Industry
From The Report: Malaysia 2012
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Malaysia has developed competitive industries in a number of key fields, from agriculture-based products like rubber and halal food, to petroleum and chemical products, to high-tech electrical and electronics manufacturing. The government’s strategy for turning Malaysia into a high-income economy includes shifting from low- to high-value production, emphasising sectors like bio-technology and pharmaceuticals that require more talent and R&D inputs. Along these lines, many firms are looking to upgrade their offerings, with medical device manufacturers moving from disposable rubber products to more high-tech equipment, and electronics manufacturers building their own tablets. Challenges for the sector include a new minimum wage introduced in 2012, although defenders of the policy say it will encourage a shift toward higher-value labour.
This chapter includes interviews with Mustapa Mohamed, Minister of International Trade and Industry (MITI); and Wong Lai Sum, CEO, Malaysia External Trade Development Corporation (Matrade).

Articles from this Chapter

Overview

Competitive advantages: The sector has a big role to play if development goals are to be met
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To meet the government’s social and economic goals of transforming Malaysia into a stable and inclusive high-income nation by 2020, gross national income (GNI) will need to register annual growth of at least 6% until 2020. This would entail lifting GNI per capita from the 2009 level of $7650 to over $15,400, and if it is to be reached the industrial and services sectors will need to make major contributions. POLICY PLANS: Recognising the scale and complexity of this task, the government…

Interview

OBG talks to Mustapa Mohamed, Minister of International Trade and Industry (MITI)
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Interview: Mustapa Mohamed What tools can be used to encourage low-end manufacturers to move up the value chain? MUSTAPA MOHAMED: The government has been adopting a more targeted approach in investment promotion, focusing on growth areas, value-added sectors and high-tech industries. To this end, the Malaysian Investment Development Authority is working to attract new quality investments and in encouraging existing industries to shift from low-value-added products and services towards high-value-added,…

Interview

OBG talks to Wong Lai Sum, CEO, Malaysia External Trade Development Corporation (Matrade)
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Interview: Wong Lai Sum How are new trade agreements expected to affect expansionary possibilities for Malaysia? WONG LAI SUM: Malaysia is seeking to sign free trade agreements (FTAs) with the GCC, Turkey, the EU and members of the Trans-Pacific Partnership (TPP) in 2012. A common sentiment among Malaysian exporters and manufacturers is that the opportunity for capitalising upon each new FTA is a narrow window, whereas FTAs are often portrayed as opening doors. Businesses must jump on the FTA immediately…

Analysis

Pedal to the metal: Infrastructure projects are fuelling an increase in steel production
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Fuelled by steady economic growth, and the consequent liberal capital expenditure policies of both the public and private sectors, steel manufacturing – along with the construction materials industry as a whole – is maintaining a steady upward trajectory. Since 2008 the annual growth of Malaysia’s construction sector has averaged 4.7%, while domestic production of iron and steel products has also been on the up, according to the central bank. Iron and steel bar and rod output reached 2.56m…

Analysis

Moving with the times: Labour costs are set to rise with the introduction of a minimum wage
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Touting the country’s 12m-strong workforce as a highly skilled labour pool able to provide a competitive advantage for businesses setting up in Malaysia, the government upped the ante in 2012 by enacting a minimum wage. Announced by the prime minister, Najib Razak, in May, the law sets the minimum salary at RM900 ($290) per month for workers in Peninsular Malaysia and RM800 ($258) a month for Borneo-based workers. “The lowest-paid will be guaranteed an income that lifts them out of poverty…

Analysis

A bright future: The growing solar industry is being supported by the government
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Requiring sophisticated manufacturing techniques, skilled labourers, reliable power supply and developed infrastructure, solar manufacturing fits neatly into the Malaysian government’s strong push into the development of value-added industrial capabilities. In addition, the government implemented a new feed-in tariff renewable energy incentive scheme in 2011, which should also boost domestic demand for high-tech devices. INCENTIVES: As one of four key industries in the electronics and electrical…

Analysis

Device-like grip: The medical equipment segment is set to go from strength to strength
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As the global population cruises past the 7bn mark, the demand for health care goods and services continues to grow through bull and bear markets. With the annual global market estimated by the Malaysian Investment Development Authority (MIDA) at $300bn and growing at a rate of 10%, the medical devices industry provides a competitive yet attractive opportunity for Malaysian companies. Due to the highly technical and diverse nature of the sector, medical instrument manufacturing also dovetails…

Overview

Consuming interest: All signs suggest spending levels will continue to rise
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Buoyed by consistent economic growth, a rising population, rapid urbanisation, low unemployment and a burgeoning middle class, Malaysia’s retail sector is continuing its strong run in the face of a cooling global economy. Total retail sales – excluding large-scale purchases such as cars and homes – for 2011 were valued at $26.8bn by Retail Group Malaysia, up 8.1% year-on-year (y-o-y), with fourth-quarter sales up 11.5%. Growth was more subdued in 2012, with second-quarter sales up 5.8%…