2. Positioning Malaysia as Total Manufacturing Solutions€¦ · malaysia : the global outsourcing...
Transcript of 2. Positioning Malaysia as Total Manufacturing Solutions€¦ · malaysia : the global outsourcing...
6/21/2012
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MALAYSIA : THE GLOBAL OUTSOURCING HUB FOR HIGH
TECHNOLOGY MANUFACTURING
N. Sangaran
Director
Machinery and Engineering Supporting Industries Division
MIDA
19 June 2012
CONTENT OUTLINE
Investment Trends
Outsourcing Opportunities
2 Malaysia: Your Premier Investment Destination
Malaysian Economy
About MIDA
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About MIDA
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MILESTONES
4 Malaysia: Your Premier Investment Destination
The principal Malaysian Government agency responsible for the
promotion and coordination of industrial
development in the country
First point of contact for investors who intend to
set up projects in the manufacturing and services sectors in
Malaysia
Established in 1967 under Act of Parliament, 1965
2011 : Rebrand as Malaysian Investment Development Authority
27 March 2004 : Government Mandated MIDA to Promote
Investments in the Services Sector
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5 Malaysia: Your Premier Investment Destination
FUNCTION OF MIDA
Promotion
Evaluation
Planning
Follow-up &
Monitoring
� Foreign Direct Investment
� Domestic Investment
� Cross Border Investment
� Business matching through E-Connect
� Manufacturing Services
� Manufacturing licenses
� Tax incentives
� Expatriate posts
� Duty exemption
� OHQ, RDC, IPC and R&D status
� Planning for industrial development
� Recommend policies and strategies on
industrial promotion and development
� Formulation of strategies, programmes and
initiatives for international economic
cooperation
� Assist companies in the implementation and
operation of their projects
� Facilitate exchange & co-ordination among
institutions engaged in or connected with
industrial development
� Advisory Services
MIDA “ONE STOP CENTRE”
6 Malaysia: Your Premier Investment Destination
Ba
sed
In M
IDA
Immigration Department
Royal Malaysian Customs
Department of Environment
Tenaga Nasional Berhad
Telekom Malaysia Berhad
Labour Department
Ba
sed
Ou
tsid
e M
IDA
Department of Occupational
Safety and Health
Ministry of Finance
Ministry of Health
Ministry of Tourism
Ministry of Human Resource
Ministry of Higher Education
Multimedia Development Corp.
(MDeC)
Construction Industry Development
of Malaysia (CIDB)
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7 Malaysia: Your Premier Investment Destination
24 Overseas Centre24 Overseas Centre
San Jose
Los AngelesNew York
Boston
Stockholm
Frankfurt
MunichMilan
Paris
London
Dubai
Mumbai
GuangzhouTaipei
Shanghai
SeoulOsaka
Tokyo
Sydney
Chicago
Houston
Bangkok
Singapore
Johannesburg
MIDA WORLDWIDE NETWORK
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Malaysian Economy
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9 Malaysia: Your Premier Investment Destination
MALAYSIA’ S KEY ECONOMIC INDICATORS
Source: Central Bank of Malaysia/Department of Statistics Malaysia/MATRADE
2010 2011p 2012f
Real GDP (%) Growth 7.2 5.1 4.0-5.0
Inflation (%) 1.7 3.2 2.5-3.0
Per Capita Income (US$) 8,140 9,508 10,134
Unemployment (%) 3.2 3.1 3.2
Trade Surplus (US$ bil) 34.2 46.7 48.6
International Reserves (US$ bil) 106.5 132.3 136.1
Retained Imports Equivalent (months) 8.5 9.6 -
Investment Trends
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INVESTMENT IN THE APPROVED MANUFACTURING PROJECTS,
2008 – APRIL 2012
11 Malaysia: Your Premier Investment Destination
Source: MIDA
YearNo. of
Projects
No. of
Employment
Proposed Investment
(RM billion)
Domestic Foreign Total
2008 919 101,173 16.7 46.1 62.8
2009 766 64,330 10.5 22.1 32.6
2010 910 97,319 18.1 29.1 47.2
2011 846 100,533 21.9 34.2 56.1
Jan – April
2012268 29,918 10.1 7.8 17.9
TOTAL 3,709 393,273 77.3 139.3 216.6
APPROVED REGIONAL ESTABLISHMENT
JANUARY – DECEMBER 2011
Source: MIDA
12 Malaysia: Your Premier Investment Destination
Type of EstablishmentNo. of
Approvals
Investment
(RM million)
Operational Headquarters (OHQ) 18 163
International Procurement Centre (IPC) 6 70.5
Regional Distribution Centres (RDC) 1 10
Representatives Offices (RE) 55 23.9
Regional Offices (RO) 32 24.4
Total 112 291.8
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PROMOTED ACTIVITIES IN THE MANUFACTURING SECTOR
13 Malaysia: Your Premier Investment Destination
High technology, capital intensive &
knowledge driven industries:
Industries manufacturing
intermediate goods:
• Machinery & equipment
• Components & parts
• Moulds and dies
Resourced-based industries:
• Alternative Energy Sources
• Biotechnology
• Advanced materials
• Advanced electronics
• Optics and photonics
• Petrochemicals
• Pharmaceuticals
• Medical devices
• ICT
• Aerospace
• Food
• Value-added products from
natural resources
Outsourcing
Opportunities
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Global
Outsourcing
Manufacturing Solution Providers
Value
Added
Value
Added
and
R&D
OUTSOURCING TREND
Solution ProvidersIntegrators and
Assemblers
Component
SuppliersP
rese
nt
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STRATEGIC REASONS FOR OUTSOURCING
16 Malaysia: Your Premier Investment Destination
Reducing cost and improving economics
Focus on core function
Access to specialised services and diverse technologies
Enhance risk management
Gain a competitive advantage through faster delivery times
Level the playing field
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OPPORTUNITIES FOR CROSS-BORDER NEMs
Source : UNCTAD report on Non-Equity Modes of
International Production and Development
Key figures of cross-border Non-Equity Modes, selected industries, 2010
Estimated NEM-related worldwide
Sales Value added Employment
Employment in
developing
economies
USD billion USD billion million million
Contract Manufacturing – selected technology/ capital intensive industries
Electronics 230 - 240 20 - 25 1.4 - 1.7 1.3 - 1.5
Automotive components 200 - 220 60 - 70 1.1 - 1.4 0.3 - 0.4
Pharmaceuticals 20 - 30 5 - 10 0.1 - 0.2 0.05 - 0.1
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GLOBAL MARKET SHARE
Source : Datamonitor
Global Market Sales Forecast for 2013
(USD billion)
Aerospace & Defense 273
Machinery 184.7
Semiconductor 90.6
Oil & Gas Equipment &
Services
82.2
Health Care Medical
Equipment
51.2
25 – 30% is
estimated for
outsourcing
of
components
and services
Measurement of NEM activity is difficult, given the lack of national and international statistics
that cover NEM-specific transactions.
Source : UNCTAD
Global NEM Investment
Value (USD billion)
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Little initiative in R&D and D&D by SMEsLittle initiative in R&D and D&D by SMEs
Reluctance of SMEs to venture out into the Reluctance of SMEs to venture out into the
global marketglobal market
Fragmented industry Fragmented industry -- Little cooperation Little cooperation
among supporting companies to collaborate among supporting companies to collaborate
for common opportunitiesfor common opportunities
Financially not strongFinancially not strong
Consistent quality
On-time delivery
Cost competitive for
high technology
products
English literacy
WE
AK
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WE
AK
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SS
ES
WE
AK
NE
SS
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WE
AK
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TR
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GT
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Lack of mid level technical expertiseLack of mid level technical expertise
Lack of high end component manufacturing Lack of high end component manufacturing
& high end supporting companies& high end supporting companies
Strong government support
Foreign exchange
Material cost
India and China
Global economic downturn
TH
RE
AT
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MALAYSIA’S SOURCING CAPABILITIES
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Cluster/ IndustrySpecialized
E&E/ Semiconductor/ Solar
Process/ Products/ Components Wafering Front-End Back-End
Integrators/ Assemblers • Stoppani • Pac Tech
• UMS (CVD)
• SRM Integration
• BesiApac
• Ismeca
• ASM
• Greatech
• Creden
• Genetec
• AGS Automation
Supporting
services
Tooling/ Maintenance • Kiswire , Tokyo Rope • Hoya, Entegris
Engineering solutions
for high precision modules & fabrication
• UPECA, Kobay, Lypometal, Atasmi, etc.
Surface engineering • AKN, Dipsol, Metek Kitamura, etc.
Infrastructure & Shared facilities • Technology Park Malaysia (TPM)
• Kulim Hi-Tech Park (KHTP)
• Zurah Industrial Park (ZIP)
Research & Training • Standard and Industrial Research
Institute of Malaysia (SIRIM)
• Penang Skills Development Centre
• Malaysia - France, British, Spanish,
Japan, German Institute
• Advanced Technology Technical Centre
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M&E INDUSTRY CLUSTER
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Cluster/
Industry
Specialized
Oil & Gas Factory Automation
Process/
Products/
Components
Exploration and
Production
Process
Equipment/
Fabricated Parts
Robotic/
mechatronic
devices
Vision
Inspection
Material
handling
Integrators/
Assemblers
• FMC
• Halliburton
• Aker
• Cameron
• Asiaflex
• Schlumberger
• KNM
• MMHE
• Sime
Sembawang
• Tepat Teknik
• Kencana HL
• Dialog
• Hittech
• Ixmation
• Frencken
• ViTrox
• AFA
• Pentamaster
• AT Engineering
• Cheng Hua
• Alliance
Contract Mfg
• KEU Control
• GSE-M
Technology
Supporting
services
Machining
• UMS
• Kobay Tech
• Upeca
Forging
• ………
-
Metal structures
• U-Metal
Engineering
• CLT Engineering
Tooling fabrication
• Indah Tool Automation
• AT Precision Tooling
Infrastructure &
Shared Facilities
• Technology Park Malaysia (TPM)
• Kulim Hi-Tech Park (KHTP)
• Zurah Industrial Park (ZIP)
Research &
Training
• Standard and Industrial Research Institute of
Malaysia (SIRIM)
• Penang Skills Development Centre
• Malaysia - France, British, Spanish, Japan,
German Institute
• Advanced Technology Technical Centre
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M&E INDUSTRY CLUSTER
Cluster/
IndustryMetalworking Power Generating General
Integrators/ Assemblers • AIDA
• TPM
• Sunfluid
• Eonmetall
• Hydralink
• Li Chin (S.E.A)
• Noorisba
• Turboservices
• …………(renewable
energy)
• Favelle Favco
• IMPSA
• MHE-Demag
• Dunham Bush
Supporting
servicesCasting HICOM Diecasting, ZincAlu, Sumber Terang, Nostalgia
Heat
TreatmentMicromagna Engineering, Yeh Chang, Oriental, Umetoku
Forging Billion Fortune, MKF, Unique Forging, Kentzu
Infrastructure • Technology Park Malaysia (TPM)
• Kulim Hi-Tech Park (KHTP)
• Zurah Industrial Park (ZIP)
Research & Training • Standard and Industrial Research
Institute of Malaysia (SIRIM)
• Penang Skills Development Centre
• Malaysia - France, British, Spanish,
Japan, German Institute
• Advanced Technology Technical Centre
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M&E INDUSTRY CLUSTER
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Cluster/
IndustryAerospace Solar Medical Devices
R&D, Design • ACM
• IAC
• Spirit
• CTRM
• Strand
• SME
Aerospace
• Bosch
• Qcells
• AUO Sunpower
• Panasonic
• SERI
• HBE
Grating
• St. Jude
• SBI
• Symmetry
• BBraun
• OSA
• Granulab
• Straits
Othopaedics
Parts
Manufacturing
& Assembly
• Honeywell
• SAM
• IAC
• Spirit
Aerosystems
• CTRM
• SME
• Upeca
• ACM
• First Solar
• AUO Sunpower
• Solar TIF
• MSR
• PVHitec
• Helios
Photovoltaic
• Raniden
Solar
• St. Jude
• Aesculap
• Jabil
• Avalon
• Stryker
• Delphax
• Osa
• Straits
Orthopaedic
Supporting
services
• Innopeak
• Hampshire
• Strand
• Aerotech
• Edag
• GT
• IAC
• All Metal
Services
• Stoppani
• UMS
• Balda
• Huber Suhner
• Pentamaster
• STR
• Dsem
• Iretex
• Polytool
• Synergy Health
• Isotron
• Steripack
• Sirim
Maintenance,
Repair &
Overhaul (MRO)
• SAE
• Agusta Westland
• Malaysia Airlines
• SME Aviation
• KLAS
• Airod
• CTRM
• ATSC
Materials • Tokuyama
• MEMC
• Imex Semicon
• Bosch
• TDK
• Rohm
• Sandvik
• Accellent
• Tyco
• Heraeus
• Zapp
Policies &
Regulations
• National Aerospace Blueprint • Feed-in-Tariff • Green
Technology
Master Plan
• Medical Devices Act 2011
MALAYSIAN INDUSTRY CLUSTERS
23 Malaysia: Your Premier Investment Destination
• Consistent quality of production
and on-time delivery
• Lower cost for high technology
products
• High volume, low mix demand
for the electrical & electronics,
telecommunications and
automotive industries
• Low volume, high mix niche
products for the medical,
machinery & equipment, oil &
gas and aerospace industry
• IP protection, laws and
regulations
• Financial incentives and
operational support
Competitive Edge
• Engineering supporting industry
(more than 1,000 cos.)
• Metal fabrication (well
established)
• Semiconductor/ electronics
components
• Silicon wafer, Wafer fab, IC
packaging and testing, IC design
house, PCB, PCBA, LED, Other
passive components (about 380
cos.)
• Plastic components (480 cos.)
• Rubber components (180 cos.)
Sourcing Capabilities
• Design centres
• Technical facilities
• Specialized colleges
• Research institutions
Infrastructure
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MALAYSIA – YOUR MANUFACTURING SOLUTION
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D&D/ R&DRaw material components
sourcing
Modules/ parts
production
Sub/ final assembly
QC Delivery
Outsourcing
Manufacturing of modules, Manufacturing of modules, components & parts
Manufacturing related Manufacturing related services
Individual components/ services
Integrated services/ total solution
- Product conception to serial production
- Manage the entire process including logistics, warehousing, packaging, testing
and certification
25 Malaysia: Your Premier Investment Destination
Outsourcing Supply Chain Management
MALAYSIA : THE GLOBAL OUTSOURCING HUB FOR HIGH TECH
MANUFACTURING
MALAYSIA : THE GLOBAL OUTSOURCING HUB FOR HIGH TECH
MANUFACTURING
Customers
Speedy response
Managing the Entire Supply Chain
Manufacturing
Solution Providers
R&DElectronic Engineering
Mechanic Engineering
Software Engineering
Continuous Prod. Improvement
Project Management
Prototyping
Interface and Hardware Design
Quality Management
TQMISOSix Sigma SPCKaizen
ServicesIPCRDCLogisticsWarehousingValue AnalysisCost ReductionsSupply Chain ManagementRegulatory ServicesCertification Services
ProductionElectronics
Plastics
Metalworks
Engineering Supporting
Box Builds
High Level Assembly
Finishing + Testing
Packaging
26 Malaysia: Your Premier Investment Destination
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Enhance local R&D and technology
development
Strengthen and complete industry
clusters
Manufacturing Solution Providers
Human Capital Development
Malaysia :
Global NEM Hub
WAY FORWARD
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MALAYSIA : THE GLOBAL OUTSOURCING HUB FOR MANUFACTURING -
WAY FORWARD
� Malaysia’s Potential− Capabilities are recognised internationally
− Diverse range of precision activities
− Good network of engineering supporting industries capable of meeting
OEMs requirements
� Target Industries− Malaysia is currently a major outsourcing destination for MNCs in the
E&E, automotive, machinery manufacturing and oil& gas industries
− Growth and future targets include the aerospace, medical, defense and
photovoltaic industries
� Total Solution Providers− Providing integrated services from product conception to serial
production and manage the entire processes including logistics,
packaging, testing and certification
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� Promotional Tools− Websites to enhance business communication system and promote
capabilities
− Promotional missions and participations in international exhibitions
− Promotion of high technology and high end industries to locate to Malaysia
� Technology− Keeping abreast with new/ latest technology and ability to advise OEMs on
product development
� Human Resource Availability− Increase MSC level 3, 4 & 5 graduates
− Re-training existing technical staff
� Institutional Support for Research and Product Innovations− Continuous support and assistance for R&D and D&D of products and
processes
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MALAYSIA : THE GLOBAL OUTSOURCING HUB FOR MANUFACTURING -
WAY FORWARD
Malaysia: Your Premier Investment Destination
RECENT POSITIVE DEVELOPMENTS
30 Malaysia: Your Premier Investment Destination
3rd Attractive Location For Outsourcing Destinations – A.T. Kearney Global Services Location Index 2011
4th For Investor Protection – World Economic Forum 2012, Global Competitiveness Report
10th For FDI Confidence Index 2012 – A.T Kearney
18th For Ease Of Doing Business – World Bank’s Doing Business 2012 Report
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• Political & Economic Stability
• Pro-business Government
• Liberal Investment Policies
• Transparent Policies
• Policy of Welcome
• Sound Banking System
• Well Developed Infrastructure
• Harmonious Industrial Relations
• Trainable & Educated Labour Force
• Quality of Life
• Excellent Track Record
WHY MALAYSIA?
31 Malaysia: Your Premier Investment Destination
32 Malaysia: Your Premier Investment Destination
MIDA as a One Stop Agency :a) Approval of projects
b) After-care services
Under the National Committee on
Investment (NCI)
Evaluation of applications for:
4 Manufacturing licence
4 Tax incentives
4 Import duty exemptions on raw
materials, components and
machinery
4 Expatriate posts/work permits
4 Regional establishments such as
Operational Headquarters,
International Procurement Centres,
etc.
FACILITATION OF INVESTMENT