Glove manufacturers are expected to deliver sequentially stronger earnings in the coming quarters, predominantly underpinned by the commencement of an inventory-replenishment cycle.

Other positive factors include the potential diversion of trade by the United States away from China to Malaysia as a result of US Food and Drugs Administration (FDA) alerts over some medical supplies from China and higher import tariffs on Chinese goods in 2026.

According to Hong Leong Investment Bank (HLIB) Research, the overall operating environment for glove makers is improving.

“The recovery thesis for 2025 is fairly priced-in, after the recent share price rally driven by positive sentiment from the Us-tariff increases announced back in May 2024.

“Furthermore, most glove makers still have not delivered any meaningful earnings at the moment,” the research house said in a report yesterday.

In Malaysia, sales volumes improved 15%-25% quarter-on-quarter in the first three months of 2024 (1Q24) versus the volatile growth trajectory for the whole of 2023.

However, the average selling price (ASP) trajectory is still mixed, said HLIB Research.

For instance, Hartalega Holdings Bhd’s ASP in ringgit improved by 2%-3% in 1Q24, while that of other manufacturers deteriorated by 2%-5%.

“We conclude that the deviation of 1Q24 sales volume and ASP trajectories compared with global peers was mainly due to price competition among local companies given that some players still have excess capacity,” the research house noted.

Going into 2Q24 and beyond, HLIB Research believe that sales-volume recovery in Malaysia will continue to gain momentum.

“In terms of ASP, we believe it bottomed in 1Q24 and the cost-pass-through mechanism will be progressively reinstated, albeit at a marginal rate, as there is still local competition in the nitrile segment,” it said.

Notably, the research house forecasts glove demand-supply dynamics will reach equilibrium in 2025, which could see the global plant utilisation rates likely to hit about 85% and the ASP for generic nitrile rubber medical gloves will be about US$20-US$21 per 1,000 pieces.

Based on the Red List for manufacturers obtained from FDA import alert number 80-04 for Surveillance and Detention Without Physical Examination of Surgeon’s and Patient Examination Gloves, HLIB Research also observed that the number of Chinese glove makers restricted by US FDA hit a recent high in 1Q24.

“We believe rising quality awareness in the United States could continue to trigger distributors of medical rubber gloves in the region to diversify away certain portions of their orders from China to prevent future order detentions,” the research house added.

Furthermore, President Joe Biden recently announced higher tariffs on Chinese medical and surgical rubber gloves from the current 7.5%, to 25% effective 2026.

“Based on our scenario analysis, we find that this event will not have a material negative effect to our forecast for 2026.

“However, we do believe that the decision of Chinese manufacturers to gradually shift their target markets from the United States to European and Asian markets, will result in a near-term trade diversion to Malaysia,” added the research house.

This will benefit most Malaysian players, especially Hartalega and Kossan Rubber Industries Bhd .

HLIB Research noted that Kossan’s 1Q24 cost structure was 12% lower at US$17.50 per 1,000 pieces compared with Hartalega’s US$19.90 per 1,000 pieces.

Kossan registered a higher 5.5% core pre-tax profit margin for its gloves and cleanroom segments in 1Q24 compared with Hartalega’s 1%, despite the latter having higher interest income.

This may be due to a more cost-effective structure and also Kossan been selling more specialised rubber-glove products, said the research house.

Kossan also had a net cash position of Rm2.1bil in 1Q24 (33% of market cap) compared with Hartalega’s Rm1.4bil (12% of market cap).

HLIB Research, which maintained a “neutral” call on the overall sector, has a “buy” call on Kossan given its possible re-rating.

Source: The Star

Glove makers to benefit from more US orders

Semiconductor and computer chip powerhouse Taiwan is keen on working with Malaysia on new opportunities.

“Malaysia is well-equipped with semiconductor capabilities, especially in packaging and testing,” said Taiwan’s Foreign Affairs Deputy Minister Tien Chung-kwang.

“It’s one of the most advanced countries in this field,” he said in a briefing with the press from countries that are part of Taiwan’s New Southbound Policy.

Introduced in 2016, the NSP aims to boost cooperation and talent exchange between Taiwan and Southeast Asian, South Asian and Australasian countries.

Tien said Taiwan is committed to leveraging its technology talent and resources from the government and private sector to reshape supply chains and industries.

In the past eight years, Taiwan had seen a significant increase in trade volume with the 18 NSP countries.

“It took Taiwan 46 years to achieve advanced expertise in computer chips and semiconductors and we want to continue offering capacity-building opportunities to interested nations,” he said.

In this area, Tien said Taiwan was looking to work with Malaysia, because of its semiconductor capabilities, highly skilled workforce and stable hydroelectric power supply.

Already, Taiwanese officials have engaged their Malaysian counterparts, including Julau member of Parliament Datuk Larry Sng.

Sng, when contacted by the New Straits Times, said Malaysia, with its strategic location, could become a hub for expansion and collaboration with more advanced countries such as Taiwan.

He said various multinational companies have already invested in Penang and Klang, and that he also hopes to draw investors to Sarawak.

In the case of Taiwan, Sng said there was potential for collaboration in engineering education.

“Instead of sending students abroad, a Taiwanese university campus in Malaysia could be established to meet the growing demand for engineers,” said Sng.

Meanwhile, Sng acknowledged that many Malaysians moved abroad to countries like Taiwan for better opportunities and higher salaries.

However, this was not necessarily a negative as the Malaysians could contribute back to the country when they returned.

“Malaysians in Taiwan gain invaluable experience in a highly competitive industry. The work ethics in Taiwan and Japan are notably similar, providing a unique professional environment that’s challenging to replicate,” he said.

Source: NST

Taiwan looking to work with Malaysia on semiconductors, computer chips

Malaysia must capitalise on the full potential and opportunities in Asean’s manufacturing sector and ensure that the ecosystem is well-developed to support and equip youths with the skills, resources and capacity to navigate the complexities and challenges.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said that for more than a decade, the manufacturing sector has served as the main catalyst for economic growth in many Asean countries, particularly Malaysia, where manufacturing contributed over 23% to the country’s gross domestic product (GDP) in 2023.

He said the manufacturing sector was also the largest contributor to Asean’s GDP in 2022, with a contribution of US$767 billion, or 21.2% of the total.

“With over 213 million youths aged 15-34 in the region, projected to reach a peak of 220 million by 2038, these young demographics provide Asean with an edge to move higher in the global value chain,” Tengku Zafrul said in his speech at the Asean Manufacturing Youth Conference 2024 (AMYC 2024) today.

He said with Asean currently at an inflexion point, the domestic manufacturing sector must maximise the opportunity to expand exponentially.

Meanwhile, Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said young entrepreneurs in the domestic manufacturing sector must collaborate and expand regionally to bring the next generation of Malaysian manufacturing to greater heights.

He advised young entrepreneurs to create strategic partnerships, engage in mergers and acquisitions, and explore Asean market opportunities to position Malaysia as a leader in the manufacturing sector.

“First, be bold. Dream big and set ambitious goals, achieved by aiming high and taking decisive actions. Believe in your ability to make a difference and take risks.

“Second, embrace innovation. As digital natives, use technology and explore how digital tools and new technologies can advance manufacturing.

“Third, create value through collaboration. Connect and develop business links through organisations like FMM. Our Youth Committee provides a platform for young business leaders to exchange updates, share experiences, and forge connections,“ Soh

He said FMM has been entrusted with the important role as the champion for mission-based Project 2.1 under the New Industrial Master Plan 2030 to create 3,000 smart factories.

“I do hope many Youth companies will come join us onboard and join us on this transformation journey,“ he said.

FMM, supported by its corporate partners Tec D Malaysia, Dell Technologies, and Microsoft, organised the inaugural AMYC 2024 with the theme Empowering Asean Youths in Manufacturing: Transformation for Sustainable Growth.

AMYC 2024 aims to foster productive engagement among stakeholders to discuss the evolving landscape of the manufacturing industry. It emphasises the significant role of youth in driving innovation and competitiveness, formulating creative strategies for talent development, and providing sustainable direction for the future through environmental, social, and governance practices.

Source: The Sun

Malaysia must capitalise on Asean’s manufacturing potential: Tengku Zafrul

The palm oil industry should explore repurposing residuals as a crucial feedstock for sustainable aviation fuel, moving beyond traditional uses of palm oil, said Deputy Investment, Trade and Industry Minister Liew Chin Tong.

He emphasised the need for the palm oil industry, alongside other non-aviation sectors, to contribute to positioning Malaysia at the forefront of the sustainable fuel landscape.

“This is also an opportunity for us to connect Malaysian industries horizontally, so that not only are we supplying the global supply chain, but also creating more domestic innovations and products that will eventually be of relevance globally,” he said during his opening remarks at the MyAero Sustainable Aviation Symposium 2024 on Tuesday.

Liew highlighted the importance of both vertical integration within Malaysian industries and horizontal linkages between sectors to shape the aviation industry’s future.

He also referenced the Malaysia Aerospace Industry Blueprint 2030, detailing 41 initiatives expected to generate RM55.2 billion annually and create 32,000 high-tech jobs by 2030.

“We hope to establish Malaysia as the aerospace hub in the region and the global community, and to build synergy with neighbouring states through promoting supply chain development, and the use of sustainable alternatives such as sustainable energy fuel, electricity and hydrogen-based energy,” he said.

Meanwhile, National Aerospace Industry Corporation Malaysia chief executive officer Professor Shamsul Kamar Abu Samah highlighted Malaysia’s industry environmental, social and governance (iESG) framework as pivotal for aerospace firms transitioning to sustainable practices.

“This includes initiatives such as developing cleaner technologies, improving fuel efficiency and investing in sustainable manufacturing processes.

“Collaborative partnerships between governments, aerospace companies and research institutions are essential for driving these innovations forward and achieving shared ESG goals, while maintaining economic viability and competitiveness in the global market,” he added.

Source: Bernama

Liew urges palm oil industry to repurpose residuals for sustainable aviation fuel

The outlook for Malaysia’s electrical and electronics (E&E) companies appears positive, as indicated by the latest survey conducted by the Malaysia Semiconductor Industry Association (MSIA).

The survey, which is also MSIA’s inaugural E&E and semiconductor quarterly pulse survey, found that 39% of companies reported better business performance in the second quarter (2Q24) compared with 1Q24, highlighting a positive industry sentiment.

However, talent shortages and market competition remain the biggest challenges faced by companies in the sector.

Despite these hurdles, 60% of the surveyed companies are optimistic about 3Q24, driven by demand for consumer electronics, automotive and artificial intelligence.

Additionally, 85% of companies are planning to hire engineers and technicians in 3Q24 and 58% have an optimistic investment outlook for the same period.

The survey also revealed that companies are looking to expand into new markets, invest in new technology and develop new products, with 72% expressing an optimistic overall outlook for the next 12 months.

Notably, 74% of companies have a positive sentiment towards the adoption of generative AI, anticipating its impact across their operations and strategies.

MSIA, in a statement, emphasised the significance of the E&E industry as one of Malaysia’s bellwether sectors.

It said that in 2023, Malaysia’s E&E exports amounted to RM575bil, accounting for 40% of the country’s total exports.

Source: The Star

Poll: Positive outlook for Malaysia’s E&E companies

Malaysia should focus on making energy-efficient vehicles and parts and components, says analyst

THE focus on producing energy-efficient vehicles, including electric vehicles (EV), together with parts and components, could give Malaysia a push to become an automotive hub in Asean, an industry analyst said.

This requires more high-tech components for production, hence it is not labour intensive.

Simultaneously, Malaysia should start focusing more on research and development (R&D).

“Malaysia used to be at the forefront of the industry but Thailand has surpassed us by developing more vendors for the crucial parts,” independent automotive analyst Hezeri Samsuri said.

“Tyre companies have built regional R&D facilities in Thailand. We are still ahead of Indonesia but we should be prepared for its growing appetite for automotive. We need to see what the industry requires. For the time being, we can see that Chinese companies are making inroads into Asean.”

He said with labour cost higher than its neighbours, Malaysia needs to focus on high-tech components for EVs, among others.

“There is no shortcut to this,” Hezeri told ‘Business Times’.

In June, Geely chairman Li Shufu said the competitiveness of Malaysia’s automotive industry was being restricted by its automotive supply chain, whose costs were 30 per cent higher than China’s and 10 per cent costlier than Thailand’s.

Hezeri said assembling cars for export to Asean markets is no longer an option because every country wants to have its own completely knocked down factories.

“Hence if we focus on EV components, we can export the parts and, later, technology to these countries. Australia is a good example where they have shut down their car factories and turned the country into an R&D centre for Asia-Pacific car companies.”

He said the talent that the nation has grown, thanks to Proton and Perodua, should not be wasted.

The challenge the country faces is focusing too much on domestic sales.

“With a small market, we do not have the volume to make local assembly plants ‘sexy’ anymore. We are also not really heavy into R&D, and with EV technology being so new, investment in R&D will be rewarding in the future.”

Hezeri added that more should be done to turn Malaysia into an automotive R&D hub in Asean.

“For example, Proton’s old test track facility should be turned into an R&D facility for any car brand to use.

“Battery tech for Asean climate and usage should be looked into further. In fact, we should push Asean to ‘protect’ the market by making it compulsory for certain EV components to be produced here.”

He said Asean must protect its market by compelling foreign car brands to use local tech or components if they want to get incentives.

Malaysia should start focusing more on R&D or else its talent would be driven away.

“Perodua has been working to develop products for Toyota and Proton’s engineers have moved out from Malaysia as their talent is no longer required here. Our engineers are scattered all over the world when we should be using them to develop our country,” said Hezeri.

AmInvestment Research said EVs made up 2.6 per cent of Malaysia’s new vehicle sales in the first four months this year, up marginally from 1.7 per cent in 2023.

Although Malaysia offers generous incentives and tax holidays to EV buyers until the end of 2025, these benefits are primarily accessible to affluent consumers due to the minimum price of RM100,000 for an EV.

“Essentially, Malaysia’s EV policy encourages affluent consumers as early adopters, and for the main

stream market to catch on.

“This strategy, also used in North America and Europe, has yielded unfavourable outcomes as EV sales declined once the incentives expired,” it said, adding that Malaysia will face a similar situation in 2026.

According to AmInvestment Research, Malaysia should consider adopting policies like China’s, which is the most successful large-scale adopter of EVs where it focuses first on lower-income individuals.

The firm, quoting China Association of Automotive Manufacturers, said China banned internal combustion engine motorbikes and mandated electrified two-wheelers in 2017, resulting in over 350 million e-scooters zipping across the country in 2023.

It added that diesel public buses were phased out and replaced with electric versions at the same time, and now 80 per cent of public buses are electrified nationwide.

“As a result of these policies, the average Chinese commuter has become familiar with the EV and its merits. Air quality has improved significantly and cities have become noticeably quieter,” it said.

AmInvestment Research said China’s EV sales in May accounted for 43.5 per cent of total vehicle sales, a significant increase from about seven per cent in January 2021 before the incentives for private EVs were introduced.

The firm said the policies clearly worked, which is no small achievement given that it is the biggest car market globally and the third largest country in terms of geographical size.

Source: NST

High-tech approach to becoming an automotive hub in Asean

A new holistic and futuristic industrial park will soon be seen in Senawang, Negeri Sembilan. Combining cutting-edge technology, flexibility and sustainability, SPD Tech Valley by Seri Pajam Development Group will offer a wide range of amenities and facilities for the convenience of its future users.

Strategically situated within Malaysian Vision Valley 2.0, the freehold 523-acre industrial park has excellent access to the North-South Expressway (PLUS) and Kajang-Seremban Highway (LEKAS). It is also near major transportation hubs such as the Kuala Lumpur International Airport (KLIA) and Port Klang, which facilitate seamless logistics and supply chain operations. Moreover, the industrial park is located 70m above sea level, which provides natural protection against flooding.

Comprehensive and modern industrial park

Besides the main industrial buildings, SPD Tech Valley integrates office spaces, commercial areas and green spaces. It will be divided into nine major zones: detached factories, heavy industrial land, medium industrial land, intelligent warehouse, commercial hub, centralised labour quarters, centre of excellence, solar power generation centre and recreational area.

Tailored solutions for diverse business needs

A diverse range of products is offered to suit the requirements of different businesses. SPD Tech Valley will allocate medium and heavy industrial plots measuring from three acres, where factories can be built to suit individual designs. These lots will come with future-proof infrastructure, which will cater for buyers’ current and future demands.

Ready-built detached factories will also be available, with lot sizes from 1.14 acres and built-ups starting from 26,000 sq ft. Each factory will have GreenRE certification and come equipped with electric-vehicle chargers, rainwater harvesting systems and solar panels. The design of the factories allows for upgrading options and customisation of space, and they will be able to accommodate larger machines, giving businesses the flexibility they need to grow their operations.

As it will be the first managed industrial park in Negeri Sembilan with integrated smart technology, businesses need not worry about a lack of facilities. Storage will not be a concern with the inclusion of a one million sq ft intelligent warehouse. It will be equipped with AI-driven logistics and real-time tracking for optimal inventory and distribution management. It will also offer a cost-saving pay-as-you-use model where extra stock can be kept during peak season without the financial burden of constructing another warehouse for businesses in the industrial park.

To cater for the workforce in the industrial park as well as the surrounding vicinity, the commercial hub will provide amenities. Located at the entrance of SPD Tech Valley, the commercial hub’s prime spot will ensure consistent foot traffic and is set to be a vibrant and dynamic business hub that caters for the area’s growing demand.

The Centralised Labour Centre will provide a comfortable place for workers to live while ensuring their well-being is taken care of. The space will have a capacity of 5,000 beds and offer the necessary services such as a canteen, automated laundry shop, grocery shop, multi-purpose hall, F&B vending machine, mineral water vending machine and first aid room. Shuttle service and 24-hour security will be provided to ensure convenience and safety.

SPD Tech Valley also offers lifestyle facilities for work-life balance. The Business Support & Leisure Centre will feature a business hotel, business lounge, business centre, fitness centre, spa and wellness centre, cinema room, game room, restaurant and café, swimming pool and bike racks, among others. A sustainable recreation park with facilities such as an outdoor gym, jogging track, multipurpose court, picnic areas and compost area will be the green lung of the industrial park. There will be solar-powered lights to illuminate jogging tracks and rain-harvesting systems to sustain the greenery.

Pioneering sustainability and smart technology

SPD Tech Valley aims to be the first industrial park in Southeast Asia to receive the LEED Gold certification for Cities and Communities. Moreover, the developer is committed to the sustainability movement by getting GreenRE certification for the development’s facilities, ensuring the park buildings and infrastructure meet high environmental standards. The design of the industrial park follows international and national guidelines and takes reference from United Nations Industrial Development Organisation (UNIDO) standards, Sustainable Development Goals, environmental, social and governance (ESG) principles, the 1 National Energy Transition Roadmap (NETR) and New Industrial Master Plan 2030 (NIMP 2030).

Green energy initiatives that will be integrated into the industrial park include the implementation of solar farming and rainwater harvesting, provision of EV charging stations, and development of bicycle paths to promote greener commuting options.

The facilities are built with a focus on ESG principles that include using sustainable materials, implementing energy-efficient systems and ensuring the operations support social and environmental responsibilities. The developer believes a sustainable ecosystem will bring many benefits such as an increase in operational efficiency and positive profit as well as the security of long-term property value.

Meanwhile, the government’s NIMP 2030 is pushing towards a digital economy and smart cities. Thus, there is increasing demand for industrial parks that support high-tech industries and innovation-driven enterprises. As such, the developer is aiming to stay ahead of industry trends by future-proofing SPD Tech Valley with Industrial 4.0 features such as automation support, data exchange and connectivity, making it ready for the future.

Other features that make the industrial park present and future-ready include a 100ft road reserved to ease traffic flow as well as accommodate heavy machinery and cargo transportation, fibre-optic infrastructure with 5G to facilitate real-time data sharing and cloud computing, and ample parking along the main road for the convenience of the workforce and clients.

The industrial park will be located next to Malaysia’s National Grid, which will provide operators with easy, reliable options for ample power, and there will be up to 65MW of estimated solar energy. Moreover, a two-million-gallon reservoir and industrial-grade water supply will be in place to ensure adequate water supply. Natural gas supply will be available through the nearby Malaysian Natural Gas pipeline connection.

Source: The Edge Malaysia

Industrial park embraces cutting-edge technology and sustainability

Furniture manufacturers in the state need to intensify efforts to increase the country’s furniture exports, said Sarawak Furniture Manufacturers Association (SFMA) president Kapitan Kong Kim Hong.

He said despite challenges faced particularly post-Covid-19, industry players should focus on delivering quality products and targeting international markets.

“According to Deputy Prime Minister Datuk Seri Fadillah Yusof, who spoke at the Malaysia International Furniture Expo last year, the global industry report released in 2019 indicated that the global furniture market value is expected to reach US$550 billion by 2027.

“After the Covid-19 pandemic, our country’s total export of furniture has remained above RM100 billion in 2021, and in 2022 it reached RM115 billion.

“These figures show that Malaysia holds a significant share in the global furniture market, making it the second-largest furniture exporter in the world,” said Kong in his speech at SFMA Miri branch’s commemoration of Lu Ban’s birthday anniversary, here on Saturday.

Therefore, he encouraged industry players in the state to seize the opportunity to develop their brands and introduce their products to the world.

“Although this is vast potential for furniture exports in the country, Sarawak’s furniture export is relatively small as compared to other regions. I suggest local manufacturers to diversify their product ranges,” he said.

Meanwhile, on the celebration of Lu Ban, who is revered as the Chinese deity of builders and contractors, state Transport Minister Dato Sri Lee Kim Shin emphasised the importance of the spirit of craftsmanship, acknowledging Lu Ban’s inventions and contributions to carpentry which have provided valuable knowledge for future craftsman.

“We should carry Lu Ban’s spirit of craftsmanship, embodying a love for work and the pursuit of perfection.

“We must continuously learn new knowledge and master new skills, while also emphasising teamwork to progress together,”said Lee, whose speech was read by councillor Jeffrey Phang.

Source: Borneo Post

Sarawak furniture manufacturers urged to boost exports

The world is highly connected and the supply of goods criss-crosses the globe via logistical planning like clockwork. But world events have thrown a spanner in the works, causing supply-chain disruptions that have a great impact on economies. With China — a key manufacturer — mired in the ongoing China-US trade war, it has been challenging for companies to export their goods.

In JLL’s “Beyond China: Asia’s next manufacturing powerhouse” report released in May, the global real estate services firm reveals that India and Southeast Asia (SEA) nations — namely, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam — that can mitigate and benefit from this situation.

“Over the past few years, companies have begun exploring the relocation of manufacturing outside of China. In Asia-Pacific, this near/re/friend-shoring trend has resulted in the China+1 strategy where companies add additional manufacturing bases outside of China to hedge against supply chain disruption by reducing reliance on a single country,” JLL says in a press statement on the report.

Nearshoring is the practice of transferring a business operation to a nearby country, especially in preference to a more distant one. Reshoring, on the other hand, is the practice of transferring a business operation that was moved overseas back to the country from which it was originally relocated. Friendshoring refers to the practice of locating parts of a company’s supply chain or manufacturing process to countries that are political or economic allies of the country where the company is based.

“Diversification within supply chains is a natural step for companies involved in manufacturing within the wider economic lifecycle of this region. We see Southeast Asia and India representing a natural complement to the existing production strength of China but feel that for companies to respond quickly to supply chain shifts, they need to adopt a flexible mindset towards land selection and funding options,” says JLL Asia-Pacific head of manufacturing strategy Michael Ignatiadis.

However, the report cautions companies from leaping on the bandwagon as they need to be able to adapt quickly given the ongoing volatile landscape.

“Land selection and the capital used will be key in determining success factors for companies. Alternative funding and new leasing options are becoming more readily available. These are enabling manufacturers to set up quickly and to pivot as needed if and when global trade and supply chains shift again,” the report says.

JLL notes that the nations in the report have strong fundamentals, which is why they are considered by companies to set up their manufacturing operations. “These fundamentals include a large population and labour pool, favourable costs and various incentives. From a manufacturing investment perspective, these factors position SEA and India as major manufacturing hubs for global markets.”

Another reason companies are looking elsewhere is also due to rising costs in China compared with SEA and India. Apart from the financial aspect, the report highlights, “Factors such as skilled labour, infrastructure, environmental regulations, proximity to suppliers and customers, and political stability contribute significantly to a factory’s long-term success and sustainability.”

Careful consideration of both financial and non-financial factors, as well as a country’s inherent benefits, is necessary to make an informed decision, JLL says.

Opportunities for Malaysia

The report points out opportunities for Malaysia and also the areas and the policies that are encouraging growth in the manufacturing sector. The industries where opportunities lie are rubber, machinery and equipment (M&E), food, chemical, transport, and electronics and electrical (E&E).

In the press statement, JLL Malaysia head of research and consultancy Yulia Nikulicheva says, “Malaysia’s manufacturing sector has attracted a significant amount of foreign direct investment in recent years, particularly in the E&E segment. The country is home to six of the top 12 semiconductor manufacturers, contributing to 7% of Malaysia’s GDP (gross domestic product). Additionally, Malaysia ranks seventh globally in E&E exports. Other sectors such as pharmaceuticals, chemicals, and machinery and equipment are also experiencing increased investment volume.”

For the rubber industry, the report says, “Malaysia plays an important role in the rubber industry in SEA. It is also the sixth-leading producer of natural rubber in APAC (Asia-Pacific)”.

The key products include gloves, tyres, thread, automotive components and seals and O-rings.

The M&E industry has huge potential. From January to July 2022, Malaysia saw an increase of 25.5% in M&E exports totalling US$8.34 billion year on year, JLL reports. The key products here are industrial machinery, electrical equipment, and construction and mining machinery.

For the food industry, JLL says, “Malaysia wants to be one of the largest global suppliers of halal products. The Global Islamic Economy Indicator forecasts that the global halal market will expand from US$2.09 trillion in 2021 to almost US$3.27 trillion by 2028.” Food products include processed and canned foods, dairy products, beverages and snack foods.

The chemical industry contributes 6% to Malaysia’s GDP, according to JLL, and employs 292,969 workers, making up 12.5% of the total manufacturing employees. Products include petrochemicals, oleochemicals, plastics and polymers, and agrochemicals.

As for the transport industry, JLL highlights, “Malaysia has attracted many global automotive manufacturers to operate their flagship facilities in the country, including the first Porsche assembly plant outside of Germany, several regional distribution centres such as Volkswagen, Mercedes-Benz, BMW and Volvo’s regional EV (electric vehicle) hub. Other manufacturers like Proton, Perodua and Honda have also established manufacturing facilities in Malaysia, which is poised to become a regional hub for the EV industry.”

Products include automobiles, motorcycles, commercial vehicles, and EVs and components.

Lastly, for the E&E industry, JLL says, “Now one of the largest export-oriented industries in the country. It contributes 38% to Malaysia’s total exports and 78% to the net trade surplus.”

The key products include consumer electronics, electrical appliances, electronic components and semiconductors.

Key industrial areas; supportive policies

JLL highlights several key industrial clusters, mainly in Peninsular Malaysia, namely in Penang, Greater Kuala Lumpur and Johor.

In Penang, the key industries there include E&E, pharmaceutical, and machinery and equipment. The Penang Port and Penang International Airport are the two export/import hubs.

For Greater Kuala Lumpur, E&E, machinery and equipment, automotive, and food and beverage are key industries. Port Klang, Kuala Lumpur International Airport and Sultan Abdul Aziz Shah Airport are key transport hubs, JLL highlights.

Lastly, in Johor, key industries include automotive and logistics, with Port of Tanjung Pelepas, Johor Port and Senai International Airport being key hubs.

Policies that are supporting and providing direction within the industrial sector include the New Industrial Master Plan 2030 (NIMP 2030), the 12th Malaysia Plan and the National Fourth Industrial Revolution (4IR) Policy.

NIMP 2030 is a master plan that lays out the course for Malaysia from 2023 to 2030 to keep the country’s manufacturing industry and related services competitive globally.

“The NIMP 2030 aims to capitalise on rising global trends, supply chain disruptions, the present geopolitical scenario, digitalisation, and environment, social and governance (ESG) considerations,” JLL says.

At the same time, the 12th Malaysia Plan from 2021 to 2025 outlines the country’s commitment to achieve net zero greenhouse gas emissions by 2050. According to JLL, Malaysia holds the top ranking in SEA in the Energy Transition Index (World Economic Forum).

Lastly, 4IR looks to “increase manufacturing productivity; elevate the contribution of the manufacturing sector to the economy; strengthen innovation capacity and capability; and increase the number of high-skilled workers”.

These policies and initiatives provide a framework to work towards, and Malaysia looks to be in a good position to capitalise on the industrial needs of global players.

Source: The Edge Malaysia

Manufacturing opportunities for Malaysia

The number of electric vehicle (EV) charging stations nationwide increased by 12.5 per cent as of June 25, compared to the first quarter of this year, driven by the government’s efforts to reduce bureaucratic hurdles in the installation process.

Investment, Trade, and Industry (Miti) Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said that previously, approvals involved numerous agencies and ministries, including the Energy Commission, the local authorities, and the Fire and Rescue Department.

“The increase over the past two to three months has been significant. Initially, there were approval challenges, but meetings chaired by Deputy Prime Minister Datuk Seri Fadillah Yusof successfully streamlined the process.

“We now have a one-stop centre to speed things up,” he said after officiating the 2024 Ipoh Barat Umno Division Delegates Meeting today.

Tengku Zafrul added that the government is maintaining its target of having 10,000 EV charging stations nationwide, and raised the target for Direct Current (DC) Fast Charging units from 1,000 to 1,500 this year.

“While DC chargers are costlier to install, they are essential due to high demand from the public,” he said.

The Low Carbon Mobility Action Plan 2021-2030, announced in 2020, aims to establish 10,000 EV chargers by 2025, comprising 9,000 Alternating Current chargers and 1,000 DC chargers.

According to Miti, 2,585 EV chargers have been installed nationwide as of June 25, excluding the Federal Territory of Labuan.

Source: Bernama

Cutting red tape drives EV charging stations’ growth — Minister