TAPiO Newsletter – March 2019 Issue

DIPLOMATIC SPHERE

Malaysia & China Signed Agreements Of Palm Oil Purchase Deals

Three Chinese companies were signed the four purchase intent documents for purchasing of 1.62 million tonnes of palm oil with four Malaysian companies which a combined estimated worth of 891 million US Dollar during the opening of the Malaysia-China Palm Oil Business Forum. Primary Industries Minister Teresa Kok said there is an increase of three-fold palm oil and palm oil products export to China from 1.02 million tonnes in 2000 to 3.07 million tonnes in 2018. Minister Kok also highlighted that the business opportunities in the palm oil industry especially in the downstream activities and encourage the companies to explore new areas of cooperation to tap into the great potential of palm oil-related products. While China has no imposes the ceiling on the import of Malaysian palm oil and palm oil products, China Ambassador to Malaysia His Excellency Bai Tian said.

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East Coast Economic Region To Sustain Socio-Economic Growth And Uplift The Wellbeing Of The People In The Region

ECER state that the continuation of ECERDC’s people-centric strategy is based on the effectiveness of its projects and programmes in elevating the income levels and socio-economic status, particularly in human capital development programmes affecting more than 90,000 individuals to-date, thus helping to ensure balanced regional development and fair wealth distribution. At the same time, these programmes will support private investment through the development of skilled workers and entrepreneurs. ECERDC Chief Executive Officer Baidzawi Che Mat state that works closely with the Federal and State agencies to facilitate the implementation of catalytic infrastructure projects, amplify efforts to further attract and realize private investment, as well as, implement holistic human capital development programmes in ECER.

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MITI Collaborate With Terengganu To Develop The Robotics Industry

Ministry of International Trade and Industry (MITI) Minister Datuk Darell Leiking stated that Terengganu has good infrastructures for robotics industry and many potential skilled workers. MITI will work together with Terengganu state government to developing this industry with training the local workers. Chief Minister of Terengganu, Dr. Ahmad Samsuri Mokhtar stated that Terengganu was ready to develop the robotics industry since the State had several technical-oriented higher learning institutions such as TATI University College in Kemaman and Terengganu Skills Development Centre in Marang. Chief Minister Ahmad Samsuri also recommended to include TATI University College and other higher learning institutions to involve in this project

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Langkawi International Maritime and Aerospace Exhibition 2019

Langkawi Maritime and Aerospace 2019 (LIMA’19) Exhibition was a huge success, having drawn huge participation in all its events since last Tuesday. Prime Minister Tun Dr. Mahathir Mohamad said that it also managed to draw thousands of visitors, who had the opportunity to witness various shows during the exhibition. In addition, there were business deals (signed) which can contribute to the economic growth of Malaysia. The Prime Minister also said there were participants of the exhibition who expressed their desire to invest in Malaysia, particularly in Kedah and Langkawi. A total of 406 companies, including 200 foreign firms, mostly involved in defense takes part in LIMA’19, which is being held at the Mahsuri International Exhibition Centre (MIEC).

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BUSINESS

Boosting Of Malaysia & France Ties

According to PARIS statistics, France-Malaysia bilateral trade for Malaysia exports to France has an increase of 11.4% which reached more than RM11 billion in 2018. While French exports to Malaysia has an increase of 3.4%. French direct investment into Malaysia also significant in the aeronautics sector and increasing sources parts in Malaysia. Besides, French companies also presence in automotive, agro-food, digital sector in Malaysia. Cooperation of Malaysia investment agencies and Chamber of commerce and Industry France-Malaysia is accelerating the French investment in Malaysia by open of third business centre in Kuala Lumpur and the new office in Johor Bahru to making French investment in Malaysia smoother.French Business Confederation has appointed a chairman for France-Malaysia Council of CEOs – Jean-Marc Chery, CEO of STMicroelectronics to promote direct contacts between business leaders of both countries.

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Foreign Investors Will Continue To Have Confidence In Malaysia’s Economy

Deputy Minister of MITI, Dr. Ong Kian Ming told reporters after officiating the Industrial Internet of Things (IoT) Plugfest Convention 2019 the stock market has improved and the important thing for us is not to look at day-to-day changes in the stock market’s performance but to have the right ecosystem so that portfolio investments that are sustainable and long-term can come over to Malaysia. The performance of Government-Linked Investment Companies (GLICs) like Khazanah does not affect foreign investors’ decisions, as they are looking at the right ecosystem so that they can manufacture and locate their R&D, as most of their products are for export. MITI has launched Industry4WRD where RM15 million has been allocated to provide Readiness Assessment and a further RM30 million for an intervention fund in the follow-up.

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Economic Downturn Impacting The SMEs And MNCs

FMM Vice-Chairman Datuk Lee Teong Li state that current economic slowdown did not apply in general across the board for all the industries. The benefit from the trade war between the US and China is to export from Malaysia to avoid the anti-dumping duties imposed on goods shipped out from China. MTUC Penang Secretary K Veeriah believes that have they only received a tiny bit of information and area of the view that the uncertainty in the global market would probably impact upon most of the major players in the sector.

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MITI Approved RM201.7 Billion In Investments In 2018

International Trade and Industry (Miti) Minister Datuk Darell Leiking state that domestic direct investments accounted for 60 percent or RM121.2 billion of the total investments while the remaining 40 percent is that of a foreign source. He also stated that the largest contributors to the manufacturing sector in Malaysia for last year is China, Indonesia, Netherland, Japan and USA. The total RM201.7 billion, the manufacturing sector contributed RM87.4 billion, 37.2 percent higher than 7 billion in 2017, as new projects attracted higher levels of foreign investments. Mida approved 4,103 projects amounting to RM103.4 billion in the services sector.

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Prime Minister Tun Dr. Mahathir Mohamad’s Keynote On March 19

During the Invest Malaysia 2019, Prime Minister Tun Dr. Mahathir Mohamad stated that Malaysian aims to be a developed nation in every sense of the word. The development targets benefit everyone, shared prosperity, sustainable growth, and committed to economic growth with social justice. Current Malaysia’s growth focus in moving ahead is the digital economy, high-tech and high-wage manufacturing, and services sector. The government will provide incentives to investments and collaborations to turn Malaysia into a digital services and communications hub. Besides, the government also encouraging local companies to enhance their capabilities by collaborating with multinationals so as to become global or regional champions. For the manufacturing sector, the government will continue to attract high value-added, high technology and knowledge-intensive investment to complete the value chain in the ecosystem of targeted industries. It mainly focuses on aerospace, chemicals and chemical products, machinery and equipment, medical devices, as well as electrical and electronics industries. For services sectors, the government will focus on tourism, private healthcare and professional services, retail, as well as food and beverages.

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Malaysia’s Digital Export Expected To Grow To RM222 Billion By 2030

Malaysia’s digital exports can increase to RM222 billion by 2030 from the current RM31 billion with the absence of digital trade barriers. AlphaBeta Singapore Engagement Manager, Konstantine Matthies stated that work done by Malaysia on digital economy was very encouraging. Malaysia has been very active in integrating small and medium into the digital economy and encourage digital adoption under Malaysia Digital Economy Corporation. Based on the report, digital trade enables Malaysian firms to lower the storing data cost, improves business practices, generates richer business insights and accesses new markets, at the meantime facilitate more efficient in global supply chains management. It concludes that the digital trade could a huge impact on the country’s domestic economy. There are four main areas able to foster digital trade which is ensuring open cross-border data flows, formulating innovation-oriented approaches to copyright and intermediary liability regulations, minimising border frictions, and encouraging digital adoption.

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Malaysia Eagers To Be Early Mover Of Fourth Industrial Revolution (IR4.0)

As the Malaysian Investment Development Authority (MIDA) actively encouraging companies to kick start their digital transformation, Malaysia currently eager to be an early mover of the fourth industrial revolution (IR 4.0).  MIDA stated in Malaysia Investment Performance Report 2018 that measures have been taken to support the development of an agile and skilled workforce capable of support businesses in this rapidly changing environment. MIDA has been organising various awareness programmes to help businesses and stakeholders prepare and uptake IR 4.0. Through the awareness programmes, MIDA aims to enlighten companies, academia and the general public on the opportunities and challenges of IR 4.0 and the available facilities for companies to utilize for IR 4.0 technologies adoption.

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MOBILITY / AUTOMOTIVE

Malaysia Is Gearing Up To Create A Flying Car Soon

Malaysia plans to launch a flying car soon despite being flooded by mockery. Malaysia is a country with a chequered history when it comes to automotive projects. The prototype of the vehicle, which uses local technology, will be unveiled later this year. The vehicle will cost about one million ringgit (USD 245,000) to develop and will fly at low altitudes. This idea is not being accepted well because our country doesn’t have a good history of developing cars. Malaysia was criticised for having unimaginative models and shoddy workmanship. A lot of people also questioned the affordability of these flying cars when they are released.

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 Deputy MITI Minister: Third National Car Is Not A Flying Car

Malaysia’s Deputy Minister of International Trade and Industry Minister, Dr. Ong Kian Ming stated that the third national car will not be a flying car and he also added that flying car is not something that will be able to be produced and sold at mass basis commercially. Dr. Ong also states that the initiative of the third national car was beyond looking at just a third brand, but the entire automotive sector should be one and through integration. The project of building the third national car not commit a lot of government finances if there are interested parties from the private sector that want to take on this project and expand it. Currently, the third national car project is now  being handled by the Malaysian Industry-Government Group for High Technology (MIGHT), under the Prime Minister’s Department.

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 New Iona E-Fluids For Electrical Vehicles In Geneva Launched By Petronas

Petronas Lubricants International’s (PLI) managing director and group CEO, Giuseppe D’Arrigo stated that the global shift towards cleaner energy is an opportunity for PLI to work collaboratively to reduce CO2 emissions with fluid solutions that are accessible to all. He added, Petronas are prepared and constantly advancing their fluid technology solution in order to meet the challenges of the future together with their partner. To make sure the usage of CO2 emission reduced in automotive sector, initial or original equipment manufacturers must adhere to the increase in regulations. The company has put high effort on achieving its objective in reducing the usage of CO2 emission as the company had pledged 75% of its research and technology investment towards innovations by launching the new and improved Syntium with CoolTech range of lubricant for hybrid vehicles. PLI has launched its Iona range of e-fluids for the electrical vehicle market at Geneva Motor Show and look forward to sharing their findings of industry-wide study of identifying the challenges and future opportunities towards advancing electric vehicle performance with its key partners at a fluid symposium hosting by PLI later this year.

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 Exclusive EV Bus Agreement With Malaysia Secured By Ideanomics

A global Fintech and AI catalyst for transformative industries, Ideanomics has made an agreement with the Malaysian Government for the purchase of EV bus through its current acquisition of Tree Motion Sdn. Bhd. Ideanomics is targeting around 60,000 local buses will be replaced with electric vehicles under bus electrification program in Malaysia. Under the term of the agreement, the company will receive a commission on the sales of all EV Buses purchased in addition to fee generated from the assets backed lease financing (municipal financing) by the Malaysian government. Chairman of Ideanomics, Dr. Bruno Wu said that this deal helps to solidify the company’s position as a key partner to municipal and national governments looking to transform their current public transportation infrastructure into modern and efficient vehicles that tremendously reduce environmental effects. This agreement also positioning Ideanomics and its local subsidiary as a leading EV in the ASEAN market and utilizing Malaysia as a launch pad for other sales in the region.

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India And Malaysia Will Work Together To Automate Robotics And Artificial Intelligence

Top industry and research institutions from India and Malaysia reached an understanding on Thursday to use robotics, artificial intelligence, machine learning and the Internet of Things to take their manufacturing to a new level of automation. MARii CEO Datuk Madani Sahari said that the industrial and trading institutions of the two countries will promote joint efforts in technology development and adoption, both of which have high levels of competence in the automotive industry. India can use Malaysia to enter the entire ASEAN market. The memorandum of understanding between EEPC India and MARI recommends investments in robotics, automotive and related fields, and encourages joint ventures with companies in their respective countries. As a partner country, Malaysia has a strong influence on IESS, and more than 100 Malaysian companies have established contacts with companies in India and other parts of the world. Malaysia has reached an understanding with the flagship project organizer EEPC India.

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Malaysia Proton Partner With Pakistan To Build Manufacturing Plant

Proton, Malaysia’s national automaker, will work with local partners to build a manufacturing assembly plant in Pakistan, the first in South Asia. According to statistics provided by the National Bank of Pakistan, Malaysia is Pakistan’s third largest foreign investor in China and the UK behind the 2017/2018 financial year. According to Malaysia High Commissioner to Pakistan Ikram Mohammad Ibrahim, the construction of automobile manufacturing plants is one of the important factors in the bilateral trade and investment relationship between the two countries. Proton and its local partner Alhaj Automotive signed an agreement in 2018. Proton believes its car potential in Pakistan is huge, which prompted it to work with Alhaj Automotive to establish an assembly plant in Sindh. This is important because it will be Proton’s first factory in South Asia because Pakistan has a population of 210 million.

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PETROCHEMICAL

New Petrochemical Plant Possibly Coming To Sabah

Sabah is planning to build a petrochemical plant that could potentially put the state on the world map of petrochemical products. This petrochemical plant will see RM13 billion pumped into it. It is Sabah’s biggest single investment. Burel is a partnership of Swiss, Saudi, Chinese and Malaysian interests. The plan is to set up a petrochemical plant in Lahad Datu to process naphtha, a petroleum by-product, into a variety of petrochemical products for the world market. Sabah was a good pick for location as Lahad Datu is very strategic.

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 New Supply And Storage Hub Will Be Built In Johor

A new ship to ship (STS), marine gas oil (MGO) and marine fuel oil (MFO) storage and supply hub is going to be built off the Port of Tanjung Pelepas in southern Johor. It is said to be the largest in the world. The cost of the construction is estimated to be around RM500 million covered by little-known KA Petra Sdn Bhd, partnering Hong Kong tycoon Li Ka-shing’s Hutchison Port Holdings Ltd. Hutchison Port will have an up to 30% stake in the completed STS hub. This project will have a gross development value of RM8 billion to RM12 billion. The STS hub will be able to handle up to 30 very large crude carriers (VLCCs) at any given time, compared with the existing STS operation there, which can only handle nine.

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 Trade Between Kazakhstan And Malaysia Increases Tremendously

The volume of bilateral trade between Kazakhstan and Malaysia increased almost fourfold compared with 2017 and amounted to $478 million in 2018, Trend reports with reference to the Ministry of Foreign Affairs of Kazakhstan. Cooperating in the fields of oil and gas industry and oil and gas services, Islamic finance, housing and infrastructure construction, agriculture, halal industry, e-commerce, tourism and cybersecurity allowed Kazakhstan export to reach $351.7 million, while imports from Malaysia reached $126.1 million. Kazakhstan, alongside with Malaysian companies and investors, implement long-term projects in the oil and gas, agricultural and construction sectors for a total amount of over $1 billion. About 1,000 Kazakhstan students study in Malaysian universities.

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