Malaysia trade set to rebound to RM1tril mark

Malaysia trade set to rebound to RM1tril mark this year
By Rupa Damodaran
rupabanerji@nstp.com.my
2010/06/22


MALAYSIA'S trade will bounce back to its RM1 trillion mark volume this year on the back of an improved global economy, says International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

Total trade slipped off the RM1 trillion mark last year, with a decrease of 16.6 per cent from RM1.2 trillion recorded in 2008.

"It is doable, based on the performance for the past four months (January to April) . From our ballpark figures, the indication shows the trend will be sustainable, Mustapa said when presenting the ministry's annual report yesterday.

Miti has targeted exports to grow between 6 and 7 per cent this year as demand improves in tandem with the global economic recovery.

High economic growth rates in China and India are expected to contribute towards continued recovery of Malaysia's exports, with the support of emerging markets such as Iran, Mexico, Pakistan, Russia and the United Arab Emirates.

Mustapa said Africa is also expected to increase its demand for Malaysia's electrical and electronic (E&E) and chemicals products, jewelleries and processed foods in 2010.

"With challenges still facing the recovery of the economies in the US and EU (European Union), we hope growth in these markets will compensate, with better numbers," he said.

Total exports declined by 16.6 per cent to RM553.3 billion in 2009, due to decreased demand from Malaysia's key trading partners. The manufacturing sector remained the largest contributor, with a 74.4 per cent share of total exports. E&E continued to the largest export item with a 41.2 per cent share of total exports.

Malaysia's trade in services, which totalled RM195 billion 2009, decreased by 3.4 per cent.

Singapore, China, the US, Japan and Thailand were Malaysia's top five trading partners last year

On investments, Mustapa said several "sizeable investment projects" are in the pipeline, and the ministry is pushing for their implementation in the shortest time.

For the first four months, Malaysia attracted RM7.1 billion investments in the manufacturing sector.

Investments in the manufacturing sector totalled RM32.6 billion last year, exceeding the RM27.5 billion target set under the Third Industrial Master Plan.



Jun 21, 2010
M'sia targets 7% export growth
KUALA LUMPUR - MALAYSIA on Monday said its exports are expected to grow between six to seven per cent in 2010 as demand improves due to global economic recovery.
'Growth rates in major economies such as the USA, Europe and Japan are expected to recover at moderate levels,' the Ministry of International Trade and Industry said in its 2009 annual report.
Malaysia, Southeast Asia's third-largest economy, said its exports dipped 16.6 per cent in 2009, attributed to the downturn in the global economy.
It said Malaysia hopes to woo 27.5 billion ringgit (S$11.5 billion) of approved investments in the manufacturing sector and 45.8 billion in the services sector in 2010.
'The government will ensure that the investment environment remains conducive and competitive,' it said, adding that it hopes to attract investors in the areas of aerospace, biotechnology and pharmaceuticals.
Early June it unveiled a 69-billion-dollar plan intended to spur growth and attract much-needed foreign investment as it faces increasing competition from regional neighbours. The country is aiming to become a high-income economy by 2020 rather than continuing to rely on its low-cost structure to make it attractive. -- AFP
Malaysia Targets Rebound in 2010 Exports, Investment
(Updates with new target for manufacturing approvals in second paragraph.)
By Barry Porter and Manirajan Ramasamy
June 21 (Bloomberg) -- Malaysia plans to boost exports and investment in 2010 as Southeast Asia’s third-largest economy recovers from last year’s global slump and Prime Minister Najib Razak pledges measures to help the nation compete with rivals.
The government is raising its target for manufacturing investment approvals to 40 billion ringgit ($13 billion) this year from 27.5 billion ringgit, Trade Minister Mustapa Mohamed told reporters in Kuala Lumpur today. That would boost total approvals for manufacturing and services by 20 percent to 85.8 billion ringgit in 2010. Exports may grow 6 percent to 7 percent this year, after plunging 16.6 percent in 2009, he said.
The nation needs to boost private investments by an average annual 12.8 percent, or 115 billion ringgit, between 2011 and 2015 to achieve developed nation status by 2020, Najib said June 10. Malaysia’s growth momentum has slowed over the past decade amid mounting competition from China, India and Indonesia, the government said in its 10th Malaysia Plan released this month.
“We were able to position Malaysia for renewed growth at the end of 2009 and going into 2010 through an aggressive agenda of liberalizations in the service sector, which was the largest contributor to 2009 gross domestic product,” Mustapa said. “A renewed effort in pursuing additional free-trade agreements and expanding our competitive trade outreach” will also support the economy, he said.
Malaysia will engage new free-trade agreement partners, particularly in emerging markets and West Asia, according to the trade ministry’s annual report released by Mustapa today.
Affirmative Action
Najib has pledged to revamp the country’s 39-year-old race- based affirmative action policies that benefited the ethnic- Malay majority, and trim state subsidies for fuel and food items. The aim is to make the measures “market-friendly, merit- based, transparent and needs-based,” he said in the five-year Malaysia Plan. He has also allowed more foreign banks to operate in the country.
The government plans to cut red tape for approvals, improve infrastructure including broadband services, and empower the Malaysian Industrial Development Authority to negotiate directly with investors, the trade ministry said in today’s report.
“The government will do its part to further improve the country’s physical and soft infrastructure,” Mustapa said in the report. “In turn, businesses must invest in research and development, undertake effective marketing and branding strategies and adopt industry best practices.”
Coca-Cola
The government approved 7.1 billion ringgit in factory investments in the first four months of 2010, Mustapa said. Coca-Cola Co., the world’s largest soft-drinks maker, said in March it plans to spend 1 billion ringgit on a bottling plant in Malaysia, creating as many as 800 jobs.
Approvals for investment in the services industry are targeted to jump 18 percent to 45.8 billion ringgit this year, the trade ministry’s report showed. Total approvals for manufacturing and services projects fell 36.8 percent in 2009.
Private investment has dropped from an average of about 25 percent of GDP in the 1990s to 10 percent in the past decade, according to the 10th Malaysia Plan report. With less than a third of manufacturing investments last year coming from domestic businesses, the government is prodding state-linked companies and local business people to invest more at home.
Petroliam Nasional Bhd., Malaysia’s state oil company, will reduce overseas drilling ventures and focus on boosting recovery from existing local wells, the Star newspaper reported on June 5, citing Chief Executive Officer Shamsul Azhar Abbas.
The country’s trade and investment targets won’t be affected by the appreciation of its currency, Mustapa said. The ringgit has climbed 11 percent against the dollar in the past year, the biggest gainer in Asia after Indonesia.
The ringgit is “going up according to market development,” he said. “There is nothing unusual.”
While there will be “some challenges” emerging from Europe and the U.S., “all this will be compensated more by Asian countries like China and India,” he added.
--Editors: Stephanie Phang, Paul Panckhurst

Malaysia's RM1.2 trillion trade target

Miti says figure based on 30% growth in first 4 months
KUALA LUMPUR: The Ministry of International Trade and Industry (Miti) aims to bring the country’s total trade number to at least RM1.2 trillion for this year, according to minister Datuk Seri Mustapa Mohamad.
He said the target was based on a 30% growth in trade during the first four months of this year.
“Trade has been improving and we believe it can be sustained going forward,” he told reporters after the launch of the Miti Report 2009.
He said total trade in 2009 slipped off the RM1 trillion mark with a decrease of 16.6% to RM988.2bil, from the RM1.2 trillion recorded in 2008.

Miti and its agency, the Malaysia Investment Development Authority (Mida), also plan to secure at least RM40bil worth of investment in the manufacturing sector this year.
Mustapa said the value of total investment approved in the manufacturing sector in 2009 was RM32.6bill, exceeding the RM27.5bil target set under the Third Industrial Master Plan.
The minister said the whole Miti machinery would be re-aligned to focus on achieving the overall private investment target of RM115bil annually set by the Government under the 10th Malaysia Plan (10MP).
He said investments in the new projects were concentrated on chemicals and chemical products, non-metallic mineral as well as electric and electronic sub-sectors.
The projects were expected to create 64,330 employment opportunities, of which 21.2% would be in the managerial, technical and supervisory categories and 43.7% for skilled workers, Mustapa said.
“Many of these approved projects are being put on track now. We will push harder for the implementation.
“Prospective investors can expect reduced lead-time for approval of projects as Mida is now invested with more decision-making authority,” he added.
He also said Mida had been empowered to assume a more effective role to attract both foreign and local investments. — Bernama
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Tuesday June 22, 2010
Manufacturing growth expected to continue
By EDY SARIF
edy@thestar.com.my

KUALA LUMPUR: The manufacturing sector recorded growth in the third quarter of 2009, after a year of contraction in production, sales and employment, as well as a decline in its export and import performance, and growth is expected to go through 2010.
According to the Miti Report 2009, the growth was contributed by the Government’s stimulus package and improvements in the economic recovery worldwide, especially in the main export markets of the EU and the US.
Consumer and business confidence had started to improve in the fourth quarter of 2009 and, with the stabilisation of external and domestic economic conditions, the manufacturing sector is expected to continue its growth momentum.

The electrical and electronic sector is forecast to sustain growth in 2010 as the demand for semiconductors in Asia and the US, the EU and Japan is expected to increase, according to the report.
The petroleum products, petrochemicals and the plastics industry is expected to register growth in tandem with the economic recovery in the Asian region in 2010.
The plastic products segment, in particular, is expected to register higher growth in 2010 due to increased demand, especially from the food-packaging segment in the domestic market.
Prospects for the pharmaceutical industry remain positive due to growing healthcare needs, an ageing population and the continuing influenza A (H1N1) epidemic.
The healthcare industry is anticipated to continue to grow in 2010 due to the Government’s efforts to promote Malaysia as an attractive healthcare destination.
The medical devices industry is expected to attract investments due to improvements in the healthcare industry and expansion in health-related infrastructure.
Demand for machinery and equipment is expected to increase as postponed projects put on hold due to the economic downturn will be revived.
According to the report, demand for cement and concrete products is also expected to rebound in 2010 due to the increase in demand from the construction industry, partly due to postponed projects being revived.
The automotive industry is expected to perform well in 2010 as consumer demand is expected to increase due to improvement in incomes and purchasing power arising from the spill-over effects of the Government’s stimulus package.
The iron and steel sector is expected to return to full capacity in 2010 as a result of the price increase of iron and steel.
Demand for iron and steel products, however, will depend on the construction industry which uses more than 70% of the sub-sector’s products.