The majority of approved investments in the manufacturing sector are from existing businesses expanding their operations, which demonstrates their confidence in Malaysia, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

“In the manufacturing sector alone, 63 per cent of investments approved are from existing businesses expanding their operations.

“This shows the companies’ confidence towards Malaysia’s economic stability and growth prospects,” he said in a post on X today.

Tengku Zafrul added that Malaysia recorded 5,310 approved projects in 2023, which could generate 130,000 jobs. 

In a separate post, he said that Prime Minister Datuk Seri Anwar Ibrahim’s visit to Australia was a resounding success. 

“The prime minister announced RM24.5 billion in potential investments from five companies within the next five to ten years, and several projects will assist Malaysia in establishing a strong digital economy and renewable energy ecosystem that is estimated to create over 1,200 high-skilled job opportunities,” he said.

The visit also resulted in potential exports exceeding RM962.1 million to Australia, encompassing a diverse range of products, including urea, wood products, food and beverages, as well as electronic components.

Tengku Zafrul said these potential investments are in sectors targeted under the New Industrial Master Plan 2030 (NIMP 2030), such as renewable energy, chemicals and digital economy.

“The government is targeting industries such as these to create high-salary jobs for the people and better opportunities for small and medium enterprises.

“These achievements also mirror the belief in the MADANI government’s policies and its capacity to implement them,” he added.

Source: Bernama

Businesses expanding manufacturing operations demonstrates belief in Malaysia’s strength – Tengku Zafrul

Goodyear is currently collaborating with several companies, including Proton Holdings Bhd to employ its workers who are affected by the closure of its factory in Shah Alam.

Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz said the company has taken steps to ensure a smooth transition for its workers.

Additionally, Goodyear has assured that they will provide compensation higher than what is mandated by law.

“The closure of the Shah Alam factory is part of the cost-cutting measures undertaken by the company as it is targeting a cost reduction of up to US$1 billion per annum.

“Goodyear is also set to close two tyre factories in Germany, affecting 1,750 workers. A tyre factory in the United Kingdom is also slated for closure, so it’s not just the operations in Malaysia that are affected, but Goodyear’s operations worldwide are also impacted,“ he said in a message on the X app on Friday.

Earlier today, the Malaysian Investment Development Authority (MIDA) said that the government, through initiatives led by the Ministry of Investment, Trade and Industry (MITI) and MIDA, has mobilised a special team to facilitate job placements, as well as offering upskilling and reskilling programmes for the 500 affected employees.

Source: Bernama

Goodyear collaborating with companies for employment of affected workers – Tengku Zafrul

CHERY Malaysia may be the first Chinese automotive brand to assemble its electric vehicle (EV) in Malaysia, with the newly launched Omoda E5 the likeliest pick.

Chery Malaysia executive vice-president Leo Chen made the announcement during the launch of the E5, which also signalled the start of the company’s environmental, social and governance (ESG) initiative.

 Also present were Deputy Prime Minister Datuk Seri Fadillah Yusof and Chinese ambassador to Malaysia Ouyang Yujing.

“This initiative aligns with the government’s policy of localisation compliance and will assist Malaysia to become a hub for EVs in the region,” said Chen, adding that it would create more job opportunities and boost the local economy.

“Meanwhile, the E5 represents a significant step forward in our mission to provide sustainable mobility solutions. We believe that it will not only meet but exceed the expectations of Malaysian consumers, perhaps also setting new standards for green mobility,” he added.

Local assembly may begin as early as in the second quarter.

The company said this was possible as the E5 shared the same body frame as the Omoda 5 sport utility vehicle, which was already being assembled in the country.

The E5 is powered by a 61kWh high-capacity lithium iron phosphate blade battery and boasts  201hp and 340Nm of torque.

The three-in-one flat-wire motor paired with a two-wheel drive (2WD) setup and three leading control systems deliver a power consumption of 15.5kwh/100km and a 430km (WLTP) range. It can charge from 30 per cent to 80 per cent in 28 minutes.

The AC charging rate is 9.9kW while it is 80kW for DC charging.

The E5 also features vehicle-to-load (V2L) technology in the event that remote powering is required.

The E5 boasts rather generous dimensions.

It has a length of 4,420mm, a width of 1,830mm, a height of 1588mm and a wheelbase of 2,630mm. The boot capacity is 483 litres.

The cabin features a dual-tone combination of blue and white-beige as well as black, coupled with the use of high-quality faux leather materials.

There is a 24.6-inch curved 2K HD dual-screen, Premium Sony Sound System, dynamic ambient lighting with more than 60 colours to choose from, in-car wireless 50W charger, active cooling system and a central console that is also a cooling storage compartment.

The E5 also has the Advanced Driver Assistance System 2.5 (ADAS 2.5) with 17 functions, including front collision warning, autonomous emergency braking, adaptive cruise control, lane departure warning, multi-collision brake, traffic jam assistant, door open warning, rear cross-traffic braking, integrated cruise assist and rear cross-traffic alert.

The E5, which is available in the Aqua Green, Khaki White, Phantom Grey and Dark Black colour options, is priced at RM146,800.

The warranty package offers a seven-year or 150,000km vehicle warranty, an eight-year or 160,000km battery warranty and an eight-year or 160,000km drive unit warranty that covers the power motor, power motor control unit, power battery management system and the vehicle’s control unit.

The company is the first brand to partner with sustainable energy infrastructure solutions provider EVC to provide autocharge services at 474 charging stations nationwide.

Chery Malaysia is also offering a one-to-one exchange if the battery’s state of health falls below 70 per cent during the warranty period.

The first 2,000 customers will receive a complimentary wall box charger, V2L charger and charging credits worth RM1,000 at EVC roaming partners.

Maybank is currently offering an all-exclusive 2.08 per cent interest to customers who purchase the E5 during the promotional period (terms and conditions apply).

Source: NST

Chery Malaysia launches Omoda E5, CKD in the works

Leaders of multinational companies face unprecedented uncertainty in shaping their supply chain strategies and reconfiguring network footprints in response to global geopolitical upheaval.

Dynamics between manufacturing powerhouse China and several major trading partners have accelerated pre-existing production shifts. Technology and relative labour costs are changing. Covid-19 demonstrated the need for more resilient supply chains at a time when geopolitical tensions have created more complex considerations for global trade partners.

CEOs must also assess how to establish an ESG-compliant supply base while identifying which geographical location will be the engine of economic growth in the coming years. These complex considerations are why over 90% of global manufacturers intend to redesign their supply footprints in the next five years, according to a survey by Boston Consulting Group (BCG).

Resilient companies are twice as likely to outperform non-resilient peers in long-term total shareholder return performance. What’s more, a successful footprint transformation can improve companies’ resilience and sustainabilityandcut global manufacturing and supply-chain costs by 20% to 50%.

With companies looking to manage supply costs and mitigate risks, Malaysia could capture significant value in this evolving ecosystem, energised by new investment priorities and a focus on manufacturing opportunities.

Southeast Asia: A new centre of global manufacturing

Southeast Asia’s attractive proposition is framed by the compelling cost-competitiveness of its manufacturing landscape. BCG’s proprietary Global Manufacturing Cost Comparison Model assesses that baseline manufacturing costs in Southeast Asia are now up to 15% lower than in China — even before applying potential logistics and tariff costs — in a region boasting large volumes of skilled, low-cost labour.

Southeast Asia has already benefited from significant shifts away from China, with exports to the US soaring by 65% from 2018 through 2022, while US goods imports from China declined by 10%.

Domestic consumption in Southeast Asia is projected to reach US$4 trillion (RM19.04 trillion) by 2031. Rapid regional growth has also fashioned a large domestic market, with a GDP of US$3.6 trillion in 2022, with the share of middle- and high-income households on track to reach 84% of households by 2031.

Regionally, the Association of Southeast Asian Nations (Asean) has implemented a range of supportive policies in recent years, with measures to enhance the free flow of goods and services among member states. Expansion and modernisation of ports have been complemented by investment in energy, transport and digital infrastructure. The Indonesia-Malaysia-Thailand Growth Triangle, the Singapore-Kunming rail project and the Asean Highway Network all offer potent examples of this evolving ecosystem. These initiatives align with the wider Asean Economic Community Blueprint, which looks to embed a deeply integrated and mutually beneficial regional economy with seamless movement of goods and people.

Major trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CP-TPP) offer competitive trade access with countries that together account for 40% or more of global GDP.

Globally, the value-add of Southeast Asia’s manufacturing industry will double from US$748 billion in 2022 to US$1.4 trillion by 2028. The projected compound annual growth rate (CAGR) of 11% puts Southeast Asia at the forefront of global manufacturing growth, outpacing competitors India (8.4%), China (3.6%) and Mexico (3.3%). In fact, according to our latest report Jobs, National Security, and the Future of Trade, cumulative Asean trade is forecast to grow by US$1.2 trillion in the next ten years.

Manufacturing opportunities in Malaysia

Southeast Asia’s manufacturing market is dominated by six key countries, with unique considerations as to the opportunities they present. Malaysia, Indonesia, the Philippines, Singapore, Thailand and Vietnam boast diverse manufacturing opportunities across a broad range of industries.

Malaysia’s own manufacturing opportunity is evolving, but companies must make careful strategic choices to unlock the greatest share of this value, assessing local benefits and challenges.

Foreign direct investment (FDI) into Malaysia has soared in recent years, growing at 34% CAGR from 2015 to 2021. Malaysia’s FDI relative to its GDP from 2015–2019 outperformed neighbouring countries Thailand, Indonesia and the Philippines, with only Singapore and Vietnam performing better over this period.

Malaysia ranks eighth in the World Economic Forum’s Workforce Quality Index, powered by a multicultural workforce with over half the population speaking English and more than a quarter proficient in Chinese.

Low productivity-adjusted manufacturing costs — 10% to 15% lower than China — offer a compelling proposition, backed by mature infrastructure that includes over 140,000km of road network connecting Thailand in the north and Singapore in the south.

The local manufacturing landscape is dominated by three key regions — Penang-Kedah, Kuala Lumpur-Selangor and Johor — that together account for 76% of manufacturing output and 69% of manufacturing investment.

Malaysia does have local challenges to address. Its position on IMD’s World Competitiveness Rankings declined 11 ranks to 25th from 2015 to 2021. The relatively modest size of the domestic market and more limited access to foreign markets also restrict market access. The dynamic contemporary political climate could also be perceived to impact future market performance.

To address these challenges, the government of Malaysia has introduced a number of supportive investment and manufacturing policies. The National Investment Aspirations (NIA) seek to catalyse investment to boost Malaysia’s economic recovery, secure its global position in a post-Covid-19 era, and deliver on the promise of inclusive development. This will be supported by five pillars: increasing economic complexity, creating high-value job opportunities, extending domestic linkages, developing new and existing economic clusters, and improving inclusivity.

The NIA also anchors Malaysia’s New Investment Policies, which aim to strengthen Malaysia’s foundations to develop new and existing high-value growth ecosystems while ensuring that future policies and investments are targeted at delivering maximum mutual value to investors and the nation alike. A sector-specific strategy to address investment challenges and drive systemic growth will initially target electronics and electricals (E&E), digital economy and pharmaceuticals while a second wave will further support the chemicals and aerospace industries.

Key supporting strategies, including the National 4IR Policy (N4IRP) and New Industrial Masterplan, further cement intentions to invest in a maturing economic landscape with support for manufacturing. The New Industrial Masterplan sets goals to grow manufacturing value-add at 6.5% CAGR to reach RM587.5 billion by 2030, increase manufacturing-related employment from 2.7 million in 2022 to 3.3 million by 2030, and increase median salaries from RM1,976 in 2021 to RM4,510 by 2030.

Southeast Asia, including Malaysia, is an attractive destination for supply chain relocation thanks to persistent geopolitical trends, regional policy measures and a growing domestic market. While the regional opportunity is ripe, understanding the local context is vital. Those who tread this path successfully are poised to position themselves at an exciting new heart of global manufacturing potential.

Kazutoshi Tominaga is managing director and senior partner at the Boston Consulting Group (BCG). Hitesh Tak is managing director and partner at BCG. Boston Consulting Group partner and director of global trade and investment Michael McAdoo contributed his insights to this article.

Source: The Edge Malaysia

Growing Champions: Malaysia’s supply chain opportunity in a shifting global landscape

Industry players should work with universities – not only for primary research but also for the commercialisation of products, says Datuk Seri Dr Wee Ka Siong.

Dr Wee, who is TARC Education Foundation board of trustees chairman, said this is one of the ways to bridge the gap between industry and academia.

“Research (done at universities) can be very theoretical. Industries know the preferences of their customers. For industries to do research is not easy because they are not trained.

“Industries making use of universities to do research and universities at the same time understanding industrial requirements and public demand is something that will help,” he told the media after attending Tunku Abdul Rahman University of Management and Technology’s (TAR UMT) InnoGratitude Day 2024 held at its main campus in Setapak here yesterday.

Dr Wee, who is also MCA president, said the ratio of research and development (R&D) spending to the country’s gross domestic product (GDP) is currently very low.

“Malaysia should increase its investment in R&D.

“Industries should come up with more initiatives and work with universities to upgrade knowledge and adopt the latest technologies,” he said.

Earlier in his speech, Dr Wee said industry collaboration is an important aspect in the growth of TAR UMT as outlined in its 10-year roadmap.

“One of the university’s aspirations is to be a leader in innovative academia-industry collaboration.

“This gathering is meaningful in celebrating the diverse innovative collaborations the university has forged with 83 industry partners,” he said.

Apart from producing practical industry-relevant solutions, Dr Wee said academia-industry collaborations enrich educational experiences, as students gain exposure to real-world problems, industry best practices and potential career pathways.

“This is the essence of TAR UMT’s Beyond Education philosophy, which focuses on the other important aspects of students’ development, including industry-ready skills and relevant experiences,” he said.

At the event, Dr Wee unveiled the university’s Academia Enterprise Partnership logo and also presented awards of appreciation to industry partners.

He also visited an exhibition by the university’s faculties titled “Collaboration and Innovation Through Time: Shaping the Future Together”.

Also present at the event were TAR UMT board of governors member Datuk Chong Sin Woon and president Prof Dr Lee Sze Wei.

In his closing remarks, Prof Lee expressed his hope that more collaborations will be established in the future to bring the university to the next level.

“Being a university that is very focused on its role in the socio-economic development of the country, we are very proud to forge partnerships with our industry partners and make an impact in nation-building,” he said.

Separately, in a message posted on his Facebook page after the event, Dr Wee highlighted TAR UMT’s collaboration with Technology Visionary Sdn Bhd, which is one of the university’s 83 industry partners from various industries, including finance, business and accounting, technology and engineering, food and beverage, media, applied sciences and education.

“Its chief executive officer Jeyashanker RK is very pleased to have conducted the internship programme in his company,” Dr Wee wrote in his post.

TAR UMT – with five branch campuses in Penang, Perak, Pahang, Johor and Sabah – started as a community college in 1969 before being upgraded to university college status known as Tunku Abdul Rahman University College (TAR UC) in 2013.

It gained its full-fledged university status upon receiving a certificate of registration from the Higher Education Department on Nov 7, 2022.

Source: The Star

‘Industries must link with varsities’

EVIDENTLY, age is just a number for semiconductor veteran turned venture capitalist Datuk Lai Pin Yong. BlueChip VC Sdn Bhd, which he co-founded, is raising US$200 million (RM956 million) to back Penang-based semiconductor companies in three promising segments — advanced packaging, integrated circuit (IC) design and niche equipment — and eventually have them listed on Bursa Malaysia.

With an initial capital of RM120 million, BlueChip VC set up shop as a specialised technology fund just a year ago, in early 2023, in George Town, Penang. It is now gunning for an annual return of more than 20% from its investments in promising investee companies seeing a spurt in growth as global supply chains are recalibrated with “friendshoring” or “China plus one” in mind amid heightened US-China trade tensions.

“The RM120 million starter fund has been fully committed to leading local electronics companies. Their names will be announced upon completion of formalities,” Lai tells The Edge in an interview.

“We are now planning to launch the US$200 million fund in view of the overwhelming response and strong requests to participate. We have met up with and received endorsement or interest from not just Malaysian sovereign wealth funds, but also regional ones. Some of these funds will be partners in our new fund as well as co-investors in our identified investee companies.”

An electrical engineering graduate of the National Taiwan University with five decades of experience in the semiconductor industry, Lai, who turns 80 in April, was among the pioneer batch of Malaysian engineers when Intel Corp set up shop in Penang in 1972 — the US chip behemoth’s first overseas manufacturing facility. There, he worked his way up to general manager, vice-president and eventually managing director of Asia-Pacific between 1983 and early 1994. In late 1994, he moved to Motorola Inc, where he was corporate vice-president and president of Motorola (China) Electronics Ltd, before being promoted to senior vice-president of Motorola Inc.

Lai says he has had a role in fostering the creation of champions in the local chip sector.

“At Intel, I initiated a then new policy to foster a local supply chain by localising the design of assembly, testing and packaging machines, and as a result building up the capability of local engineering firms.

“This was followed by encouraging promising young engineers, who had the [expertise] to set up their own companies, with contracts [from large foreign tech multinational corporations that had begun to outsource smaller jobs]. Eventually, it created many new semiconductor-related companies, of which at least eight have been listed [or are seeking to list] on Bursa Malaysia,” he elaborates without naming the eight companies.

Lai also says he fostered the deepening of the supply chain when he ran Motorola in Greater China. “I asked the suppliers of Motorola to set up operations in China. Otherwise, the contracts would not be given to them. Consequently, about 100 downstream foreign suppliers went to China.”

The experience and network helped to draw industrial leaders from China and Malaysia to be limited partners (LPs) at BlueChip VC, says Lai. Both he and BlueChip VC CEO Tim Chen Yongzheng are among the 12 LPs of the fund. Chen previously headed Motorola, Microsoft and Hon Hai Technology Group’s (Foxconn) operations in China.

“We will be able to induce the Chinese semiconductor firms to set up operations in Malaysia, which can serve as their second home to export, especially to the US. So far, the response from my China network in Suzhou, Tianjin, Wuxi and Shenzhen to invest in Malaysia has been overwhelming,” says Lai.

BlueChip VC and its partners can also be co-investors, which could then introduce new businesses to the local semiconductor firms, he adds, noting that US sanctions restrict the supply of semiconductors, associated intellectual property and equipment to China’s manufacturers — not just from the US, but also other allied countries such as Japan, the Netherlands, the UK and Germany — necessitating a response from Chinese firms.

Given that Penang has established a strong electrical and electronics (E&E) ecosystem over the past 50 years, Lai is of the view that the state should have the know-how, trained personnel and network to absorb the diverted orders from Chinese firms and to support their new factories.

“It is this realisation that crystallised the starting of BlueChip VC, if you like, as a catalyst and ‘marriage broker’ to further broaden and deepen the industry. It is our hope that a new impetus can be given to Malaysia, especially Penang’s semiconductor industry for the next 50 years,” he says.

While Penang is BlueChip VC’s initial focus, the venture capital firm has also received invitations and support to move into other states in Malaysia.

“However, we will be disciplined in establishing ourselves soundly with investments in Penang before branching out. We will work with semiconductor companies operating in Malaysia, be they locally owned or foreign owned, who are willing to work with us,” says Lai.

Apart from bringing in capital to its investee companies, BlueChip VC will also help them access the China market, he says. “Our targeted investee companies must be in targeted segments — advanced packaging, IC design and niche equipment — with strong market positioning and good growth opportunity, as well as a strong and ethical management team. To ensure a timely and fruitful exit, we would like to help investee companies get listed on Bursa Malaysia, or at least be attractive for a private placement.”

Lai goes on to say that BlueChip VC will not insist on having a representative on the board of directors of investee companies.

“What is more important to us is a good collaboration, as well as frequent and in-depth discussions on progress. Definitely, we will endeavour to use our network to add value to them,” he says.

Lai highlights that when these investee companies take root in the Malaysian economy, they will work closely with the locals. “In the so-called Semiconductor Industry 1.0, we have seen many outstanding local engineers get motivated to become entrepreneurs and set up their own businesses. We hope our efforts will bring about a positive momentum, with more high-value jobs being created. For sure, more partnerships and investments will help to elevate our country’s E&E industry.”

Semiconductor veterans assembled

According to Lai, BlueChip VC is a closed-end fund whose capital will be fully invested within three to four years, with the aim of returning all proceeds before the end of the 10th year.

“In other words, we have a high target of 20% return per year. Our LPs are all professionals and high-net-worth individuals. We will assemble a special research and investment team under Tim. They will be responsible for investment decisions,” he says.

“Meanwhile, I will provide advice and assistance in the analysis. We pride ourselves as a team with strong domain knowledge as most of us are from the semiconductor industry. Unlike other funds, we don’t have to draw our industrial knowledge from consultants.”

Apart from Lai and Chen, other LPs include the founders of three listed E&E companies in Penang who worked under Lai at Intel, a co-founder of a top 10 semiconductor company in China, an Asian chief technology officer of a global tech giant, as well as leading economists and financial experts.

“We have a good mix of global industry experts, local industry leaders and financial specialists as our LPs,” says Lai, declining to name the other LPs at the current juncture.

BlueChip VC is working to set up a complete team as soon as possible to undertake “vigorous evaluation of opportunities” coming its way. “Obviously, we will follow a sound risk-controlled investment strategy, meaning we will spread investments in all these areas without excessive concentration in any single industry or company,” he says.

Lai believes the global consumption of semiconductors will increase rapidly and spread into more areas in the coming years.

“We are very optimistic about the semiconductor sector. That is why we set up BlueChip VC and plan to launch more funds. We are seeing enhancement of many traditional operations using technology, be it artificial intelligence, green technology or energy savings. The world of technology is growing and improvements in tech are increasing efficiency, yield and greater sustainability,” he says. 

Source: The Edge Malaysia

Tech: Semiconductor veteran turned VC raising US$200 mil to back IPO-able chip firms

“The proposed industrial park, about the size of 1,000 football fields, will be one of the largest purpose-built fully integrated new industrial estates in Johor.”

Iskandar Waterfront Holdings Sdn Bhd (IWH) and PLS Plantations Bhd, two entities linked to tycoon Tan Sri Lim Kang Ho, are in talks with a China state-owned company to develop an industrial park and innovation hub in Johor.

The two companies inked a memorandum of understanding (MOU) with Shenzhen provincial government-owned Shenzhen Shenyue Joint Investment Co Ltd (SSJI) on Tuesday, for the proposed development of a 1,000-acre Johor-Shenzhen Industrial Park in Ulu Sedili, together with a 50-acre Johor-Shenzhen Innovation Development Hub in Johor Bahru, according to a statement from IWH.  

“The proposed industrial park, about the size of 1,000 football fields, will be one of the largest purpose-built fully integrated new industrial estates in Johor. It will be designed to provide companies with offices and production facilities, as well as related support services to promote industrial development and collaboration,” the property developer said.

“This will be supplemented by the Johor-Shenzhen Innovation Development Hub to be set up within the Johor Bahru central business district, which will provide resources and support for innovative activities and research and development initiatives in Johor,” the group said.

PLS Plantations is the landowner of one of the identified locations for the developments, said IWH, adding that SSJI’s parent, Shenzhen Investment Holding Co Ltd, has developed 50 industrial parks covering 8,000 acres in Shenzhen.

Lim, who represented both IWH and PLS Plantations at the signing of the MOU, said the two projects would ride on Johor’s industrial wave spurred by the Johor-Singapore Special Economic Zone (JSSEZ) and the Johor Bahru-Singapore Rapid Transit System (RTS).

“These two projects are a positive value proposition for Johor and will attract interest from businesses, both domestic and foreign,” he added.

IWH, in which the Johor state sovernment owns 37% through Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ), is one of the biggest land developers in Iskandar Malaysia. The IWH group owns more than 4,200 acres of land bank, including prime waterfront land in Johor Bahru.

Source: The Edge Malaysia

IWH, PLS Plantations in talks with China state-owned firm to develop industrial park, innovation hub in Johor