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Malaysia lays down roadmap for next decade of plastics industry development

The Malaysian Plastics Manufacturers Association (MPMA) has developed a Roadmap based on inputs provided by plastics industry participants that will act as a guide for plastic processors to meet the aspirations of the government's New Economic Model (NEM).

July 26, 2010

3 Min Read
Malaysia lays down roadmap for next decade of plastics industry development

Speaking at the MPMA's 43rd anniversary dinner, president Lim Kok Boon said "MPMA has developed a Technology Roadmap which is aimed at transforming the Malaysian plastics industry into a world-class player within the next decade. To achieve this vision, the Roadmap has identified that MPMA members must pursue a strategy that is defined by four key elements, namely: New Applications, Speed to Market, Enabling Infrastructure; and Sustainability. To achieve this strategy, the Roadmap focuses on five core areas which are, Advanced Materials; New Product Development; Advanced Manufacturing Technology; Education and Training; and Sustainable Development."

Lim had said that the NEM articulates on the need to: develop a quality workforce by increasing industry-driven training and skills upgrading programs; focus on innovative processes and cutting-edge technology for high value-added goods; and reduce the dependency on foreign labor. On the first proposal of developing a quality workforce, Lim had added that in drawing up the Roadmap, MPMA had already seen this as an urgent and necessary requirement.

Lim added, "There are increasingly diversified and sophisticated technologies being incorporated into single products. It is difficult for companies, especially SMEs, to acquire and develop all the technologies and technical knowledge required for innovation on their own. It is also difficult in obtaining relevant industrial higher-skills courses locally. Furthermore, higher-skills training courses are expensive and available mostly overseas, and many companies cannot afford them on their own."

In this regard, Lim said that MPMA had proposed to the Ministry of Science, Technology and Innovation (MOSTI) for a grant that covers 100% of the cost for higher-skilled training courses. The grant would act as an incentive for companies—especially SMEs—  to upgrade skills and competence to a higher level, thus helping to transform companies.

Lim said that on the second proposal of focusing on innovative processes and cutting-edge technology, MPMA is fully supportive of this proposal, considering that the high export-to-turnover ratio recorded by the plastics industry over the last few years was due to MPMA members increasingly focusing on quality.

Lim said, "Our members will therefore continue to upgrade machines and technology. However, in order for this to be facilitated and accelerated, we have appealed to the Ministry of International Trade and Industry (MITI) to assist us on two important issues, namely, reinvestment allowance (RA, a type of tax break) and electricity charges."

On RA, Lim had said that some MPMA members had exceeded the 15-year period where they qualify for RA, and in view of the rapid technological changes, many manufacturing companies find the need to constantly reinvest in new and more advanced plant and machinery to maintain their competitive edge as older ones become obsolete or less productive. Lim had added that this requires heavy reinvestments in plant and machinery that many companies find prohibitive if they are not able to claim the RA after 15 years.

Acquiring advanced manufacturing technology is one of the identified key areas of the MPMA Roadmap, and is important to the industry if it is to remain competitive. MPMA has requested the government relax the RA claimable period by allowing manufacturing companies to claim on RA on their reinvestment expenditure with no time limit, as this would assist tremendously in maintaining the productivity and competitiveness of the plastics manufacturing sector by enabling manufacturers to invest in new machines to achieve better efficiencies.

On electricity charges, Lim said, "Currently our SME members do not qualify for off-peak rates and all members do not have off-peak rates on Saturdays and Sundays, unlike countries like Thailand where these days are considered as off-peak. Given that MPMA members are investing in expensive machines in order to stay relevant, there is a need to run 24/7 to effectively amortize the high cost of the machines. In this regard, and given that the electricity utility benefits from our members' constant demand profile, as opposed to varying peak demand profile if we do not run 24/7, our members should be given the off-peak rates." —[email protected]

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