TAPiO Newsletter – October 2018 Issue
Ireland / His Excellency Eamon Hickey
RUMC (formerly Penang Medical College) recorded a historical milestone with its upgrading to university status, marking it as Malaysia’s 10th Foreign University Branch Campus. The recent launching ceremony was graced by Irish Minister for Education and Skills Richard Bruton T.D, Higher Education Malaysia deputy Director-General Dr Mohd Nor Azman Hassan and Irish Ambassador to Malaysia Eamon Hickey. “This is a historic day for the future of higher education in Ireland, having two of its oldest and leading medical schools, RCSI and UCD, working with Malaysian public hospitals through RUMC,” Bruton said. It was important to keep developing the quality of higher education institutions in Malaysia as the country embarks on the Fourth Industrial Revolution (IR4.0).
Saudi Arabia / His Excellency Mahmoud Hussien Saeed Qattan
Saudi Arabia under King Salman Abdulaziz Al Saud and the Malaysian government under the leadership of Tun Dr Mahathir Mohamad are keen to cooperate and develop their relations in all existing fields of mutual interest while exploring new areas of cooperation. The Kingdom’s ambassador to Malaysia Mahmoud Hussien Saeed Qattan said this is expected to greatly benefit both countries and their people.
Meanwhile, efforts are also being taken by the two countries in the fight against terrorism and extremism with emphasis on the principles of tolerance and moderation in Islam. Malaysia has been invited to participate in the Vision 2030, considering its leading regional role in the fields of investment and trade. Saudi Arabia ambassador to Malaysia Mahmoud Hussien Saeed Qattan said this is expected to greatly benefit both countries and their people.
China-Malaysia Keen to Boost Ties
China’s Pacific Construction Group Ltd (CPCG) announced a plan to invest RM10 billion over 10 years in Malaysia in infrastructure development, hi-tech machinery and education. This is by far the biggest investment plan by a foreign company after the change of government. Besides that, the recent cancellation of several China-financed projects by Prime Minister Tun Dr Mahathir Mohamad had sent jitters to the business community in the Middle Kingdom. He also said that Malaysia’s fundamentals are strong because the country has excellent infrastructure, a robust ecosystem and a big pool of trilingual talents. Therefore, Malaysia is a strategic launch pad for their expansion into the Asia Pacific.
Budget 2019 to Include Incentives for Industry 4.0
Incentives for Industry 4.0 will be included in Budget 2019, said Deputy International Trade and Industry Minister Dr Ong Kian Ming today. The government will provide a conducive business environment, enablers and relevant policies for companies to improve, to be more competitive and adopt Industry 4.0. Ong said the government will roll out the National Industry 4.0 Blueprint this year, where the government will act as an enabler towards the digital transformation of the manufacturing and related services sector.
Government Opens Door to German Car makers for 3rd National Car Project
The government is opening its door to German automakers to participate in the third national car project. There are a lot of German car companies which have been very successful in assembling completely knocked-down (CKD) vehicles with a lot of local content. “If the German Automotive companies are interested to explore opportunities in the third national car project, we are willing and open to their proposals,” Deputy Minister Dr Ong Kian Ming said after the exchange of a MoU on the Malaysia-Germany Strategic Collaboration and the soft launch of the East Coast Economic Region’s (ECER) Asia Centre of Excellence for Smart Technologies (ACES). However, German Ambassador to Malaysia Nikolaus Graf Lambsdorff said, there were no official proposals or enquiries of interest from these carmakers to participate in the third national car project until now.
Meanwhile, ECERDC CEO’s Datuk Seri Jebasingam Issace John said the RM12 million ACES were scheduled to begin operations in early January next year. ACES also exchanged MoUs with IJM Corporation Bhd, MCKIP Sdn Bhd, Kuantan Port Consortium, Universiti Malaysia Pahang and Siemens Malaysia to support Industry 4.0 initiatives and the upskilling of local graduates.
MOBILITY / AUTOMOTIVE
J.D. Power 2018 Malaysia Sales Satisfaction Index – Nissan Takes Top Spot
J.D. Power announced Malaysia Sales Satisfaction Index (SSI) Study for 2018 which contain the analysis of the new-vehicle purchase and delivery experience based on 2,477 respondents. The average mass market for this year is 782 points. While the ranking Come out as:
- Nissan managed to take first place with 812 points (out of 1000 points) and successfully overtake the last year’s leaders.
- Second place is Isuzu with 797 points.
- Third place is Honda with 795 points.
- Fourth place is Toyota with 791 points.
- Fifth place is Mitsubishi with 787 points.
- Sixth place is Proton with 782 points.
- Seventh place is Volkswagen with 779 points.
- The last place is Perodua with 774 points.
Besides this findings, the study also revealed the growing number of buyers who researched online for information before calling the dealer and the fact that the buyers’ consideration is mostly influenced by finances when purchasing a vehicle. Country head of Malaysia at J.D. Power, Muhammad Asyraf Bin Mustafar said that younger car buyers in Malaysia are increasingly concerned about the cost of owning a vehicle and often turning to online for researching on the best deals.
Southeast Asia Seeks Ways to Protect Car Industry
Southeast Asian countries are finding ways to protect their emerging car industries from imports. Indonesia, Vietnam and Thailand have introduced measures either to hinder imports or benefit local production, while Malaysia is looking at possible restraint on foreign car sales. In July, Malaysian Prime Minister Mahathir Mohamad stated that Malaysia needs to study the possibility of certain activities that can limit foreign cars entering into Malaysia and give Proton and local cars the chance to dominate the local market. Malaysia has supported domestic companies like Proton through excise tax incentives and aid for R&D. However, domestic car companies still failed to become key exporters.
Malaysia’s Disruptive Technology-Driven Car will Debut in 2020
Malaysia is making a big push into developing “disruptive technology-driven” vehicles for global markets, with its maiden model is expected to be ready for sale in two years. The model is under the New National Car Project (NNCP) proposed by the country’s Prime Minister. Its prototype is expected to be rolled out early next year, followed by the real car itself for consumers by 2020, said the Malaysian Industry-Government Group for High Technology (MIGHT) President and Chief Executive Office. This new car will use 100% disruptive technology and not follow conventional car manufacturing methods. The aim is to rebuild the capability with existing skills and technology to make the industry competitive; the country is poised to begin building the cars now.
GREEN TECHNOLOGY/ELECTRIC VEHICLE
The Green Route for Public Transport
Malaysia already has the route to green alternative fuel for public transport with their abundant biomass resources from palm oil which is a good resource for biogas. Scania’s David Lantz says that there is no better time to use biogas as fuel for Malaysia’s transport system, seeing the vast palm oil plantation. According to the Ministry of primary industries, there are 464 palm oils mills nationwide in which 102 mills have installed biogas trapping facilities. However, while the benefits and availability of biogas in Malaysia seem like an attractive choice, higher initial set-up cost for the infrastructure of biogas facilities makes it less desirable. While it is less compelling for the oil-producing nation like Malaysia to push hard into alternative, Malaysia is in a good position to accelerate adoption of biofuel in road transport with biogas as one of the options that available right now.
3,000 Charging Stations for EVs by End 2019
About 3,000 charging stations for electric vehicles (EVs) will be set up by the end of next year nationwide to cater for the rising interest in EVs. BMW Group head of product management Dr Alexander Kotouc said BMW Malaysia aims to leverage on plans by Green Technology Malaysia Corporation (Green Technology) and Tenaga Nasional Bhd Energy Services (TNB ES) to set up about 1,000 charging stations by the end of this year alone.
IGEM 2018: Green Economy & Industry 4.0
The International Greentech and Eco Products Exhibition and Conference Malaysia (IGEM) returns for the 9thtime to the Kuala Lumpur Convention Centre from 17 to 20 October targeting business leads of RM2.5 billion, through the convergence of more than 250 exhibitors and 30,000 expected global visitors from over 35 countries. IGEM 2018 is well-positioned to enable businesses tapping into its immense potential and continue to cement Malaysia’s position as a centre for green technology and generating business leads that have catapulted investment in the green sector. IGEM 2018 will focus on sustainable cities highlighting innovations in the five key sectors of green technology, encompassing Renewable Energy, Energy Efficiency, Waste Technology & Management and Green Manufacturing.
Oil and Gas still Subject to Volatility, Players ‘Tread Cautiously’
National energy company Petroliam Nasional Bhd (Petronas) president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin believes that all players should still “tread cautiously”. Brent crude yesterday reached US$81 per barrel, its highest since 2014, due to the tightening of the oil market and the reluctance of the Organisation of the Petroleum Exporting Countries (OPEC) leaders to immediately boost production.
The price of the strategic commodity has been on a steady rise since topping the US$70 per barrel level in mid-April this year. Year-to-date, Brent oil prices have averaged at US$72 per barrel, which represents a significant increase from the average of US$52 per barrel for the whole of 2017. As encouraging as it is, they can still expect volatility to continue, given the prevailing external factors such as trade wars and other geopolitical risks. While it is evident that players are now changing gears from survival to growth mode, he urges all players to tread carefully and respond cautiously to the unpredictable landscape as they do in Petronas.
Putrajaya Eyeing US$3.1b Investment in Bintulu Petrochemical Project
Entrepreneur Development Minister Mohd. Redzuan Md. Yusof met with several quarters in Sarawak on 28th September for a bid to attract investments worth US$3.1 Billion in a petrochemical project in Bintulu. The project covering 101.17 hectares will be developed in several phases involving engineering procurement, construction and commissioning (EPCC) contractors. The budget for the project will be raised through equity and bond offerings on the stock market. As the Ministry is in charge to enhance the country’s entrepreneur development, they are facilitating strategic investments that can create employment opportunities and high-value entrepreneur ecosystem in Malaysia. This is a new and disruptive approach that is able to offer local entrepreneurs with the experience and opportunity to be involved in high technology activities.
Bursa Malaysia Listed Oil and Gas Counters may be Perceived to be in a Sweet Spot
In contrast with the increase in crude oil prices, the oil and gas counters in Bursa Malaysia fell among the exchange’s top decliners and most-active stocks as the broader market sell down continued. In fact, investors should have perceived O&G counters as a bargain because of the indicative forward price-earnings ratio (PER) valuations of Bursa-listed O&G stocks and sustainable crude oil prices. Today, TA Securities Holdings Bhd noted that the comparison table for Bursa-listed O&G stocks indicated that the average sector PER stood at 12.3 and 10.8 times 2018 and 2019 earnings respectively. There is a possibility for theO&G sectors may be able to remove the supply overhang on O&G assets which may recover the day rates and fleet utilization. CNBC reported that the forthcoming measures are widely expected to create an oversupply of High Sulphur Fuel Oil while sparking demand for IMO-compliant products.