Transportation Industry – Shipbuilding & Ship Repair

The Small and Medium-Sized Commercial Vessels (SBSR) industry in Malaysia is a pivotal component of the maritime sector, complementing the oil and gas industry. With the ability to construct various types of vessels and provide repair services for larger vessels, Malaysian shipyards play a crucial role. The demand for marine vessels remains stable due to PETRONAS’ extensive production and drilling operations in Malaysian waters. The PETRONAS Activity Outlook 2020-2022 highlights the need for approximately 150 vessels of different sizes to support production, especially for new offshore vessels (OSVs) and replacing older ones.

However, the year 2022 has presented challenges for Malaysian shipyards due to disruptions caused by COVID-19 and the Russia-Ukraine conflict, leading to supply chain disruptions and shortages of skilled personnel. To encourage growth and competitiveness, tax incentives for the SBSR industry have been extended until 2027. Malaysia’s shipyards are well-positioned to capitalise on the growing demand for Liquefied Natural Gas (LNG)-powered vessels as the global shipping industry moves towards more environmentally friendly options. Notably, a strategic collaboration among Malaysian shipyards and a Singapore-based ship designer resulted in the construction of Malaysia’s first green OSV, aligning with the nation’s commitment to achieve net-zero carbon emissions by 2050 and integrate Environmental, Social, and Governance (ESG) principles into the SBSR industry.