Posts tagged manufacturing

‘Wave’ of FDI flows into Malaysia in 2011


There has been a ‘wave’ of foreign direct investment (FDI) into Malaysia this year, totaling RM31.7 billion (US$10.6 billion) to the end of July 2011. More than half of this has flowed to the manufacturing sector and the top sources are Japan, Singapore, the Netherlands and Taiwan.

Malaysia’s Minister of International Trade and Industry, Mustapa Mohamed, announced the figures and said government initiatives such as the Economic Transformation Programme (ETP) had attracted international interest. Domestic investment had also improved, with RM4.3 billion ($1.44 billion) also going to manufacturing projects.

Business Times reports a breakdown of manufacturing investments shows RM6.5 billion ($2.2 billion) went to electronics and electrical products, RM2.4 billion ($804 million) to basic metal products, RM1.7 billion ($570 million) to chemicals and chemical products, and RM1.1 billion ($369 million) to food manufacturing.

Mustapa also said the figures reflect a shift towards high-value-added, more capital intensive (investment per employee) industries as Malaysia became less competitive at the lower-pay end against countries like China and Vietnam. He promised more new opportunities and growth areas as the ETP chases its 2020 goal of RM1.2 trillion ($40.23 billion), 92% of which the government wants to come from the private sector.

Total investment in Malaysian projects, including both foreign and domestic, was RM47.2 billion ($15.8 billion) in 2010.

source & article: Business Times

Could Indonesia overtake Thailand as an auto manufacturer?


Will Indonesia overtake Thailand as the automotive manufacturing center of Southeast Asia? Thanks to increased investment from overseas carmakers, government incentives and a growing domestic demand for vehicles, many think so.

Thailand has traditionally been the country of choice for international manufacturers. Despite its own large middle-class customer base and strong production figures (1.64 million vehicles in 2010) it faces new pressure from rising costs and a new government-set minimum $10 daily wage for workers. Companies produced a total 650,000 vehicles in Indonesia and sold 764,000, but forecasts predict both numbers could top a million by 2013.

The Jakarta Globe reports:

Indonesia is already expecting more than $1 billion in investment in the automotive sector starting this year. Nissan recently announced a $250 million expansion plan; Suzuki has announced an $800 million expansion; Chrysler a $100 million expansion; Daihatsu just carried out a $246 million expansion; and BMW a $12 million expansion. India’s Tata also expressed interest in building a production base in Indonesia.


Peugeot and General Motors have also announced plans to assemble vehicles in Indonesia. The government also intends to provide tax breaks for investments over Rp1 trillion (US$117 million), though no formal arrangement has been made yet.

Indonesia’s auto manufacturing base is in Bekasi and Karawang, near Jakarta and the government-set minimum wage of $8 may see Thailand-based companies chase lower costs. As always, Indonesia’s infrastructure inadequacies will be an issue and the country would need to address them before it could become a serious global export leader, an analyst said.

source & article: The Jakarta Globe


BAE Systems looking for Malaysian aerospace partnerships


Malaysia’s dreams of becoming a regional leader in aerospace received a boost today from UK-based BAE Systems, which said it was keen to revitalize the two countries’ relationship. The group’s business development director, Alan Garwood, said he would be keen to discuss issues with Malaysian Prime Minister Najib Razak, who is on an official tour of the UK this week.

PM Najib met with 20 major industry players at an official dinner to discuss possible Malaysian collaborations.

Malaysia has earmarked aerospace as a potential major industry, with the government saying it hopes to become a big player in aircraft component manufacture and aircraft repair and maintenance. Do do so would need advances in local training and skills, as well as investment from international aerospace companies like BAE. Conveniently, many aerospace/defense firms have begun to focus on Asia-Pacific and Middle East of late, seeking new markets in emerging economies at a time when developed countries are spending less on their equipment.

Garwood said Malaysia’s growth over the last few years had been “phenomenal”, and unmatched by European countries. BAE Systems is looking to find local partners for joint ventures, and is also hoping to use that leverage to become a defense contractor to the Malaysian government when the Malaysian air force replaces its fleet of 10 MiG-29N fighters soon.

BAE has already teamed up with Malaysia’s Composites Technology Research Malaysia Sdn Bhd (CTRM).

source & article: Business Times

Selling to Japan is the ‘feather in the cap’: Malcorp CEO


Malaysian auto parts manufacturers have spent years building a reputation for product build quality and supply reliability, exporting their products to several automakers around the world. Appealing to Japanese automakers, however, is another story entirely. A contract with a major manufacturer there offers lucrative rewards and increased stature, but Japanese thoroughness and taste for flawless quality present extra challenges to suppliers.

Some Malaysian companies were making inroads into the Japanese market even before the 11 March disasters in Tohoku damaged supply chains. The two countries signed a five year Economic Partnership agreement in 2006, with an auto industry component providing a skills training center in Malaysia and a number of trade shows.



Since March, many Japanese companies have expressed a desire to diversify their risks by teaming up with manufacturers in other Asian companies and Malaysia has found itself in a prime position. Trade agencies JETRO and MATRADE are aiding firms to find each other and achieve profitable outcomes on both sides. (more…)

New machines to boost Penang medical device industry skills


Penang has been positioning itself as a center for medical device production, and a new agreement with a Swiss machinery maker will see local skills improve in this industry, and pass them on to other Malaysian manufacturers.

The Penang Skills Development Centre (PSDC) has teamed up with Tornos SA, a Swiss machinery maker, to provide a loan machine for two years and training for 10 staff of its sliding headstock type computer numeric control (CNC) lathe. The PSDC has applied to the government for funds to purchase four more of the machines under the 10th Malaysia Plan.

CNC skills are vital to advancing the medical devices industry, which in turn produces valuable skills for other high tech manufacturing sectors like semiconductors and automation. PSDC has run CNC training courses since 1992, producing 160 skilled operators every year.

Foreign medical device companies with operations in Penang are B. Braun Melsulgen AG, Symetry Medical Inc and St Jude Medical Inc. Malaysian company Vigilenze Medical Supplies Sdn Bhd also has a facility in the state.

source & article: NST Business Times, MIDA

More aviation engineers needed to fulfill Malaysia’s MRO goals


Aircraft maintenance, repair and overhaul (MRO) is earmarked as a Malaysian growth industry and has full government support under the Economic Transformation Programme (ETP). To achieve its stated vision of becoming RM193.3 billion (US$65 billion) industry by 2020 and making Malaysia a regional MRO hub, however, the industry needs to make big leaps in policy & procedure improvement, availability of skills, and build a spare parts infrastructure.

MAS Aerospace Engineering (MAE), a division of national carrier Malaysia Airlines (MAS), is the company best positioned to achieve the goal and seems to have a good understanding of improvement points. The company made RM2 billion ($663.8 million) in revenue in 2010, 40% from its parent company and 60% through third-party and joint venture services. It is the third-largest airframe MRO company in the world, and says 75% of the world’s top airlines are on its client list.

Business TImes reports MAE is currently in talks with potential joint venture partners in China, and recently opened a facility with partner GMR Group in Hyderabad, India, its first outside Malaysia. Asia-Pacific, China and India accounted for 23% of the global MRO market, or RM29.6 billion ($9.8 billion), the company said.

On the homefront, MAE said that to properly develop MRO leadership, Malaysia needed more licensed aviation engineers and more training centers to produce the engineering skills required. There is also a feeling among the country’s top aviation schools that aviation engineering isn’t being promoted effectively enough as a vocation, and that the industry needed greater public awareness of its economic importance before it could develop and keep up with increasing speed and complexity.

source & article: Business Times

Malaysia’s Northern Corridor accelerating investment


While Southern Malaysia’s Iskandar zone continues to impress with rising property prices and shiny development proposals, the other end of the country is also drawing its share of investments. The Northern Corridor Economic Region (NCER), which spans Perlis, Kedah, Seberang Perai on mainland Penang and northern Perak, has recorded RM3.3 billion (US$1.09 billion) in new investments for the first four months of 2011. That’s already looking healthy against 2010′s total of RM6.08 billion ($2.02 billion), and is a vast improvement on 2008-09′s RM1.4 billion ($464 million).

About 50% of this year’s investment is from domestic sources, in the key areas of logistics, commercial agriculture, manufacturing and tourism. The region also focuses on high tech industries.

The development region is overseen by the Northern Corridor Implementation Authority (NCIA), which recently showcased investment opportunities in the four key areas in Kuala Lumpur. If NCER lives up to expectations, it will lift the region’s share of Gross National Income (GNI) to RM13.3 billion ($4.41 billion) by 2020 and generate thousands of high skilled jobs.

source: MIDA

Malaysia’s Scomi wins Sao Paulo monorail construction contract


A consortium led by Malaysia’s Scomi Engineering Bhd has won a RM2.6 billion contract to build an 18km monorail line in Sao Paulo, Brazil’s largest city. The contract, beginning in July this year, will see Scomi and three local partners cover every aspect of the line’s construction from design, supply, manufacture and implementation.

The 18km ‘Gold Line’ monorail will need to carry 250,000 passengers per day from Jabaquara to Sau Paulo-Morumbi. Scomi itself will manage design and delivery of 24 three-car vehicle sets, and supply a vehicle management system (VMS), design for switches, system integration, system assurance, and testing & commissioning. The contract also includes construction of 18 stations.

Sao Paulo has six million cars, one of the world’s largest fleets, and is famous for its chronic traffic congestion. Currently, the city operates a suburban train system, a fast-lane bus network, and is in the process of constructing an underground metro. Scomi Engineering specializes in monorail and bus systems as well as specialized vehicles like tankers and compactors, and is moving into more international markets after supplying its products to the Asia-Pacific and Middle East regions for years.

source & article: The Edge Malaysia, Scomi Engineering


Japan promises billions in new Malaysian investments


More good news of new Japanese investments for Malaysia as Prime Minister Najib Razak completed a short but high-level tour last week. Japanese firms have reportedly confirmed a commitment to RM3.8 billion (US$1.26 billion) in new investments between now and 2012, with another RM5.22 billion ($1.72 billion) to follow from 2013-15.

Key targets for investment are industries specializing in electrical and electronic goods, biomass, metallics and substrates used in the manufacture of hard drives. The total includes Tokuyama Corporation’s RM3.7 billion ($1.22 billion) investment in a polysilicon project in Bintulu, Sarawak state. Polysilicon is a vital ingredient in making electronics and solar photovoltaic (PV) cells.

During the tour, Najib met with Japanese Foreign Minister Takeaki Matsumoto, held discussions with representatives of the Japan-Malaysia Economic Association (Jameca) and delivered the keynote address at the 17th Nikkei International Conference.

Matsumoto apparently asked Najib to consider Japanese firms for major Malaysian infrastructure projects arising from the Economic Transformation Programme (ETP), such as the proposed Mass Rapid Transport system. He also expressed support for the new Malaysia-Japan International Institute of Technology, due to begin in September, and promised a special loan from his government to guarantee its success.

For its part, Malaysia has lifted a travel advisory it issued for its citizens going to Japan after the Fukushima nuclear incidents, and offered its expertise as an intermediary between Japanese firms seeking foreign investments of their own in lucrative Middle East markets.

source & article: Business Times

Japanese companies look to Philippines in wake of disasters


It’s been hinted before that Southeast Asian economies might benefit from Japanese investors and manufacturers looking to diversify their interests after March’s disasters. Apparently many are traveling to the Philippines on fact-finding missions, attracted by the country’s prices, proximity to Japan and a skilled, English-speaking workforce.

Many Japanese companies already have a presence in the Philippines and it’s long been a popular destination for Japanese tourists. Local tourism bodies plus trade and investment boards should capitalize on the opportunity to attract Japanese investment that would otherwise go to countries like Vietnam or Thailand, said a government official.

This includes hundreds of small and medium sized enterprises in the northeastern Tohoku region that were completely wiped out by March’s tsunami, as well as others whose operations were damaged but were seeking to hedge against any similar future disasters. Sergio Ortez-Luis Jr, head of the Philippines Chamber of Commerce & Industry (PCCI), said if the Philippines could promote itself as a safe and attractive tourist destination for Japanese, then investment would follow.

source & article: Philippines Daily Inquirer

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