Malaysia News

6th January Sunday 2019

The export of local automotive components is almost RM12 billion

By Nasuha Badrul Huzaini

RAWANG: The export value of parts and spare parts in the automotive sector is expected to reach over RM12 billion this year, Chief Executive Officer of Malaysian Automotive, Robotic and IoT Malaysia (MARii), Datuk Madani Sahari said.

He said for the period January to October last year, the value of exports of automotive components and parts had reached almost RM11 billion.

Hence, he said the higher export value recorded is the higher the competitiveness of suppliers in the country.

“In 2011, the export value of components and spare parts is around RM5.2 billion and the value is doubled in five years.

“We are now collecting achievement data in 2018 and will announce it in a ceremony with the Minister soon. Of course, we set a higher target for export this year.

“To date, around 175 local suppliers have been exporting automotive parts and parts globally,” he told a press conference after the Karakuri Award Presentation Ceremony here today.

Karakuri is a way to increase productivity by 30 percent. A total of 30 participants from 15 companies successfully completed the MARii Karakuri Program.

Present at the event was the President, who is also the Chief Executive of Otomobil Kedua Sdn Bhd (PERODUA), Datuk Zainal Abidin Ahmad.

Meanwhile, Zainal Abidin said the local level of competitiveness of local suppliers has been comparable with automotive component suppliers in Indonesia and Thailand.

“We see that suppliers in both countries can supply their products to global genuine (OEM) production worldwide.

“We hope local suppliers can also follow the footsteps, not just by exporting full-import (CBU) products but also their components,” he said.

Commenting on the direction of PERODUA this year, Zainal Abidin said the car manufacturers could no longer rely on traditional sales concepts.

“We now need to focus on new sales strategy or what I call technical sales. We need to believe in our products and give full investment to them.

“In addition, we also need to continue to focus on customer service aspects at every level,” he said.

Malaysia News

6th January Sunday 2019

FMM urged free trade agreement to be made immediately

By Nasuha Badrul Huzaini

KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) urges free trade agreements to be implemented sooner and faster, taking into account trade conflicts between the United States and China as well as uncertainties in the global environment

It is one of the promises made by his President, Datuk Soh Thian Lai to strengthen the new era of manufacturing industry in the country.

In addition, in the same statement, Thian Lai also called for more stringent enforcement of smuggling and piracy as well as reinforcing intellectual property laws.

He said Malaysia’s Promotion Shopping Cart, Made in Malaysia should also be launched immediately and government purchases and government projects should also be monitored closely to ensure that the campaign is achieving its targets.

“In addition, the success factors in the manufacturing industry also depend on the government’s success in combating corruption at all times and giving priority to economic development as well as the well-being of the people.

“As for the business aspect, with the presence of business-friendly and investment ecosystems in the country will give a fresh start to the manufacturing sector as well as help new investors and existing investors continue to grow.

“It can be implemented through direct tax benefits, more grants that support investment in technology and innovation including Industry 4.0 will be introduced especially for Small and Medium Enterprises (SMEs),” he said in a new year message to FMM members.

Based on Economic Outlook 2019 issued by the Ministry of Finance, the national economy is expected to grow at 4.9 percent, up from the expected 4.8 percent in 2018.

Meanwhile, gross exports are expected to grow by 3.9 per cent and imports will grow by 4.1 per cent.

However, the risk of continuing to grow in the global environment is uncertain as trade conflicts between the US and China have an important impact on the country’s exports.

Commenting further, Thian Lai said he urged all FMM members to maximize the use of government aid programs to implement initiatives at the company level.

“It includes adopting Industry 4.0 technology, upgrading skills and innovation as well as leveraging on market expansion and various types of programs.

“In addition, members are also urged to provide fast industry-related feedback to FMM on the challenges faced either in accessing government programs in the domestic or international market so that the government can be more sensitive and concerned,” he said.

Sunday, “January 6, 2019”

Lim: 2019 a challenging year for Malaysia’s economy

Finance Minister Lim Guan Eng and Bursa Malaysia chief executive office Datuk Seri Tajuddin Atan mingle with the crowd at the The Marketplace @ Penang Fair in Bayan Baru. – NSTP/DANIAL SAAD

By Bernama – January 5, 2019 @ 3:25pm

GEORGE TOWN: 2019 will be a challenging year for Malaysia’s economy.

This is due to the on-going US-China trade war, geopolitical concerns in the Middle East, global monetary tightening and swings in oil prices, said Finance Minister Lim Guan Eng.

He said the Malaysian economy especially the stock market will not be spared from the external factors happening outside the country.

However, he expressed optimism that the nation’s economy will continue to remain on a steady growth path supported by domestic and external demand.

“Despite a turbulent year, our stock market has remained resilient in comparison to our peers in Singapore, Thailand, Hong Kong, and China. Amidst large capital outflows among emerging markets and ASEAN countries this year, the FBM KLCI benchmark index registered a year-to-date (YTD) decline of 5.8 per cent as at end-November, compared to other Asian markets that have experienced declines ranging from 9.1 per cent to 22.7 per cent ,” he said in his keynote address at the MarketPlace @ Penang Fair 2019 here today.

He added that Malaysia was the second-best performing stock market in the Asia Pacific region.

Lim said on the back of a challenging environment for global equity markets, facing external headwinds such as the ongoing US-China trade war, geopolitical concerns in the Middle East, global monetary tightening and swings in oil prices, trading activities in the local stock market remained robust with an average daily value trade of close to RM2.5 billion as at end-November 2018.

“This is still an improvement from last year’s RM2.3 billion, which indicates that general interest remains intact as investors take opportunities on the market volatilities,” he said.

Lim said if there is a resolution to the US-China trade war, there is a high possibility that the stock market will rise as it is determined primarily by external factors.

He said the government has introduced various policies and measures to invigorate the capital market.

“For example, the waiver for stamp duty for trading in Exchange-Traded Funds, SWs (Structured Warrants), stocks of mid- and small-cap companies was introduced to encourage greater investor participation in this segment of the market,” he said.

Given the alarming red flags, Lim said it is crucial for Malaysians to step up on their financial literacy and increase their efforts to learn smart ways to manage their finances, particularly investing in a regulated environment instead of falling victim to get-rich-quick schemes or fraudulent companies and investment scams.

“Financial literacy among Malaysians is still seriously lacking where people generally are not informed of its importance and the impact it has on a person’s future and lifestyle,” he said. – Bernama

Sunday, “January 6, 2019”

12:00 AM, January 06, 2019 / LAST MODIFIED: 12:00 AM, January 06, 2019

New tax breaks for exporters

It is interesting to note that the government, which had reduced tax-at-source for exporters to 0.60 percent (for all goods except jute) back in September, has now reduced it further to 0.25 percent as the new government is about to be sworn in. It is unclear as to why this further reduction has taken place in the span of four months. This new tax regime is to remain in force till the next budget which is due in June. When we take into consideration the fact that 83 percent of all exports from Bangladesh comes from ready-made garments (RMG), it is easy to deduce that the greatest beneficiaries of such a policy will be the RMG sector. The flipside to this arrangement, according to experts, is that government revenue collection will be adversely affected.

While we are being told that this new short-term policy will encourage more exports from the RMG sector, is there really any need to give greater benefit to an already mature sector? Indeed, the National Board of Revenue (NBR) already had a tax-friendly outlook towards exporters prior to this reduction and the tax rate was a very modest one percent. One could make the argument that if the industry cannot afford to pay a paltry one percent payment as tax on export, precisely how will then revenue coffers be filled? The NBR may face a tax revenue shortfall of Tk 400-500 crore due to this reduction in tax-at-source from RMG export, and we wonder what other sectors will have to bear the brunt of this revenue deficit.