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Malaysia’s move into Industry 4.0 as well as the Internet of Things (IoT) technology is only possible because of the existence of its established electrical and electronics (E&E) sector, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

“Malaysia is now the world’s seventh largest exporter of E&E products with a total export of RM287.7 billion last year,” Mustapa said at the launch of IoT Malaysia today.

“In fact, IoT technology is made possible due to the established E&E sector in Malaysia. This sector serves to provide the intermediary products and components which enable the execution of industry 4.0 by leveraging on IoT technology in various sectors.”

He explained that the E&E sector had shown an upward trend in export for the past three years, thus making it the only industry that recorded a trade surplus for three consecutive years.

For the first eight months up to August, E&E exports amounted to RM220.56 billion, growing 21.4 per cent compared to the same period in 2016.

“For the first half of this year, approved investments in the E&E industry recorded a total of RM5.8 billion in 47 projects. This will create additional 5,670 job opportunities,” said Mustapa.

He noted that last year, Malaysian Investment Development Authority (MIDA) had approved a total of 107 E&E projects with investments of RM9.24 billion.

“Of these, RM1.29 billion was from domestic sources while RM7.94 billion was from foreign sources. These have created over 16,200 job opportunities for the country.”

Mustapa also spoke about a catalytic sub-sector that stood alongside E&E, which is the machinery and equipment (M&E).

The government has formulated the 3+2 strategy under the 11th Malaysia Plan (11MP) which focuses on the development of three catalytic sub-sectors namely E&E, M&E; and two high potential growth sub-sectors namely aerospace and medical devices.

These targeted sub-sectors are envisioned to re-energise the manufacturing sector in the country.

“Malaysia’s M&E industry has grown significantly over the years. It contributed 4.6 per cent to the country’s total export of manufactured goods in the first eight months of 2017,” said Mustapa.

“With a healthy compound annual growth rate of 4.3 per cent, the M&E export is projected to reach RM43 billion in 2020.”

For the first half of 2016, approved investments for M&E were RM709.7 million, totalling into 37 projects and 1,606 job creation.

Last year, MIDA approved a total of 88 M&E projects with investments of RM1.54 billion. Of this, RM1 billion was from domestic investments while RM0.54 billion from foreign investments.

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Hong Kong signed free trade and investment agreements with the 10-nation Association of Southeast Asian Nations on Sunday, in what one of the Chinese territory’s officials called a “loud and clear” vote against rising regional trade protectionism.
 
 
The pacts, which conclude nearly three years of talks, are expected to take effect on Jan 1, 2019, at the earliest. They aim to bring “deeper and bolder” integration of market access with the bloc, said Edward Yau, Hong Kong’s commerce and development secretary.
 
 
“In the face of protectionist sentiments in other parts of the world, these two agreements are in fact a loud and clear vote from all of us here for freer and more open trade,” Yau said.
 
 
“Hong Kong, being a free trade promoter and advocate of a strong, rule-based, multilateral trading system, will continue to take this pathway, continue to do our utmost.”
 
 
Total merchandise trade between Hong Kong and ASEAN was HK$833 billion (US$107 billion) last year, official figures show. Total services trade was HK$121 billion in 2015.
 
 
The ASEAN Hong Kong China Free Trade Agreement (AHKCFTA) was signed on the sidelines of a summit of the regional grouping in the Philippine capital of Manila.
It came after leaders attending an Asia-Pacific Economic Cooperation (APEC) summit in Vietnam agreed to tackle “unfair trade practices” and “market-distorting subsidies” in a statement on Saturday that bore the imprint of U.S. President Donald Trump’s efforts to reshape the global trade landscape.
That summit offered a contrast between the vision of Trump’s “America First” policy and the usual consensus favouring multinational deals that China now seeks to champion.
 
 
Hong Kong has one of the world’s freest and most open economies, and the pacts will see many ASEAN countries gradually reduce or eliminate customs duties on Hong Kong goods. Professional services should also benefit, with increased investment flows, Yau said.
 
 
The partnership “will usher in greater trade synergies and more job opportunities for people and businesses in the region,” said Philippine Trade and Industry Secretary Ramon Lopez.
 
 
The ASEAN grouping includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
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The Budget 2018 announced the right impetus to increase the participation of Malaysian companies in international trade. The Budget’s policy intent is to strengthen MATRADE’s export promotion and export development initiatives will further strengthen Malaysia’s external trade performance.
 
 
The budget of RM150 million allocated for MATRADE, Malaysian Investment Development Authority (MIDA) and SME Corp. will be channeled to enhance companies’ market expansion through export promotion activities including for the Market Development Grant (MDG). These export promotion activities will be focused in key markets where Malaysia has Free Trade Agreements with and markets with high demand for Malaysian exports especially in sectors such as Furniture, Electrical & Electronics, Information, Communication and Technology (ICT), Oil and Gas, Food & Beverage (F&B), Construction and others.
 
 
In providing financial support for Malaysian companies, RM200 million of credit facility for export will be provided by EXIM Bank to local Small and Medium Enterprises (SMEs).
 
 
Also, RM1 billion is allocated for credit insurance for companies and loan facility amounting RM100 million with 70 percent Government surety to encourage automation among the local furniture companies will definitely boost production for export.
 
 
Over the last 10 years, MIDF has approved over RM 1.5 billion of loans under Soft Loan Scheme for Automation and Modernisation (SLSAM).- an amount which is still small given the importance of automation especially in current business landscape as well as the pressing need not only to reduce dependence on foreign workers, but also to create more high income jobs.
 
 
The provision of RM 245 worth of matching grant under the Strategic Domestic Investment Fund will upgrade the Smart Manufacturing Facilities, which are an important dimension of Industry 4.0. The government is commited in providing necessary ecosystem that will encourage and facilitate more companies to innovate and adopt Industry 4.0 elements in their business processes.
 
 
In addition, the budget will also be utilised to enhance the development of Malaysian companies through programmes such as Go-Ex, Bumiputera, Women and Youth Exporters Development Programme (BWYEDP), Mid-Tier Companies Development Programme (MTCDP) and eTRADE Programme.
 
 
“It is imperative that the Malaysian exporters community continue to receive strong support from the Malaysian Government through both export promotion and exporters development activities. The Budget announced today will support MATRADE’s continuous efforts in strengthening Malaysia’s trade balance,” said MATRADE’s Chief Executive Officer Ir. Dr. Mohd Shahreen Zainooreen Madros.
 
 
The share of exports in Malaysia’s Gross Domestic Products (GDP) currently stands at 67.7 percent, indicating external trade’s importance to Malaysia’s economy. As such the support to ramp up export-based programmes will ensure our capabality to sustain Malaysia’s competitiveness globally.
 
 
MATRADE’s initiatives will also be complemented by zero-cost programmes organised in collaboration between MATRADE and other agencies, private sector, business chambers, business councils and trade associations. MATRADE, as Malaysia’s only trade promotion agency under Ministry of International Trade and Industry, will continue adopting smart partnerships so it can facilitate more Malaysian businesses to venture abroad without depending on budget allocation.
In an effort to encourage export among beginner-level and mid-level SMEs, strong emphasis will be put into promoting market access through digital platform by maximizing the potential of the eTRADE Programme. The programme is designed to accelerate Malaysian exporters’ market access by getting them onboard leading global eMarketplaces such as Alibaba.com, eBay.com, Amazon.com, TradeIndia.com, Aladdin.com. and Matahari.com.
 
 
As for encouraging more export sales, MATRADE aims to build up industry’s export strength in high-value sectors such as aerospace, petrochemical, automotive parts & components, E&E, ICT, medical tourism and construction services through policy intervention developed by the National Export Council chaired by the Prime Minister YAB Dato’ Sri Mohd Najib Tun Razak. The budget will also lead to more export promotion programmes overseas that will be coordinated by MATRADE’s 47 trade offices in major cities around the world.
 
 
In first eight months of 2017 (Jan – Aug 2017), there was unprecedented growth in Malaysia’s trade. Growth has exceeded 20 percent every single month of the year, except for January and June. Malaysia’s total trade breached the RM1 trillion mark in July this year as opposed to September last year. The trade surplus has also been healthy, increasing to RM60.84 billion for the first eight months of 2017. In the same period last year, it stood at RM52.47 billion. This year we are likely to see a slight increase in the trade surplus compared to RM88.15 billion in the whole of last year.
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The Fourth Industrial Revolution, commonly known as Industrial 4.0 in Germany was introduced by a German economist, Klaus Schwab in 2015. It corporates advanced sensors, machine-to-machine communication links, 3-D printing, robotics, artificial intelligence, big data analytics and cloud computing technology. These cyber-physical platform monitor factory processes and make decentralised, self governing decisions, leading to “intelligent” or “smart” factories. Industry 4.0 covers the entire value chain, including suppliers, procurement, design, logistics and even sales, resulting in higher productivity and flexibility. There will be less wastage or storage, better monitoring and maintenance of machinery, and improved security and safety.

Smart Manufacturing is the catchphrase nowadays in Malaysia’s media coverage. This has been further reaffirmed that we are in the process of formulating the National Industry 4.0 Blueprint, which is expected to be ready before the end of 2017. 

According to the Minister of MITI, more than 5,000 multinational companies (MNCs) in Malaysia have embraced the challenges of the technological evolution. Based on research conducted by PwC, Industry 4.0 sees a promising future in the digitization of products and services and means of robotic manufacturing and engineering – companies expect to reduce operational costs by 3.6% per annum while increasing efficiency by 4.1% annually – over the course of five years.

There is a lot to be said however, Malaysia is still lagging behind Vietnam, Thailand and Myanmar in the pecking order which they already have Industry 4.0 policy frameworks. With only three years left to 2020, most of the companies have started to generate new applications and find ways to leverage on these technologies to their competitive advantages – that are not only beneficial to consumers but also profitable to the market.

Bringing the Industrial 4.0 to AUTOMEX

As the organiser of the largest machine tools and metalworking trade show, we felt it is vital to take the lead by bringing together the local and international companies all under one roof to experience the revolution.
AUTOMEX is the only platform which showcase the Industrial 4.0 technology and organise seminar activities that covers all of major industrial smart manufacturing topics. 

The exhibitors will demonstrate how machines and work with human workers and offers support in factories. More than 2,000 participating companies and over 21,000 trade professionals, decision-makers, potential buyers and partners from over 40 countries are expected to attend the show.