Supporting SMEs in the adoption of Industry 4.0 – Industry4WRD Intervention Fund

Conducted in two phases across the nation, the outreach programme will be an avenue for industry players to understand the Industry4WRD related programmes and incentives offered by the Government such as Readiness Assessment, Intervention Fund, Domestic Investment Strategic Fund (DISF) and Automation Capital Allowance (Automation CA).

The outreach programme’s first phase is scheduled for February to April 2020 and will be held in collaboration with relevant Ministries, Agencies and business associations throughout Malaysia.

To encourage more local small and medium enterprises (SMEs) stakeholders within the manufacturing and related services sectors to embrace Industry 4.0, the Government has introduced a new incentive, known as the Industry4WRD Intervention Fund.

This is in tandem with the National Policy on Industry 4.0, which introduced the Industry4WRD Readiness Assessment (RA). The RA is a comprehensive programme to help SMEs to assess their capabilities and readiness to adopt Industry 4.0 technologies and processes. Upon completion of the RA programme, companies will be given recommendations to prepare feasible strategies and plan to move towards implementing Industry 4.0 in their operations. To materialise the recommendations that have been put forward, SMEs are encouraged to apply for the Intervention Fund through the Malaysian Investment Development Authority (MIDA).

On 20 January 2020, YB Dr. Ong Kian Ming, Deputy Minister of International Trade and Industry, officiated the Seminar on Industry4WRD Incentives, kick-starting the Nationwide Industry4WRD Outreach Programme for the year 2020.

Industry4WRD Intervention Fund

What is the incentive?

It is a matching grant (70:30) on reimbursable basis based on eligible expenditures, up to a maximum grant of Ringgit Malaysia Five Hundred Thousand (RM500,000.00). This fund aims to support SMEs in implementing intervention projects based on the recommendation of Industry4WRD Readiness Assessment (RA) Report on the shift factors of people, process and technology.

Who are eligible?

• Manufacturing or manufacturing-related services (MRS) companies incorporated under the Companies Act, 2016
• Small & Medium Enterprises (SMEs) 
  • Manufacturing: Sales turnover from RM300,000 to not more than RM50 million and/or employee from 5 to not more than 200 
  • MRS: Sales turnover from RM300,000 to not more than RM20 million and/or employee from 5 to not more than 75
• In operation for at least three years in the current business line
• Possess a valid business licence and/or Manufacturing Licence
• Completed the Government-funded Industry4WRD Readiness Assessment (RA) Programme–received a report from the Malaysia Productivity Corporation (MPC)

What are the eligible expenditures?

• Only expenditures based on the recommendations of the RA report will be considered.
• The following expenditures will not be eligible:
  • Purchase or rental of land, building, vehicles and furniture;
  • Premise renovation;
  • Collateral or loan for any purpose;
  • Marketing/ promotional activities;
  • Operation expenditure including salary, employee benefits, travelling expenditures; Expenditures on R&D activities; and
  • Working capital not related to the project.

What are the important timelines?

• Received Remaining Grant from MIDA
• Submit claim for Remaining Grant to MIDA
• Initiate the expenditures
• Received Upfront Grant from MIDA
• Sign Grant Agreement
  • Grant Agreement must be signed not more than 30 days from the date of approval by MIDA
• Received Approval letter from MIDA
• Submit Application to MIDA
  • Application must be submitted not more than 2 months from the date of approval (RA Report) by MPC
• Received RA report from MPC

Expenditures must be incurred not more than 12 months from the date of approval by MIDAClaims for remaining grants must be submitted not more than 18 months from the date of approval by MIDA.

Last date for application submission is 31 December 2021

What are the process workflow?

1. Received RA Report from MPC
2. Submit application of Intervention Fund to MIDA for evaluation
3. Company to present (pitching session) at IIFC at MITI
4. Upon approval by IIFC, MIDA will send approval letter and grant agreement to company
5. MIDA and Company sign the agreement
6. Company receives upfront grant from MIDA
7. Company implements the project
8. Company submits claim for remaining grant to MIDA
9. Audit visit by MIDA and RA Assessor Body
10. The application of claim will be deliberated at JPPG at MIDA
11. Upon approval by JPPG, company will receive remaining grant from MIDA

IIFC = Industry4WRD Intervention Fund Approval Committee

JPPG = Coordination & Disbursement of Grants Committee

What are the documents needed?

• 1-page Application Form
• Industry4WRD Readiness Assessment (RA) Report (with MPC’s cover letter)
• Technical Proposal
• Financial Statements (audited) for the past three (3) years
• Manufacturing Licence from MITI or a Confirmation Letter for Exempted from Manufacturing Licence from MIDA

What to put in Technical Proposal?

1. Project Description
2. Scope of Project
3. Duration of Project
4. Method of execution (solution providers)
5. Source of Technology
6. Expected Deliverable
7. Breakdown of Expenditures

Application Form, Template Technical Proposal, Guidelines & Process Workflow are available in MIDA Website: https://www.mida.gov.my/home/industry4wrd-incentives/posts/

To submit applications (in hardcopy) to:

Chief Executive Officer

Malaysian Investment Development Authority (MIDA)

MIDA Sentral,

No. 5, Jalan Stesen Sentral 5,

Kuala Lumpur Sentral, 50470 Kuala Lumpur.