Making Malaysian Industries Globally Competitive

Dato' Soh Thian Lai, President of FMM
Dato' Soh Thian Lai, President of FMM

The Federation of Malaysian Manufacturers (FMM) is the largest private sector economic organisation in the country, representing over 3.000 manufacturing and industrial service companies of varying sizes. Since its establishment in 1968, the FMM has consistently led Malaysian manufacturers in spearheading the nation’s modernisation and growth. Its President, Dato’ Soh Thian Lai, outlines the role of this important organisation, showing how it facilitates the growth of the industry both locally and internationally.

European Times: As the voice of the Malaysian Manufacturing industry, could you elaborate on the activities and priorities of your organisation?

Dato’ Soh Thian: Our priorities are focussed on advocacy, capacity building and ensuring a sustainable business environment. As the representative voice of the Malaysian manufacturing sector, FMM has established a close relationship with the government and its agencies in contributing to policy-making and solving industry issues, in addition to assisting members with a sustainable business environment. FMM engages in international trade opportunities by actively organising international trade missions for its members as well as leading them to renowned trade shows to expand their business network internationally. We also organise seminars and conferences all year round to prepare our members to thrive in the dynamic business environment. The reliable and expert advisory services provided by FMM in various areas such as human resources, industrial relations, customs, incentives and investments have enabled manufacturers to solve their operational issues.

European Times: What is the level of development of the manufacturing industry in Malaysia?

Dato’ Soh Thian: The manufacturing sector continues to be a very strong and important sector in our economy. Its performance has continued to be remarkable, with key contributions to overall growth, exports, and employment, including salaries. Manufacturing is growing by six percent per annum; it has a 23% share in the GDP and employs a 2.5 million workforce. It is the second largest contributor to GDP and the second largest employer.

European Times: What are the country’s most relevant ongoing projects and developments in the sector?

Dato’ Soh Thian: The “Approved Investments 2017” consist of 5,466 projects in the manufacturing, services and primary sectors that will generate an additional 139,520 job opportunities, while “Eleventh Malaysia Plan or 11MP (2016-2020)” has placed greater priority on improving public transport, especially connectivity from rural areas to the cities. The Kuala Lumpur-Singapore High-Speed Rail (HSR) under the Economic Transformation Programme, is expected to improve the economic dynamism of Kuala Lumpur, slashing travelling time to Singapore to an estimated 90 minutes compared to the current four-hour drive. Its expected completion is set for 2026.

The world’s first Digital Free Trade Zone (DFTZ) will be a regional eFulfillment centre and hub for SMEs, marketplaces and monobrands. An estimated US$65 billion worth of goods will be moved through the DFTZ and create 60.000 direct and indirect jobs by 2025. The East Coast Rail Link (ECRL) is one of the key projects boosting economic growth, especially for the concerned states of peninsular Malaysia. It attracts foreign investments, particularly from China, which remains Malaysia’s largest trading partner for the ninth consecutive year since 2009.

A fully integrated system for import/export clearance called uCustoms was created, which allows different processes to be managed by various parties via a single portal. It is the national single window to assist exporters in the seamless transfer of data and save costs on transactions as it is fully electronic and accessible remotely.

Malaysia now has a new Curabitur after the conclusion of its 14th General Election on 9 May, 2018. The new Curabitur has indicated that it will review some of the infrastructure projects planned by the previous government including HSR and ECRL.

European Times: Which are some of the most successful sub-sectors, both local and internationally?

Dato’ Soh Thian: Our Malaysia Productivity Blueprint has targeted certain industries in the manufacturing sector as priority sectors based on their contribution to GDP, employment, the potential for and readiness to implement productivity improvement and their high multiplier effect. They include electrical and electronics, chemicals and chemical products, machinery and equipment. These are also among the sectors identified as drivers of manufacturing growth in the export-oriented sector and key recipients of investments.

Based on Bank Negara Annual Report 2017, the economic contributions of these sectors included 8% of growth in production of electrical and electronics products, machinery and equipment, and 4% growth in chemicals and chemical products. The former had a growth in exports of almost 37% in 2017, while the latter grew by 7.3%.

At the individual company basis, there are many successful businesses in all industry sub-sectors, both local and international, which are located in Malaysia and many of them are members of FMM.         

European Times: What is your advice to future foreign investors that are willing to come and invest in Malaysia’s manufacturing industry?

Dato’ Soh Thian: Our country has always been the gateway of choice for regional business opportunities and manufacturing was the first economic sector to benefit from the liberalisation of requirements and procedures for investments. We welcome new investors and are eager to show them the potentials of working with the Federation of Malaysian Manufacturers.