A major grouping of players in the Malaysian durian industry has pledged to bring the industry to greater heights.

Celebrating its first anniversary yesterday, the Durian Manufacturers Association (DMA) has renewed its commitment to bringing global recognition to a diverse variety of Malaysian durians, while promoting fair trade practices for the so-called “king of fruits”.

DMA president Eric Chan said the association has 11 members comprising durian farmers and durian product manufacturers, with a local market share of 75%.

“Coming together under the association is a realisation of a long-held dream, a truly momentous occasion in our history,” said Chan, adding that the effort to bring every significant player on board had been painstaking.

“Uniting hasn’t been a simple journey, but we’ve persevered.

“We grasp the significance of nurturing our durian sector not only for personal gain but for our nation’s advancement.

“Former rivals among our members have evolved into trusted allies, united in advancing the industry over the last decade,” he said at the association’s inaugural anniversary dinner here recently.

Guests of honour included Deputy Agriculture and Food Security Minister Datuk Arthur Joseph Kurup and other ministry officials.

Moving forward, Chan said DMA wants to make the Malaysian durian a global icon and has laid out five key pillars to achieve it.

Among the focuses were to empower durian growers with knowledge, resources and sustainable practices, ensuring high-quality produce and fostering industry excellence; advocating environmentally sustainable durian farming practices; and championing the global recognition of Malaysian durians.

Chan said DMA also called for the promotion of fair trade practices and consumer awareness worldwide while driving innovation and research.

“We are also focused on expanding the export market for Malaysian durians.

“Leveraging their unique taste and quality, we aim to reach international consumers and establish Malaysian durians as a preferred choice worldwide,” he said.

The dinner also saw the signing of a memorandum of understanding (MOU) for the Kuala Lumpur-Zhengzhou Durian Exclusive Chartered Air Cargo Route.

Chan said the MOU was a significant step forward for the durian industry, opening up new avenues for trade and collaboration between Kuala Lumpur and Zhengzhou, China.

“With the establishment of this exclusive chartered air cargo route, we are not only enhancing the accessibility and efficiency of durian transportation but also strengthening the economic ties between Malaysia and China.

“This initiative underscores DMA’s commitment to driving innovation, fostering collaboration, and unlocking the full potential of the industry,” he said.

In his speech, Kurup said the impact of the durian industry extends beyond agriculture, serving as a driving force in various sectors such as logistics, light industry and more, and contributing significantly to the national economy.

He said the upcoming collaboration for air cargo routes between Malaysia and China represents a groundbreaking development that will “revolutionise how we export durians” by ensuring the delivery of the freshest and highest quality fruit to one of Malaysia’s largest markets.

Kurup also lauded the establishment of DMA and its achievements.

“The association marks a significant milestone in achieving the collective vision of making Malaysia the top exporter for durian,” said Kurup, adding that realising the full potential of the durian industry requires collaboration, innovation and strategic partnerships.

“The government and industry players have a collective responsibility to drive growth, promote sustainability, and uphold the highest standards of quality and integrity.

“By sharing knowledge, best practices and market insights, we can strengthen our competitive advantage and position Malaysian durians as the preferred choice in the global marketplace,” he said.

Statistics showed that Malaysia exported 455,458 metric tonnes of durians in 2022, reaching a value of US$259mil (RM1.2bil), with expectations to reach 505,853 metric tonnes by 2025.

“This growth is a clear indicator of the potential and vitality of our durian industry. This represents a growth of 168% compared to 2019, signaling rising global demand and Malaysia’s emerging significance as a key exporter,” he added.

Source: The Star

Industry players pledge to bring durian to new heights

Premier Datuk Patinggi Tan Sri Abang Johari Openg foresees Sarawak leading the charge on renewable energy exports for the country by the year 2027.

He expressed optimism that within three years’ time, the state would have the facilities and technologies required to produce renewable energy, particularly hydrogen.

“By 2027, we will have a plant to produce hydrogen together with South Korean companies namely Lotte Chemical and Samsung Engineering, which have become offtakers to the production of hydrogen.

“At the same time, we will also retain around 7,000 tonnes of hydrogen for domestic use, and this will be the energy for industries that have base in Sarawak,” he told reporters when met after officiating the Borneo Energy Transition Conference (BETC) 2024 here today.

The Energy and Environmental Sustainability Minister said Sarawak is on the right track towards its transition to renewable energy as the state eyes to export renewable energy specifically hydrogen to foreign countries.

“This will increase our Gross Domestic Product (GDP) while at the same time provide new job opportunities for the new generation because this depends on the latest technology.

“Sarawak has all the resources and if we combine these with technology, therefore the state’s potential is very vast especially in terms of the National Energy Transition Roadmap (NETR) policy.

“It is possible that we can become the decisive factor in us transitioning from the old into the new energy,” he said.

He said at the moment, the state has two confirmed offtakers through Japan and South Korea.

“If we were to scale up our production, there is also a possibility for other countries because they would have to comply with green energy.

“What I’m saying here is that Sarawak may one day become a green energy supplier for the whole region depending on the technology that is used in the production of hydrogen,” he said.

Earlier in his speech, Abang Johari said Sarawak is fortunate to have partners from overseas who were willing to invest in the state’s renewable energy ventures.

“However, the question now is that the banks are still undecided. Even through there has been a lot of pressure for us to transition towards green energy, the banks are afraid that we might no be able to pay because there is no guarantee that this will work.

“But to me, it will work because if the transition from coal to fossil fuel worked, don’t tell me that the transition from fossil fuel to renewable energy cannot work,” he said.

The Premier hoped to see the exchange of landmark documents between SEDC Energy (SEDCE) and Gentari Sdn Bhd on Sarawak Hydrogen Hub; joint development agreement with Samsung Engineering, Lotte Chemical, Korea National Oil Corporation, as well as a groundbreaking initiative with Sarawak Metro on the Rembus Hydrogen Plant at BETC today serve as a signal to industry players that the Sarawak government is serious in its mission of producing clean energy for the world.

“Sarawak would like to become a hub, if possible, together with Gentari Sdn Bhd and to be the sole supplier for clean hydrogen for any downstream facilities in the state such as ammonia and methylcyclohexane (MCH).

“This hydrogen hub concept is separated between upstream hydrogen production and downstream hydrogen derivatives.

“This illustrates that the hydrogen hub is able to cater to multiple investors through a plug-and-play concept for investors especially the electrolyser modules and other facilities that can be shared with the hub and managed and operated by SEDCE and Gentari Sdn Bhd,” said Abang Johari.

Also present were Deputy Premier Datuk Amar Dr Sim Kui Hian, Deputy Energy and Environmental Sustainability Minister Datuk Dr Hazland Abang Hipni, Deputy International Trade, Industry and Investment Minister Datuk Dr Malcolm Mussen Lamoh, Sarawak Economic Development Corporation (SEDC) chairman Tan Sri Datuk Amar Abdul Aziz Hussain, and SEDCE chief executive officer Robert Hardin.

Source: Borneo Post

Premier foresees Sarawak’s lead in country’s renewable energy exports by 2027

Entries by international EV companies signal a significant move towards EV transition, and longstanding local players also play pivotal roles 

Malaysia’s automotive sector is embarking on its next revolutionary phase with the introduction of electric vehicles (EVs).

EV companies such as Tesla Inc and BYD Auto Co Ltd entered Malaysia’s market with a big statement towards the transition, aligning with a mission to champion the cause for environmental sustainability. 

Noma SWO Consult associate partner and Gerson Lehrman Group’s (GLG) council member Nik Zafri Abdul Majid, alongside Proton Holdings Bhd deputy CEO Roslan Abdullah, shared perspectives on recent partnerships, government initiatives and Malaysia’s position in the global shift towards EVs. 

Nik Zafri emphasised the pivotal roles of longstanding industry players, highlighting DRB-Hicom Bhd’s position through Proton. 

“DRB-Hicom has been a long-standing player, in which Proton is the branding and monument for its success,” he told The Malaysian Reserve (TMR). 

He said the collaboration with international brands like Suzuki, Honda and Mitsubishi has propelled DRB-Hicom to a leadership position in domestic production. 

“Most importantly, the car parts are imported and (then) assembled locally (complete knock-down [CKD]) which promotes domestic production, job creation and vendor development,” he said. 

He also believed that broad experience, domestic production, job creation and vendor development are four key elements of how DRB-Hicom influenced the market trends, making it more competitive with appealing local vehicles. 

UMW Holdings Bhd, synonymous with Toyota, offers diversified options to consumers. 

“The influence of UMW on consumer choices and market trends are diversified options and established international brands,” he added. 

Nik Zafri also noted that Tesla’s entry into Malaysia signals a significant milestone in the government’s push towards Sustainable Development Goals (SDGs), particularly in the EV domain. 

“Tesla’s presence with EVs raises awareness and interest, which may influence the future direction of market trends, where the plan is to establish supercharger networks and service centres, which will boost the EV ecosystem,” he said. 

Strategic Initiatives and Partnerships

Proton’s collaboration with DRB-Hicom and Zhejiang Geely Holding Group Co Ltd, as shared by Roslan, plays a crucial role in shaping Malaysia’s automotive trajectory. 

Proton has recently made progress with the development of the Automotive High-Tech Valley (AHTV) project in Tanjung Malim, Perak. 

“The project is a major initiative which is expected to energise the Malaysian automotive industry and attract RM32 billion in investments over the next 10 years, while creating job opportunities and helping Malaysia become a regional leader in the production of next-generation vehicles (NxGVs),” Roslan told TMR. 

He also said that Proton’s transition into battery electric vehicles (BEVs) positioned the company at the forefront of Malaysia’s EV revolution, gaining valuable insights and contributing to the digital transformation journey associated with EVs. 

“Proton started its BEV journey with the introduction of the smart model, distributed through its subsidiary, Proton New Energy Technology Sdn Bhd (Pro-Net), in 2023,” he said. 

In regards to AHTV, Nik Zafri resonated with Roslan’s statement, adding that it will boost domestic production. 

“We can expect transfer of technology in the future which will encourage the localisation of EV technology and components, hence reducing imports,” he said. 

DRB-Hicom’s partnership with Geely further emphasises Malaysia’s commitment to boosting domestic production, localising technology and fostering a sustain- able automotive ecosystem. 

“As at the end of 2023, the company has introduced 31 models and cumulatively sold 4.98 million units, so we are approaching another milestone in 2024,” said Roslan. 

Meanwhile, Nik Zafri said the Malaysian Investment Development Authority’s (MIDA) collaboration with Perusahaan Otomobil Kedua Sdn Bhd (Perodua) would lead to the launching of the MIDA-Perodua Digital Transformation Ecosystem Programme. 

“The aim is to upgrade the local automotive suppliers with state-of-the-art technologies and advanced machinery, digitising manufacturing processes (upgrade of the prevailing material requirements planning [MRP]/enterprise resource planning [ERP] system) and for a more affordable vendor development programme for Perodua,” he noted. 

Investments in research and development (R&D), coupled with digitisation efforts, underscore the industry’s dedication to modernisation and innovation. 

NAP2020 and Tax Initiatives

Government initiatives and incentives, crucial catalysts for growth, play a vital role in Malaysia’s automotive sector. 

The government’s launch of the National Automotive Policy 2020 (NAP2020) was aimed at enhancing Malaysia’s automotive industry in the era of digital industrial transformation. 

The goal is to cultivate the NxGV technology ecosystem to position Malaysia as a regional hub for NxGV production, enhancing the involvement of the domestic automotive industry in the sector. This initiative not only emphasises technology advancement but also encompasses the overall transport ecosystem. 

The policy aimed to modernise the domestic automotive industry in line with the Industrial Revolution 4.0 (IR4.0) and ensure that consumers, domestic industry and the government benefit from NxGV implementation. 

Furthermore, the policy was also aimed to reduce carbon emissions from vehicles by improving the fuel economy level in Malaysia by 2025 in line with the Asean Fuel Economy Roadmap of 5.3 litres of gasoline equivalent (Lge)/100km. 

Concerning fuel economy level, it was reported in October 2023 that Malaysia’s refined fuel consumption is projected to grow at a much slower pace than anticipated over the next 10 years, averaging at around 1.5% from 2023 to 2032. 

Hence, it is a good time for Malaysia to transition towards the government’s Environmental, Social and Governance (ESG) goals with the usage of EVs, and the development of Kulim Hi-Tech Park in the northern region of Malaysia. 

Nik Zafri said the commitment to attracting investments, promoting technological advancement via grants and funding programmes, developing infrastructure, foster- ing workforce competencies, encouraging localisation and supporting vendor development created an enabling environment for industry players to thrive. 

For example, tax exemptions offered by the government, such as investment tax allowances and pioneer status, would attract more foreign direct investors (FDI) into the automotive industry. 

It will reduce the initial investment costs for companies, making Malaysia a more attractive destination for establishing or expanding their manufacturing operations. 

“For individuals, income tax relief of up to RM2,500 on EV charger rental, purchase, and installation; and for companies, this applies to the tax deductions on EV rental, in which both of these incentives will be extended until 2027,” he said. 

Training More Skilled Workers

Nik Zafri also touched upon the government’s initiative to introduce the National Dual Training System (NDTS). 

“Initiatives like NDTS combine classroom learning with on-the-job training, providing graduates with practical experience and improving their employability in the automotive sector,” he said. 

Subsequently, Investment, Trade and Industry (MITI) Minister Tengku Datuk Seri Zafrul Abdul Aziz said during his speech at a recent BYD launching ceremony that MITI would collaborate with other ministries to fulfil the industry’s demands. 

“MITI will continue to collaborate with the Human Resource, Education and Higher Education Ministries to ensure that the industry’s requirements for skilled workers will be fulfilled,” he said. 

Last year, MITI set up the National EV Steering Committee, which is a Cabinet committee comprising key ministries to address top concerns in the industry. 

“This 400% increase in BEV adoption signifies our strong policy push that has generated a strong trend in the shift from internal combustion engine (ICE) to EV among Malaysian consumers,” Tengku Zafrul added while complimenting BYD for achieving the highest number of units of EV cars brought into Malaysia. 

Meanwhile, Roslan said Proton’s alignment with government aspirations and its focus on connectivity, autonomous, shared mobility and electrification (CASE) technologies echoed this commitment. 

He also noted the government’s active participation in the promotion of EVs, which aligned with the Net-zero Carbon Mobility blueprint. 

“The government must make the policies clear to the public to address the various concerns regarding the usage of EV cars such as range anxiety, financing facilities, as well as the second-hand value of EV cars,” he said. 

Malaysia’s Position in the EV Revolution

Nik Zafri said although Malaysia is still in the early stages of the EV revolution, there is significant potential for growth. 

Challenges such as limited EV production and infrastructure gaps exist, but strong government support through initiatives like tax breaks and subsidies signals a promising future for EV adoption and production. 

With these challenges, he said Malaysia is likely to face tough competition for at least one to two years, given the head start in EV development and production enjoyed by countries like China and South Korea. 

However, he was hopeful about Malaysia’s trajectory in its EV development. 

“Partnerships and investments with Geely and Tesla can bring in expertise and technology, accelerating Malaysia’s EV development,” he said. 

Nik Zafri believed that leveraging expertise, partnerships and financial support, Malaysia, including Proton, is poised to emerge as a key player in the regional EV market by 2025. 

As for Roslan, he supported the government’s targets towards transitioning to EVs, notably achieving 15% EV of new car sales by 2030. 

“Proton views these targets to be in line with the ICE-to-EV transition period as it may require some time to convince consumers and stabilise the industry,” he noted. 

However, he said that ICE and hybrid EV (HEV) cars are expected to prevail until 2030, followed by the decline of volumes for ICE vehicles. 

Source: The Malaysian Reserve

Unlocking Malaysia’s global automotive potential

Contributed about 5.8% to the GDP in 2023, the sector is targeting RM120b by 2025 in GDP growth and RM495b in export earnings 

Malaysia’s major involvement in the electric and electronic (E&E) sector, especially the semiconductor industry, is propelling new growth areas, as more companies are moving into more knowledge-intensive, hi-tech, innovative and higher-value-added activities.

In the region, Malaysia is among the major players in the expanding E&E market, acts as the catalyst for the development of other industries and enhances the supply value chain. 

Malaysian Industrial Development Finance Bhd (MIDF) head researcher Imran Yassin Md Yusof said the semiconductor industry is projected to remain a key driver of the E&E sector in Malaysia which will intensify through the advancements in technology as its driving force. 

New growth areas the E&E manufacturers are currently exploring include e-commerce, automation, Internet of Things (IoT) and artificial intelligence (AI), accelerating the move towards IR4.0 both at industrial and societal levels. 

Today, IoT is pushing demand for more advanced semiconductor devices such as sensors, resistors and transceivers, to help the industry to adopt digitisation and digitalisation aimed at improved productivity, profit and competitiveness. 

“In one particular area, the rise of IoT and connected devices has significantly influenced the E&E sector, leading to increased demand for smart and interconnected solutions,” he told The Malaysian Reserve (TMR). 

He believed that AI is now seen as a new supporting ecosystem as the possible future trend in the semiconductor industry evolves across electronics manufacturing services, communication technologies and smart devices. 

“Moving forward, we expect the demand for advanced semiconductor products for applications like 5G, IoT and AI is expected to drive growth,” he said. 

It is noted that the E&E industry is producing 13% of global back-end semiconductors, driving 40% of the nation’s export output and contributing about 5.8% to the GDP in 2023. 

With ambitious targets set at RM120 billion by 2025 in GDP growth and RM495 billion in export earnings, the industry is a catalyst for Malaysia’s economic progress. 

“Looking at global trends, the development of AI and the need for advanced chips is expected to drive development going forward. 

“Although some would say it is still in its infancy stage, we could witness a breakthrough in this field soon,” Imran added. 

However, given the nation’s E&E sector still very much relies on the external chain and global influence, Imran said the sector needs a resilient supply chain as it faces challenges related to global supply chain disruptions, affecting the production and distribution of electronic components. 

“Last year saw the E&E sector performing weakly from an export perspective. We believe that this was due to slower demand, particularly in consumer electronics, where our local E&E is part of the value chain. 

“We also saw lower demand coming out of China. All of this could be due to either slowing end consumer demand or the draw-down of inventories by companies, or both,” he said. 

Despite that, Imran expects the situation to recover due to better demand and restocking activities this year. 

Investment and Building More High-Tech Facilities

In developing the sector, a balance between attracting investments and ensuring sustainable growth is pivotal, without neglecting the interests of the community of investors and workforce in line with the evolving industry trends and global economic shifts. 

At this juncture, Malaysia is also recognised as being an investment-friendly nation with the policy implementation, on top of providing investment incentives, and research and development (R&D) grants which saw a success in creating an environment that fosters competitiveness and innovation. 

As it gears toward high technology, Malaysia also elevates itself as the hub for manufacturing growth with the establishment of industrial parks and zones specifically tailored for the sector that contributes to the development. 

This includes the development of high-tech parks such as Kulim Hi-tech Park in Kedah as a hub in creating a robust industrial economy focusing on high-tech manufacturing, advanced technologies and R&D activities, as well as the rise of Cyberjaya as the global tech hub. 

The government through the Malaysian Investment Development Authority (MIDA) has been encouraging manufacturers to establish more R&D, and design and development centres; centres of excellence; global procurement centres; logistic centres and operational headquarters in Malaysia. 

Not only that, through the New Industrial Master Plan 2030’s mission-based champions, Malaysia is also set to explore more high-end segments of the semiconductor supply chain namely integrated circuit design and wafer fabrication. 

At its core, this vision seeks to create an abundance of high-value job opportunities, transforming Malaysia’s reliance on relatively low-cost foreign labour. 

Growing Presence and Friendly Investment Policy

Many multinational semiconductor companies have established a presence in Malaysia, chosen over our infrastructure, skilled workforce, competitive costs and strategic location in the Asia-Pacific region. 

The E&E sector is also diverse, encompassing various subsectors such as semiconductors, electronic components, telecommunications equipment and consumer electronics which allows Malaysia to participate in multiple aspects of the global supply chain. 

Bosch Malaysia MD Klaus Landhaeusser said Malaysia has built up an unparalleled eco-system for semiconductors which has assembled important players in the value chain. 

“For example, it brings the Bosch semiconductor manufacturing network much closer to the upstream processes of packaging companies, such as outsourced semiconductor assembly and test vendors, and customers in the important Asian market,” he told TMR. 

Apart from Malaysia’s geographical location, backed by a well serviced by all primary air and shipping lines, the country’s economy remains resilient and rests on strong fundamentals, while implementing investment-friendly policies. 

“These are the factors attracting foreign investors, giving rise to Malaysia being an essential player in the E&E ecosystem. This is also the main reason why Bosch remains committed to the Malaysian market,” Landhaeusser added. 

As of Dec 31, 2022, Bosch has made a total of €86.2 million (RM446.52 million) investment in Malaysia and in August 2023, recently launched a new plant, the Bosch semiconductor backend site, which reflects the evolution of the E&E sector over the years. 

Landhaeusser said currently, only one-fifth of the plant is built at a cost of some €65 million and Bosch intends to invest a further €285 million at the site by the middle of the next decade. 

In short, a total of €350 million is planned for this facility until 2035. 

Through its new and existing manufacturing plants in Penang, Bosch — as a key player — will continue to strengthen its position, inventing E&E-related products such as producing mobility electronics, power tools and semiconductors to enhance the quality and efficiency of living. 

“With the new plant addition, Penang is now home to the largest number of manufacturing facilities in a single country for Bosch in South-East Asia. 

“This facility is one of Asia’s most advanced test centres to perform final testing of automotive chips and sensors,” Landhaeusser added. 

Landhaeusser also believed that the future integration of AI will present numerous business potentials in new growth areas for the E&E manufacturers including smart manufacturing and smart energy efficiency solutions, connected devices and IoT, autonomous systems and more. 

“AI-powered predictive maintenance systems can help E&E manufacturers anticipate equipment failures before they occur, enabling proactive maintenance activities and reducing costly downtime,” Landhaeusser said. 

R&D and Retaining Tech Talent

As investors continue to come in and intensify competitive situations regionally, human capital readiness is equally important to ensure a skilled workforce to meet the need for technological advancement. 

This requires close coordination among the private sector, the Human Resources Ministry and the Higher Education Ministry to bridge skill gaps effectively. 

In this regard, another important player in the manufacturing sector, ams OSRAM Malaysia, believed that deeper involvement in research is needed to fast-track the evolution, which subsequently helps semiconductor companies to retain top talents aggressively. 

“As the research accelerates, there will be more engagement with local semiconductor eco-systems to source materials and equipment technologies for advanced manufacturing,” its spokesperson said in response to an inquiry from TMR. 

This will also allow the local institutes and universities to supplement scientific and technical knowledge. 

“To prepare better, the industry must work closely with national and local governments to motivate the youths to consider science, technology, engineering and math careers and at the same time work with local companies to operate at world-class levels to support the semiconductor ecosystem,” it said. 

The group believed that Malaysia should learn from the pandemic and current geopolitical tension by renewing its focus on building a balanced supply chain that balances between local and regional or global suppliers. 

“Malaysia must seize this opportunity to build upon its 50-year history and encourage entrepreneurship or start-ups to support and participate in the whole semiconductor industry,” it added. 

Technically, it opined that Malaysia is reaching the end of “Moore’s Law” and the industry is rapidly adopting “advanced packaging” where multiple chips are combined in single packages that go into phones, cars, drones, watches and other applications. 

“Malaysia’s strength in semiconductor packaging can be leveraged to thrust Malaysia to the forefront of this fast-growing sector,” it added. 

Source: The Malaysian Reserve

 

E&E sector presents new key growth areas with the rise of tech and high-value sectors

A shift from quantity to quality employment and emphasis on local talents is imperative to foster progressiveness 

The manufacturing sector, despite a marginal rebound of 0.1% growth in the last quarter of last year (4Q23), faces challenges to continue its momentum into 2024 due to the expected moderation of the export-oriented segments. 

According to the Department of Statistics Malaysia (DoSM), while certain sub-sectors such as vegetable and animal oils and fats experienced growth, declines in electrical, electronics and optical products restrained the overall sectoral performance. 

Private economists and analysts, however, are more optimistic of 2024’s brighter outlook as the 4Q23 economic performance indicated a growth rebound in the manufacturing and mining and quarrying sectors, as well as expansion in agriculture. 

Kenanga Investment Bank Bhd reported that Malaysia’s 4Q23 GDP figures (at 3.4% is a slight uptick from the preceding quarter’s 3.3%) offers invaluable insights into the countr y’s economic landscape against the backdrop of global certainties and domestic challenges. 

The impact of expanding sectors were softened marginally due to the weaker growth in the services and construction sectors.

The manufacturing sector individually experienced a slight rebound, growing by 0.1% compared to a marginal contraction in the previous quarter, supported by activities such as manufacturing of vegetable and animal oils and fats, non-metallic mineral products, and basic metal and fabricated metal products. 

However, the growth momentum was limited by declines in electrical, electronics and optical products, and petroleum, chemical, rubber and plastic products. 

The report also states that the performance of growth in 2023 was primarily hindered by a weak manufacturing export-oriented sector, influenced by China’s fragile post-pandemic recovery.

It was exacerbated by extended global supply chain disruptions resulting from escalating geopolitical tensions, notably the Russia-Ukraine war and the Israel-Gaza conflict.

Of which, evidence was seen in the subdued Manufacturing Purchasing Managers’ Index (PMI) in December, which remained in contraction since August 2022. 

Additionally, exports experienced a decline throughout the year, with full-year growth contracting by 8%. 

Despite these challenges, the expectation is that domestic demand will continue to support GDP growth. 

This is supported by projected improvements in the unemployment rate for 2024 and sustained growth in distributive trade sales due to increased tourist arrivals and spending. 

Furthermore, the anticipated recovery in the manufacturing sector, potentially driven by an electronics and electrical (E&E) upcycle particularly in the second half of 2024 (2H24), coupled with China’s gradual recovery, bodes well for the domestic growth outlook. 

Consequently, the GDP growth forecast for 2024 is maintained at 4.9%, falling within the Finance Ministry’s projection range of 4%-5%. 

DoSM in its latest quarterly GDP release said, the overall growth for 2023 moderated to 3.8%, marking a significant decline from the previous year’s robust 8.7%. 

The figure fell short of initial projections, with the housing forecast standing at 3.7% and Bloomberg’s consensus at 4.1%. 

On a positive note, the mining and quarrying sector witnessed a notable rebound of 3.7% in 4Q23, primarily fuelled by expansions in natural gas and crude oil and condensate production, contributing positively to GDP growth after a previous quarter of contraction. 

The agriculture sector also showcased resilience with a consecutive expansion of 1.2% in 4Q23, driven by improved palm oil production amid fluctuating economic conditions. 

For the service sector, while it sustained overall growth momentum, it witnessed a slight moderation to 4.7% growth in 4Q23. Contributions from sub-sectors such as wholesale and retail trade, transport and storage, and business services played a crucial role in sustaining growth. 

The construction sector, however, witnessed a sharp moderation to 2.5% growth in 4Q23, notably in civil engineering and residential building sub-sectors. 

Government’s Role 

While approximately half of Malaysia’s GDP originates from the services industry, manufacturing retains significant importance for the Malaysian economy, particularly due to its concentration in key areas such as Penang; Kulim, Kedah; the Klang Valley; and Johor, where high-value manufacturing hubs are situated. 

Global data and business intelligence platform Statista anticipated that this year, the manufacturing market would witness substantial growth across various key metrics. 

The value added in the sector is forecasted to reach US$118.5 billion (RM560.51 billion), with a projected compound annual growth rate (CAGR) of 6.05% from 2024 to 2028. 

Similarly, the output in the manufacturing market is expected to amount to US$726.9 billion in 2024, demonstrating a significant CAGR of 23.68% during the same period.

Moreover, the number of enterprises operating within the manufacturing market is projected to reach 246,500 by 2024, with an anticipated CAGR of 61.62% from 2024 to 2028.Additionally, the number of employees in the sector is expected to reach 4.87 million in 2024, reflecting a CAGR of 19.22% over the forecast period. 

The government in the New Industrial Master Plan (NIMP) 2030 seeks to reform industries and achieve broad-based growth. 

Emphasis is placed on integrating small and medium enterprises (SMEs) into both domestic and global value chains, ensuring equitable distribution of manufacturing benefits across all states. 

As Malaysia attracts more hi-tech and innovation-driven investments, particularly in green manufacturing and renewable sectors, the plan aims not only to enhance labour productivity but also to support Environmental, Social and Governance (ESG) goals. 

This strategic approach ensures continued access to ESG-sensitive markets for Malaysian exports. 

Central to the NIMP 2030 are clear missions aligned with the Madani Economy, positioning Malaysia as Asia’s economic leader through knowledge-based innovations and prioritising the wellbeing of its citizens. 

The plan addresses challenges across sectors and leverages existing and upcoming government policies to ensure alignment and coherence. 

Projections under the NIMP 2030 anticipate significant growth in Malaysia’s manufacturing sector, with manufacturing GDP expected to surge by 61% to RM587.5 billion by 2030. 

Employment opportunities are set to expand, providing livelihood for 3.3 million Malaysians, driven by the creation of high-skilled jobs and advancements in automation. 

Moreover, median salaries in the manufacturing sector are projected to increase by 9.6% to RM4,510, reflecting a shift towards higher value-added activities and the creation of high-skilled job opportunities. 

In pursuit of these ambitious goals, Malaysia aims to attract foreign direct investment (FDI) from global leaders in wafer fabrication, leveraging targeted investment strategies and incentive packages. 

For instance, the US government’s CHIPS Act provides a 25% investment tax credit for semiconductor manufacturing investments in the country. 

Furthermore, the NIMP 2030 places significant emphasis on smart manufacturing, integrating physical and digital processes to optimise operations and enhance efficiency. 

Technologies such as the Internet of Things (IoT), data analytics, artificial intelligence (AI), robotics, cloud computing and cyber security are pivotal in this transformation, facilitating informed decision-making and streamlined production processes. 

The 2024 Budget revealed on Oct 13, 2023, allocated an initial budget of RM200 million for the rollout of the NIMP 2030 programmes and initiatives — which showed the government’s commitment in bolstering the manufacturing sector. 

Key Risks Impacting Growth 

Looking ahead to Malaysia’s economic growth this year, economist Dr Nungsari Radhi was hopeful for a stronger momentum into 2024. 

While 2023 concluded with weaker economic performance compared to the overall annual rate, there is optimism for stronger momentum in 2024. 

He said there were some positive signs in 4Q23, particularly concerning investments, which grew at a faster pace than the overall economy. 

If the trend continues into 2024, it bodes well for overall growth prospects. 

Investments play a crucial role in building capacity, which in turn has positive implications for future economic growth. 

However, it is essential to note that sustainable growth cannot solely rely on consumption expenditures. 

Challenges persist in the tradeable side of the economy, particularly in commodities and manufacturing exports.

While the term “recovery” may not accurately reflect the current situation, Nungsari said it is evident that Malaysia’s economy is experiencing growth. 

However, to sustain the growth trajectory, he believed a focus on increasing investments is crucial, even if certain sectors are not growing as rapidly due to subdued demand. 

The emphasis should be on developing new capacities and capabilities to enhance competitiveness, particularly in the tradeable part of the economy. 

“I believe that both better quality jobs and higher paying jobs depend on us expanding our competitiveness in international trade. That is the only way to do that. 

“To also increase demand for the ringgit and therefore strengthen it fundamentally,” he said in a written reply to The Malaysian Reserve (TMR). 

In considering how domestic demand will persist in supporting GDP growth despite external challenges, Nungsari said it is important to acknowledge the factors that define and constrain domestic demand, namely income growth and credit growth. 

Historically, there has been a significant reliance on domestic demand to fuel economic growth. 

However, looking ahead, there is a shift in focus towards investments as the primary driver of long-term and structural growth. 

Although there are concerns about short-term growth, the focus is on closely monitoring investments, acknowledging their crucial role in fostering long-term economic growth. 

While demand and trade are expected to recover over time, he said it is imperative to enter this cycle by implementing improved strategies and initiatives. 

When considering the primary risks or uncertainties that might affect the GDP growth projection for 2024, he emphasised that Malaysia’s capacity to cultivate new capabilities via enhanced investment is pivotal to unlocking brighter prospects for the future. 

This encompasses not only private investments, both domestic and FDI, but also public investments aimed at fostering new capabilities. 

“As long as we build new capabilities, we are looking at better prospects ahead,” he added. 

Therefore, he said it is imperative to prioritise the proportion of the developmental budget within the overall budget, emphasising the need for more optimal spending rationalisation. 

Conversely, a non-resident senior fellow at the Malaysian Institute of Economic Research (MIER) Prof Geoffrey Williams projected a slowdown in Malaysia’s economic growth during the forecasts conducted by economists and analysts in November 2022. 

This outlook was reiterated in the early months of 2023, suggesting that Malaysia would not achieve the earlier forecasted growth target of 4%-5%. 

Recent data suggests that the Malaysian economy is on a path to a modest recovery in 2024, with an expected growth rate of around 3.5%. 

However, he said there is a caveat to this outlook, as there exists a tangible risk that the growth rate could dip even lower than anticipated. 

Furthermore, he said the official estimate of 4%-5% growth depends on higher domestic activity in consumer spending and investment, and stronger international growth — which are all facing significant downside risks. 

Apart from the electricity and plantation sector mentioned in the report, he also highlighted that the gig economy is anticipated to play a significant role in bolstering incomes for millions of individuals across various fields – not just p-hailing but also professional freelance work. 

Williams commented on the expected resilience of domestic demand in sustaining GDP growth despite external challenges, highlighting several factors to consider. He noted that while domestic demand could bolster growth at a modest rate, it is unlikely to propel it to the targeted 4%-5% range unless there are policy adjustments in the short term. 

These adjustments might involve rationalising subsidies and reallocating savings to income support and tax restructuring. An example would be postponing the Sales and Service Tax (SST) increase, similar to what occurred in the traditional and complementary medicine (TCM) sector. 

In terms of consumer spending, he said it remains weak due to higher employment in low-paying jobs, barely keeping pace with the rising cost of living. 

Meanwhile, investment showed some positive improvements but there is a long-term decline in the percentage of GDP devoted to investment. 

On international trade, Williams said it is also weak, with recession and stagnation in major markets and significant geopolitical risk holding back real investment. 

Furthermore, China is facing challenges in returning to its full potential, which serves as a significant growth driver in Asia, upon which Malaysia relies. 

“Government spending and development investment is not forecast to rise very much to compensate. All these factors point to slower than normal growth in 2024 similar to 2023,” he told TMR. 

Regardless, he believed the key risk that could potentially impact the GDP growth forecast for 2024 include the existing geopolitical risks which have held back global growth through 2023. 

There is also a risk that the subsidies rationalisation programme will be delayed and that overconfidence in the official narrative and forecasts will make the government too cautious on reform. 

Geopolitical Conflicts 

On the other hand, MIER senior research fellow Dr Shankaran Nambiar said that events unfolding in Ukraine or Gaza will exert additional pressure on the Malaysian economy beyond its current impact. 

“The global scenario is not particularly optimistic. On the more pessimistic side, China may not post very vibrant figures, too. 

“I think the rather muted global economic environment will surely be a factor that will impact Malaysia’s export-oriented manufacturing sector,” he told TMR. 

Furthermore, Shankaran said the main impetus for the sector will come from the E&E sector, particularly from the semiconductor industry. 

“The semiconductor cycle, according to some accounts, is not set to pick up until the latter part of the year. 

“Given this, it is unlikely that we can expect spectacular outcomes from the manufacturing sector for some time,” he added. 

Expanding on this, Socio-Economic Research Centre (SERC) ED Lee Heng Guie said the manufacturing sector contracted further by 0.3% year-on-year (YoY) in 4Q23 from -0.1% in 3Q23. 

The decline was driven by continued decreases in the production of electronics, machinery and equipment, textile and wearing apparel, and wood products. 

He also noted that output growth in food processing, beverages, basic metal products, fabricated metal products, non-metallic mineral products, and leather products has increased. 

Additionally, he mentioned the continued growth in domestic demand, albeit at a slower pace. 

“Growth in construction-related materials, such as basic metal and fabricated metal products, as well as non-metallic mineral products, was supported by the ongoing, albeit slower, growth in the construction sector (3.6% YoY in 4Q23 against 7.2% in 1Q23), ongoing public infrastructure spending and housing development,” he told TMR. 

Moreover, Lee commented that the export-oriented manufacturing industry was largely dragged down by weak global demand and oversupply of electronics demand, leading to inventory adjustments in the PC segment, consumer electronics and server sectors. 

“This is in tandem with an 8.3% decline in global semiconductor sales, with chip sales falling across different parts of the world, namely in the US (-5.2%), Japan (-3.1%) and China (-14%). 

“Meanwhile, the Red Sea conflict-induced shipping disruptions and higher freight costs have impacted importers in the chemicals, machinery and automotive industries due to delays in supply chain and production timelines, while exporters face minimal disruption amid freight cost increases,” he said. 

However, he expected the manufacturing sector to recover in 2024, gaining higher growth traction to an estimated 3.9% in 2024 from +0.7% in 2023. 

Several current and forward indicators suggest improved growth in the sector. 

“In January 2024, global manufacturing PMI returned to 50 points after 16 consecutive months below the threshold separating between expansion and contraction, signalling an improvement amid persistent challenges in the manufacturing sector. 

“Global semiconductor sales have bottomed out and marked positive growth in January 2024. The tech upturn cycle is seen with global semiconductor sales expected to increase by about 13% in 2024 (-8.3% in 2023),” he said. 

Lee also said Malaysia’s exports increased by 8.7% YoY in January 2024, with exports of E&E products showing a smaller rate of decline. 

“Manufacturers and exporters must be mindful of cost and supply chain management, as well as logistics, to safeguard against the risks of disruption from a wider escalation of the ongoing conflicts in Ukraine-Russia and (between) Israel-Hamas, which could hamper the global economy,” he added. 

Source: The Malaysian Reserve

Manufacturing sector: Mixed trends, brighter outlook for 2024

Under the leadership of JPDC, the PIPC has been meticulously planned and executed, with a focus on sustainability, innovation and operational excellence 

The Pengerang Integrated Petroleum Complex (PIPC) stands as a significant oil and gas (O&G) development initiative situated in Pengerang, Johor, spearheaded by Johor Petroleum Development Corp Bhd ( JPDC). 

The complex is strategically designed to become a world-class integrated refinery and petrochemical hub, to propel Malaysia’s downstream O&G sector while solidifying its position as a regional industry hub. 

For the record, JPDC is a federal agency reporting to the Economy Ministry and a subsidiary of Malaysia Petroleum Resources Corp (MPRC). 

Spanning a vast area in Pengerang, the PIPC is designed to encompass various facilities, including refineries, petrochemical plants, storage terminals and supporting infrastructure. 

This comprehensive approach underscores the complex’s ambition to emerge as a world-class integrated hub for O&G activities, serving as a catalyst for industrial development and job creation. 

Under the leadership of JPDC, the PIPC has been meticulously planned and executed, with a focus on sustainability, innovation and operational excellence. 

Leveraging Malaysia’s strategic geographical location and abundant natural resources, the complex is poised to attract significant investments and propel the country’s energy sector into a new era of growth and prosperity. 

Moreover, the development of the PIPC is not merely confined to economic considerations. 

Environmental sustainability and safety remain paramount priorities, with stringent measures in place to minimise ecological impact and ensure the well-being of local communities. 

Through collaborative efforts with government agencies, industry stakeholders, and the community, JPDC is committed to fostering responsible and sustainable development practices within the complex. 

According to a statement from the Malaysian Investment Development Authority (MIDA), JPDC has achieved success in securing committed investments exceeding RM5 billion for the second phase of the PIPC. 

This achievement signifies a resurgence in investments following the Covid-19 pandemic. 

As of April 6, 2023, investments in the second phase of PIPC totalled RM5.05 billion, surpassing JPDC’s 2021 target of RM5 billion for investments spanning 2020 to 2025. 

JPDC acting CEO Izhar Hifnei Ismail highlighted the agency’s efforts in facilitating and supporting prospective investors in their feasibility studies for establishing downstream O&G and petrochemical businesses within PIPC. 

In this phase, the focus has shifted towards the development of new industrial areas like the Pengerang Industrial Park by Johor Corp (JCorp). 

Additionally, collaborations with international players such as LG Chem Ltd from South Korea, in a joint venture (JV) with Petroliam Nasional Bhd (Petronas), are being pursued. 

Completion of Phase 1 

The PIPC, scheduled for a 25-year development between 2013 and 2037 in four phases, witnessed the completion of phase one (2013-2019) which included two catalytic projects. 

These projects include the Pengerang Deepwater Terminals (PDT), a storage facility for oil and petroleum products with a capacity of up to five million cu m, developed by Dialog Group Bhd, and the Pengerang Integrated Complex (PIC) consisting of refinery and petrochemical facilities developed by Petronas. 

Critical infrastructure and social amenities worth over RM3 billion have been developed by the federal and Johor state governments to support industrial growth within PIPC. 

JPDC is now emphasising sustainability in the second phase, urging new investments to have robust sustainability plans, in line with the growing focus on green technology. 

Investments are expected to adhere to environmental, social and governance (ESG) standards, with financiers scrutinising project proposals accordingly. 

The majority of new investments originate from Europe and Asia, reflecting a global interest in the development of PIPC with a sustainability-driven approach. 

In a recent interview with The Malaysian Reserve (TMR), Izhar shed light on the current status and future prospects of the PIPC. 

Development of PIPC began in 2013, guided by the PIPC Development Master Plan 2013-2037, he shared. 

On Oct 13, 2023, Prime Minister cum Finance Minister Datuk Seri Anwar Ibrahim announced that the PIPC is designated as a hub for petrochemical and chemical activities, to be supported by incentives for investments in selected activities and for the development of industrial parks. 

Izhar unveiled that the PIPC has made significant strides in its development, as of Dec 31, 2023. 

As an overview of the progress achieved, he said a total of 22,904ha have been designated for industry development. 

“Of this, 10,415ha, accounting for 45.5% of the total land area, have been committed to industry development. 

“Notably, development has already been completed on 6,256ha, representing 60% of the committed area,” he elaborated. 

In terms of investments, he said the targeted total investments in PIPC by 2037 amount to RM330.6 billion and as of Dec 31, 2023, he declared that committed investments have reached RM139.66 billion, constituting 42.2% of the targeted total investments. 

Job Creation and Refining Capacity

On job creation, PIPC aims to create a total of 30,095 direct and indirect jobs by 2037. 

As of Dec 31, 2023, 7,549 jobs have been generated, marking 25% of the targeted total. “The planned total liquid storage capacity from 2013 to 2037 is set at five million cu m. “Currently, as of Dec 31, 2023, the available liquid storage capacity stands at 4.1 million cu m, achieving 82% of the planned total,” he disclosed.By 2037, he shared that the planned total refining capacity is projected to reach one million barrels per day. 

“As of Dec 31, the available refining capacity is at 300,000 barrels per day, reaching 30% of the planned total capacity,” he told TMR. 

Moreover, the planned total petrochemical production capacity by 2037 is aimed at 11.3 million tonnes per annum. 

At the end of last year, he revealed the petrochemical production capacity stands at 3.6 million tonnes per annum, achieving 31.9% of the planned total production capacity. 

“In 2022 and 2023, the government introduced several economic development policies, ranging from macroeconomic policies to sector- and industry-specific policies, including those on energy, manufacturing and chemical industries that have bearing on the activities that are being promoted in PIPC,” he noted. 

Meanwhile, the current PIPC Development Master Plan emphasises on preparing an integrated downstream O&G environment, and for the past 10 years, the two key investors in PIPC have been diligently developing facilities that serve as the backbones for the industry to grow. 

Dialog Group Bhd has developed deep water jetties for the transportation of crude oil and liquid petroleum products as well as liquid natural gas, together with more than three million cu m of liquid storage capacity in Pengerang Deepwater Terminals (PDT), he commented. 

He also pointed out that Petronas has developed oil refineries, petrochemical processing plants, a regasification facility and other supporting facilities within its PIPC, the biggest such industrial complex in Malaysia. 

However, the development policies and plans launched in 2022 and 2023 have introduced new dynamics, as well as set new economic aspirations and targets. 

For example, Izhar said the Ekonomi Madani plan calls for the creation of new economic opportunities through strategic industries, to improve the economic wellbeing of Malaysians through high-paying jobs and business participation. 

“The National Energy Policy 2022-2040 and the National Energy Transition Roadmap set targets for a sustainable energy sector, including increasing use of renewable energy and managing the levels of greenhouse gas emissions into the environment,” he said. 

On top of it, the New Industrial Master Plan 2030 and the Chemical Industry Roadmap 2030 chart the paths of promoting petrochemical- and chemical-related manufacturing activities in Malaysia without compromising on the sustainability agenda. 

Key Priorities 

On key priorities and objectives for JPDC regarding the future phases of the PIPC, its development is guided by the PIPC Development Master Plan 2013-2037, which is divided into four phases, namely Phase 1 (2013-2019), Phase 2 (2020-2025), Phase 3 (2026-2031) and Phase 4 (2032-2037). 

In Phase 1, the main activities were the construction of PDT Phase 1 and Phase 2, and the PIPC from 2015 to 2019, with a total committed investment of RM120.67 billion. 

In Phase 2, two industrial parks were opened in PIPC, namely OASIS@Pengerang (developed by Perisind Samudra Sdn Bhd) and Pengerang Industrial Park (developed by JCorp), offering site options for companies involved in downstream O&G, petrochemical and chemical activities. 

“JPDC is currently reviewing the PIPC Development Master Plan to ensure that Phases 3 and 4 can accommodate and support industrial activities that need to comply with sustainable development objectives and net-zero goals,” Izhar said. 

These include aligning the PIPC master plan with the country’s sustainable economic development plans, especially those relating to the future growth of the energy and manufacturing sectors. 

With Pengerang being designated as a hub for petrochemical and chemical activities, supported by a set of investment incentives, as announced by Anwar in the 2024 Budget, the JPDC CEO said the company will be emphasising inbound investments in petrochemicals and chemicals. 

“We have also gained immense experience and know-how in facilitating and guiding industry growth in PIPC, and we believe that we can share and apply that knowledge at the national level, by advising and assisting government, business and community stakeholders in managing similar activities in their respective areas,” he explained. 

He also shared that since the beginning of PIPC development in 2013, JPDC has been focusing on three main mandates, which are to plan and coordinate the physical development of PIPC, including public infrastructures and industrial plants and facilities; to promote and facilitate investments in downstream O&G, petrochemical and chemical activities in PIPC; and to facilitate and guide members of the local communities to participate in the economic growth taking place in PIPC. 

The construction of new highways and upgrading of roads have allowed for improved traffic access into and from Pengerang, and opened up new areas of development, including commercial and residential areas. 

The increased presence of industry personnel also contributed to higher levels of commercial activities in Pengerang. 

For example, in a joint study conducted by JPDC and Petronas Refinery and Petrochemical Corp Sdn Bhd (PRPC) in 2019, commercial and retail activities in areas surrounding the PIPC construction were found to have increased fivefold in terms of value during the project construction period from 2014 to 2018. 

Furthermore, the main beneficiaries were food and beverage outlets, hotels, retail shops and supermarkets. 

Also in 2013, JPDC organised training programmes for local manpower, enabling them to gain certification in skillsets and job competencies required by the downstream O&G industry. and secure employment with companies or contractors serving the industry in Pengerang. 

These cover the construction and operational phases of the industrial facilities, as well as the plant turnaround and maintenance jobs. 

From 2013 to Dec 31, 2023, JPDC trained 6,898 Malaysian workers in new skills or to upgrade their current skill sets, with 95% of the trainees able to secure jobs with employers in the industry right after completing their training. 

This contributes towards the setting up of a community of highly paid skilled and competent industrial manpower in Pengerang, ready to serve the industry. 

In 2024, JPDC has embarked on a Contractors Development Programme, aimed at facilitating and supporting competent and qualified local contractors to enhance their business scale, capabilities and readiness to serve the downstream O&G, petrochemical and chemical industry. However, to reiterate, land area development has fallen slightly behind, achieving only 45% of the targeted projection, with 10,415ha currently utilised out of the planned 22,904ha. 

Core Activities and Development Areas

To reflect, PIPC’s core activities revolve around six key components, which are oil refinery, naphtha cracker, petrochemical, liquid storage, deepwater terminal and specialty chemical. 

The development areas identified by JPDC are the PDT, Pengerang Industrial Park (PIP), and OASIS@Pengerang, in addition to PIPC. 

There is also PIC, occupying 6,242ha and it is an integrated refinery and petrochemical complex featuring a cogeneration power plant, air separation unit, dedicated water supply, and common utilities. It is operated by PRefChem, a JV with Saudi Aramco. 

PDT, spanning 1,200ha, includes storage terminals with a total capacity of five million cu m, supporting the efficient handling of O&G products while the PIP is a 786ha integrated industrial park connected to PIPC and PDT, targeting heavy, medium and light industries. 

OASIS@Pengerang encompasses 678ha and it is a mixed development featuring commercial and industrial spaces, including ready facilities and a resource recovery complex for scheduled waste. 

Lastly, Pengerang Deepwater Terminal 2 (PDT2) is under development, including storage capacity of 1.3 million cu m and a liquefied natural gas (LNG) regasification terminal owned by Petronas Gas Bhd, Dialog LNG Sdn Bhd and Permodalan Darul Ta’zim Sdn Bhd. 

PIPC’s Vision for the Future 

PIPC Phase 2 is poised to focus on strategic investments to further enhance its position in the downstream O&G sector. 

Key focus areas include completing the product chain by producing final products from intermediate products, such as plastics and synthetic fibres. 

Additionally, the company is focusing on new integrated projects with enhanced technology, embracing technologies like crude oil to chemical (COTC), plastic waste to chemicals and methanol to olefins (MTO) to improve competitiveness, efficiency and sustainability. 

There will also be initiatives toward a low-carbon energy system, including accelerating the solar energy industry, leveraging bio-energy resources, exploring full hydrogen potential, and developing new energy technologies. 

Lastly, JPDC is utilising the industrial land available for downstream oil, gas and energy hub development. 

Investment Opportunities and Support Services

JPDC offers a range of investment facilitation services, including pre-investment consultation, investment execution assistance, and post-investment support. 

PIPC also presents investment opportunities in integrated logistic facilities, waste management centres and maintenance repair overhaul and support services. 

As PIPC continues to evolve, it not only contributes significantly to the economic landscape but also becomes a beacon of innovation and sustainable development in the downstream O&G industry. 

Source: The Malaysian Reserve

Pengerang Integrated Petroleum Complex shaping global energy markets

The Federation of Malaysian Manufacturers (FMM) on Friday inked a memorandum of understanding (MoU) with the Hungarian Chamber of Commerce and Industry (HCCI) to establish a framework for collaboration to support industrial development in Malaysia and Hungary, and to strengthen mutual understanding and cooperation between the business communities.

The MoU was signed by FMM president Tan Sri Soh Thian Lai and HCCI president László Parragh, in conjunction with the HCCI delegation’s visit to Malaysia from Feb 21 to 23. The signing was witnessed by Hungarian ambassador to Malaysia Dr Petra Ponevács-Pana.

According to Malaysia’s Department of Statistics, trade between Malaysia and Hungary amounted to US$644 million (RM3 billion) in 2023 with exports of US$498 million and imports of US$146 million.

“I believe the MoU will provide more opportunities for Malaysian businesses in exploring potential trade opportunities in Hungary and we welcome investments from Hungary to Malaysia given the strategic location of Malaysia in Asean coupled with the most recent signed free trade agreements, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, which is the world’s largest free trade area in terms of combined gross domestic product and market size, accounting for almost one-third of the world’s population,” said Soh.

Parragh said: “Malaysia, being Hungary’s second largest trading partner from Asean, is welcome to tap on Hungary as a gateway to the European Union’s market of close to 500 million population and I believe there are ample opportunities for future cooperation between our members.”

Source: The Sun

FMM, HCCI in pact to support industrial development in Malaysia, Hungary

SK Nexilis Co Ltd, the world’s largest copper foil producer, has set up for its subsidiary SK Nexilis Malaysia Sdn Bhd its first green syndicated term loan facility (green loan) in Malaysia to finance the construction cost of its first overseas copper foil manufacturing facility in the Kota Kinabalu Industrial Park, Sabah.

In a recent statement, the company said the RM2.3 billion manufacturing facility would have an annual production capacity of 50,000 tons, increasing SK Nexilis’ global production capacity by two times.

It said the copper foils produced will be exclusively used in electric vehicle batteries, enabling sustainable, low-carbon mobility solutions in various locations, including South Korea, Malaysia, Poland and North America.

OCBC Bank (Malaysia) Bhd acts as the green loan structuring adviser, playing a pivotal role in structuring the green loan and advising on the underlying green financing framework to adapt to SK Nexilis’ environmental, social and governance (ESG) objectives.

OCBC Bank also acts as the mandated lead arranger, facility and security agent, and a joint lender, alongside AmInvestment Bank Bhd as the other mandated lead arranger, and AmBank (M) Bhd as a joint lender.

SK Nexilis also appointed Moody’s to issue a second party opinion report.

The report certifies the green loan framework to be in compliance with the green loan principles.

SK Nexilis Malaysia chief executive officer Shin Dong Hwan said the electrification of motor vehicles is essential for the decarbonisation of the transport sector, which currently contributes approximately one-fifth of greenhouse gas emissions globally.

“Our new manufacturing facility will not only facilitate the decarbonisation initiative, but also create job opportunities for the local talent network, and provide traction for more investments to enhance the local supply chain development for electric vehicles,” he said.

OCBC Bank managing director, senior banker and head of investment banking Tan Ai Chin said that as a major electrical and electronics hub, Malaysia is well positioned to develop a thriving local electric vehicle manufacturing base and ecosystem.

“SK Nexilis’ presence reinforces this ecosystem, and supports the nation’s decarbonisation efforts,” she said.

Source: The Edge Malaysia

Copper foil producer SK Nexilis sets up RM2.3b manufacturing facility in Sabah

The manufacturing industry operated at 79.8 per cent capacity in the fourth quarter of 2023 (4Q 2023), edged down by 0.4 percentage points from a rate of 80.2 per cent in 4Q 2022, said the Department of Statistics Malaysia (DOSM).

In a statement today, Chief Statistician Datuk Seri Mohd Uzir Mahidin said a lower capacity utilisation of the manufacturing industry was primarily attributable to decreases in the sub-sector of petroleum, chemical, rubber, and plastic products (-4.2 percentage points) and electrical and electronic products (-0.5 percentage points).

The manufacturing industry operated at 79.4 per cent capacity utilisation in 3Q 2023, down 1.9 percentage points year-on-year (y-o-y) while expanding every quarter.

He said the utilisation rate in the manufacturing industry exceeded 80 per cent for two consecutive months, operating at 80.4 per cent in October 2023 and 80.1 per cent in November 2023, while the capacity utilisation rate for December 2023 dropped to 78.9 per cent.

“The decline in the capacity utilisation rate in 4Q 2023 mirrored the trend of the manufacturing industrial production Index, which slipped by 0.2 per cent (3Q 2023: -0.1 per cent).

“The decrease in production capacity was primarily influenced by low demand, insufficient supply of materials, as well as the repair and maintenance of machinery and equipment,” Uzir said.

Five sub-sectors posted a capacity utilisation rate above 80 per cent in the 4Q 2023, with the highest rate of 83.2 per cent recorded by the manufacture of non-metallic mineral products, basic metals, and fabricated metal products sub-sector, with a y-o-y increase of 4.5 percentage points.

This was followed by transport equipment and other manufactures with 82.2 per cent.

Meanwhile, the manufacture of petroleum, chemical, rubber, and plastics sub-sector operated at the lowest capacity with 77.9 per cent, reducing by 4.2 percentage points.

In comparison with the preceding quarter, all sub-sectors posted an increase except for the electrical and electronic products, which declined by 0.7 percentage points to 79.2 per cent.

As for the capacity utilisation in export-oriented industries, he said it continued to decline for four consecutive quarters, dropping by 2.1 percentage points y-o-y to 8.4 per cent in this quarter.

“The manufacture of coke and refined petroleum products recorded a substantial deterioration of 9.6 percentage points, reaching 76.1 per cent, followed by the manufacture of textiles, which shrank by 7.7 percentage points to 76.9 per cent,” Uzir said.

In comparison with the previous quarter, the capacity utilisation rate in export-oriented industries increased slightly by 0.02 percentage points.

The capacity utilisation rate of domestic-oriented industries remained vibrant, registering 82.8 per cent in 4Q 2023 (+3.3 percentage points), with all industries in this segment posting an upward trend except for the manufacture of leather and related products, which decreased by 10.9 percentage points to 81.9 per cent.

At the state level, he said that in 4Q 2023, the manufacturing industry in six states operated at a capacity exceeding the national rate, namely Labuan (95.6 per cent), Negeri Sembilan (83.8 per cent), Pahang (83.7 per cent), Selangor (82.1 per cent), Melaka (81.9 per cent), and Johor (81.8 per cent).

Six states experienced a y-o-y decrease in capacity utilisation: Kedah, Kelantan, Melaka, Perlis, Terengganu, and Sarawak.

Perlis continued to record the lowest capacity utilisation rate at 72.3 per cent.

The manufacturing industry’s overall performance in 2023 operated at a lower capacity rate of 79.3 per cent, which fell by 1.1 percentage points as against 2022’s 80.4 per cent.

“Almost all sub-sectors posted a decline except for the non-metallic mineral products, basic metal and fabricated metal products (+1.5 percentage points at 80.7 per cent) and transport equipment and other manufactures (+0.5 percentage points; 82.1 per cent),” Uzir said.

Export-oriented industries decreased by 2.1 percentage points to 78.3 per cent in 2023 (2022: 80.4 per cent).

Domestic-oriented industries posted 81.4 per cent, improving by 1.1 percentage points (2022: 80.3 per cent).

Source: Bernama

Manufacturing industry nearly 80 pct operating capacity in fourth quarter last year

In a strategic move to underscore Malaysia’s growing prominence in the global aerospace sector, National Aerospace Industry Corporation Malaysia (Naico Malaysia) is set to showcase its expertise and capabilities at the ongoing Singapore Airshow 2024 (SA24).

The airshow, renowned as a premier platform for the aerospace and defence industries, will witness Naico Malaysia’s efforts to propel the nation’s aerospace capabilities to new heights.

“Participation in SA24 marks a significant milestone for Malaysia’s aerospace industry,” said Naico Malaysia CEO Shamsul Kamar Abu Samah at the opening of the Malaysia Pavilion at the airshow, which runs until Feb 25, at the Changi Exhibition Centre in Singapore.

The Malaysia Pavilion was officially opened by Malaysia’s High Commissioner to Singapore Datuk Dr Azfar Mohamad Mustafar in the presence of Malaysian Investment Development Authority (Mida) chairman Tan Sri Dr Sulaiman Mahbob.

Shamsul Kamar said SA24 is an opportunity to demonstrate Malaysia’s advancements, forge global partnerships, and attract investments that will propel it towards its goal of becoming the aerospace hub of Southeast Asia.

“Through strategic initiatives and the unwavering spirit of innovation that defines our industry, we are not just participating; we are setting the stage for the future of aerospace in Malaysia and beyond,” he said.

Shamsul Kamar said Naico Malaysia will engage with several international companies, including those from Japan, China, Canada, France, the United States, and the United Kingdom, as well as numerous original equipment manufacturers and Tier 1 suppliers.

“These interactions are pivotal in expanding our global footprint and enhancing our industry’s capabilities through strategic partnerships,” he said.

The Malaysia Pavilion, featuring 10 of the country’s leading aerospace companies and three government agencies, represents the nation’s commitment to excellence and innovation.

In line with the Malaysian Aerospace Industry Blueprint 2030, several memoranda of understanding are scheduled to be held at the Malaysia Pavilion to emphasise the country’s aerospace industry’s dedication to collaboration and innovation.

A mini-investment seminar will also be organised by Mida and a roundtable meeting will be hosted by Invest Selangor to highlight the lucrative opportunities within Malaysia’s aerospace sector, inviting global investors and industry stakeholders to explore potential collaborations.

Naico Malaysia, an agency under the Ministry of Investment, Trade and Industry, was formed to lead the overall development of the aerospace industry and oversee the implementation of strategies and initiatives in the Malaysian Aerospace Industry Blueprint 2030.

The agency serves as the focal point in linking the aerospace industry players, relevant government ministries and agencies, and academia to collectively work together in strengthening the capability and capacity of Malaysia’s aerospace industry.

Source: Bernama

Naico Malaysia to elevate country’s aerospace profile at Singapore Airshow

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz has encouraged electric vehicle (EV) auto makers with Malaysian facilities to consider making Malaysia their hubs to supply and service the fast-growing EV market in Asean.

He said this is because the EV market in Asean is expected to grow at a compound annual growth rate of about 33 per cent from around US$500 million in 2021 to US$2.7 billion (RM11.77 billion) by 2027.

“Malaysia has many positive factors that make its investment landscape highly conducive to supporting multinationals’ regional hub ambitions.

“Apart from our strategic location, good infrastructure and rule of law, we also have a highly-established electrical and electronics industry which has been reliably feeding the other industries, including aerospace, renewable energy and EVs,” he said in his keynote address at the launch of UMW Toyota Beyond Zero here, today.

Commercially, the automotive industry registered a strong performance in 2023, achieving total industry volume (TIV) close to 800,000 units while the adoption of electrified vehicles (xEV) also increased from 2.77 per cent of TIV in 2022 to 4.12 per cent in 2023.

New registered passenger battery electric vehicles (BEVs) jumped from around 3,000 units in 2022 to more than 13,000 units in 2023.

In preparing for the zero-emission vehicle transition, through the National Automotive Policy (NAP 2020), Tengku Zafrul said the Ministry of Investment, Trade and Industry (MITI) is targeting to empower local automotive industry players through various investment incentives for the assembly or manufacture of hybrid and EVs.

“We also encourage collaboration with global industry leaders to bring the production of clean energy vehicles to Malaysia and begin their research and development facilities in the country so that we can develop more highly skilled local workers and support more domestic vendors,” he said.

The National Net Zero goal is also supported by NAP 2020, and, among others, the Hydrogen Economy and Technology Roadmap (HETR) 2023-2050.

On the industry’s high demand for skilled talent, he said MITI will continue to collaborate with the Ministry of Human Resource and Ministry of Higher Education to ensure that the industry’s requirements for skilled workers will be fulfilled.

“We have already started by suggesting a short-term solution, which is to open up our job market selectively to foreign graduates with the targeted qualifications to address the talent gap, while also working on long-term measures to increase domestic students’ enrolment in science, technology, engineering, and mathematics (STEM) subjects and the technical and vocational education and training track,” he said.

As far as energy-efficient vehicles and EVs are concerned, the government set up the National EV Steering Committee last year, which is a Cabinet Committee comprising key ministries such as the Ministry of Finance, Ministry of Transport, Ministry of Science, Technology and Innovation, and the Ministry of Housing and Local Government.

In building the necessary infrastructure to achieve the target of having 20 per cent of TIV for EVs (including hydrogen fuel cells) by 2030, 50 per cent of TIV by 2040, and 80 per cent of TIV by 2050, the Steering Committee will, among others, address a few key concerns.

“The top concerns are firstly, the availability of charging stations to address customer range anxiety, and secondly, ensuring the supply to power up the charging ecosystem, so owners can charge any form of EV quickly, easily and reliably in an urban or rural setting,” he said. 

Source: Bernama

EV auto makers urged to consider making Malaysia their EV hubs in ASEAN – Tengku Zafrul