the push for EVs is led by governments providing support in the form of policies based on the idea of reducing carbon emissions and increasing the use of renewable energy.

In Malaysia, there are import and excise duty exemptions for EVs. The exemptions will last until Dec 31, 2025 for locally assembled models, but only until the end of 2023 for completely built-up (CBU) vehicles. In the recently tabled Budget 2023, there is a proposal to extend the exemptions for CBUs by another year.

Some other countries have more robust EV policies. Thailand has a policy to move 30% of total automotive production to EVs by 2030, while the Indonesian government has set a goal for EVs to make up 20% of all domestic cars manufactured by 2025.

Singapore is even more aggressive, targeting to cease new diesel car registrations from 2025 and requiring all new car and taxi registrations to be of cleaner-energy models from 2030.

Not surprisingly, the take-up rate of EVs in Malaysia remains low. In 2021, it was reported that only 274 EVs were sold from a grand total of 508,911 units, which is a paltry 0.05%.

From January to May this year, 390 EV units were sold in Malaysia, with the percentage of EV to internal combustion engine or ICE cars increasing to 0.17%.

Globally, sales of EVs doubled in 2021 from the previous year to a new record of 6.6 million, a steep rise from the 120,000 units sold in 2012. In the first quarter of this year, two million EVs were sold, up 75% from the same period in 2021.

China, the biggest maker and user of EVs, saw EV sales hitting 3.7 million units from January to August this year.

In comparison, in the United States about 520,000 EVs were sold this year up to September.

EVs made up 6.1% of total car sales in the American market in the third quarter of 2022 as compared to only 2.2% in the corresponding quarter of 2020.

Closer to home, Thailand’s Energy Minister Supattanapong Punmeechaow revealed this week that the country recorded a 223% increase in EV sales for the first nine months of 2022 to 13,298 units, compared to the period of January to September 2021.

In China, the motivation to move to EVs comes from its intention to cut its dependence on oil, as the country imports more oil than it exports. That and coupled with the fact that it has an abundance of the natural materials used to produce EV batteries.

China is spending a lot on EV subsidies.

Since 2009, US$14.8bil (100 billion yuan or RM70.2bil) in subsidies were provided to EV consumers in China. To help EV sales rebound in 2020 in the midst of lockdowns, the central government extended incentives as well as prolonged the purchase-tax exemptions of EVs throughout 2022.

Locally, experts familiar with EVs are offering varying views as to how the industry can become mainstream.

Industry players say that a specific roadmap from the government is essential.

Malaysia Automotive, Robotics and IoT Institute (MARii) chairman Datuk Phang Ah Tong notes that there are huge opportunities for Malaysia to tap into the EV eco-system.

“With EVs having a lot of electronic components and with Malaysia already having a solid semiconductor base, it is a shoo-in for the country to play into the space.

“It is best for Malaysian companies to aim to support EV development such as providing components, rather than to try and make and build our own EVs,” he tells StarBizWeek.

Industry checks reveal that a number of China-based EV makers are scouring the region including Malaysia with the hope of setting up plants here or securing parts.

Some notable EV investments into Malaysia include the RM1bil that Fieldman EV Sdn Bhd is investing in Melaka to construct the nation’s first EV assembly plant, and the RM7bil Samsung SDI Energy Malaysia Sdn Bhd invested to open its EV battery cell manufacturing facility in Seremban, which fully opened its doors in July.

Still, EVs are not mainstream in countries like Malaysia for one main reason. They cost more. Another problem is the lack of infrastructure, namely, sufficient charging stations.

Bermaz Auto Bhd group chief executive Datuk Francis Lee says with EV cars generally being priced at a minimum of RM150,000, there is insufficient volume to drive up the sector.

“We need a nation-wide policy to push the industry. Back home, as announced in Budget 2023, the government is planning to extend the import and excise duty exemption for CBU EVs to Dec 31, 2024, (from Dec 31, 2023), but they did not mention anything about the CKDs,” says Lee.

Lee believes that the extension to 2024 for CBUs would instead encourage local auto players to import CBU vehicles, rather than look to assemble these vehicles.

“There has to be a commitment to the CKD programme, such as an extension of the duty exemption for another five or six years, perhaps,” he says.

Datuk Thiruchandran Thiruchelvam from a local firm venturing into EV charging infrastructure called Charge N Go Sdn Bhd is more optimistic about the local EV scene, noting that prices will come down for EVs.

He says EV battery prices have dropped by almost 90% over the last 12 years due to improvements in battery technology and economies of scale. This is significant because the battery typically accounts for 40% to 50% of the cost of an EV, he adds.

“Many analysts forecast that EVs could reach price parity with ICE cars sometime within the next two to five years. Once that happens, we can see large-scale adoption of EVs,” says Thiruchandran.

He is also encouraged by the fact that the deployment of EV charging infrastructure in Malaysia, while still at its infancy, has taken off as multiple charge-point operators have commenced the installation of both AC and DC chargers in condominiums and commercial buildings, as well as in public areas along highways.

“This is a good sign of the confidence that players in the industry are willing to invest in infrastructure despite the low number of EVs at present.

“The growth of the EV charging infrastructure will be in tandem with the number of EV cars and in more mature markets like the European Union, more than 300,000 chargers have been deployed,” Thiruchandran notes.

He also expects a gradual increase in EV buses, lorries and bikes as the long-term drivers are the same, namely, advances in battery technology and falling battery prices.

He says: “For commercial vehicles such as buses and lorries, once key cost thresholds are reached, an EV would be the most economic option.”

Environmental issues

But are EVs really environment friendly? The debate on this is not new.

Notes Bermaz’s Lee: “We need to remember that about half of all electricity generators in Malaysia are powered by coal. By pushing for EV adoption, could that mean we are encouraging more coal usage?” he quips.

On the other hand, he notes that there is also the matter of older ICE vehicles that are still on our roads and which consume more petrol compared to newer cars, and hence emit more pollutants.

“It would make more sense if we encourage the use of ‘green’ electric cars, while on the other hand we find a way to reduce the number of older vehicles on our roads, similar to what Singapore is implementing,” Lee suggests.

In terms of the pricing of EVs, it is notable that Sime Darby Motors Malaysia is targeting to bring in the Dolphin EV from Chinese EV manufacturer BYD Auto Co Ltd.

The Dolphin is estimated to be priced under RM100,000, becoming the most affordable EV in Malaysia. However, it should be noted that all cars including EV cars have to pass standards set by the Road Transport Department, which are based on some internationally set criteria.

Bermaz’s Lee says that they are speaking with a few Chinese manufacturers such as BYD, Great Wall Motor Co Ltd, Changan Automobile Co Ltd and Foton Motor Co Ltd to ink out potential distributor deals.

Describing some of the challenges Bermaz is facing in its attempt to secure EV distribution contracts with Chinese producers, he says most of these companies expect immediate results in terms of volume, probably because that is the environment the much bigger Chinese market expects of its players.

Lee says, “In our discussions with these EV producers, we discovered that the immediate expectation they would want from us is volume. In other words, how many units we can sell. This is very short-term thinking, but brought about understandably by the massive and competitive Chinese market.

“We have the experience of distributing Mazda, Peugeot and Kia cars over here, and we are also doing our best to better educate the public, the government and various other stakeholders on how EVs work. We can work out a strategy for this, but it will be a longer-term project.”

Fuel subsidy removal could boost EV usage

Another interesting factor to consider in the EV journey in Malaysia is the high possibility that the government will remove fuel subsidies.

Charge N Go’s Thiruchandran notes that electricity as a fuel source is already cheaper on a per km basis relative to petrol and the only challenge is that the cost of an EV is more than the average ICE vehicle.

“Therefore, any reductions in the fuel subsidy will obviously increase the amount of comparative savings, making the EV more viable on a total cost of ownership basis,” he opines.

On the other hand, Bermaz’s Lee is of the belief that things may take a little more time and the execution of the subsidy removal is key.

“Firstly, we need to see how this subsidy removal is executed. Secondly, even if subsidies were removed and the price of RON95 were to increase to RM3 per litre from the current RM2.05, the M40 segment may still prefer paying more for petrol over buying an EV car, because the EV car is still not within their affordability range,” he explains.

The lowest priced EV car at the moment, the Hyundai Kona, is priced around RM150,000, which translates to an instalment of about RM2,000 monthly, Lee says, and this may still be a burden to many in the M40 group.

The charging problem

Challenges related to the charging of EVs remain a problem. The general thinking is that there are not enough charging stations and it takes too long to charge EVs.

Home charging also requires homes to have three phased electricity wiring. Older apartment blocks do not have charging facilities, unlike newer developments.

Charge N Go’s Thiruchandran, though, points out that the charging of an EV battery is similar to charging a mobile phone overnight. He says: “A relatively low-cost 7kW AC charger would be sufficient to fully charge most EVs overnight.

“Also, as most EVs have a range of between 300kms and 400kms on a full charge, the average user is not going to fully utilise this range within a day. Hence, they would just need a couple of hours every night on their home charger to top up their charge.”

He also highlights that for long distance driving, an infrastructure of high-speed direct current fast chargers along highways is of course essential.

Interestingly, national power supplier Tenaga Nasional Bhd (TNB) has pledged to invest RM90mil to increase the number of charging points for EVs on expressways.

TNB says the rationale behind this investment is to solve the challenges of charging infrastructure, to better ensure that the anxiety of EV drivers on Malaysian highways can be dissipated.

“But we also require other parties such as highway concessionaires and the city councils to give their cooperation for the charging point operators to deploy our chargers on Malaysian roads,” TNB Programme Management Office Project Director-Electric Vehicles Mohd Junaizee Mohd Noor tells StarBizWeek.

Mohd Junaizee says experts have shown that the battery technology will be affordable from 2025 onwards and this will bring the selling price of EVs to par with petrol-fuelled vehicles.

He adds: “This will be a turning point for the mass market, as they now have the option of a low-carbon mobility lifestyle. Also, we believe the recent incentives announced by the government (import tax and excise duty exemption) will surely be another catalyst to stimulate the take-up.”

TNB recently announced an agreement with Gamuda Land Sdn Bhd – the property arm of Gamuda Bhd – to build two electron stations for EV charging in property development projects in Selangor.

One interesting point that Mohd Junaizee raised is this: all vehicles including public buses, lorries and trucks entering neighbouring Singapore will soon have to be only EVs.

This is because the city-state will no longer allow the registration of diesel-powered cars and taxis from 2025 onwards, he points out.

“Therefore, the requirement for the fleet industry such as buses, lorries and light vehicles in Malaysia to convert to EVs is getting more pressing,” he says.

He notes that TNB is embarking on a group-wide effort to convert 30% of its fleet vehicles to EVs by 2030.

Source: The Star

Jumping on the EV bandwagon

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Industronics Bhd has entered into a Memorandum of Understanding (MOU) with Malaysian NGV Bhd (MNGC) to build and operate the Kedah Aerotropolis project worth 3.3 billion euros (or RM15.36 billion).

In a filing with Bursa Malaysia on Friday, Industronics said the proposed development will be built on 9,154.98 acres of land belonging to the Kedah State government.

The development consists of three key components, namely the Airport City — consisting of cargo terminals, MRO (maintenance, repair and overhaul) centre and Kulim International Airport — as well as a business park and the Sidam Logistics, Aerospace and Manufacturing (SLAM) hub.

The first phase of the project is Airport City which is targeted to be completed in 18 months.

“The proposed development is massive, and through this collaboration with MNGV, we will be part of the development of important infrastructure in Malaysia,” said Industronics executive director Datuk Chu Boon Tiong.

Under the MOU, MNGV will continue to attend and liaise with KXP Airportcity Holdings, a subsidiary of the Kedah State Development Corp and other related parties to secure the proposed development.

Meanwhile, Industronics will secure financing and facilitate funds from the domestic or international market to fund the project’s land and building costs.

According to Chu, Industronics will seek funds and facilitate funds amounting to 3.3 billion euros with its strategic partner, Bluemount Financial Group Ltd and other possible investors for the development.

Chu has acquired a 10% stake in Bluemount, and the group also expressed interest in investing in Bluemount last year.

Shares of Industronics gained 25% to 10 sen, giving the company a value of RM43.75 million.

Source: The Edge Markets

Industronics to co-develop RM15.36 bil Kedah Aerotropolis project

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Malaysia and the United Kingdom (UK) have convened the second Joint Committee on Trade and Investment Cooperation in London.

The first Joint Committee meeting was hosted virtually by Malaysia in 2020.

His Majesty’s Trade Commissioner for Asia Pacific, Natalie Black CBE, co-chaired the meeting alongside Deputy Secretary General (International Trade) for the Ministry of International Trade and Industry (MITI) Malaysia, Hairil Yahri Yaacob.

In recognition of the importance of the trading relationship, the meeting also formalised the intent to elevate the Joint Committee to a Ministerial led Joint Economic Trade Committee (JETCO), MITI said in a statement.

The new JETCO will help to promote and enhance trade, investment and economic cooperation linkages, including addressing trade barriers affecting business between the two countries.

The first meeting of the UK-Malaysia JETCO is expected to be held in the autumn of next year.

At the meeting of the Joint Committee, the UK congratulated Malaysia on its ratification of CPTPP. The UK provided an update on their accession status and Malaysia presented the benefits of CPTPP when it enters into force for Malaysia on Nov 29, 2022.

The CPTPP will increase the potential for further trade between the UK and Malaysia, contributing to the shared prosperity of both countries through the creation of new opportunities for businesses and investors.

The meeting also brought together six working group co-leads to report on the progress of their bilateral cooperation in agreed priority areas.

In addition, there were presentations from the UK on teacher training and on Malaysian sustainable palm oil initiatives. 

Source: Bernama

Malaysia-UK to elevate committee on trade and investment to ministerial level

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