Find Industry and Manufacturing expertise in Malaysia

The Malaysian manufacturing industry made a significant contribution to the Malaysia’s GDP for 2010 contributing 26.11% to the country’s overall GDP for the year according to a World Bank report from 2012 (2012). The Malaysian Department of Statistics states that a total of 1,020,265 workers were employed by the manufacturing sector in Malaysia in December 2012, equivalent to 3% of the total population or 28.86 million; an increase of 1.6%, or 16,339 persons from the previous year (Department of Statistics, Malaysia 2012).

From the 1970s, Malaysia achieved phenomenal growth through what economists call “export-oriented industrialisation”, a policy and process aimed at speeding up the industrialisation process of a country through the exportation of goods. Malaysia’s rich natural resource base, global position and extensive coastline make exportation of goods relatively easy. The Malaysian economy is highly open, with exports comprising over 100% of the total GDP. Malaysia is one of the world’s leading exporters of electrical appliances, electronic parts and components, palm oil, and natural gas.

Manufacturing within Malaysia is responsible for attracting a substantial amount of foreign direct investment (FDI); in 2011 manufacturing was responsible for just over half of all Malaysian FDI; nearly double that of the services sec­tor. 2011 also saw a dramatic increase in the total investments in the manufacturing sector, with a total of 846 manufacturing projects approved, carrying a value of US$18.57 billion, an increase of 19% from the previous year (Malaysian Investment Development Authority 2012).

Manufacturing activities in Malaysia are made up of rubber and oil palm processing and manufacturing, electronics, smelting, logging and timber processing. Electronics is one of the major growth industries within the country. Multinational corporations that have a presence within this sector include Motorola, Intel, Sony, Samsung, Phillips, Siemens and STMicroelectronics. Rubber production is another key industry, which was initially aided in growth by the government’s Industrial Master Plans. Malaysia’s natural rubber production in 2011 amounted to 996,210 tonnes from the following industries: latex products (80.3%); tyres (9.2%); general rubber products (7.2%); industrial rubber products (3.2%); and others (0.2%). The rapid growth of the rubber industry in Malaysia has made it the world’s largest consumer of natural rubber latex. The Malaysian rubber products industry is made up of more than 500 manufacturers, contributing 18.1 billion to the country’s export earnings in 2011.

The 2012-2013 World Economic Forum Global Competitiveness Report rates Malaysia as 25 out of 144 countries based on production process sophistication, scoring 5.1 out of 7, where 7 is the most desirable. This is fairly standard score for the region, with Singapore having a similar ranking of 18 and scoring 5.5 (WEF 2013). Malaysia also ranks 12 out of 35 in the World Bank 2013 Ease of Doing Business Index, suggesting that it is significantly externally competitive (World Bank 2013).

The Federation of Malaysian manufacturers (FMM) is a private sector economic organisation representing over 2,500 manufacturing and industrial service companies of varying sizes.  Founded in 1968, the FMM serves to represent Malaysian manufacturers and assist in Malaysia’s growth and modernisation. The FMM is nationally recognised as the official voice of the manufacturing industry. Membership is voluntary.