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Madani govt’s policies boost Malaysia’s comparative advantage — Economist

The Madani government has introduced several new policies to attract foreign investors and tackle the impact of global economic uncertainty in 2024, boosting the country’s comparative advantage.

Universiti Teknologi Mara (UiTM) Sabah campus political economy senior lecturer Associate Professor Firdausi Suffian said among the policies introduced by the government led by Prime Minister Datuk Seri Anwar Ibrahim within a year are the Madani Economy framework, the National Energy Transition Roadmap Phase 1 and Phase 2, the New Industrial Master Plan 2030 and the Mid-Term Review of the 12th Malaysia Plan.

Firdausi said the introduction of clear policies would be able to restructure the national economy and bolster the supply chain post-Covid-19.

“Through the Madani Economy framework, the government intends to boost the manufacturing chain which focuses on complex value-added production activities to convince the people and foreign investors about the government’s seriousness in stimulating economic growth,” he said during Bernama TV’s ‘Malaysia Petang Ini’ programme, entitled ‘Economic Challenges 2024’ on Thursday.

Firdausi opined that 2024 would be the government’s implementation year amid a challenging period for the global economy and Malaysia due to factors such as continued geopolitical tensions, tightening of monetary policy to deal with inflation and the increased risk of economic slowdown worldwide.

“Malaysia is an open trading economy. Hence, external factors will directly affect the country’s economic position, the performance of the ringgit and trade,” he said.

However, Firdausi said the Prime Minister had stressed that Malaysia’s diverse economic structure and strong foundations built over the years have bolstered economic resilience and put the country on a stable growth pathway.

Anwar, who is also the Finance Minister, said these positive factors, supported by strong policies and action plans underpinned by the Madani Economy framework and the continuous implementation of pragmatic measures and initiatives set by the government, would ensure that the economy remains strong and resilient.

“Although the external sector remains important, growth is now increasingly driven by domestic demand,” said Anwar in the Economic Outlook 2024 report published by the Ministry of Finance in October.

Source: The Edge Malaysia

Madani govt’s policies boost Malaysia’s comparative advantage — Economist

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Clean energy expert Solarvest Holdings Bhd has completed a 1.1 megawatt-peak (MWp) rooftop solar photovoltaic (PV) installation project for Swedish company Bromma (M) Sdn Bhd at its manufacturing plant in Chemor, Perak.

Solarvest said it serves as the engineering, procurement, construction, and commission (EPCC) provider for the rooftop installation of solar PV panels, with an expected annual clean electricity generation of 1,497.8 megawatt-hours (MWh).

“This allows Bromma to offset 957 tonnes of carbon dioxide emissions, which is equivalent to the air-purifying effect of 43,505 mature trees,” it said in a joint statement with Bromma and the Malaysian Investment Development Authority (Mida) today.

On the completion of the PV installation project for Bromma, Mida deputy chief executive officer (CEO) for investment promotion and facilitation Sivasuriyamoorthy Sundara Raja expressed the authority’s full commitment to supporting businesses and investors throughout their journey in Malaysia.

He said the Malaysian government has recently announced visionary policies that highlight the significance of clean energy sources, and Bromma’s dedication to renewable energy couldn’t have come at a more opportune time.

“By adopting solar power, Bromma is not only reducing their environmental impact but also actively contributing to our nation’s ambitious goal of increasing the renewable energy capacity mix to 70 per cent by 2050.

“They are paving the way for a brighter, greener future,” he said.

According to Sivasuriyamoorthy, sustainability practices have been amplified with the adoption of environmental, social and governance (ESG) principles that will certainly spur sustainable growth by addressing the issues related to climate change.

“This is in line with the National Investment Aspirations (NIA) to ensure that the country remains a competitive destination for high-value investments, delivering sustainable and holistic economic growth,” he said.

Solarvest executive director and group CEO Davis Chong Chun Shiong said by leveraging the company’s expertise in turnkey engineering and technical solutions, the group is confident in helping Bromma achieve its energy efficiency targets through this solar PV system.

“With sustainability initiatives becoming an important corporate agenda, we are seeing a surge of interest in clean energy adoption,” he said.

He added that the company’s job pipeline remains strong, with a tender book of about 2.5 gigawatts (GW) comprising large-scale power plants, commercial and industrial projects, as well as overseas ventures.

Bromma president ShuShu Zhang said Bromma is committed to helping reduce its carbon footprint by halving its greenhouse emission by 2030, as part of its climate ambition to limit the rise in global temperature by 1.5°C per year.

“In pursuit of this objective, we are excited to transition to solar energy to promote clean electricity consumption and emission reduction.”

“In addition to reducing the environmental impact of our operations, we aim to mitigate the risk of rising electricity costs by utilising solar energy,” she said.

Source: Bernama

Solarvest empowers Bromma’s green initiatives through provision of clean energy solutions

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The Communications and Digital Ministry has urged Asean countries and India to leverage on the digital economy, which has been rapidly transforming the world, for better economic growth.

Communications and Digital Minister Fahmi Fadzil said with a population of close to two billion people and a gross domestic product (GDP) of more than US$6 trillion (RM27 trillion), Asean and India represent a huge market with immense potential.

He believes that Malaysia has made significant progress in digital transformation.

“We’re working hard to expand and future proof our digital infrastructure to ensure that the latest digital technology is able to fulfil its full potential and thriving economic, social and corporate governance,” Fahmi said at the fifth Asean-India Business Summit yesterday.

Fahmi recognises that digitisation can serve as one of the great levellers in society, and that the whole of Malaysia must have stable, affordable, reliable and fast access to the Internet to realise its full potential across Malaysia and also Asean.

“To do so, the Ministry of Communication and Digital is committed to ensuring that those living in the last 3% of populated areas without access to the Internet will be finally connected,” he said, adding that the quality of service experienced by the remaining 97% will be improved.

According to him, there are many people still having issues with basic 4G, but he thinks it can be overcome.

“We recognise that the access to and adoption of digital services are crucial not only for the digital economy, but also in achieving many targets of the sustainable development goals,” he said.

On 5G in Malaysia, Fahmi said the deployment has started in 2021, and the service is now available in all major cities nationwide.

He said that more than 7,000 sites will be deployed, with an emphasis on achieving a target of 80% population 5G coverage by the end of this year, if not earlier.

“When fully deployed, the network will be accessible to more than 30 million individuals and businesses, up from the current 15 million users,” he added.

He said the number of data centres, Internet exchange points and international connectivity for businesses in Malaysia has increased substantially, in the midst of integrating 5G.

Digitalisation presents numerous opportunities for Asean-India collaborations, including areas such as eCommerce, financial technology, digital payments, and digital skills, he added.

We need to work together to unlock the full potential of digitalisation and create shared prosperity for our people,” he said.

On trade between Malaysia and India, Ministry of International Trade and Industry secretary-general Datuk Isham Ishak said in 2022, bilateral trade between the two countries increased by 23.5% year-on-year.

He noted that India is one of Malaysia’s major sources of foreign direct investments (FDI), where last year’s FDI from India totalled to about US$2.8bil (RM12.5bil).

However, Isham has urged the federal government of India to relook at its complex taxation programme. This is to ease Malaysian investors to do business in India.

According to him, different states of India have different taxation platforms, which investors’ find tedious.

“I would like to suggest perhaps to the federal government of India to form one single entity that could bring all 28 states and eight unions together so that our Malaysian businesses can only work with one entity,” he said, in regards to decentralisation of government.

Meanwhile, Miti deputy minister Liew Chin Tong considers India as a very important partner in an increasingly multipolar world.

“It is not only important that we engage as many partners as possible, but we also have to build deeper ties with each other,” he said.

He believes that as India becomes more prosperous and sophisticated as well as more digital and technologically driven, there are many ways to work together.

Liew hopes, at some point, India will be part of the Asean.

“But with or without India’s participation, there are so many other areas where we can work on both bilateral and also relationships with the region,” he added.

Commenting on the benefits of trading with India, Isham said: “Currently, India is the fifth largest country by GDP. It has expanded by three times within the last 20 years.”

He added that India, which has visions of achieving a GDP of US$5 trillion (RM22.38 trillion) in 2025, is predicted to overtake China as the most populous country by 2024.

Isham also believes that India’s young population, with a median age of about 28 years old, will be the key driver to the growth of its economy in the coming years.

Source: The Star

Leveraging on digital economy key to growth

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More electric vehicle (EV)-related incentives are in store in the revised Budget 2023, said Natural Resources, Environment and Climate Change Minister Nik Nazmi Nik Ahmad.

Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim will table the revised Budget 2023 in the Dewan Rakyat on Feb 24.

“The Government is looking forward to announcing more EV-related incentives in the revised Budget 2023,” said Nik Nazmi at the memorandum of understanding signing ceremony between Cyberview Sdn Bhd and Roda Emas Industries Sdn Bhd on the development of a smart mobility ecosystem in Cyberjaya here on Thursday (Jan 5).

Then finance minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz tabled a RM372.3 billion Budget 2023, the largest allocation in Malaysia’s history, on Oct 7, 2022.

Three days later, Parliament was dissolved to make way for the 15th general election on Nov 19.

After the Unity Government was formed, the Dewan Rakyat on Dec 20 unanimously approved a RM107.72 billion operating expenditure, and the Consolidated Fund (Accountable Expenditure) Bill 2022.

Nik Nazmi said that through incentives provided by the Government for EVs in 2022, the number of registered EVs had increased to over 2,000.

He said Malaysia, through the Low Carbon Mobility Blueprint 2021-2030, aims to install 10,000 EV charging points by 2025.

“Currently, more than 900 public EV chargers are installed by various charge point operators in Malaysia.

“To support the current and future growth of EVs in terms of charging infrastructure, regulations and standards are being updated to ensure the safety of these premises,” he said.

Nik Nazmi added that the Energy Commission had developed the EV charging system licence, and recommended the charge point operators involved in developing such infrastructure in the country to immediately obtain a valid licence for installation no later than March 31 this year.

In a separate statement, Cyberview and REISB said that their collaboration would leverage each other’s strengths, knowledge, networks, and capabilities in developing a smart mobility ecosystem that is centred on creating and fortifying the EV infrastructure, adoption of electromobility, and improving energy management in Cyberjaya.

“The partnership will also see Cyberview and REISB explore potential collaboration for the expansion of EV charging stations and management systems to other strategic locations in Malaysia,” they said.

Source: Bernama

More EV-related incentives in revised Budget 2023 — minister

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The Negeri Sembilan government is expecting total investments to reach more than RM9 billion this year, the highest recorded in the state’s history, Menteri Besar Datuk Seri Aminuddin Harun said.

He said the investment momentum has strengthened in the state, with the Malaysian Investment Development Authority (MIDA) recording approved investments totalling RM1.48 billion up to the second quarter of 2022.

“In addition, investment applications of another RM6.44 billion have been submitted to MIDA and are awaiting official approval.

“This includes RM6 billion from Samsung SDI Energy Malaysia Sdn Bhd to build a factory to make electric vehicle battery cells in Phase 2 of Kawasan Perindustrian Tuanku Ja’afar, Senawang.

“If it goes as planned, the state government is confident that it will once again post a record high total investment of over RM9 billion, with [MIDA] set to make an official announcement,” he said in a Facebook post.

Aminuddin said the state succeeded in recording investments worth RM5.76 billion last year, which exceeded its RM5 billion target despite facing Covid-19 constraints.

The state recorded investments totalling RM7.93 billion involving the manufacturing sector, real estate, finance, and trade distribution services in 2020, versus RM6.77 billion in 2019.

Source: Bernama

N Sembilan expects to record RM9b investments in 2022

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Malaysia and China seek to jointly explore the development trend of virtual power plants (VPPs) under the worldwide green and low-carbon transformation.

Towards this goal, the China-Malaysia Virtual Power Plant Project Achievements Conference and China-Malaysia Virtual Power Plant Development Cloud Forum were held online today, the Shanghai Energy Technology Development Co Ltd (SETD) said in a statement.

The subsidiary of China’s State Power Investment Corp Ltd said the event was of great significance for the two countries in terms of cooperation in the VPP business and promoting the green and low-carbon energy transformation.

“At the forum, the panelists exchanged views and gave suggestions on the development status and trend of new energy and energy storage in Malaysia, and the development potential, technical research, construction and operation and business model of the virtual power plant.

“Going forward, China and Malaysia will work together to promote green, low-carbon and smart energy transition and make new contributions to tackling climate change and achieving sustainable development for mankind,” it said.

In 2022, SETD, together with domestic and Malaysian universities and counterparts, led the preparation of a research report, “Development Potential Analysis and Cooperation Prospect of VPP in China and Malaysia”, both in English and Chinese.

The report offers an in-depth analysis of China and Malaysia’s energy and power development status and the development potential of VPPs in the two countries.

It also puts forward a preliminary design of the operation scheme of VPPs in Malaysia, as well as suggestions for bilateral cooperation in this field.

Source: Bernama

Malaysia, China exploring the development of virtual power plants

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The Coca-Cola Bottlers Malaysia (CCBM), the bottling arm of The Coca-Cola Company, remains positive about the long-term outlook of its business and the broader Malaysian economy, reinforcing its commitment to the communities it serves here.

From recycling initiatives through many partnerships and providing access to clean water for more than 22,000 villagers in rural Sabah to programme on empowering women economically, the company is dedicated to building sustainable communities in Malaysia, said chief executive officer of Bottling Investments Group for Singapore, Malaysia, and Brunei, Louis Balat.

“We intend to continue investing in this country, in the local talent pool, in innovation and technology, realising our World Without Waste vision, and in local communities,” he said in a statement.

Balat noted that the company would also continue to make significant infrastructure investments in order to build a stronger brand presence and to underpin its commitment to Malaysia.

To date, CCBM has invested RM1.3 billion cumulatively in building its world-class distribution hub at Halal Park in Bandar Enstek, Negeri Sembilan, and supporting the Malaysian economy.

As part of its growth, RM500 million from the investment was allocated to the plant’s expansion and a state-of-the-art automated storage retrieval system (ASRS) warehouse, tripling its plant’s site storage capacity and paving the path to sustainable manufacturing.

“The ASRS warehouse is a significant investment in sustainable manufacturing for CCBM to support volume growth, increase our operational efficiency across the supply chain, (and) reducing environmental impact by cutting energy consumption through automation, and is an important step in helping to future-proof our operations,” he said.

Source: Bernama

Coca-Cola positive on long-term outlook of business in Malaysia

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The government will strengthen efforts to boost foreign investor confidence by guaranteeing good governance and a corrupt-free Malaysia. 

Prime Minister Datuk Seri Anwar Ibrahim said this is because the government has received a list of investors from countries such as Europe, the United States, China, India and several countries around Asia who will be monitoring developments in Malaysia themselves, especially from the economic aspects.

“We hope there is a new focus that can increase and drive economic growth more convincingly. This is necessary because Malaysia is a trading country that has all this while recorded an economic growth rate based on our efforts to secure domestic and foreign investment.

“Besides political stability and good governance, another step that should be taken is to speed up the approval process by ensuring that Malaysia is not a place where leaders amass wealth and look for commissions,” he said.

The prime minister said this in his New Year 2023 message that was broadcast live on local television stations tonight.

With regard to this, Anwar warned that he would not tolerate public servants and enforcement bodies found to be ‘negligent’ in their duties with their ‘old practices’ of asking for kickbacks and imposing additional costs.

“I will not tolerate this negligence that has destroyed the country all this time. I am asking for your cooperation because I know a large number of civil servants and this small (corrupt) group understand this, and this group must be eliminated.

“Hopefully there will be repentance, otherwise, strong and harsh action must be taken,” he said.

Anwar said he also does not want these political shortcomings to continue and for positions to be seen as an opportunity to amass wealth.

“I would like to touch on attacks that seem to imply that we in the government are involved in such matters. I would like to say that our conduct is clear here, and the enforcement bodies have been given full authority to monitor,” he said. 

At the same time, he also reminded government agencies to adopt a culture of moderation and to prevent wastage, in addition to ensuring all government-linked companies (GLCs) are monitored, expenditure included. 

Anwar said he does not want the often-touted term, ‘paradigm shift’, to not be practised in the right manner, especially in terms of development that involves the well-being of the people at the grassroots level. 

“We will continue with development but let’s not trivialise, ignore the fate of the needy. That is the concept of development written in the Quran, the concept of physical development cannot be separated from the values of life, morals and piety,” he said.

Meanwhile, in dealing with racism or religious prejudice that often punishes without being based on facts, the prime minister said the Unity Government will intensify religious community activities, studies and training in mosques for young people.

He also wants efforts to be taken to enhance religious understanding among Muslims and non-Muslims so as to prevent the seeds of Islamophobia, which he said were planted since colonial times, from influencing and confusing society’s thinking.

Source: Bernama

Good governance to boost investor confidence, curb plundering of wealth – PM Anwar

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The Ministry of International Trade and Industry (MITI) will ensure that trade remains the main driver of Malaysia’s economic growth in 2023 amid challenging global conditions.

Minister Tengku Datuk Seri Zafrul Abdul Aziz (pix) said apart from that, MITI will also focus on reviving investor confidence and enhancing foreign direct investments.

“We also need to ensure that the drafting and implementation of the various trade deals will add value and give solid advantage to domestic players in Malaysia’s supply chains, especially micro, small and medium enterprises,” he said in a New Year Instagram video posting today.

Source: Bernama

MITI will ensure trade remains main driver of Malaysian economy: Minister

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Little more than 12 months since Malaysia’s 5G rollout began, it’s heartening that faster and more resilient mobile connectivity has been made available to over 40% of populated areas by the end of 2022. Furthermore, coverage is expected to reach 80% by 2024.

Malaysia did a bold move with commissioning a nation-wide 5G network. And it paid off. Malaysia will have achieved one of the fastest 5G rollouts in the world, which will enable all the benefits of a digital economy sooner.

The ongoing deployment is not only focused on rapid delivery, but also availability, affordability, performance, customer experience and security. Both low-band and mid-band spectrum have been made available and, together, they deliver a world-class user experience with the infrastructure to drive innovation throughout Malaysia. Crucially, this will include rural and suburban areas.

The country’s commitment to rollout 5G so efficiently, demonstrated by the optimal spectrum allocation, means the potential to realize the benefits of digital transformation before other emerging markets.

A major new study, commissioned by Ericsson and delivered by management consulting firm Analysys Mason, covers 15 such countries and forecasts that Malaysia could be among the biggest beneficiaries from 5G deployment. The potential for economic boost in the study was based on 5G use cases across four sectors – in particular, industry, logistics, rural and public services – while also spanning verticals such as energy and utilities, ports and healthcare. The study found that across these four sectors, which comprise 18.4% of Malaysia’s Gross Domestic Product (“GDP”), the potential boost to total GDP can go up to 0.38% per year.

In fact, according to the report, Malaysia will realize these incremental GDP benefits faster compared to other emerging markets. Based on the 5G infrastructure already being rolled out, the cumulative economic benefits through to 2035 from these four sectors alone are estimated at USD 10.1 billion.

In addition, an EY report in 2021, which looked at all economic sectors across Malaysia, indicated that in 2030, the adoption of 5G technologies will increase Malaysia’s GDP by 5% or RM122 billion. 5G is estimated to lead to the creation of approximately 750,000 jobs across the economy and will contribute to an increase in the proportion of high-skilled jobs.

The economic opportunities alone are compelling, yet 5G can also help address climate change, increase social inclusion and wellbeing, plus close the digital divide in areas where fixed infrastructure is poor. A strong 5G network can help reduce carbon emissions by supporting the digitalization of agriculture, freight and logistics, smart factories and construction.

In fact, 5G is a limitless platform for innovation, capable of driving exponential positive impact on society. New consumer applications like cloud gaming and enterprise services, including new use cases for the digitalization of industries, are already creating business opportunities across all sectors. The country’s entrepreneurs and enterprises can develop new applications on top of the network, to be launched both locally and globally, supporting the economy by creating new jobs and skills.

Malaysia’s plan to accelerate the deployment of 5G encourages efficient infrastructure sharing and will further improve power consumption and reduce carbon emissions. The rapid deployment of the DNB network means more opportunities for education, skills development, employment, and economic growth – with five major operators already able to offer 5G services to their customers only 14 months after work started.

With such significant progress over the past year, the country can make even more gains from programs and policies aimed at boosting the 5G ecosystem, including foreign direct investments to help drive the use of 5G by consumers and enterprises.

Ericsson is also nurturing a strong ecosystem that will spur the development of innovative new 5G use cases and services as this is an enabler for the digital transformation of Malaysia’s economy. To this end, in 2015, Ericsson’s partnership with Universiti Teknologi Malaysia (UTM) established the Innovation Centre for 5G in Malaysia, to foster the development of 5G use cases. Today, our partnership has been expanded with DNB, to teach students about 5G and other technologies using the Ericsson Educate platform.

Another initiative designed to nurture the digital ecosystem in Malaysia involves us working with DNB and the Malaysian Research Accelerator for Technology and Innovation (MRANTI). We aim to use the growing availability of 5G to accelerate the development of innovation clusters, providing comprehensive knowledge sharing and educational support for enterprises.

On the global technology stage, Ericsson and DNB recently achieved a world record distance for Gigabit speeds. Conducted over the 28GHz millimeter wave (mmWave) frequency, this test achieved a peak throughput of 1Gbps at a record distance of more than 11km. This achievement demonstrates the ability of mmWave, with the support of Ericsson’s extended-range software, to deliver cost-effective and high-quality internet connectivity in areas where wired alternatives aren’t economically feasible.

By connecting the last mile over the airwaves, rather than deploying expensive fiber, 5G can reach underserved communities in rural locations. Imagine the value this will bring to workers and students who can collaborate remotely and use online learning resources. The potential for banking and telehealth services, in addition to innovative solutions to Malaysia’s food security agenda, is also huge.

Ericsson and DNB have already achieved several impressive milestones during the 5G deployment, which is the world’s first commercial network to apply Dynamic Radio Resource Partitioning. This enables all six of Malaysia’s mobile operators to deliver customized 5G services with guaranteed performance, while also allowing them to differentiate their offerings.

We are equally proud that the technology used in the DNB network was recently recognized at the prestigious Glotel Awards, which celebrate innovation and excellence in advancing telecommunications.

Ericsson has been part of Malaysia’s telecommunications journey since 1965 and we look forward to accelerating Malaysia’s journey towards becoming a digital economy.

Source: The Edge Markets

Boosting Malaysia’s regional competitiveness with 5G

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The automotive sector’s total industry volume (TIV) is expected to increase by two per cent or 690,000 units in 2023 from an estimated 680,000 units in 2022, driven by the continued delivery of order backlogs, said Kenanga Research.

In a note, it said its projection is more upbeat than the forecast of 636,000 units by the Malaysian Automotive Association (MAA).

“We believe the odds are in favour of MAA raising its number along the way. The vehicle sales in 2023 will be driven by the continued delivery of order backlogs to the tune of 350,000 units (as at end-October 2022), which was unchanged compared to three months ago, indicating that deliveries had been replenished with strong new bookings especially for attractive new models even in the absence the Sales and Service Tax (SST) exemption.

“Additionally, the vehicle sales will be supported by launches of new battery electric vehicles which will enjoy SST exemption and other electric vehicle facilities incentives up to 2023 for completely built-up (CBU) and 2025 for completely knocked-down (CKD),” it said.

Kenanga Research said vehicle sales would remain robust in 2023 supported by the reopening of the economy; financial assistance to the low-income group and subsidies on fuels, electricity and selected food items to keep the cost of living in check; a relatively stable job market; and healthy household balance sheets of the M40 (middle 40 per cent income) group.

The research house also said it was unperturbed by the impact of the rising interest rates on vehicle sales.

“Assuming that the Bank Negara Malaysia raised the Overnight Policy Rate (OPR) by another 25 basis points (bps) to 3.00 per cent in January 2023, taking the total OPR hike for 2022 and 2023 to a total of 125 bps (from 1.75 per cent to 3.00 per cent), this would only raise the monthly instalment for, say a Perodua Myvi AV priced at RM60,000 (90 per cent financing margin, five-year tenure), by about six per cent from RM978 to RM1,035,” it said.

Kenanga Research also noted that the actual interest rates charged vary based on terms, financiers, car models, and the individual’s credit score, and newer popular models are most likely to be charged a lower effective interest rate range.

On its sector top picks, it selected MBM Resources Bhd and Bermaz Auto Bhd.

Source: Bernama

Auto sector’s TIV set to rise by 2% to 690,000 in 2023

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Nasdaq-bound Graphjet Technology Sdn Bhd, the world’s leading graphite and single-layer graphene producer, has signed a letter of offer to build its RM400 million production facility in Phase 3 of the Malaysia-China Kuantan Industrial Park.

The company, which is heading for a US$1.5 billion (RM6.64 billion) listing, is the first and only one in the world to transform palm industry waste materials, palm kernels, into graphite and single-layer graphene.

Graphene is known as a super material and was attributed the Nobel Prize in Physics in 2010.

“The revolutionary patented technology will transform palm kernel shell, a waste from palm kernel production, into single-layer graphene, at a significantly lower cost than the current production of single-layer graphene.

“The production plant is expected to produce 10,000 tonnes of graphite and 60 tonnes of single-layer graphene annually. It is expected to generate revenue of RM3.6 billion per year for Graphjet Technology,” the company said in a statement on Thursday (Dec 29).

Its founder and chairman Lim Hooi Beng said the new 8.09ha (20-acre) integrated plant (upstream and downstream) is expected to be completed within 18 to 20 months after the initial public offering and generate up to 700 jobs over the next four years.

“We have great growth ambitions for Graphjet Technology and will not only stop with one plant.

“We expect the first products to come online in the first quarter of 2025 and serve customers across Asia, Europe, and the United States in the automotive and renewable energy businesses,” he said.

Meanwhile, chief executive officer Aiden Lee Ping Wei expressed optimism that the development of the production plant in the East Coast Economic Region (ECER) would create a greater economic effect on the local community.

“Our project will lead and drive innovation and investment in the downstream new energy industry. This will play a vital role in advancing the development of new technology, future materials, and energy industry in Malaysia.

“We believe that the impact of our investment will have a far-reaching and positive spill-over effect in the country,” said Lee.

Source: Bernama

Nasdaq-bound Graphjet Technology to build RM400m production plant in Kuantan

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Malaysia and Japan reaffirmed their commitment to further strengthen bilateral trade, investment and industrial ties for both countries’ mutual benefit, said the Ministry of International Trade and Industry (MITI).

In a statement today, MITI said this commitment came after International Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz hosted his counterpart Nishimura Yasutoshi and his delegation yesterday (Dec 28).

The one-hour maiden engagement covered key issues such as supply chain resiliency, the embracing of the environment, social and governance (ESG) concept in investments and industry, as well as possible mutual collaborations in sectors such as the energy and aircraft industries.

The discussion also centred around economic cooperation in various free trade platforms such as theComprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Regional Comprehensive Economic Partnership (RCEP), Asia Pacific Economic Cooperation (APEC) and the Indo- Pacific Economic Framework (IPEF).

“Both ministers also discussed the convening of the Malaysia-Japan Public-Private Industrial Dialogue in Kuala Lumpur (2023) and reaffirmed their commitment to solidify collaboration in line with the elevationof the Malaysia-Japan bilateral relationship to a comprehensive strategic partnership earlier this year,” MITI said.

Tengku Zafrul expressed his gratitude to Japan for their unrelenting support to Malaysia thus far and reaffirmed Malaysia’s continued commitment to the Look East Policy (LEP), which has underscored the strengthening of the Malaysia-Japan bilateral relationship over the past 40 years.

On this, MITI said Malaysia will continue to strategically work with Japan, particularly in areas such as ESG, artificial intelligence, the internet of things, robotics, smart manufacturing and renewable energy.

On ASEAN-Japan relations, both ministers pledged continued engagement, particularly as the ASEAN-Japan Friendship and Cooperation approaches its 50th-anniversary milestone in 2023.

Japan has been one of Malaysia’s top sources of foreign direct investment with total investments amounting to RM90.9 billion (US$27.6 billion) recorded in 2021, creating 337,280 jobs.

Japan was also the fourth largest trading partner for Malaysia in 2021, with total trade amounting to RM149.76 billion (US$36.14 billion).

MITI said with the launch of the New Investment Policy (NIP) in October 2022, Tengku Zafrul emphasised the ministry’s commitment to ensuring that Malaysia remains a preferred investment destination for all investors, including those from Japan.

Recognising the vast opportunities to deepen trade and economic linkages, both ministers reaffirmed their commitment to build on the Malaysia-Japan bilateral ties’ positive momentum and to further advance both countries’ economic interests.

Source: Bernama

Malaysia, Japan reaffirm commitment to deepen trade and economic linkages: MITI

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Sunway Bhd’s unit Sunway Medical Centre Sdn Bhd (SMCSB) has acquired a seven-storey purpose-built hospital building and land worth RM430 million.

The group said SMCSB has entered into a conditional sale and purchase agreement with RHB Trustees Bhd, as trustee for Sunway Real Estate Investment Trust (Sunway REIT), for the acquisition.

“The proposed acquisition entails the purchase of the land and buildings known as Tower A and Tower B of Sunway Medical Centre, together with the plant and machinery, and all fixtures and fittings affixed or located or used in the buildings.

“The property is currently leased and used by SMCSB to operate a medical centre,” it said in a filing with Bursa Malaysia today.

Sunway said that the property includes a seven-storey purpose-built hospital building with a lower ground floor annexed with a multi-storey car park block as well as a convention centre.

It said the acquisition is part of Sunway Healthcare Group’s plan to rationalise and streamline its decision on capital expenditure enhancement and value preservation on its assets by having full ownership and control.

“Furthermore, the proposed acquisition would enable SMCSB to improve the operational efficiency of the hospital by having more flexibility in managing its operating and financing costs.

“Over the longer term horizon, it is expected to outweigh a long-term lease,” it said.

Sunway also said that the acquisition is synergistic with the overall capacity expansion of SMCSB in solidifying its current position as one of the largest medical centres in Malaysia.

“It is expected to strengthen its position as the flagship medical centre under the hub-and-spoke model of Sunway Healthcare Group in the provision of tertiary and quaternary care.

“(Additionally, this would) cater to the anticipated increase in demand for healthcare services such as major surgeries, treatment of complex medical illnesses and increase in medical tourism post-pandemic and reopening of international borders,” it said.

Sunway said that SMCSB had previously disposed of the property to Sunway REIT for a total disposal consideration of RM310 million on Dec 31, 2012.

SMCSB had also entered into a master lease agreement dated Oct 9, 2012, with RHB Trustees (as the lessor) and Sunway REIT Management Sdn Bhd (SRM) for a 10-year term which commenced on Dec 31, 2012, and will expire on Dec 30, 2022.

SMCSB is a 99.99 per cent-owned subsidiary of Sunway Healthcare Holdings Sdn Bhd, which in turn is a 90.26 per cent-owned joint venture of Sunway City Sdn Bhd, a wholly-owned subsidiary of Sunway. 

Source: Bernama

Sunway unit to acquire 7-storey purpose-built hospital building, land for RM430m

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MIDA leads the way to facilitate, promote sustainable investment to champion the nation’s green agenda

Source: The Star

Future-proofing economic growth through sustainability

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The Japanese Ambassador to Malaysia, Takahashi Katsuhiko, arrived in Malaysia in November last year expecting the assignment to be a routine one.

After all, he had visited Malaysia before on numerous business trips and holidays. The diplomat, who also speaks Arabic, is comfortable with Malaysia’s Muslim setting, having served in Iraq and Saudi Arabia, mostly in the Middle East and African affairs bureaus.

But he wasn’t prepared for the fast-paced political developments in Malaysia.

On the recently concluded general election, the ambassador had a diplomatic and guarded response: “It has been exciting and interesting.”

While politicians come and go, the relationship between Malaysia and Japan has remained intact and strong. “Malaysians have had a busy political year, but 2022 was the 40th anniversary of the Look East Policy (LEP), and this year marks the 65th anniversary of the establishment of Japan-Malaysia diplomatic relations.

“Not many can remember that each time Malaysia celebrates its National Day on Aug 31, it is also the anniversary of our diplomatic ties. Japan was among the first nations to recognise Malaysia.

“On Aug 31, 1957, Malaysia and Japan set our diplomatic ties. We are indeed proud of that fact,” he said in an interview at his residence.

Without doubt, during Tun Dr Mahathir Mohamad’s first tenure as prime minister, the LEP was at its peak, while successors have also kept the strong policy going.

“The benefits of the policy over the last 40 years saw more than 26,000 Malaysians studying or getting training in Japan.

“Japan also provided Malaysia with Japanese style vocational training, namely CIAST (Centre for Instructor and Advanced Skill Training) in Shah Alam, and through other institutions in Penang and Kuala Lumpur (KL).

“Having Malaysians with Japanese expertise has worked quite well in bringing Japanese investment to Malaysia.

“Currently, there are more than 1,600 Japanese companies doing business in Malaysia – quite a large number compared to other Asean nations, in terms of population and economic size.”

Katsuhiko said most of these Japanese manufacturing companies are operating in Peninsular Malaysia, mainly in Selangor and KL, followed by Penang and Johor.

“Forty years ago, many manufacturing companies came to Malaysia at the invitation of Dr Mahathir, such as Daihatsu and Mitsubishi, which tried to help Malaysia’s automobile industry. AEON was also invited to Malaysia back then.

“In Kelantan, a semiconductor company called ROHM-Wako is still operating as the only Japanese company in that state. The company maintains a big presence in Kelantan, creating several hundred jobs for locals.

“In addition to traditional manufacturing (electronic appliances, cars, semiconductor, IT industry), these days, we see new types of Japanese businesses coming in,” he added.

Takahashi revealed that the company Hokto has been operating in Negri Sembilan for the past 10 years, selling Japanese mushroom-related products in Malaysia and Singapore.

He also cited Chitose, which operates in Cameron Highlands, providing Japanese vegetables (white corn, radish, Japanese leafy vegetables) and strawberries.

“It originally started marketing in Singapore, but is now also selling in Malaysia,” he added.

A Japanese contact lens manufacturer to be set up in Penang, he said, aims to be the hub for the Asean market. He said the factory is now under construction and is expected to start operating next year.

Takahashi said logistics companies are already in Malaysia, which is a hub for the region, particularly in the cold chain system of transporting temperature sensitive goods to deliver them fresh.

“Then there are the retail companies like Don Don Donki, LaLaport and Tsutaya Books,” he added.

He explained that since Dr Mahathir’s time, succeeding Malaysian administrations tried to modify the LEP based on the economic environment.

“Major changes to the LEP were discussed 10 years ago (the 30th anniversary of the LEP). Back then, among the things discussed were including more advanced technology for the LEP and enhancing the role of the private sector.

“When the LEP started, it was mainly for the Malaysian bureaucracy trying to dispatch Malaysians to learn the ‘secrets of development’ from Japan.

“As a result of Malaysia’s development, the role of the private sector became much larger than that of the public sector. IT (information technology) was then introduced, and the private sector was encouraged to play a larger role in the LEP.”

Takahashi shared that of the 27 secretaries-general in Malaysian ministries, almost half of them (13) have received education or training in Japan.

“They are very understanding and helpful to Japan – it is an asset in the public sector, and we want to have the same situation in the private sector.

“In other words, those who have studied in Japan contribute to the development of Malaysia, particularly in the private sector.”

On bilateral trade, he said Japan continues to be Malaysia’s fourth largest trading partner and third largest source of foreign direct investments.

Takahashi said Japanese companies are starting to pay more attention to South-East Asia as a safe investment area.

“The Japanese economy is shrinking due to its smaller population, and our companies are starting to see South-East Asia as a possible new market.

“When it comes to GDP (gross domestic product) per capita, Malaysia and Singapore are the frontrunners – Singapore is a bit too advanced, and Malaysia is considered a good location to do business,” he added.

Regarding the opening of the branch campus of Tsukuba University here, he said it was still at the discussion stage.

“Malaysia has indicated that the issue is a national agenda, no matter who becomes the PM of Malaysia.

“This is to provide the Malaysian people with Japanese-style education here in Malaysia. Governmental level arrangements hopefully will be finalised as soon as possible.

“If all goes well, the earliest possible opening will be September 2024.”

Takahashi said he hopes Prime Minister Datuk Seri Anwar Ibrahim will visit Japan for the Nikkei Conference in May 2023.

“Another opportunity for the Malaysian PM to visit Japan is in December 2023, when Japan hosts a Commemorative Summit in Tokyo marking the 50th Year of Asean-Japan Friendship Cooperation.”

“If Anwar goes to Japan twice, we have good reason to expect the Japanese Prime Minister to visit Malaysia, which did not happen this year.”

Source: The Star

Forging closer ties with Malaysia

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NCT Group’s NCT Smart Industrial Park (NSIP) is on track to attract investors from China to invest in the company’s properties and developments under the project.

Endorsed by the Selangor government, NSIP’s unique positioning as “The First” Managed Industrial Park (MIP) aims to boost investment opportunities from local and international investors.

NCT said NSIP’s positioning as the global hub for the semiconductor, electronic and electrical (E&E), and pharmaceutical industry was set to create a multiplier effect in Malaysia.

The project was also supported by the Hainan government of China.

NCT general manager and NSIP project lead Eddy Lim Swee Shien said sustainability was at the core of the project and it truly embodies environmental, social and governance (ESG) values.

“It was designed with this very objective and we have seen great interest in the development. 

“Creating an efficient and effective development, NSIP is designed in line with the GreenRE rating criteria and is on track to being a solar-equipped, Managed Industrial Park (MIP), among other components. 

“This will be further supported by various partners, such as Telekom Malaysia Bhd, Solarvest Holdings Bhd and Samaiden Group Bhd, and other players, which are aligned with NCT’s vision to contribute towards reducing industrial carbon footprint,” he said during the 12th Malaysia-China Entrepreneurs Conference (MCEC 2022) recently.

During the conference, NCT presented the project to more than 350 delegates that include representatives from the Hainan government who joined virtually.

Located at the Integrated Development Region in South Selangor (IDRISS), NSIP is led as a Fourth Industrial Revolution (4IR) inspired development that integrates smart innovations and sustainable solutions to cater to the current and future needs of entrepreneurs. 

Upon completion, the project is targeted to create 50,000 job opportunities, addressing the shortage of jobs in the state while contributing to the

local economy.

NCT is working closely with the Selangor state government’s investment arm, Invest Selangor, the Malaysian Investment Development Authority and the Ministry of International Trade and Industry to strengthen the exposure of NSIP by tapping into their pool of investors and network. 

The project, which has started with site clearing earlier this month, has received an overwhelming response, with 100 per cent of Phase 1A fully booked.

Source: NST

NCT Group’s smart industrial park in Selangor ready to attract investors from China

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Duopharma Biotech Bhd has become the first pharmaceutical company to receive halal certification for an oncology product.

In a statement today, the company said the certification was awarded by the Department of Islamic Development Malaysia (JAKIM).

The product is currently approved as an adjuvant treatment for postmenopausal women with early breast cancer as well as a first-line treatment for postmenopausal women with advanced breast cancer.

Produced at Duopharma Biotech’s Highly Potent Active Pharmaceutical Ingredients (HAPI) facility in Glenmarie, Shah Alam, the halal oncology product is supplied to both government and private healthcare hospitals in Malaysia.

It has recently been approved for export to Brunei and Singapore.

Duopharma Biotech group managing director Leonard Ariff Abdul Shatar said the milestone halal certification for an oncology product manufactured at its HAPI facility was in line with the company’s ESG commitment.

“We are making continuous efforts to provide consumers and patients with access to much-needed medicines and therapies – assured safe for use and effective, high in quality, hygienic and halal from the start.

“Our state-of-the-art HAPI facility plays a vital role in the fight against many diseases, enabling us to embrace innovation and technology to serve patient needs and expand access to specialised therapies,” he said.

Duopharma Biotech’s HAPI facility is the first cancer medicine manufacturing facility in Malaysia, kickstarting the company’s foray into the oncology segment in 2019.

Currently, the facility produces generic treatments for breast cancer, lung cancer, colorectal cancer, cervical cancer and blood cancer.

Since 1999, Duopharma Biotech has pioneered a range of Halal-certified health supplements, including CHAMPS, Flavettes, Proviton and Naturalle products, in compliance with MS 1500:2009 standards.

Source: NST

Duopharma is first in Malaysia to receive halal certification for oncology product

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Tiong Nam Logistics Holdings has entered into a joint venture (JV) agreement with Johor Corp to develop a high-tech logistics industrial park on a 300-acre land at Sedenak Technology Valley, Johor.

In a statement on Wednesday (Dec 28), Tiong Nam said its wholly owned subsidiary Tiong Nam Logistics Solutions Sdn Bhd (TNLS) inked the agreement with Johor Corp’s wholly owned subsidiary JLand Group Sdn Bhd (JLG) following a preliminary collaboration agreement in August 2022.

The JV company — known as JTN Logistics Park Sdn Bhd — will undertake the acquisition of the 300-acre land, plus the development and management of the industrial park.

“Under the JV agreement, TNLS will hold 51,000 ordinary shares, representing 51% equity stake, while JLG will hold the remaining 49,000 ordinary shares or 49% equity stake in the JV company,” said Tiong Nam.

The development consists of ready-built and customised warehouses, factories and commercial buildings, along with integrated logistics infrastructure for global businesses.

JTN will also acquire the development land from JLG for a purchase consideration of RM52.3 million, or RM4 per square foot.

The land has a leasehold of 99 years and is currently under the ownership of Johor Corp. It will be procured by JLG before its sale to JTN.

JTN will pay the land purchase consideration to JLG through the advances from JV shareholders, while TNLS will be involved in funding the working capital through internally generated funds.

Additionally, JTN is expected to prepare and submit the development layout plans to the Johor state authorities within the next 12 months, with construction expected to begin in 2025.

Tiong Nam’s managing director Ong Yoong Nyock said the JV is a recognition of the group’s capabilities and a milestone in its track record in transforming Johor’s logistics landscape over the past four decades.

“We will bring tremendous value to the project which caters to Johor’s strategic goals, by leveraging on our experience as a leading integrated logistics and warehousing services provider to multinational customers across Southeast Asia,” said Ong.

“The technology-enabled development will also enhance the state’s logistics infrastructure to support greater international connectivity and trade.”

Tiong Nam’s share price closed lower by two sen or 2.47% to 79 sen for a market capitalisation of RM416.98 million.

Source: The Edge Markets

Tiong Nam enters JV agreement with JLand to develop high-tech logistics park

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KUALA LUMPUR: NanoMalaysia Bhd is piloting an electric-vehicle (EV) charger at Temasya Petronas station on the Federal Highway in the Klang Valley using the Renewable Energy Nanogrid (Renew) concept powered by clean, renewable energy technology using nano-enhanced solar panels.

NanoMalaysia is an agency for localisation of EV technology development under the Science, Technology and Innovation Ministry.

The technology development is managed by Nano Commerce Sdn Bhd (NCSB), a wholly owned subsidiary and business arm of NanoMalaysia, in partnership with a local EV enterprise.

Renew consists of a fast-charging 50kW EV charger, nano-enhanced solar photovolatic (PV) panels, and lithium-ion batteries. The solar PV is enhanced through nano coating supplementing hydrophobic properties allowing greater efficiency during inclement weather.

With Renew additionally powered by solar energy with storage capabilities, the system’s dependency on grid power is reduced by up to 20% which effectively will assist Malaysia’s decarbonisation.

This 18-month trial project is part of NanoMalaysia’s Enabling Mobility Electrification for Green Economy (Emerge) initiative. Emerge focuses on developing electric vehicle technologies to support low-carbon mobility through the enhancement and deployment of energy storage and management system, the Internet of Nano-Things and off-grid green charging stations, and building EV prototypes as validation platforms for eventual industrial adoption. This initiative supports Malaysia’s target to reduce carbon intensity against gross domestic product by 45% by 2030 and reach carbon neutrality as early as 2050.

NanoMalaysia has been spearheading the nation’s EV technology agenda since 2021, along with other relevant EV technology development programmes such as the NanoMalaysia Energy Storage Technology Initiative, Hydrogen EcoNanoMy, Rapid Electric Vehicles Innovation Validation Ecosystem, and Campuses for Local Electric Vehicle Expeditious Rollout.

This strategic collaboration between NanoMalaysia and Petronas Dagangan Bhd aligns with the National Energy Policy 2022-2040 of early-stage public-private initiatives to support charging infrastructures to enable and accommodate EV penetration.

NanoMalaysia’s CEO, Dr Rezal Khairi Ahmad, said: “Renew is a significant milestone that we are now commercially deploying a charging station that rides on a locally developed renewable energy nanogrid technology, with the view of making fast charging, green energy easily accessible nationwide. Through this project, NanoMalaysia is aggressively nudging the country to be at least a regional leader in EV technology and innovation rather than just mere users of imported products.

“Success from this pilot project will strengthen the local EV industry and expedite the government’s target to achieve 10,000 EV charging stations in Malaysia by 2025 under the Low Carbon Mobility Development Plan 2021-2030. This may increase the percentage of EV numbers towards 38% total industry volume in the country in line with Malaysia’s Low Carbon National Aspiration 2040.

The penetration rate for renewable energy in Malaysia was 2% from 92.8 million tonnes of oil equivalent in 2019. Malaysia has set a target of 20% by 2025. Currently, there are about 30,300 plug-in hybrid electric vehicles and battery electric vehicles on the roads, and Malaysia is targeting 220,000 EVs by 2030 under the National Electric Mobility Blueprint.

Source: Bernama

Nano Malaysia rolls out EV charger that uses green energy in trial

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Malaysia, Thailand and Indonesia will transform the two-wheeler electric motorbike and electric scooter industry in a big way from 2023 onwards.

Sersol Bhd and Thai energy giant Takuni Group PCL have signed a joint-venture agreement to manufacture, assemble and distribute electric two-wheeler (2W) motorbikes and scooters across the three countries in anticipation of surging demand for greener mobility solutions.

The announcement follows their heads of agreement signing in late October this year indicating a commitment to invest in technology transfer in the electric vehicle segment for 2W motorbikes and scooters by incorporating a joint-venture company, Sersol-Takuni.

As post-Covid-19 pandemic market conditions across Malaysia, Thailand and Indonesia are buoyant, Sersol-Takuni plans to sell about 100,000 electric 2W motorbikes and scooters annually.

“We are elated to have Takuni Group as a strong partner for this initiative, as they are energy kings in Thailand with expertise in building renewable energy infrastructure, in addition to driving expansion of Thailand’s charging network for the EV industry,” said Sersol Bhd managing director Datuk Wira Justin Lim.

Lim said Sersol-Takuni will use its capabilities in battery technology to build a plant to manufacture lithium-ion batteries.

“In Malaysia, our government strongly supports the battery electric vehicles agenda and has the right incentives in place for producers to enjoy tax exemptions for imports, excise duty and sales for locally assembled models,” said Lim.

Malaysia has launched a Green Technologies and Application for National Low Carbon Cities 2030 Masterplan for the establishment of 200 low carbon zones across the country. This will push higher demand for green vehicle adoption on the back of the nation’s flourishing B2B landscape to use 2W electric motorbikes and scooters.

Lim said Sersol-Takuni anticipates strong demand for their 2W electric motorbikes and scooters in Indonesia which according to Businesswire is predicted to grow by about 21% to reach US$816 million (RM3.6 billion) by 2025. As adoption of electric motorbike and scooters has been burgeoning within the e-hailing and e-sharing sectors, the Indonesian government has placed generous incentives related to climate mitigation programmes to reduce greenhouse gas emissions.

“Our market potential is enormous as Indonesia and Thailand, which are two of Asia’s four largest 2W electric motorcycle and scooter markets anticipating exponential growth outside India and China,” Lim added.

McKinsey predicts a surging demand for batteries to grow by 30%, and the battery value chain to grow 10 times, with global revenue expected to rise to US$410 billion by 2030.

Source: The Sun Daily

Sersol, Takuni seal electric motorbike, scooter joint venture

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Johor is looking at strengthening its position as a key medical tourism hub in the region by targeting Vietnamese wanting world-class medical treatment here.

Tourism Johor director Suhairi Hashim (pic) said medical tourism was among the key tourism initiatives besides education and heritage to attract foreign tourists here.

“Next year, we will strengthen those initiatives, in particular medical tourism, to get more foreign tourists to come into Johor and spend more than a day here.

“Johor has been the main choice for medical tourists coming from Indonesia and Singapore,” he said when contacted yesterday.

Suhairi added that the next step would be getting medical tourists from Vietnam to come to the state and get medical treatment from world-class private hospitals.

He said that state tourism, environment, heritage and culture committee chairman K. Raven Kumar had led a delegation, which included members of Johor Medical Tourism Council, to Vietnam.

“Vietnam is an emerging market with a changing lifestyle among its people and an increasing demand for better medical services.

Suhairi also said that they were working to lure more European tourists next year to Johor through its heritage tourism and the creation of attractive packages for them.

In June, Malaysia Healthcare Travel Council chief executive officer Mohd Daud Mohd Arif said the medical tourism industry in 2019 had raked in RM1.7bil in hospital receipts alone, and with the spillover effects into other industries, contributed an estimated RM7bil to the economy.

The medical tourism sector is expected to continue growing, with a projected annual revenue of RM2bil in 2025, it was reported.

Source: The Star

Johor aims to tap medical tourism further

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THE first half of 2023 could be a challenging period for semiconductor equipment players, including automated test equipment (ATE) makers such as ViTrox Corp Bhd.

ViTrox co-founder, president and CEO Chu Jenn Weng acknowledges that the group will experience a slowdown. But Chu remains optimistic that it is unlikely to be a long, cold winter. He believes the recovery will come within six to nine months, therefore, the group needs good strategies in place to prepare for the rebound.

“In a best-case scenario, we are hopeful that the decline will bottom up in 1QFY2023 or 2QFY2023, and to rebound in [2H2023]. In a worst-case situation, however, the downturn could be prolonged up to 12 to 18 months. Nonetheless, if you look at our past financial results, we have never experienced two consecutive years of decline,” he tells The Edge in an interview at the company’s headquarters in Batu Kawan, Penang.

“For 2023, we will put more emphasis on long-term growth strategies while preparing for a mild downturn. It is time to serve more rather than to take,” says Chu, a former Hewlett-Packard (HP) Malaysia engineer.

Nonetheless, ViTrox’s earnings remained on the growth path in the first nine months of the year. For the nine months ended Sept 30, 2022 (9MFY2022), the company generated revenue of RM560.3 million, which grew by RM65.9 million, or 13%, year on year from RM494.4 million. Net profit in 9MFY2022 expanded 23% y-o-y to RM152.21 million from RM123.54 million. The strong financial performance was due to the strong US dollar and favourable product mix.

ViTrox has more than 600 installed bases by products in more than 40 countries, including Malaysia, China, Taiwan, the US and Mexico. The group has two main business segments — machine vision system (MVS), which provides component-level inspection solutions; and automated board inspection (ABI), which offers board-level inspection solutions.

Its MVS target market is semiconductor manufacturers, including integrated device manufacturers (IDMs) and outsourced semiconductor assembly and test (OSAT) players, whereas its ABI business unit serves electronics manufacturing service (EMS) providers and contract manufacturers.

In layman’s terms, ViTrox makes machine vision inspection systems that scan for defects in semiconductors and other hi-tech gear.

Product-wise, research analysts believe the delivery for ViTrox’s ABI machinery is likely to decelerate from the record high of 3QFY2022, owing to the uncertainty in general business outlook. The shift in preference towards local brands among Chinese firms and price wars waged by competitors may also limit the segment’s near-term upside.

ViTrox’s MVS segment faces a similar threat, as competition from Chinese machine makers intensified, particularly in the lower-end and cost-sensitive space. Moreover, the already soft demand from the mobile and PC segments could worsen as demand for the end-products remains sluggish, following the expectations of a global economic slowdown.

Fortunately, the well-diversified revenue base and exposure to high-growth industries remain ViTrox’s bright spots. Chu says the trade war between the US and China — the two biggest powers in the world — will continue for many years to come.

“If this turns out to be a competition, I believe it is good for Malaysian companies and we will continue to be the beneficiary. If this becomes a conflict, however, we may have to choose a side [between the US and China], and it might be a big issue. This is something that nobody can predict,” he says.

Nevertheless, Chu highlights that, this year, ViTrox continued to do well, as the group’s products experienced strong demand from many regions, including the US, China, India and Asean.

“That’s a very good sign to show that the trade tension between the US and China has [had a positive impact on us] so far,” says Chu, the company’s single-largest shareholder, with a direct stake of 26.89%.

ViTrox co-founders Steven Siaw Kok Tong and Yeoh Shih Hoong — both of whom sit on the board as executive directors and executive vice-presidents — own 19.05% and 10.24% equity interest respectively.

Chu was ranked 47th in Forbes Malaysia’s 50 Richest list, with a net worth of US$280 million in 2020, before climbing to 35th, with a net worth of US$460 million in 2021.

Despite seeing his net worth drop to US$430 million (RM1.88 billion) this year, the 52-year-old remains the 35th richest man in the country.

Expansion and diversification

ViTrox’s headquarters is located at its 450,000-sq-ft Campus 2.0 in Batu Kawan Industrial Park (BKIP), Bandar Cassia.

Notably, the group had in August 2021 kicked off the new expansion phase of its existing land to build ViTrox Campus 3.0, which is an extension of Campus 2.0, consisting of three blocks of multi-storey buildings and is slated for completion by 2H2023.

Campus 3.0 will add 442,000 sq ft of floor space for production, business development, design and development, and shared services activities at the plant.

In May 2021, ViTrox had also acquired a 21.04-acre land adjacent to Campus 2.0 for RM48.33 million as part of its 10-year expansion master plan (2021 to 2030).

The land acquisition is expected to further strengthen ViTrox’s technology and product research and development (R&D). The group is also enhancing its global business expansion, worldwide service and support, supply chain development as well as smart and lean manufacturing.

Chu points out that ViTrox’s 10-year master plan is still a work in progress.

“For the next two years, our biggest capital expenditure (capex) investment will be for our new facility — Campus 3.0, for which we have allocated RM150 million for building and interior design. We have allocated RM110 million for capex next year, followed by RM40 million in 2024.”

He says Campus 3.0 will double ViTrox’s manufacturing floor, R&D and warehouse space, as well as shared services.

“On top of that, there will be new elements such as an accelerator programme for growing tech start-ups here,” he adds.

Asked about what comes after Campus 3.0, Chu says ViTrox still has 10 acres, its last remaining tract in Batu Kawan.

“That will very likely be used for the business expansion of our manufacturing and R&D facilities. We have no issue of growing three to five times here before the end of our 10-year master plan, which is scheduled to be fully completed by 2030,” he discloses.

Amid concerns of a chip shortage-turned-chip glut and fears over a recession, many global semiconductor stocks, including semiconductor-related counters in Malaysia, have been battered since the beginning of this year. Most of them are down 30% to 40% so far this year.

Year to date, ViTrox had declined 21% to close at RM7.80 last Thursday (Dec 15), giving it a market capitalisation of RM7.37 billion. The counter is trading at a historical price-earnings ratio of 39 times.

In a report dated Nov 11, AmInvestment Bank research analyst Muhammad Afif ­Zulkaplly downgraded his recommendation on ViTrox to a “hold” from a “buy”, with a lower fair value of RM7.10, from RM8.96 previously.

“Given slower earnings growth prospects over the upcoming years, the stock’s risk/reward profile looks less compelling at this juncture, in our view. We cut our FY2023 and FY2024 earnings by 11% to 13% after imputing a more conservative sales assumption, owing to softer global economic growth expectations in the coming months amid uncertainties in the China market,” he wrote.

Of the 10 analysts who track ViTrox, Macquarie’s target price of RM9.35 is the highest and that of CLSA, which advises investors to reduce investments in ViTrox, is the lowest at RM7.05.

Doing its part for food security

Before ESG (environmental, social and governance) became the buzzword, ViTrox Corp Bhd had already jumped on the bandwagon long before others followed suit.

ViTrox invested in making sure that its headquarters — the 450,000-sq-ft Campus 2.0 in Batu Kawan Industrial Park, Bandar Cassia — was a green working place. The bricks of the building can breathe, and the roof features solar panels that can generate renewable energy. Rainwater is recycled to water the plants at ViTrox’s organic farms.

Chu Jenn Weng, the company’s managing director, believes vegetarianism is an ideal way to reduce global warming. In a recent interview with The Edge, Chu emphasises that ViTrox will continue to embark on new initiatives for smart farming technologies to do its part for food security.

Early this year, the group, via ViTrox Agritech Sdn Bhd, started a smart farming cluster development in Ara Kuda, where almost one-third of the farmland has been used for prototyping, in the form of either farming technologies or farming automation.

“The land that we leased from the government is about 15 acres, and 30% of the land, or four acres, has been used for the purpose. The aim is to improve the yield of leafy vegetables sustainably and cost effectively,” he notes.

While Chu realises that ViTrox Agritech will not contribute significantly to ViTrox’s earnings in the next three to five years, that will not deter the company from putting in more effort to ensure it is sustainable and profitable.

“Our focus right now is to be able to come up with solutions that are cost effective enough to help farmers to significantly reduce the dependency on foreign workers, overcome extreme weather disruption and eliminate use of pesticides,” he says.

ViTrox has allocated RM25 million over three years, starting from 2022, for this venture.

“Food security will be a big issue in the next 10 to 20 years, owing to climate change. We are working hard to develop workable and cost-effective solutions for our farmers, especially for the micro, small and medium farmer clusters in the country. We also hope to offer our agritech solution to neighbouring countries that face similar problems,” says Chu.

“With innovation and new technology such as semi-autonomous farming equipment, Internet of Things and machine learning, we believe we can attract more young people, especially fresh graduates, to venture into this industry.”

Source: The Edge Markets

ViTrox prepares for mild slowdown while continuing to invest

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Universal Robots (UR), the Danish collaborative robot (cobot) company, urged Malaysia’s robotics industry to leverage its extensive global ecosystem to realise the benefits of strategic collaboration.

To facilitate this ecosystem, UR has custom-built its UR+ platform to work with third parties who are experts in their respective fields of technology.

Universal Robots’ ecosystem comprises four main parts: UR+, its distributor network, certified system integrators, and original equipment manufacturers (OEM) – totalling 1,100 partners globally. The UR+ platform includes over 300 UR+ partners and over 400 certified UR+ components, application kits and solutions.

Verified Market Research projected Malaysia’s robotics market to produce 4,742 units of robots by 2027, at a CAGR of 16.77% from 2020 to 2027. Creating a robotic system requires hardware and software development, application development, sensors and numerous interfaces. The main challenge faced by technology companies across Southeast Asia region including Malaysia is the lack of expert knowledge in every domain.

“By combining the UR platform with the talent of the industry’s largest ecosystem, UR+ allows easier identification of tools compatible with UR cobots and helps distributors, integrators and OEM customise the right products for the market,” said Ix Lee (pic), head of sales, Southeast Asia and Oceania, Universal Robots.

Universal Robots has identified three key benefits for Malaysia’s robotics industry in leveraging a collaborative ecosystem:

Drives Innovation

Collaboration fosters strength and expertise. An extensive and integrated platform drives innovation while maintaining high standards, encouraging collaboration and creativity that ultimately benefits end users. Collaboration of engineers across different areas of expertise inspires creativity and ensures the highest quality and best possible outcome.

Provides Widest Choices

Problem solving is part of every business. Having access to a diversity of expertise with more choices means that a company can meet their customers’ needs. A dynamic ecosystem promotes competition that will uncover underserviced niches.

Eliminates Gaps with Customer

Leveraging the sheer size and diversity of Universal Robot’s global network of ecosystem enables industry players to be closer to their customers as a one-stop-shop.

Malaysia’s National Robotics Roadmap 2021-2030 has identified three high-impact sectors that could benefit from automation and significantly impact Malaysia’s gross domestic product: retail & healthcare (services), agriculture and manufacturing. In Malaysia’s Shared Prosperity Vision 2030, adoption of technology in the manufacturing and services sectors is still low at 37% and 20% respectively.

Businesses need to innovate constantly and remain adaptable in order to survive and expand. They will rely ever more on technology and innovation to break new ground. Cobots are designed to perform common tasks alongside humans that are dull, dirty and dangerous.

According to The Collaborative Robot Market 2022 Report, the cobot industry is projected to grow to US$2.2 billion by 2026. While cobots remain instrumental for picking, packing, palletising, welding and assembly, they will continue to expand into different industries as the ecosystem continues to grow.

“As more businesses turn to collaborative automation, the number of complete turnkey solutions is growing. These are often created by original equipment manufacturers (OEM) which have seen an advantage in embedding the UR platform into their own products. OEM solutions contain a UR cobot, hardware, software, installation, support and training,” said Lee.

He concluded that collaboration with partners on full solutions enables UR to address some of the most common application needs in manufacturing thus making it easier for businesses to automate.

Source: The Sun Daily

Malaysia’s robotics sector can benefit from collaborative ecosystem

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Malaysia and Australia on Friday expressed their commitment to strengthen bilateral relations under the Comprehensive Strategic Cooperation (CSP), said Prime Minister Datuk Seri Anwar Ibrahim.

Anwar, who received a phone call from his counterpart, Australian Prime Minister Anthony Albanese, said that the two countries also agreed to strengthen cooperation in various fields including trade and investment, education, defence and people-to-people relations.

He said Australia is a close and important partner for Malaysia, and in 2021, the two countries enhanced bilateral relations through CSP.

“This is the first interaction between the two of us since I took over the administration last month. Australia was Malaysia’s 13th largest trading partner last year with a trade value of RM52.28 billion (USD13.76 billion),” he said in a post on Facebook on Friday.

A 2.5-minute video recording of the telephone conversation between Anwar and Albanese was also posted.

In the conversation, Anwar also said that the Unity Government led by him was stable and has already received more than two-thirds of the support of the Dewan Rakyat and wanted to focus on driving the national economy.

Albanese also congratulated Anwar on his appointment as the 10th Prime Minister of Malaysia, describing his appointment as the main leader of the government as an inspiration through his resilience in life and politics.

On Nov 24, Anwar who is also the Chairman of Pakatan Harapan, was sworn in as the 10th Prime Minister.

Source: Bernama

Malaysia-Australia committed to strengthening bilateral ties — PM

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