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The government is expected to launch a national policy on Industry 4.0 by mid-2018, as the country embraces the evolution of a technology-driven global economy.
Deputy International Trade and Industry Minister Datuk Seri Ahmad Maslan (picture) said the process of drafting the national policy started last year in collaboration with several ministries and relevant agencies.
 
 
Public consultations to record inputs from stakeholders, namely industries and academicians, were also held as part of the drafting process, he told the Dewan Negara yesterday.
 
 
Ahmad was responding to Senator Datin Rahimah Mahamad who asked on the status of the framework and how the country’s small and medium enterprises are positioned to embrace the Industry 4.0.
 
 
“The policy is expected to be launched mid-next year,” he said, adding that the high-level task force set up by his ministry in May 2017 was aimed to formulate a comprehensive nationwide policy and action plan for the development of Industry 4.0.
 
 
“In general, this policy aims to make Malaysia a strategic partner for smart manufacturing and related services in Asia Pacific, a key destination for high-tech industry investment and a comprehensive solution provider for advanced technology,” Ahmad said.
 
 
 
P Premkumar & Dashveenjit Kaur(2018, April 5). Industry 4.0 National Policy to be Launched. The Malaysian Reserves. Retrieved from https://themalaysianreserve.com/2018/04/06/industry-4-0-national-policy-to-be-launched/

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KUALA LUMPUR: Malaysia and 10 other Asia Pacific countries signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in Santiago, Chile on Thursday.
 
 
The Minister of International Trade and Industry (MITI) Datuk Seri Mustapa Mohamed said the countries were Australia, Brunei Darussalam, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore and Vietnam.
 
 
“Despite the absence of the US, Malaysia still stands to gain from market access to countries like Canada, Peru and Mexico with whom we currently do not have preferential trading arrangement,” he said in a statement.
 
 
“In addition to the market access, our participation in the CPTPP will also benefit us in terms of enhancing governance in a number of economic sectors, strengthening economic cooperation among member countries and promoting adoption of international standards.
 
 
“Malaysia believes that this agreement will help us to further promote our trade and investment agenda and mitigate the challenges of the global economic environment,” he said.
 
 
Mustapa said Malaysia would gain from the CPTPP as it would enable more Malaysian companies to expand their presence beyond the borders of the country.
 
 
The deal would also enhance Malaysia’s position as a premier investment destination and eventually create additional quality jobs for our people.
 
 
“The Malaysian public at large will also benefit from the increase in consumer choices on goods and services in our market,” he said.
 
 
To recap, the CPTPP was concluded on Jan 23, 2018 in Tokyo after eight rounds of negotiations which started in early 2017 at Ministers and Senior Officials level.
 
 
Mustapa said CPTPP ministers shared the view that, by achieving a high-standard and well-balanced outcome, the Agreement will strengthen the mutually-beneficial linkages among participating economies, boost trade, investment and economic growth in the Asia-Pacific Region, and create new opportunities for businesses, consumers and workers.
 
 
“In light of recent protectionist sentiment which is prevalent in a number of countries, the signing of the CPTPP is timely as it sends a strong signal of our commitment towards an open and liberal trading system.
 
 
“What the world needs now is more trade and investment flows and not restricted markets,” it said.
 
 
 
The Star Online(2018, March 9). Malaysia, 10 other AsiaPac Nations Ink Trade Deal. The Star Online. Retrieved from https://www.thestar.com.my/business/business-news/2018/03/09/malaysia-10-other-asiapac-nations-ink-trade-deal/
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INDUSTRIALISATION is the process of transformation from a primarily agrarian economy to one based on the manufacturing of goods. This process fosters development in aspects beyond economic fundamentals such as social, demography, and politics.
 
 
Besides that, it enables urban-rural migration and social mobility, improves purchasing power and spending habits, and creates political movements that challenge the traditional agrarian elites.
 
 
However, industrialisation is passé for most advanced economies as they have long progressed past that into the post-industrial phase of development, which was brought about through new technological discoveries.
 
 
The concept of replacing an old economic practice with a new one was coined as “creative destruction” in the early 1900s by Joseph Schumpeter, a political economist. Over time, creative destruction spurred advanced economies to deindustrialise and shift their focus to services.
 
 
Historically, the US was the very first country to experience deindustrialisation back in the mid-1950s, when the economy saw declining employment within the manufacturing sector.
 
 
During the period of deindustrialisation, the share of employment in the manufacturing sector has been declining while manufacturing value-added remained constant to the total share of Gross Domestic Product (GDP) – evidence of increasing labour productivity growth within the sector.
 
 
Why deindustrialisation?
 
Over the years of development, contribution of manufacturing sector towards GDP growth will likely plateau as manufacturing productivity peaks. Therefore, more efforts would be directed towards the services sector to achieve higher growth.
 
 
As a matter of fact, a proper deindustrialisation process requires consistent heavy investments into education and infrastructure, as the economy divests into more growth sectors. Then, only would the transition from a manufacturing-oriented economy into service-oriented economy be smooth.
 
 
Hence, share of employment within the services sector will increase, as automation gradually takes over employment within the manufacturing sector.
 
 
Manufacturing spearheaded Malaysia’s growth
 
Before the 1997 Asian Financial Crisis (AFC), a strong emphasis was placed on the manufacturing sector to drive the Malaysian economy. Manufacturing output grew sharply from 14% in the early-1970s to nearly 30% in the late-1990s.
 
 
Privatisation, which was officially announced in 1983, picked up pace as the government sought to reduce its financial and administrative burden. By mid-1990s, there were 200 privatisation projects in the pipeline.
 
 
Nevertheless, this economic liberalisation nurtured industrialisation and gave Malaysia an early start in the manufacturing sector, especially in the electronics and electrical (E&E) segment.
 
 
However, manufacturing expansion slowed down and became less significant to the country’s economic growth after the AFC, which resulted in a slump in private investment.
 
 
Consequently, Malaysia underwent a structural change to a services-led economy. According to statistics, services output rose from 43% in 2000 to 53% in 2016.
 
 
Similarly, manufacturing output also gained momentum post-AFC and increased by 31% in the late-1990s. However, such growth was not sustainable as it dwindled to below 25% and has been flat for the past decade.
 
 
As at 2016, contribution from the manufacturing sector stood at a meagre 20% of GDP.
 
 
The 24th Productivity Report 2016/2017 by the Malaysian Productivity Corporation stated productivity growth of 1.4% within the manufacturing sector – below the 11th Malaysia Plan (11MP) target of 2.6%.
 
 
Ultimately, Malaysia seems to exhibit signs of premature deindustrialisation as the country looks towards becoming a service-oriented economy without having had a proper experience of industrialisation. Here, we explore the possible causes of Malaysia’s premature deindustrialisation.
 
 
Globalisation and the rise of the dragon
 
As the country opened up to trade, the manufacturing sector began to “import” deindustrialisation from the advanced economies. Due to its market size in world markets, Malaysia was essentially a price taker.
 
 
Therefore, the decline in the price of manufacturing in advanced economies put a squeeze on manufacturing in Malaysia, right when technological progress was about to pick up steam.
 
 
Furthermore, China’s accession to the World Trade Organisation (WTO) in 2001 marked the time China began to engage more fully with the global economy. As a result, developing countries were indirectly impacted negatively by China’s export expansion.
 
 
According to a study by Gordon H. Hanson and Raymond Robertson on China and the Manufacturing Exports of Other Developing Countries, had China’s export supply capacity remain constant over the 1995 to 2005 period, export demand would have been 0.6% to 1.8% higher in developing countries.
 
 
Change in consumption preference
 
The declining share of manufacturing to GDP is not unique to Malaysia. From 1997 to 2015, the global services sector recorded relatively faster growth as it rose from 63% to 69%.
 
 
At the same time, manufacturing grew slower from 20% to 15%, indicating higher income growth around the world and a shift in consumption preferences away from goods and towards services.
 
 
In the case of Malaysia, spending on goods (food and non-alcoholic beverages, clothing and footwear, furnishing and household equipment) made up 33% of monthly household expenditure in 1994. However in 2016, it fell to 26% of total household spending.
 
 
Meanwhile, spending on services (health, recreation and culture, education, restaurants and hotels) increased from 20% of household expenditure in 1994 to 22% last year.
 
 
Besides the shift in preference towards services, the proliferation of e-commerce has also altered consumer behaviour. The intersection of globalisation and technology means greater connectivity and speed between buyers and sellers when conducting sales transactions.
 
 
Since e-commerce requires a manufacturing firm with flexible and agile production capacity, the traditional manufacturing model of mass production is slowly losing its significance.
 
 
In order to survive the age of disruption, manufacturers are required to adopt a business strategy that can quickly respond to customer needs and market changes in a cost-effective manner.
 
 
The necessity to address the elephant in the room
 
At present, the fast pace of technological advancement has begun paving way for the imminent disruptive wave of Industry 4.0.
 
 
Through the gradual incorporation of robotics and artificial intelligence, usage of big data and cognitive computing, and implementation of cashless transactions in all sectors of the economy, corporates attempt to maximise productivity and profitability while being cost-effective.
 
 
Not surprisingly, Malaysia has already felt the effects of disruptive technology, from ride-hailing taxi apps such as Grab, to shopping within the comfort of your own home without even physically being at the mall using online shopping apps such as Lazada and 11street.
 
 
Thus, it is crucial to address the probable issue of premature deindustrialisation in our economy.
 
 
Within the manufacturing sector, jobs in the assembly line would be most affected. The onset of automation will likely replace lower skilled labours with robots, causing jobs displacement in the short run.
 
 
With the E&E segment having the largest added value contribution and highest employment share of 421,018 workers, the 24th Productivity Report 2016/2017 stated that around 2.3% of total E&E employments were lost largely due to automation replacing unskilled workers – translating into almost 10,000 job losses.
 
 
Therefore, unskilled workers disrupted by this, especially ones without a college degree, should be given adequate reskilling training in order for them to adapt to a higher skilled job, increasing their productivity and allowing them to value add in their future employment.
 
 
Preparing Malaysians for the change
 
Currently, measures have already been taken by the government pertaining to this issue as the country strives towards the new Transformasi Nasional 2050 (TN50) plan.
 
 
Just recently, Malaysia was listed among 25 “Leading Countries” well-positioned to gain from Industry 4.0 in the Readiness for the Future of Production Report 2018 published during the recent World Economic Forum 2018.
 
 
As part of an initiative to cultivate globally competitive young Malaysian students, the government allocated RM2.2bil worth of scholarships for young Malaysians to pursue their higher education, with an additional of RM90mil under the MyBrain scheme specifically for postgraduate studies in the latest Budget 2018.
 
 
Through the Malaysia Education Blueprint initiated in 2011, the Science, Technology, Engineering and Mathematics (STEM) approach was integrated into our learning system to provide students with much more relevant skills gathering and analysing problems based on up-to-date real world situations.
 
 
Additionally, our Prime Minister announced that computational thinking skills will be integrated alongside STEM into the education system’s syllabus, from as young as Year One students.
 
 
Meanwhile, the Technical and Vocational Education and Training programme is currently being developed to prepare the future workforce in facing the disruptive force of Industry 4.0.
 
 
However, with all the policies and initiatives introduced by the government to prepare our nation in embracing the Fourth Industrial Revolution, policy execution remains the key to success.
 
 
 
Manokaran Mottain(2018, February 10). Malaysia in the Age of Disruption. The Star Online. Retrieved from https://www.thestar.com.my/business/business-news/2018/02/10/malaysia-in-the-age-of-disruption/
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Small and medium enterprises (SMEs) are agile enough to adapt and use digitalisation through big data, cloud computing, the Internet of Things (IOT) sensors and 3-D printing through all aspects of manufacturing and production.
 
 
Through these digitalisation technologies, SMEs have the ability to enhance the operation of machines and devices, manoeuvre the movement of all material from different locations, as well as the consumption of energy by the minute.
 
 
These are the technologies involved in the Industry 4.0 initiative worldwide which include robotics and machine learning.
 
 
Industry 4.0 was created in Germany and made huge changes in machine intelligence and automation driven by software, computing power and sensor hardware.
 
 
To learn and keep abreast of Industry 4.0 and digitalisation issues, 21 Malaysian journalists were sponsored by the Human Resources Development Fund (HRDF) and K Pintar on a study tour to Germany from Dec 4-10.
 
 
During the workshop on the road from Berlin to Stuttgart and in Munich, Malaysian media practitioners had an opportunity to visit the FabLab Berlin, a place where anyone or SMEs can build prototypes using 3-D printing before undertaking mass production.
 
 
The media was also introduced to some of the equipment used in the IOT.
 
 
The technology is definitely a game changer in many ways as it can instantly print parts and entire products, anywhere in the world.
 
 
3-D printing is available in Malaysia and can help SMEs grow tremendously as they can take the risk of creating designs without the burden of a heavy investment.
 
 
It is time for Malaysian SMEs to keep up with the changes and “learn how to learn” through digital education opportunities due to the rapid growth of technology and the required skill sets.
 
 
HRDF Deputy Chief Executive Muhammad Ghazali Abdul Aziz said technicians of the future won’t just maintain machines.
 
 
“They need to also know about cloud computing, integrate cloud communication with the machines, and create interfaces between one machine and another.
 
 
“To achieve this, HRDF has introduced programmes like the National Empowerment in Certification and Training for Next Generation Workers (NECT-GEN).
 
 
“To help talent handle digitalisation of production, it covers areas such as Big Data, Cloud Computing, the Internet of Things (IOT), Cyber Security and Vertical Integration,” he told Bernama.
 
 
The seven-day Industry 4.0 and Digitalisation Study Programme in Germany was also organised in collaboration with the Berlin-based European School of Management and Technology (Esmi) and the Malaysian Press Club.
 
 
Esmi is an international business school founded by 25 leading global companies and institutions which are reputedly among the most effective to educate people on Industry 4.0, digitalisation through the IOT, crisis reporting and its related areas.
 
 
Throughout the course, the 21 media practitioners were exposed to Industry 4.0 and Digitalisation through IOT via a combination of classroom sessions and on-site visits to Porsche, Festo, BMW, Impact Hub, FabLab Berlin and IDG Communications Media AG, among others. — Bernama
 
 
Bernama (2017, December 31). SMEs agile enough to adapt to digitalisation for manufacturing facilities. Bernama. Retrieved from http://www.themalaymailonline.com/money/article/smes-agile-enough-to-adapt-to-digitalisation-for-manufacturing-facilities#ujGKV5GR0jZ5iDsH.97
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The Ministry of International Trade and Industry (MITI) hopes to announce the National Industry 4.0 policy framework before mid-year, said Deputy Minister Datuk Chua Tee Yong.
 
 
He said the framework, currently at the last stage of drafting, would be announced by the MITI Minister, Datuk Seri Mustapa Mohamed.
 
 
“It’s in the progress. We try to avoid the framework form being just a government-driven agenda, so there is a lot of engagement being done with the industry players, including the small and medium enterprises.
 
 
“The input process took a while for us (MITI) to formulate. We are hopefully try to hit before middle of this year,” he told reporters after visiting Saiyakaya (M) Sdn Bhd’s factory here today.
 
 
To recap, Mustapa said, the ministry was coordinating five working groups, involving various ministries, in drafting the National Industry 4.0 policy framework.
 
 
The ministries are the Ministry of Science, Technology and Innovation, Ministry of Human Resources, Ministry of Higher Education, Ministry of Finance and the Ministry of Communications and Multimedia.
 
 
“After the framework is tabled in Parliament, the government will decide which ministry will drive the implementation of the National Industry 4.0,” he said.
 
 
On trade performance, Chua said, the 2018 would register a positive growth but not as strong as 2017.
 
 
He said the excellent 2017 results, which saw the export figures registering a consistent double-digit growth, created a higher base for this year.
 
 
“Nevertheless, with the initiatives that the government is looking at (on enhancing trade) will play a role in assisting Malaysia (to continue post growth).
 
 
“We believe that to hit a (month-on-month) double-digit growth will be challenging. It will be single-digit growth,” he added.
 
 
In November 2017, Malaysia’s total trade surged by 14.8 per cent to RM157.05 billion compared with the corresponding month of last year.
 
 
During the period, exports rose by 14.4 per cent to RM83.5 billion, the highest monthly export value ever recorded after the RM82.62 billion registered in March 2017 while imports surged by 15.2 per cent to RM73.55 billion.
 
 
Trade surplus amounted to RM9.95 billion, the 241st consecutive month of trade surplus since November 1997.
 
 
On monthly basis, total trade, exports and imports rose by 1.9 per cent, 1.5 per cent and 2.4per cent respectively.
 
 
For the first eleven months of 2017, the total trade grew by 20.8 per cent year-on-year to RM1.622 trillion, with exports totalling RM856.05 billion (up 20.4 per cent) and imports at RM766.07 billion (up 21.2 per cent).
 
 
Trade surplus was recorded at RM89.98 billion, higher by 13.6 per cent compared to the corresponding period a year ago. — Bernama
 
 
Bernama (2018, January 10). MITI hopes to announce National Industry policy before mid-year. Bernama. Retrieved from http://www.themalaymailonline.com/money/article/miti-hopes-to-announce-national-industry-4.0-policy-before-mid-year#ILhyOK8Vxl0gkeLz.97
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BACK in 2015, many had predicted that the Malaysian economy would dip into recession by 2018, or even earlier. Perhaps, this was based on historical data which suggests that the economy tends to plunge into a recession every seven to 10 years.
 
The last time the economy experienced a recession was in 2009, when gross domestic product (GDP) contracted to 1.5 per cent. There were other recessions prior to this, one in 1998, and another in 1985. The depth of the recession was more significant in 1998 when GDP took a dive to negative 7.4 per cent. In 1985, GDP contracted to 0.9 per cent.
 
 
Given this background, what is the prospect for the Malaysian economy next year?
 
 
Clearly, there is no indication whatsoever that the economy is on the path of recession or crisis. On the contrary, there is evidence emerging that suggests the economy is on course to become a high-income nation by 2020.
 
 
The World Bank, based on simulations, predicted that we are on track to achieve the target. In fact, according to Malaysian Institute of Economic Research (MIER) analysis, Malaysia may even arrive at the high-income status as early as the first quarter of 2018.
 
 
The consensus forecast for Malaysian economic growth in 2018 is within the range of 5.5 to 5.8 per cent, with the prospect of stable inflation and low unemployment. There is evidence to suggest that the overall wellbeing of the people has improved steadily as incomes edged higher, especially for the bottom 40 (B40) group. Data shows that the education system is improving, number of jobs growing, income and regional inequalities are being reduced, and public transportation is becoming better over time. And, this trend is set to continue next year for reasons which I will elaborate.
 
 
For the first time since the great recession, the world economy is in a somewhat positive mood. It is projected to grow at more than 2.5 per cent next year. Interestingly, both developed and emerging economies are forecast to perform better next year.
 
 
The United States and the rest of Europe are expected to turn in an average growth rate of two per cent in 2018 while China, despite its slower than expected growth rate, is still a major force, with an economic trajectory of around 6.7 per cent next year. And without a doubt, the recently unveiled 2018 Budget, touted as the “mother of all budgets”, will further boost the Malaysian economy as we approach 2018, especially the people part.
 
 
The 14th General Election (GE-14) will be the central issue next year. While the government has a clear economic plan, a policy direction and a vision, the opposition has merely an incoherent economic wishlist: to abolish the Goods and Services Tax (GST), to have free education and to reduce the civil service. These are not economic plans, they represent an economic wishlist. Contrast it with the government’s Economic Transformation Programme (ETP), which is set to turn the country into a high-income, inclusive, and sustainable economy by 2020.
 
 
Instead of reverting to the past, the government is set for the future beyond 2020 with the Transformasi Nasional 2050 (TN50) vision. TN50 will prepare Malaysians, especially the youth, for future challenges such as the Fourth Industrial Revolution (Industry 4.0), an ageing society, the era of robots, climate change and the digital economy.
 
 
Indeed, with the launch of the Digital Free Trade Zone (DFTZ) this year, 60,000 high-income jobs are expected to be created primarily for the youth.
From the perspective of financial management of the country, the prospect for 2018 is promising.
 
 
Our international reserves now stand at US$102.2 billion (RM416.97 billion), which is sufficient to finance 7.5 months of retained imports and 1.1 times short-term external debt.
 
 
This compares starkly with 1998, when our reserves stood at a mere US$20 billion, sufficient to finance just 2.6 months of retained imports.
As for the prospect of the ringgit strengthening, we can see that the Malaysian currency is now performing well at RM4.08 against the US dollar compared with 1998 when it was at RM4.88.
 
 
Other indicators, such as the inflow of foreign direct investments (FDIs) and trade activities are also expected to improve. This is due to major investments in public transportation infrastructure and strong bilateral ties with important economies such as China, the US, Saudi Arabia, India, and Japan.
 
 
The 14 Malaysia-China business memoranda of understanding (MoU) and the 31 Malaysia-India business MoUs for instance, are expected to bring about RM302.4 billion worth of investments into Malaysia.
 
 
Multi-regional economic links such as the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership are also set to take effect in 2018.
 
 
That said, 2018 will surely be another encouraging year for Malaysia. Have a great New Year.
 
 
Dr Irwan Shah Zainal Abidin (2017, December 29). 2018 a good year for Malaysian Economy. New Strait Times. Retrieved from https://www.nst.com.my/opinion/columnists/2017/12/319399/2018-good-year-malaysian-economy
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The government is aggressively undertaking various efforts to assist industry players in embracing Industry 4.0 through the adoption of automation and smart manufacturing.
 
 
Malaysian Investment Development Authority (MIDA) strategic planning (manufacturing) executive director Zabidi Mahbar said Ministry of International Trade and Industry (MITI) and MIDA are heavily involved in formulating strategies and conducting related research.
 
 
“The research includes the “Future of Manufacturing” Study on the 3+2 catalytic and high growth potential sectors identified under the 11th Malaysia Plan and the National Plan for Industry 4.0,” he said in his keynote address during the East Malaysia Domestic Investment Seminar in Sabah, today.
 
 
He said both research documents are expected to be completed by the first quarter of 2018.
 
 
“Since 2015, the government has provided a facility in the form of Automation Capital Allowance for automation expenditure to assist manufacturing companies in embracing this new concept,” he added.
 
 
As at October 2017, MIDA has approved a total of 71 applications of which two applications approved were from Sabah.
 
 
In the recent Budget 2018, the government highlighted several new incentive packages to accelerate the growth and adoption of smart manufacturing and Industry 4.0 in Malaysia.
 
 
“With these facilities in place, we would like to encourage more companies to adopt smart manufacturing technologies and processes that will in return serve them well by reducing dependency on foreign labour, improve productivity and enhance their long term competitiveness,” Zabidi said.
 
 
He pointed out as the principal investment promotion agency of Malaysia, MIDA seeks to attract quality investments, which would have spillover effects towards generating greater prosperity for Malaysians.
 
 
“Sabah is certainly one of the recipients of such investments. As at December 2016, a total of 757 manufacturing projects with investments worth RM19.7 billion have been implemented in the state,” he said.
 
 
Zabidi said there are more than 91,000 Sabahans have benefitted from these projects through employment and Sabah continues to attract additional approved investments of more than RM400 million this year.
 
 
The approved investments include in the services sector particularly the hotel and tourism; energy generation and conservation projects, and in the manufacturing sector in the first half of 2017.
 
 
“We know that a comprehensive ecosystem will be a natural magnet for investments. With that in mind, the government continues to undertake concerted efforts to put in place the required enablers that will support investors in doing their business in this country.
 
 
“We are optimistic the latest infrastructure development project such as the Pan Borneo Highway will be an impetus to attract more quality investments into East Malaysia, particularly in the targeted sectors such as petroleum products, chemical and chemical products, oil & gas, building materials, food manufacturing, furniture, tourism and agriculture,” Zabidi said.
 
 
More than 200 industry players attended the one-day programme, which was part of MIDA’s continuous efforts to update the industry players especially in East Malaysia on the latest policies and facilities that are available.
 
 
It also featured two plenary sessions moderated by Federation of Malaysian Manufacturers (FMM) and Persatuan Usahawan Maju Malaysia (PUMM) and key speakers from MIDA, Malaysia External Trade Development Corporation (MATRADE), SME Corporation Malaysia (SME Corp), Halal Industry Development Corporation (HDC), Small Medium Enterprise Development Bank Malaysia (SME Bank), Malaysian Industrial Development Finance (MIDF), and Credit Guarantee Corporation (CGC).
The event also featured business clinic sessions that enabled participants to engage and obtain direct consultations with various agencies at both federal and state levels.
Ayisy Yusof (2017, December 7). Government Assists Industry Players to Embrace Industry 4.0. New Strait Times. Retrieved from https://www.nst.com.my/business/2017/12/311823/government-assists-industry-players-embrace-industry-40
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The manufacturing sector provided further signs of Malaysia’s economic recovery, registering an expansion rate last month that was not seen since 2014.
According to Nikkei Malaysia’s monthly Purchasing Managers Index (PMI), Malaysian factories recorded a score of 52.0 in November, up from 48.6 in the month before; the rate was the highest recorded since April 2014.
 
 
The index considers any score above 50 to be an improvement, while those below signify a contraction. Malaysia’s score was also the second-highest in the Asean region.
 
 
“The overall upturn reflected accelerated growth in both output and new orders, supported by improvements in domestic and overseas demand conditions.
 
 
“In response to greater inflows of new business, firms raised their payroll numbers at the joint-strongest pace since December 2012,” Nikkei Malaysia said in its report.
 
 
November was also the first time Malaysia has climbed above 50 in the PMI this quarter, with Nikkei Malaysia saying that factories were also receiving fresh orders at a rate not seen since 2014.
 
 
Backed by stronger foreign demand, the manufacturing sector also reported that export orders in November grew at the second-fastest rate since Nikkei Malaysia began the PMI in 2012.
 
 
“The degree of business confidence towards the 12-month outlook for output was the strongest in nearly four years. Positive projections for stronger demand conditions and new projects were cited as the key factors behind positive sentiment,” the firm added.
 
 
The news follows Malaysia’s sterling performance in the third quarter, when the country beat forecasts to register a gross domestic product (GDP) growth of 6.3 per cent, prompting Bank Negara Malaysia to raise its full-year projection to between 5.2 and 5.7 per cent.
 
 
The ringgit is also recovering on the back of improving oil prices, and is hovering at the 4.09 mark against the US dollar.
 
 
Elsewhere in the region, factories in the Philippines were also enjoying a boom, with a score of 54.8 in the Asean-level PMI. Myanmar was third with 51.6.
 
 
“Meanwhile, Indonesia’s manufacturing industry recorded another marginal upturn, albeit one that was stronger than in the previous month. Thailand reported stable operating conditions in November after a slight deterioration in October,” Nikkei Malaysia said.
 
 
Of the countries rated, only Singapore’s manufacturing remains in contraction, scoring 47.4 on the index.
 
 
 
Malay Mail Online (2017, December 4). Malaysia Factories in Highest Surge of Over Three Years. Malay Mail Online. Retrieved from http://www.themalaymailonline.com/money/article/malaysian-factories-in-highest-surge-of-over-three-years#7PQMTmw65s0OLG21.97
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The Malaysian automation and control systems market, one of the biggest for suppliers, is stable and growing, says the study by Frost & Sullivan, which projects the market to be worth more than $409 million in the next four years.
 
 
Government incentives to aid manufacturing and infrastructure spend, as well as an established end-user base of sophisticated automation systems, are driving growth in the region.
 
 
Nonetheless, barriers to market entry are high. To succeed in a fiercely competitive ecosystem, automation vendors must embrace new technologies, such as Internet of Things, collaborate with developers of machine-to-machine technologies, and improve production capabilities.
 
 
Krishnan Ramanathan, Frost & Sullivan’s industrial automation and process control industry analyst, says: “Traditional end users, such as the oil and gas, power, and chemicals and petrochemicals industries, will continue to be important revenue contributors for automation systems suppliers.
 
 
“However, as Industrial Internet of things (IIoT) gains significance, such companies will have to collaborate with multiple suppliers and service providers in the value chain to reap the full benefits of the latest technology.”
 
 
Frost & Sullivan’s report, Opportunities in Malaysia for Automation and Control System Manufacturers, finds that the total automation and control market in Malaysia will be worth $409 million by 2021.
 
 
The study provides an analysis of current and expected market developments, drivers, restraints, and revenue forecasts across segments.
Strategic imperatives for success and growth in Malaysia’s automation and control systems market include:
  • Embracing change in both the short and long terms through new business models that offer scope for implementation of IIoT technologies;
  • Vendors cutting costs at all levels to optimize client benefits due to popularity of main automation contractor and main instrumentation vendor concepts;
  • Expanding cloud-enabled services through partnerships and relationships with service providers to leverage technological benefits;
  • Investing in requisite upgrades now to be able to adopt and integrate new technologies when they are available;
  • Offering development and training services; and
  • Focusing on niche solutions.
 
Krishnan says: “With the proliferation of IIoT and other digital technologies, the chances of a cyberattack on an industrial network increases. In most instances, the levels of readiness and skills to thwart cyberattacks are low.
“Collaborating or partnering with cybersecurity firms will be vital to future success.”
Frost & Sullivan’s study covers automation market segments such as:
 
  1. programmable logic controllers (PLC);
  2. distributed control systems (DCS);
  3. supervisory control and data acquisition (SCADA);
  4. human machine interface (HMI); and
  5. safety systems.

The market share and competitive analysis of major suppliers, such as Siemens, Rockwell Automation, Schneider Electric, Yokogawa, Emerson, Honeywell and Omron, are also discussed.

Mai Tao (2017, July 18). Government incentives driving growth of Malaysian automation and control systems market. Robotics and Automation News. Retrieved from https://roboticsandautomationnews.com/2017/07/18/government-incentives-driving-growth-of-malaysian-automation-and-control-systems-market-says-report/13400/
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For the past 20 years, Malaysia’s manufacturing sector has embarked on robotic assembly lines, precision engineering and computer controlled processes. Building upon the country’s strong manufacturing base, Malaysia is aligning with the Fourth Industrial Revolution (Industry 4.0). Being open to emerging technologies is a key competitive differentiator that will assist in overcoming the many challenges faced by today’s businesses.

Companies that are able to grasp these technologies and incorporate them into their future strategy, development and innovation process will stay ahead and achieve much success through higher profitability, better energy efficiency and improved productivity. Some of the Malaysian companies are already undertaking research and development, engineering design, innovation and system integration as well as developing proprietary machinery and equipment for global exports.

To date, there are 165 projects to manufacture robotics and automation equipment for various industries. Most of them are in specialised machinery and equipment for the semiconductor industry and material handling while the rest are in food and beverages processing and packaging. Total investments made in these industries amounted to RM4.9 billion.
There are also more than 35 local systemintegrators (SI)such as ACM, VisDynamics, Kobay Technology, ViTrox, Genetec, Greatech, RC Precision, Pentamaster and Keu Control that can provide integrated automated solutions for high-tech industries. The presence of renowned global manufacturers such as ABB, KUKA (regional offices) and Hirata Engineering, which actively develop and produce robotic arms, have also led to technological progress, skills development and outsourcing requirements for this sub-sector. Malaysia’s engineering supporting companies have also been groomed to provide consistent quality of production and on-time delivery.
Recognising the challenges of transitioning towards this phase, the government is undertaking various efforts toassist the business community. This includes drafting a National Policy on Industry 4.0 that will be tabled in the Cabinet by the fourth quarter of this year and establishing a National Industry 4.0 Taskforce to spearhead the government’s policy and strategy in this area. There is also an industrial study focusing on the Future of Manufacturing “Industry 3+2 sectors”that is led by the Malaysian Investment Development Authority (MIDA).
The outcome of the study is expected to underscore the way forward for these industries vis-à-vis Industry 4.0. It is also a step in the right direction to address some of the existing challenges, such as privacy and security concerns for the implementation of smart factories, lack of inter-industry collaboration due to competition, requirements for a trained and knowledgeable workforce and cost of licensing software or systems. Today, Malaysia continues to adapt to emerging trends to maintain its competitiveness.

Rapid progress int his digital age is driving profound economic changes. The industry has no choice but to change the way it does business and think about the future, or risks being left behind. History has proven that Malaysia is a resilient nation and MIDA will continue to be an active participant in Malaysia’s transitioning towards being future -proof.

As an organisation, MIDA continues to re-engineer itself to become more pro-active and adaptive to the needs of its stakeholders with the goal of creating longterm inclusive and sustainable prosperity for Malaysians. In ramping up its efforts, MIDA is leveraging on its 50th anniversary celebrations to intensify engagements with its stakeholders through various platforms.

NST Business (2017, November 23). Industry 4.0: Where are our manufacturers now?. New Strait Times. Retrieved from www.nst.com.my/business/2017/11/306732/industry-40-where-are-our-manufacturers-now