Foreign Direct Investment (FDI) Opportunities in MalaysiaMalaysia has come a long way in the last few decades since its independence in 1957 to achieve the present status of an industrialising economy. The rapid industrialisation of the country is attributed in part to the inflow of foreign direct investment to the manufacturing sector: Malaysia is now host to more than 5000 foreign companies, including multinational corporations. Many manufacturers have taken advantage of the country’s capabilities by outsourcing their manufacturing activities to Malaysian companies or setting up their own operations in Malaysia. Many companies have since expanded and diversified their operations reflecting their continued confidence in the conducive environment of the country.
Malaysia – a leading player in the rubber manufacturing industry
Malaysia continues to be one of the largest producers and exporters of top quality, technically specified rubber and now has emerged as the world’s largest natural latex consumer and fifth in natural rubber uptake. This is due to the rapid expansion of its rubber products sector over the past few years, making a significant contribution to Malaysia’s economic growth and development. The industry today is a world-class manufacturer of the highest quality rubber products that conform to world specifications and standards. Malaysia is also a competitive source of raw materials including natural rubber, synthetic elastomers and chemical suppliers.
The Malaysian rubber products industry is made up of more than 300 manufacturers, mostly small and medium-scale enterprises, producing a vast range of latex products, tyres, industrial and general rubber products, footwear and footwear components. The industry employs more than 60,000 workers and recorded sales worth RM6.9 billion (US$1.8 billion) in 2002. It is expected that there will be a significant growth in the industrial and general rubber goods sub-sector due to greater usage of rubber for the manufacture of components for the automobile industry and construction industries. There is vast potential in the manufacture of specialised products for the petroleum, marine, aerospace and transportation industries.
The government continues to promote the development of Malaysia's resource-based industries to diversify the country's sources of growth. In addition to the fiscal incentives which are currently available for promoted products and activities, the government has further fine-tuned the incentives to promote specific activities, among which is the rubber products industry.
Dedicated research and development supportThe success in this key sector is based on a close-knit network of relationships between industry, science and research. Malaysia has the world’s largest single research establishment dedicated to rubber – the Malaysian Rubber Board (MRB). The two laboratories are the Rubber Research Institute of Malaysia in Kuala Lumpur and the Tun Abdul Razak Research Centre (TARRC) in Hertford in the United Kingdom. Both establishments have had at their disposal throughout their existence a pool of the highest calibre, internationally recognised researchers and experts. The Rubber Technology Centre of the MRB has become one of the principal testing centres for rubber products in the region.
Real investment opportunities
For European and US companies, there has never been a better time to investigate the opportunities that exist for trade and investment in the Malaysian rubber-based industry. Malaysia’s industrialisation programme has focussed on further development of the manufacturing sector with the backup of R&D and design capabilities, the development of supporting industries, packaging, distribution and marketing. With a dynamic economy and ranked the 17th largest trading nation in the world, Malaysia’s economic growth exceeded nine percent per annum over the last decade and the main impetus to this growth continues to come from the manufacturing sector. In terms of world competitiveness, Malaysia has been ranked fourth amongst countries with over 20 million people, based on criteria such as economic performance, government efficiency, business efficiency and infrastructure.