Westports Holdings Bhd’s wholly-owned subsidiary, Westports Malaysia Sdn Bhd (WMSB), has acknowledged the approval received from the Ministry of Finance (MoF) with respect to the granting of a 10-year Investment Tax Allowance (ITA).

The ITA granted is from January 1, 2022 to December 31, 2031 to facilitate the capital expenditure (capex) to be incurred by WMSB for its existing and future expansion programmes, it said in a filing with Bursa Malaysia today.

“As part of the ITA, 50 per cent of the qualifying capex incurred by WMSB within the stipulated 10-year period can be offset against its statutory taxable income for each year of assessment within the stipulated 10-year period.

“The ITA was granted to WMSB following consultations with the MoF, with the conditions, among others, that WMSB is required to incur a minimum of RM4.0 billion in capex with respect to its terminals during the stipulated 10-year period,” it said.

Source: Bernama

Westports gets 10-year investment tax allowance from Finance Ministry

Malaysia Airports Holdings Bhd (MAHB) has sought the Malaysian government to “structure better terms” to increase domestic and foreign direct investments which pertain to the remaining short tenure of the land lease.

The airport operator, in a filing with Bursa Malaysia, said its engagement with the government last year has resulted in some changes in some earlier agreements.

The engagement has resulted in a 99-year development agreement between KLIA Aeropolis Sdn Bhd (KASB) and the Malaysian government commencing Nov 17 2022 which gives KASB, MAHB’s wholly-owned subsidiary, to plan, design, develop and construct the KLIA Aeropolis land measuring 3,454.92 hectares.

There is also a land lease agreement between KASB and the Federal Lands Commissioner for a 99-year lease commencing Nov 17 2022 which gives the rights to KASB to occupy, use, control, manage and sublease the land.

The filing also said there were supplemental agreements between Malaysia Airports (Sepang) Sdn Bhd and the Malaysian government “to vary” the terms and conditions of an earlier operating agreement to carve out land for the development of KLIA Aeropolis.

“Consequent to the above, Malaysia Airports Sepang will retain the remaining 47 lots of land of about 9352.71 hectares for the continued purposes of KLIA airport operations, to be held under the operating agreement and the lease agreement,” the filing said.

For background, MAHB, the government and Malaysia Airports (Sepang) signed an operating agreement, dated Feb 12, 2009, effective for a period of 25 years until Feb 11, 2034, for the development and operations of Kuala Lumpur International Airport.

There was also a lease agreement between the Federal Lands Commissioner and Malaysia Airports (Sepang) dated Feb 12, 2009, also effective for 25 years until Feb 11, 2034.

The filing said that based on engagements with various potential investors and businesses, there were “challenges faced” by them to get a palatable return on investment due to the short remaining tenure of the land lease. 

Source: Bernama

MAHB’s unit given developmental rights to develop KLIA Aeropolis land

MSMEs with great potential are expected to be strengthened as the backbone of the nation’s development

DIGITAL transformation, rare earth elements (REEs) and the healthcare industry are expected to become the new, major sources of growth for Malaysia in the next five years.

Socio-Economic Research Centre (SERC) ED Lee Heng Guie said Malaysia needs to leverage on digitalisation, smart technologies and innovation, as well as knowledge, to add value to the services, manufacturing, mining and agriculture sectors.

He added that these include electronics and electrical (E&E) products, renewable energy, climate change and green industries, food-based industry including halal, and Islamic financial services. 

“The government has to focus on driving quality private investment, skills development and productivity improvement, technology transformation and improving public delivery services to raise long-term economic growth,” he told The Malaysian Reserve (TMR). 

Echoing his views is Putra Business School Associate Prof Dr Ahmed Razman Abdul Latiff, who told TMR that Malaysia should focus and take advantage of the new economy, which will drive the growth of the country in the next five to 10 years. 

Ahmed Razman explained that this includes the digital economy, which covers a broad area of industries and applications such as artificial intelligence (AI), data analytics, drone, fifth-generation network (5G), hybrid and blockchain technology, among others. 

He noted that building 5G infrastructure is crucial to support the demand for this economy since 5G is important to two major contributing sectors — services and communication. 

“To bring things into realisation, the next government must realign the 12th Malaysia Plan (12MP) to the current situation and challenges. 

“They must also take into consideration the opportunities available under the ratification of two of the largest free-trade agreements in the world, namely the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP),” he said. 

REEs Industry 

Ahmed Razman opined that Malaysia also has the opportunity to venture into the REEs industry. 

“REEs pretty much cover the whole ecosystem from upstream to downstream level in Malaysia. 

“So, it is important for the government to encourage potential investors to explore the business prospects of the REE ecosystem, since REEs form a crucial component in the manufacturing of smartphones and electric vehicles (EVs), especially the battery and motor parts,” he noted. 

REEs have soared in significance as interest in consumer electronics, EVs, clean energy and military equipment keep on increasing in the past decade, according to the Malaysian Investment Development Authority (Mida). 

REEs are used in necessary components for products across a wide range of applications, especially high-tech consumer products and devices including smartphones, digital cameras, computer hard disks, fluorescent and light-emitting-diode (LED), flat-screen televisions, computer monitors and electronic displays. 

In terms of military equipment application, REEs are materials used in making night vision goggles, precision-guided weapons, communication equipment, Global Positioning System (GPS) equipment and other defence electronics. REEs are also used for laser targeting and weapons in combat vehicles. 

Additionally, REEs are also known for their usage in clean energy technologies — for example wind turbines, electric motors, catalysts and solar panels — due to their strong permanent magnetic properties. 

As for EVs, mainly two types of REEs are used: Neodymium (Nd) and dysprosium (Dy). Nd is used in permanent magnet motors, which are often termed as neodymium iron boron magnets. Dy is also used in motors, but in minimal amounts relative to Nd. 

According to Mida, China has the largest reserves of REEs at 44 million tonnes, in addition to having the largest refinery controlling the market. 

“Malaysia was able to break that monopoly with the presence of Lynas Malaysia Sdn Bhd, with operation locally since 2012 making it the first REEs-refining plant outside the PRC. 

“Malaysia is also recognised as a nation having notable production of REEs, among other countries such as the US, Australia, Brazil, India, Russia, Thailand and Vietnam,” the agency noted in a recent report. 

Mida said currently, Lynas produces rare-earth oxides (REOs), carbonates, oxalates and chlorides in Gebeng, Pahang, with a total capacity of 22,000 tonnes per annum. 

The production of REOs, particularly Nd and praseodymium (Pr), is in high demand due to their usage in the production of rare-earth magnets used in technological applications. 

The global rare-earth magnet market was valued at US$7.69 billion (RM34.87 billion) in 2020 and is expected to reach US$11.61 billion by the end of 2026, representing a compound annual growth rate (CAGR) of 6% from 2022 to 2026. 

Recognising the potential of this downstream industry as well as the advantages of having REO production as raw materials in the country, the government, through Mida, has been promoting the production of advanced materials including rare-earth magnets under the Promotion of Investment Act (PIA) 1986. 

As such, Mida noted that there is high potential for interested parties, either local or foreign companies, to explore downstream applications to boost the industry’s economic value. 

“Additionally, establishing a downstream ecosystem will ensure more value-added products are produced in the country, which will directly impact the total export status of Malaysia. 

“As such, the value of REEs as an important element in the downstream industry value chain should not be ignored, and its ability to leave a mark on the nation’s future technological journey should be acknowledged,” it said. 

To continuously support this, Mida is currently continuing its collaborations with relevant stakeholders to attract potential investors to develop the industry. 

Healthcare, Cybersecurity 

Meanwhile, Universiti Teknologi MARA (UiTM) Faculty of Business and Management senior lecturer Dr Keshminder Singh viewed healthcare and cybersecurity as the new major sources of growth for Malaysia in the next five years. 

He noted that major growth is expected in these two sectors, especially in develop- ing countries. 

“The Covid-19 pandemic has taught a tough lesson to governments globally, financing the immunisation programmes by raising debt. 

“Therefore, the healthcare industry, especially high-end products like vaccines and medical devices, will see more investments in Malaysia,” he told TMR. 

According to Statista Market Forecast, the Malaysian healthcare industry revenue is expected to show an annual growth rate (CAGR 2022-2027) of 17.65%, resulting in a projected market volume of US$238.7 million by 2027. The number of users is expected to amount to 7.1 million users by 2027. 

In 2022, the revenue in the healthcare segment is projected to reach US$105.9 million, with most revenue generated from China. 

Also, Keshminder said the cybersecurity market is going to grow with the increasing threats to financial markets and personal data. 

He noted that products like Internet security solutions, threat detection devices and personal cybersecurity home solutions will grow moving forward. 

“With the growth in these two industries, we believe investment is going to be top notch. 

“Therefore, important elements such as AI, medical expertise and smart engineering require immediate attention,” he said. 

The year 2020 marked the end of Vision 2020 and the 11th Malaysia Plan (11MP) 2016- 2020 period. 

As a continuation, a post-2020 development plan, namely the 12MP (2021-2025) with a clear strategic direction was formulated to set the way forward for the national development agenda along with the implementation framework over the next decade. 

This is to ensure an inclusive and meaningful socioeconomic development towards a more prosperous society, which includes criteria such as economic empowerment, environmental sustainability, and social re-engineering. 

Some of the policies and strategies introduced under the 12MP include partnership with the private sector, which is expected to continue to be the key driver of growth for Malaysia. 

In addition, the business support ecosystem will be strengthened under the 12MP to increase labour market productivity and efficiency and the private sector involvement will be promoted, especially through quality investment in identified high-potential industries to enable the industry to move up the value chain. 

MSMEs Moving Forward 

Micro, small and medium enterprises (MSMEs) with great potential are also expected to be strengthened to be the backbone of the nation’s development, and they will be encouraged to modernise businesses through the adoption of advanced technology and digitalisation, thus increasing opportunities to explore global markets. 

Moving forward, the 12MP is believed to lay a strong foundation in building a high-tech and high-income nation with more equitable distribution. 

The GDP growth forecast in 12MP is an average of 5% per year (4.5%-5.5% for the 12MP period of 2021-2025). The World Bank currently forecasts a 5.61% growth for the 2022-2025 period and a slower rate of growth in 2023-2025. 

Malaysia’s GDP saw a stronger growth of 14.2% in the third quarter of 2022 (3Q22) (2Q22: 8.9%), partly driven by strong domestic demand, underpinned by improvements in labour market and income conditions, as well as ongoing policy support. 

Bank Negara Malaysia (BNM) said the “stronger growth” came despite base effects from the negative growth in 3Q21. 

The central bank highlighted that exports remained supported by strong demand for E&E products, while the recovery of inbound tourism lent further support to economic activity. By sector, it said the services and manufacturing sectors continued to drive growth. 

Overall, the Malaysian economy expanded by 9.3% in the first three quarters of 2022. 

Moving forward, BNM governor Tan Sri Nor Shamsiah Mohd Yunus explained that the Malaysian economy will continue to be supported by firm domestic demand amid continued improvements in the labour market. 

“Growth would also benefit from the realisation of large infrastructure projects as well as higher tourist arrivals. 

“However, Malaysia remains susceptible to weaker-than-expected global growth, higher risk aversion in global financial markets, further escalation of geopolitical conflicts and re-emergence of supply chain disruptions,” she said during the 3Q22 GDP announcement recently. 

She reiterated that Malaysia’s economy will continue to expand, albeit at a more moderate pace, in 4Q22 and the expected slower pace of growth reflects the more challenging global environment as well as absence of base effects. 

Nevertheless, BNM said growth for the whole of 2022 is expected to remain robust, given the strong outturns in the first three quarters of the year. 

“Looking ahead, the Malaysian economy is expected to expand by 4% to 5% in 2023,” she noted.

Source: The Malaysian Reserve

Digitalisation, REEs, healthcare to be Malaysia’s new sources of growth

Digitalisation is a significant catalyst in facilitating the recovery and sustained growth of the Asia-Pacific Economic Cooperation’s (APEC) micro, small, and medium enterprises (MSMEs), said Chief Secretary to the Malaysian Government Tan Sri Mohd Zuki Ali. 

Mohd Zuki, who is at this year’s APEC Economic Leaders’ Meeting (AELM) in his capacity as the Special Representative of the Prime Minister, said digitalisation itself without noteworthy enablers, such as inclusivity, may not be adequate in providing the necessary traction for MSMEs to evolve, mature and move up the value chain.  

“At the outset, we need to advance the digital literacy and capabilities of our MSMEs. 

“In order to do so, governments need to work together with private sector representatives such as those from the APEC Business Advisory Council (ABAC) to identify the gaps in the digital skillsets of our MSMEs and work towards pragmatic solutions that fittingly address these shortfalls,” he said in his intervention notes at the ABAC Dialogue with APEC Economic Leaders here on Friday (Nov 18).

Thai Prime Minister Prayuth Chan o-cha chaired the ABAC Dialogue with APEC Economic Leaders at Queen Sirikit National Convention Centre in Bangkok. 

Mohd Zuki said that APEC economies should continue to reskill and upskill its workers in the MSMEs sector.

“These measures will enable employees in such enterprises to equip themselves with the right knowledge and technical know-how, as well as further facilitate their integration into an increasingly digitalised space for smaller firms and businesses,” he said.

Meanwhile, Mohd Zuki also shared Malaysia’s initiative of launching the Malaysia Digital Economy Blueprint to position it as a competitive global player in the field of digital products and solutions.

“Strong and dependable Internet connectivity at cost-effective rates, for example, will be an important pre-requisite for MSMEs looking to embark on their digitalisation journey. Cognisant of this fact, Malaysia continues to invest heavily in nationwide 4G and 5G coverage.  At present, we are on track to achieve an estimated 96.9% of 4G coverage and 36% of 5G coverage by the end of this year.

“Malaysia is highly encouraged by ABAC’s efforts in accelerating digitalisation and enhancing inclusivity, including through policy recommendations, implementation of supportive capacity building programmes, and democratisation of business resources. 

“Let us continue to strengthen our linkages and advance the work on digitalisation, as well as inclusivity, for the prosperity of all our people and future generations, as underscored in the APEC Putrajaya Vision 2040,” he said.

Meanwhile, Mohd Zuki said the element of digitalisation is the “central to work” for APEC economies  towards achieving sustainable economic recovery and inclusive growth.

In his intervention notes at the APEC Leaders’ Informal Dialogue With Guests on Friday, he said a silver lining to the pandemic has been the accelerated adoption of digital tools, skills and technologies, particularly by MSMEs, workers in the informal economy, as well as other groups of untapped economic potential.

Building upon this, he said that it is now essential to consolidate, sustain and augment the skill sets acquired by these segments of societies.

“In this regard, it is also crucial for APEC to expeditiously operationalise the initiative on Future of Work, to safeguard the economic well-being of our people in an increasingly digitalised world,” he said.

Mohd Zuki said the responsibility lies on the governments to put in place high-quality policies and programmes that promote fair and equitable access to digital enablers, infrastructure and marketplace, as they strive to level the playing field and improve the livelihoods of the people.

Source: Bernama

Digitalisation a major catalyst in assisting recovery of APEC’s MSMEs, says Mohd Zuki

• To strengthen Penang’s digital talent pool, software tech talent
• Penang’s manufacturing, engineering ideal to create digital talent hub

The Sunway Education Group (SEG) and state government agency Digital Penang signed a memorandum of understanding (MoU) to explore opportunities in building the digital ecosystem to strengthen Penang’s vibrant digital talent pool. 

In a joint statement, both parties said this is in line with the national agenda and the state’s Penang2030 vision. 

They said the MOU will see collaboration opportunities and synergies to groom software tech talents to become world-class developers and tech entrepreneurs.

This is in addition to creating job opportunities to meet the growing industry demands, they added.

Under SEG’s extension of 42 Kuala Lumpur (42 KL) and Sunway iLabs, both parties will explore opportunities to curate tech workshops, talks, build a peer-to-peer coding learning environment, and jobs matching to create a sustainable digital ecosystem in Penang, the companies said.

42KL is a non-profit initiative through a partnership between Sunway Education Group and MDEC, together with the support from the Jeffrey Cheah Foundation and Sunway iLabs. 

Laying the foundation for Malaysia to become the leading digital economy in Asean, the ground-breaking French-founded coding school’s unique and disruptive educational model offers zero tuition fees, zero teachers and zero traditional classrooms, SEG said.

This enables students to learn and grow in a peer-to-peer environment on a 100% merit-based through practical, project-based learning, it said.

Matt van Leeuwen, chief innovation officer for Sunway Group and director of Sunway iLabs believes that Penang’s strong foundation in the manufacturing and engineering sector makes it an ideal location for it to be the digital talent hub of the North.

“Penang’s vibrant ecosystem and its digital aspirations is a match-made in heaven to cultivate hardware expertise and software skills.

“We’ve set out a target to train and develop 10,000 students over the next ten years through programmes like 42KL that will be present in more states across the country and the potential 42 Penang will play a key role for this vision,” said van Leeuwen.

Tony Yeoh, chief executive officer of Digital Penang said to meet the ever growing and evolving demands for tech talents in the state, Digital Penang is committed to exploring initiatives and programmes to develop local talent with industry and global validated skills to accelerate digital tech careers. 

“As ecosystem partners to build capabilities of tech talents and entrepreneurs, the state welcomes this partnership and looks forward to investing in talent development programmes that will benefit industry demands and the ecosystem in Penang.

“We place high priority in developing talents in the software tech industry, enhance employability for software talents especially the B40 category to provide high-income and high-skill jobs to further attract investments and talent into Penang’s digital ecosystem,” said Yeoh.

Source: Digital News Asia

Sunway, Digital Penang to build talent development ecosystem

IN PRIMARY SCHOOL, Sunview Group Bhd CEO Ong Hang Ping was introduced to the concept of 3R — reduce, reuse, recycle — by his teacher. As he grew older, he realised that the first two letters of each 3R word were “re”, which is also the commonly used acronym for renewable energy.

“I started to think that [renewable energy] is no longer a trend. Instead, there is a need for us to utilise renewable energy,” he says.

Eventually, Ong’s passion for the topic blossomed into an ambition to run a business based on renewable energy. To strengthen his knowledge on business management, he worked in multiple companies, including a well-known multinational electronics company, before joining the sales department of Sunview in 2013. He was appointed a director and shareholder in 2015.

A new kid on the block, Sunview is principally involved in engineering, procurement, construction and commissioning (EPCC) as well as construction and installation services for solar photovoltaic (PV) facilities, solar power generation and supply, and its associated services and products.

The company has a strong unbilled order book of RM558.34 million (as at Aug 30, 2022), which provides it with earnings visibility until the financial year ending March 31, 2024 (FY2024). It has 35 ongoing EPCC projects for solar PV facilities, with a total contract value of RM685.30 million.

On Oct 17, Sunview debuted on the ACE Market of Bursa Malaysia at 59.5 sen, a 105.1% premium to its initial public offering (IPO) price of 29 sen. The stock was also the most actively traded that day with a trading volume of 127.57 million.

However, it has not been plain sailing for the company, Ong admits. His tenure as a director and shareholder in 2015 was filled with various obstacles.

He recalls an incident when Sunview had secured a 50MWac solar project, which was later called off after the team had put in a lot of blood, sweat and tears. In another case, the company had secured a project as a subcontractor, but the client declared bankruptcy halfway through the project.

Despite the unfortunate events, Ong continued to pursue his dream. “Just do your best until the very end. Don’t do things halfway. You have to continue [because] you never know [if success is meant to be yours].”

Sunview currently has 18 solar PV facilities (as at 30 Aug, 2022) throughout Peninsular Malaysia. The company reinvests in those assets through acquire-own-operate (AOO), build-own-operate (BOO) and build-own-operate transfer (BOOT). It is also looking to expand its asset ownership to provide more recurring and steady income for the company.

ADHERING TO ESG METRICS

The renewable energy sector, especially solar energy, has a huge potential to grow in Malaysia. This is apparent from the RM2.1 billion total market size for the construction of solar PV facilities in the country as at 2021.

The government has introduced numerous programmes and incentives to promote the transition towards renewable energy to boost the economy. For example, the Ministry of Energy and Natural Resources is aiming to increase the use of renewable energy from 24% of the total installed capacity in 2020 to 31% in 2025.

Renewable energy should be the solution for countries to reduce carbon intensity significantly, but the solar energy business is often slammed for greenwashing because more often than not, land has to be cleared and trees have to be chopped down to build solar farms.

Ong explains that most government solar policies such as the Suria 1000 programme and the Feed-In Tariff (FiT) by Tenaga Nasional Bhd cater more for rooftop solar installations, but there needs to be a higher level of awareness before solar companies and the public can move towards complying with ESG standards.

“There is a learning curve that we need to go through before we can push the [ESG agenda] forward,” he says.

Businesses might find the initial cost of installing solar panels a burden. To address this problem, Sunview has launched a zero capex scheme that allows clients to install solar panels without an upfront payment.

Ong also hopes that carbon market initiatives such as the Bursa Malaysia Voluntary Carbon Market will be able to help companies, including Sunview, reduce their carbon emissions further by converting renewable energy assets into carbon credits.

An estimated 315 million kg of carbon dioxide have been saved each year from Sunview’s completed solar projects since 2013.

Sunview is currently working with a consultant to create an ESG policy framework. Ong assures that the company is continuously working on all three ESG components. For example, under the social aspect, the company helps old folks’ homes increase their energy efficiency and save on their electricity bills.

Apart from solar energy, Sunview is looking to venture into the biomass industry as well, having put in a tender for a project.

Moving forward, Ong says the company is setting up a new office in Johor to serve its clients in the southern region and capture the potential solar PV market there. “There are a lot of industrial parks in the southern region. We want to aim for more market share there as well.”

Sunview aspires to educate Malaysians on climate change and create a sustainable country for generations to come. “Young Malaysians are getting more environmentally conscious. We need to constantly share the right information on how the people can take action, so that the next generation can enjoy the benefits of sustainability,” says Ong.

Source: The Edge Markets

Assisting businesses in adopting ESG through renewable energy

Hyundai Glovis Co said on Nov 16 it has signed a preliminary deal with Malaysia’s retail-to-steel conglomerate Lion Group to partner up for smart logistics solutions in the Southeast Asian market.

Under the memorandum of understanding (MoU), Hyundai Glovis’ advanced logistics management system will be introduced to Lion Group’s key business units, starting off with the steel area, before expanding it to other sectors, such as retail, Yonhap news agency reported the South Korean company said in a release.

Hyundai Glovis and Lion will work to upgrade the overall logistical efficiency of the latter’s steel business by adopting smart solutions designed to be more cost-effective.

The two will also cooperate on expanding the regional foothold to other neighbouring Asean countries, which include Thailand, Vietnam and Singapore, it added.

Hyundai Glovis, the logistics unit of Hyundai Motor Group, has been seeking to bolster its market presence in Southeast Asia. It set up subsidiaries in Vietnam in 2019 and Thailand this year. 

Source: Bernama

Hyundai Glovis signs MoU with Lion Group for smart logistics

Samchem Holdings Bhd  is scheduled to complete its Pulau Indah and Vietnam expansion by year-end, increasing its total warehousing capacity by 38% and 58% in Malaysia and Vietnam, respectively.

“This will enable us to move into 2023 with the readiness to expand into new segments and enhance our product portfolio. Our expansion strategies, coupled with a long-term focus on operational excellence will drive future performance and market penetration,” chief executive officer Ng Thin Poh said in a statement.

The integrated chemicals and lubricants distributor remained confident of its prospects and continue to invest in long-term growth as chemicals are indispensable to many industries.

In the third quarter ended Sept 30, Samchem’s net profit tumbled 48.5% to RM6.5mil, or earnings per share of 1.19 sen against RM12.6mil, or 2.32 sen achieved a year prior.

Revenue, however, rose 6% to RM317.32mil compared to RM272.81mil achieved in the preceding year’s corresponding period due to higher volume and higher average selling prices.

For the first nine months of the year, the group’s revenue increased by 8% year-on-year to RM1.05bil and net profit was down 12.8% to RM44.3mil.

Ng said unfavourable macro conditions such as interest hikes, inflationary pressure, higher input costs, logistic disruption, and zero-Covid policy from China posed significant challenges in 3Q22.

“We view the setback in chemical demand as temporary as the market adjusts to the new economic benchmark, rationalise product prices and normalising inventory levels.

“Despite various challenges, we remained profitable and maintained strong financial resilience. This allowed us to continue rewarding our shareholders with dividends and we declared a third interim dividend of 0.6 sen per share, representing a payout ratio of 50%,” he added.

Source: The Star

Samchem to increase warehousing capacity in Malaysia, Vietnam