Manufacturers: Implementation of Minimum Wage Policy was Unsatisfactory

FMM /Perlis signs Memorandum of Understanding with AIMST University

New Online System for the Submission and Payment of Sales and Service Tax

Updates on Industrial Designs (Amendment) Act 2012 Contents

FEDERATION OF MALAYSIAN MANUFACTURERS

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PUBLISHED BY Federation of Malaysian Manufacturers Cover Story 14 Updates on Industrial Designs Wisma FMM (Amendment) Act 2012 No 3, Persiaran Dagang PJU 9 03 Manufacturers: Bandar Sri Damansara Implementation of Minimum 52200 Kuala Lumpur Wage Policy was Trade Policy Tel: 03-62867200 Unsatisfactory Fax: 03-62741266/7288 Email: [email protected] 16 New Online System for the Website: www.fmm.org.my Submission and Payment of Special Feature Sales and Service Tax

FMM has eight branches and 04 Winners of the Manufacturer two representative offices located in of the Year Award (SMIs) & FMM in the News Kedah, Penang, Perak, Selangor, The Rising Star of the Year Negeri Sembilan, Malacca, , Award 2013 FMM Selangor Branch Eastern, Sabah and Sarawak. 19 Supports the Quick Any material extracted from Resolution of the Water Business in Action @ FMM to be News Highlights Shortage Crisis in Selangor quoted or reprinted should contain an acknowledgement to FMM or its 06 Potential Sales of RM2.6 Impact of Increase in Toll acknowledged sources. million Recorded at Foodex Rates on the Manufacturing Saudi Sector Editorial 07 Visit to Spirit AeroSystems ADVISOR Sdn Bhd Branch Events Dr Yeoh Oon Tean Chief Executive Officer 10th Automotive Aftermarket 20 Perak Industry and Tuning Trade Fair Selangor EDITORIAL TEAM Madeline Loh Pahang General Manager (Trade) 08 Tan Sri Datuk Yong Poh Kon 23 elected Council Member of Ng Lee Lee ICC World Chambers Kedah/Perlis Senior Manager 24 Federation International Business Division Johor Florance S Gabriel Upcoming Trade Fairs 27 Negeri Sembilan Assistant Manager Communications and Publications Unit 29 Penang ADVERTISEMENTS 10 Events In Pictures Sabah Kenny Lee Marketing Unit (+6012-383 3857) 30 Sarawak Updates Malacca PRINTED BY Attitude Communications Sdn Bhd 13 Abolishment of Free on C3-5-3, Solaris Dutamas, Board Price in the ASEAN Jalan Dutamas 1, Trade in Goods Agreement 50480 Kuala Lumpur

02 BIA@FMM I Mar _ Apr 2014 Cover Story

Manufacturers: Implementation of Minimum Wage Policy was Unsatisfactory

FMM recently responded to an article on “Malaysia Implements Minimum Wages” by the Secretary General of the Ministry of Human Resources on The Star Online on January 9, 2014. FMM congratulated the Government for introducing this policy and while it supported the implementation of this policy, in retrospect, the implementation could have been better planned and more efficient. FMM would like to share the difficulties encountered by its members as lessons learnt with the hope for improvement in future implementation of Government policies. Throughout the implementation, our members faced considerable uncertainties and unacceptable deadlines. Authorities were reluctant to consider practical and fair recommendations by employers and only relented after intense lobbying and protests.

The introduction of minimum wage is not a simple foreign workers on February 20, 2013, but only with procedure. It requires companies to review, adjust, permission from the Labour Department. The application renegotiate and restructure the entire wage structure procedure was made very complicated. After intense because of knock-on effects on those already earning lobbying by employers, blanket approval was given for at and above the minimum wage level. In addition, these deductions on March 19, 2013 which was already remuneration to employees is paid in many forms and three months after the implementation date. the definition of what constitutes wages must be clear and fair to avoid confusion, unhappiness and increased Whilst there has been a series of consultation costs. with stakeholders, they were carried out after the announcement of the policy was made and there has Insufficient notice and time were given to employers for been reluctance by the authorities to accept some of the this major change. The announcement of implementation recommendations made by FMM and other chambers of minimum wage policy by January 1, 2013 was made [employer associations] which would have made the on April 30, 2012, the Order was gazetted on July 16, implementation smoother, more efficient and minimised 2012 and the Guidelines, which detail what must be any hardship for employers. For example, FMM had done, was released on September 7, 2012. Effectively, recommended that at least 12 months be given to employers had only 4 months for implementation. To companies for implementation, minimum wage be compound the problem, there remained unresolved defined as basic wages and all fixed cash payments and issues in the Guidelines, particularly on the types of allowances be defined as wages under Section 2 of the allowances which could be included in the new minimum Employment Act and to set minimum wage for different wage. zones in the Peninsula to take into account the different cost of living in the various zones. Unfortunately none of Unacceptable deadlines were set for companies to these recommendations was taken into account. comply. For example, companies could appeal for deferment of implementation of the policy but had to Consultation would be more effective if done during the submit their applications by October 2, 2012, which crafting of the policy. In this respect, FMM has been was less than one month from the release of the actively lobbying for a more representative participation Guidelines. Industry associations protested against in the National Joint Labour Advisory Council as well the tight deadline and the Ministry called a meeting on as the National Wages Consultative Council, currently November 5, 2012 and agreed to extend the deadline to represented only by one association representing November 7, 2012, two days after the meeting. Results employers, which surely cannot be expected to be able of the applications were only published on the Ministry to truly represent the country’s diverse economy. of Human Resources’ website on a Friday afternoon, December 28, 2012, three days away from Going forward, employers are deeply concerned that the implementation date of January 1, 2013. even before their operations could stabilise following the full implementation of the minimum wage and Significant uncertainties and labour issues were minimum retirement age, there have been additional created due to lack of clarity on definition of wages and increases in the cost of doing business such as in allowances. This resulted in the authorities back-tracking energy, assessment rates, logistic costs, etc. Employers after substantial lobbying and protests by employers will have to overcome these tough challenges by e.g. announcement of deduction of levy to be borne by becoming more efficient and productive. It would help foreign workers on January 30, 2013 with immediate if Government procedures are simple and easy, and effect, and the deduction of accommodation costs for Government policies are efficiently implemented.

The above was released to the press on January 13, 2014.

Mar _ Apr 2014 I BIA@FMM 03 Special Feature

Winners of the Manufacturer of the Year Award (SMIs) & The Rising Star of the Year Award 2013

uring FMM’s Annual Dinner which was held on November 28, 2013, the Excellence Award 2013 winners were announced. The Manufacturer of the Year Award 2013 - SMIs was won by Barkath Co-Ro Manufacturing Sdn Bhd while The Rising Star of the Year Award 2013 was awarded to Steel Recon Industries Sdn Bhd.

Barkath Co-Ro Manufacturing Sdn Bhd is the producer of Sunquick, Malaysia’s top brand in concentrated fruit juice drink. The Company is a joint venture between Kumpulan Barkath and Co- Ro Food of Denmark. The strong partnership has enabled Barkath Co-Ro to transform itself from a labour-intensive operation into a modern, fully automated SMI with the largest manufacturing plant among the 18 Sunquick factories globally, even ahead of the headquarter plant in Copenhagen, Denmark. The low fixed operating cost which is even lower than China has enabled Barkath Co-Ro to capture the Asean market. In Malaysia, Barkath Co-Ro has more than 40% market share in the concentrated fruit juice category. Dato’ Seri Barkath Ali Bin Abu Backer of Barkath Co-Ro Manufacturing Sdn Bhd (right) receiving the trophy from Senator Dato’ Seri Abdul Wahid bin Omar while FMM President Dato’ Saw Choo Boon looks on

Barkath Co-Ro Manufacturing Malaysia Sdn Bhd staff after winning the award

04 BIA@FMM I Mar _ Apr 2014 Special Feature

Steel Recon Industries Sdn Bhd on the other hand was established in 1974 and is a 100% Malaysian owned manufacturer of fire fighting equipment. The Company continually innovates through R&D and spends 2% to 3% of its average annual sales on R&D for product development and new fire fighting technologies and skills. Its innovations include being the first company to launch home and car safety kits and its latest ‘Inertec fire suppression system’ is internationally certified to protect lives, properties and the environment. Steel Recon achieved all these while striving to make fire-fighting equipment affordable.

In 2013, this new product contributed over 12% to total sales, an increase of 4% from 2012. Steel Recon Industries has markets in over 70 countries worldwide, supplying to Hong Kong, Disneyland, Sydney Olympics Stadium, Daimler Chrysler Centre in Germany and Sands Casino Macau.

The awards were presented to Barkath Co-Ro Manufacturing Sdn Bhd and Steel Recon Industries Sdn Bhd by the Minister in the Prime Minister’s Department, Senator Dato’ Seri Abdul Wahid bin Omar.

Wee Chew Kiat from Steel Recon Industries Sdn Bhd (right) receiving the trophy from Senator Dato’ Seri Abdul Wahid bin Omar. Far left is FMM President Dato’ Saw Choo Boon

Steel Recon Industries Sdn Bhd staff after winning the award

Mar _ Apr 2014 I BIA@FMM 05 News Highlights

Potential Sales of RM2.6 million Recorded at Foodex Saudi

oodex Saudi, organised under the patronage of the Saudi Arabian Ministry of Agriculture, is the largest food and beverage exhibition in Saudi Arabia. This Event has become the benchmark, raising the bar for food and beverage exhibitions in Jeddah.

Global and local food and drink specialist companies usually take part in this Event to discover new products, meet key contacts, and more importantly, get orders. The exhibition includes sectors such as grocery, wholesalers, food service providers and manufacturers. There is representation from the biggest multi-nationals to the smallest and most specialist niche companies. Foodex Saudi is the ideal forum to launch new products and build brands. It also provides a fantastic visitor experience with demonstrations, seminars and appearances from celebrity chefs.

FMM coordinated the participation of ten companies for the first time in Foodex Saudi 2013 in Jeddah held from December 8-11, 2013.

The exhibition attracted over 130 exhibitors from 27 countries. A total of 10,200 visitors including 50 invited hosted buyers from Saudi Arabia visited the exhibition. More than 90% of the visitors were from the Saudi Arabia including Jeddah, Riyadh, Dammam and the economic cities. Exhibitors are expected to receive a total of RM2.6 million sales from the exhibition. Over 120 serious Chow Kien Yu, Business Development Manager (left) of Intraco enquiries were received during the exhibition. Plastics (M) Sdn Bhd briefing a potential customer on plastic pallets

Khairul Annuar, (centre, left) Trade Commissioner and Mohammed Haris (centre, right), Deputy Trade Commissioner of MATRADE briefing the Malaysian exhibitors

06 BIA@FMM I Mar _ Apr 2014 News Highlights

Visit to Spirit AeroSystems Malaysia Sdn Bhd

total of 22 FMM members visited Spirit AeroSystems Malaysia Sdn Bhd on December 22, 2013. Winner of FMM Excellence Award 2012 - Rising Star of the Year, Spirit AeroSystems Malaysia Sdn Bhd is a subsidiary of Spirit AeroSystems Inc, Wichita USA, the largest independent airframe supplier in the world and one of the largest Tier–1 suppliers to Boeing and Airbus.

In operation since 2008, the Spirit AeroSystems Malaysia facility covers 307,000 sq ft producing sub-assemblies of composite and metallic wing components for Airbus A320 and Boeing 777. In October 2012, Spirit AeroSystems Malaysia started producing the A350XWB Root End Fixed Fairing Assembly and J-Panel Assembly, as well as the complete assembly of the Boeing 787 Fixed Leading Edge. Spirit AeroSystems Malaysia In-House Design Team provides engineering design support to the Spirit Group. The Design Team is the first in Southeast Asia to receive the Airbus AP1020 Design/Stress/Weight and Material Review Board Approval to sign off wing components designed and manufactured locally with conformity to airworthiness.

FMM delegation toured the plant and viewed the assembly of the wing components of Airbus and Boeing.

FMM delegation being briefed during the plant tour.

10th Automotive Aftermarket Industry & Tuning Trade Fair

he 10th Automotive Aftermarket Industry and Tuning Trade Fair, Guangzhou Edition was recently held from February 17-19, 2014 at the Pazhou Complex, Guangzhou, Guangdong Province, China. FMM, being one of the co-organisers accompanied its members to the Trade Fair.

The two-and-half day Fair housed approximately 3,000 exhibitors showcasing the products and services comprised Auto-multimedia, Auto- electronics, Auto-audio & visuals, Auto-lighting, Interior Accessories, Auto care & Beauty, Anti Blast Film, Auto Repair & Maintenance, Auto parts and Exterior Decoration & Modification. The Fair attracted over 200,000 professional trade visitors. The highlight of the Fair was a visit to the renowned Auto Parts City where delegates had the opportunity to network with merchants in the automotive and automotive-related industries.

One of the Malaysian exhibitors at the exhibition showcasing Malaysian products.

Mar _ Apr 2014 I BIA@FMM 07 News Highlights

Tan Sri Datuk Yong Poh Kon elected Council Member of ICC World Chambers Federation

Tan Sri Datuk Yong Poh Kon, FMM Immediate Past President & Vice-Chairman of ICC Malaysia has been elected to the ICC World Chambers Federation (WCF) General Council for a three-year term beginning January 1, 2014. The Council comprises 50 members with representation from transnational, national, regional, local, public and private law chambers.

ICC WCF is a non-political, non-governmental body and WCF is a unique and truly a global forum that not only is the backbone of the chamber community, uniting the helps individual chambers to become more productive, global network of 12,000 chambers and their business but also strengthens links among them. From managing communities. the ATA Carnet system, which allows for the duty-free and tax-free temporary import of goods, to the World FMM has been acknowledged as an important Chambers Network Chamber Directory, WCF offers a stakeholder in ICC WCF global chamber membership. wide range of products and services to help chambers FMM had the opportunity of working closely with ICC deliver the best possible service to their respective WCF when hosting the ICC WCF 6th World Chambers members. Congress held in Kuala Lumpur back in 2009.

Upcoming Trade Fairs

Trade Fairs Date Location

1 Subcon Thailand May 15 -17, 2014 Bangkok, Thailand 2 Propak Asia June 11 - 14, 2014 Bangkok, Thailand 3 Beauty Eurasia June 12 - 14, 2014 Istanbul, Turkey 4 Manufacturing Expo June 19 - 22, 2014 Bangkok, Thailand 5 Phil Beauty June 18 - 20, 2014 Manila, Philippines 6 Fine Food New Zealand June 22 - 24, 2014 Auckland, New Zealand 7 Africa’s Big Seven June 22 - 24, 2014 Johannesburg, South Africa 8 SAITEX June 22 - 24, 2014 Johannesburg, South Africa 9 Food Taipei June 25 - 28, 2014 Taipei, Taiwan 10 Pharmex Asia Sept 1 - 3, 2014 Bangkok, Thailand 11 Indonesia Maritime Expo Sept 5 - 7, 2014 Jakarta, Indonesia 12 Food & Hospitality Oman Sept 9 - 11, 2014 Muscat, Oman 13 Franchise & License Expo Sept 12-14, 2014 Jakarta, Indonesia 14 InterCharm Ukraine Sept 17-19, 2014 Kiv, Ukraine 15 COSME Tokyo Oct 20 - 22, 2014 Tokyo, Japan 16 Intralogistic Oct 29 - 31, 2014 Jakarta, Indonesia 17 Interfood Nov 12 - 15, 2014 Jakarta, Indonesia 18 Food Week Korea Nov 12 - 15, 2014 Seoul, South Korea 19 Foodex Saudi Nov 17 - 20, 2014 Jeddah, Saudi Arabia 20 Saudi Health and Beauty Nov 24 - 27, 2014 Jeddah, Saudi Arabia 21 Motorshow Oman Dec 2 - 5, 2014 Muscat, Oman

For more information, please call Clarissa or Wee Leng from the FMM Secretariat at 03-6286 7200 or email [email protected] / [email protected]

08 BIA@FMM I Mar _ Apr 2014

Events in Pictures

2nd Joint Meeting of the MSBC Tourism & Hospitality Committee, Johor Bharu, January 8, 2014

Seminar on Personal Data Protection Act 2010: Practical Steps to Compliance, February 19, 2014 Foodex, Saudi Arabia, December 8-11, 2013

Automotive Aftermarket Industry & Tuning Trade Fair, Guangzhou, February 17-19, 2014 Meeting with MATRADE, February 25, 2014

10 BIA@FMM I Mar _ Apr 2014 Events in Pictures

ICC Mediation Rules 2014 Launch Seminar - Best Practices In International Selangor Branch’s Briefing on Preferential Commercial Mediation, March 18, 2014 Certificate of Origin, January 9, 2014

Kedah/Perlis Branch’s signing of Memorandum Negeri Sembilan Branch’s visit to Akzo Nobel Paints (M) Sdn Bhd, of Understanding between FMM and AIMST December 18, 2013 University, December 10, 2013

Women in Business’ Dialogue Session with Datuk Seri Shahrizat Abdul Jalil, February 10, 2014

Mar _ Apr 2014 I BIA@FMM 11

Updates

Abolishment of Free on Board Price in the ASEAN Trade in Goods Agreement

here have been frequent requests from the private sector for the removal of Free on Board (FOB) Price to be stated in the Preferential Certificate of Origin (CO) under the various free trade agreements. The ASEAN Economic Ministers have agreed to remove the requirement to state the FOB price in the Certificate of Origin (CO) under the ASEAN Trade in Goods Agreement (ATIGA). The Ministers and their counterpart in the Republic of Korea have also agreed to remove the requirement to state the FOB price in the ASEAN-Korea Free Trade Agreement (AKFTA).

The Federal Government Gazette for the amendments related to ATIGA and AKFTA have been gazetted on December 30, 2013 for implementation on January 1, 2014.

The gazettes are as follows: i) P.U.(A) 380/2013: Customs Duties (Goods of ASEAN Countries origin) (ASEAN Harmonised tariff Nomenclature and ASEAN Trade in Goods Agreement) (Amendment) Order 2013; and ii) P.U.(A) 381/2013: Customs Duties (Goods under the Framework Agreement on Comprehensive Economic Co- operation among the Government of the Member Countries of the Association of Southeast Asian Nations and the Republic of Korea (Amendment) Order 2013.

A. Abolishment of the FOB Price in the ATIGA CO Form D B. Abolishment of the FOB Price in the CO Form AK

The 27th ASEAN Free Trade Area (AFTA The 8th Meeting of the ASEAN-Korea FTA (AKFTA) Council) Meeting on August 19, 2013 endorsed the Implementing Committee (AKFTA-IC) held in Seoul, recommendation to implement the removal of the Korea on June 25-27, 2013 endorsed the amendment FOB price in the ATIGA CO Form D in case where of the AKFTA Operational Certification Procedure Wholly Obtained (WO), Change in Tariff Classification (OCP) by amending Rules 5, 6, 7 and 10 of the (CTC) or Process Rule is applied by adding a new Rule OCP and box 9 of the AKFTA CO Form AK. These 25 in the Operational Certification Procedures (OCP) amendments will enter into force effective January 1, under ATIGA and amending box 9 of the CO Form D. 2014. The CO Form AK shall reflect the FOB value in box 9 only when the RVC is applied. In case of multiple The implementation date of the FOB value removal items declaration an additional Form can be used to from the CO Form ATIGA in cases where WO, CTC the CO Form AK. or Process Rule was January 1, 2014. This applies for all ASEAN countries except Cambodia and Myanmar. The 8th AKFTA-IC also agreed to allow a transition A transitional period of six months from the period of 6 months from the date of the entry into force implementation date until June 30, 2014 is allowed for of the amendment specifically with regards to the use of the existing CO Form ATIGA or Form D. accepting the old version of AK Form. With respect to Since the CO Form ATIGA or Form D is valid for one Cambodia and Myanmar, the CO Form AK issued to year from the date of issuance, an old CO Form D and from them shall reflect the FOB value regardless issued on or before 30 June 2014 will be accepted by of the origin criteria for the transition period of two ASEAN Member States. years from the date of entry-into-force of the amendment. The 27th AFTA Council Meeting also agreed to allow a 2-year flexibility period for Cambodia and Myanmar, Malaysian manufacturers and exporters are requested that is, until March 31, 2016. During the 2-year to take note of the changes and to follow the new flexibility period given to Cambodia and Myanmar, the requirements in the submission of Form D and Form FOB value will have to be reflected in the CO Form D AK to Ministry of International Trade and Industry, HQ issued to and from the two countries for all cases or its branch offices for endorsement. where WO, CTC, Process rule and RVC is applied. Source: Ministry of International Trade and Industry’s Website

Mar _ Apr 2014 I BIA@FMM 13 Updates

Updates on Industrial Designs (Amendment) Act 2012

he following are the pertinent amendments to the Industrial Designs (Amendment) Act, amending the existing Industrial Designs Act 1996 (IDA), which came into effect on July 1, 2013.

(a) The Novelty Requirement (c) Amendment to Part V IDA

• The IDA dictates that if before the filing or priority • Section 9 of the Amendment Act states that a date of the design that is being applied for registered industrial design may be the subject of registration, it or an industrial design differing from a security interest in the same way as other it only in immaterial details or in features commonly personal or moveable property. The Amendment used in the relevant trade was disclosed to the Act includes a new paragraph to Section 35 Part V public anywhere in Malaysia, then the said design IDA which provides that the Court shall refuse to would not be considered new and would award costs to an owner who acquired the title to consequently be ineligible for registration. the registered industrial design by way of assignment or transmission or by operation of law • The Amendment Act now requires that before the or by a security interest transaction in an filing or priority date of the design that is being infringement if a recordal of the same is not made applied for registration, it or an industrial design unless it can be shown that an application to record differing from it only in immaterial details or in such interest was made before the end of the features commonly used in the relevant trade was period of six months beginning from the date of not disclosed to the public anywhere in Malaysia or the relevant transaction or the Court is satisfied elsewhere. that it was not practicable for the said application to have been made before the end of that period (b) Period of Registration or that an application was made as soon as practicable thereafter. • The existing Section 25 IDA states that the registration of an industrial design shall be deemed Source: Skrine & Co. to have come into force on the filing date of the industrial design application and shall subsist for an initial five years and thereafter this period may be extended for two further terms provided renewal fees are made to extend such periods of registration accordingly.

• Under the Amendment Act, the applicant would now have the option of extending the period of registration up till a maximum of four terms which in other words would enable a design to be in force for 25 years.

• Although these amendments would have no retrospective effect, the proposed savings provisions go on to state that save for the designs registered under Section 49 IDA an industrial design that has been registered under the existing IDA would also qualify and benefit from the enlargement of the period of protection and an application may be made under Section 25 IDA to have the period of registration extended up till a maximum of 25 years if so desired. [Designs registered under Section 49 IDA are briefly those designs which were registered in the United Kingdom prior to the coming into force of the IDA on September 1, 1999.

14 BIA@FMM I Mar _ Apr 2014

Trade Policy

New Online System for the Submission and Payment of Sales and Service Tax

he Customs Department recently launched an online system called the CJP Online System on February 25, 2014. The CJP Online System can be utilised by all sales and service tax licensees for the submission of returns (Form CJP1) and payment of sales and service tax.

How to access and start using the CJP Online System: • Users can proceed to submit returns (Form CJP1) and make electronic payment via Financial Process • New users are required to register at their Customs Exchange (FPX) participating banks of up to RM30,000 office where the sales and service tax license is for individual banking and RM 1 million for corporate issued. The documents needed for the registration banking. are a Company Authorisation Letter, Certificate Of Incorporation Of Private Company (Form 9) and the The submission of returns and payment of sales and CJP Online ID Request Form (Lampiran A) which can service tax via the CJP Online system is not mandatory. be downloaded from the website. Sales and service tax licensees can still submit returns and make payment manually.

• A user ID will be given to the authorised person. The To download the CJP Online System user manual please authorised person will be appointed as the log on to: https://cjponline.customs.gov.my/CJPSystem/ administrator and can create additional user ID for up infopage/Manual%20for%20Public%20Users.pdf. to five (5) personnel. For enquiries, please contact Maygelah Siva of the FMM • Go to https://cjponline.customs.gov.my and login Secretariat (Tel: 03-62867320 or Fax: 03-62741266/7288 with the given user ID and password. The system can or E-mail: [email protected]). be accessed through Internet Explorer Version 8.0 and above.

PHARMEX Asia 2014 is set to be the first Southeast Asia’s largest ever international trade exhibition to serve Asia’s pharmaceutical, medical equipment and healthcare industries. The exhibition will be held from September 1 - 3, 2014 at Bangkok International Trade & Exhibition Centre (BITEC), Thailand. The co-located World Pharmaceutical Congress, the annual meeting of the International Pharmaceutical Federation (FIP), is expected to attract up to 3,000 international delegates, plus an additional 7,000 trade visitors. The FIP is an organization founded in 1912 in The Hague with a globally rotating congress and supporting exhibition.

Also participating in this exhibition includes GSK, DKSH, Pfizer, Roche, Zuellig Pharma, Biolab and Microsoft. Do not miss this golden opportunity to be part of inaugural PHARMEX Asia 2014, call us at 03-6286 7307 or email to [email protected] for more information.

16 BIA@FMM I Mar _ Apr 2014

FMM in the News

FMM Selangor Branch Impact of Increase in Toll Supports the Quick Rates on the Manufacturing Resolution of the Water Sector Shortage Crisis in Selangor The Federation of Malaysian Manufacturers conducted a quick survey among its members to gather feedback he Federation of Malaysian Manufacturers (FMM) on the proposed increase in toll rates by the toll Selangor Branch wishes to express its utmost concessionaires in Klang Valley. concern over the protracted resolution of the water restructuring deal to resolve the water crisis faced by Possible New Toll Rates the industries in Selangor. FMM Selangor Branch has confidence in the ability of Tan Sri Abdul Khalid, Selangor Highway RM Menteri Besar to resolve the issue in a professional Old New manner. FMM Selangor Branch lauds the Memorandum Besraya Highway 1.30 2.00 of Understanding (MoU) signed between the Federal and New Pantai Expressway (NPE) 1.60 2.00 State Governments which provided some assurance to Selangor State water users that the water shortage crisis Damansara/Puchong Highway (LDP) 1.60 2.10 would be resolved in an amicable manner. Ampang Elevated Highway (Akleh) 1.50 2.50 Kajang Highway (Silk) 1.00 1.30 The manufacturing sector continues to be an important Kl-Putrajaya Highway (MEX) 2.50 3.50 part of the Malaysian economy contributing a 25% share Kajang-Senawang Highway (Lekas) 1.90 2.30 of Malaysian GDP. In 2013, total exports amounted to RM719.81 billion, of which 67% or RM482.98 billion is Sprint Highway 1.50 2.50 manufactured goods. Selangor as the most industrialised Kerinchi Link 1.50 2.50 State contributes about 25% to the said GDP from all its Damansara Highway 1.00 1.50 economic activities. The State’s manufacturing sector is Penchala Link 2.00 3.00 expected to expand at 5.5% in 2013 and 5.1% in 2014. The current water rationing exercise and unscheduled SKVE Expressway 14.96c/km 16.46c/km water interruptions have already adversely affected the Guthrie Corridor Expressway (GCE) 1.40 1.90 manufacturing sector in production loss and customer & Smart Highway 2.00 3.00 investor confidence. Source: Malaysiakini

An uninterrupted water supply is prerequisite for the The estimated increase in transportation cost submitted industries to operate. FMM Selangor Branch has by respondents is summarised as below: repeatedly urged all parties involved to resolve the matter in a quick and amicable manner given its contribution Respondents Percentage of increase in to the economy of the State. FMM Selangor Branch transportation cost urges the State Government to be transparent in implementation of the MoU and preliminary agreement 46% 2% to 10% with the Federal Government. In addition, FMM Selangor Branch would like the State Government to maintain 18% 11% to 20% the water tariffs for 3-5 years in view of the current 15% 25% to 30% challenging business environment. While waiting for the expected completion of Langat 2 Project in three years, In conclusion, FMM would like to highlight that the hike the State should provide clear guidelines on the use of in toll rates would result in an increase in the prices of alternative water supply through the Hybrid Off River goods and raw materials, and subsequently increase Augmentation System or extraction of groundwater. the operating cost of manufacturers. This increase in operating cost would eventually be passed down to FMM Selangor Branch would like to reiterate that any consumers. Given the recent increase in electricity rates, further delay to the resolution of the water restructuring the proposed toll hikes would definitely put pressure agreement would translate into prolonged water on inflation and FMM foresees that these increases rationing and unscheduled water interruptions resulting would dampen domestic consumption and affect export in difficulty for the Rakyat, industries and the economy. competitiveness. Thus, there should not be any further delay in the State Government’s negotiations to conclude the agreement FMM strongly urges the toll concessionaires to and that the Selangor Menteri Besar and his state review their decision to increase the toll rates and the executive councillors be allowed to undertake this task Government to intervene to prevent any further increase professionally. in the cost of doing business in Malaysia.

FMM Press Release: March 7, 2014 FMM Press Release: January 23, 2014

Mar _ Apr 2014 I BIA@FMM 19 Branch Events

Perak

The Branch organised the following activities:

• Seminar on the New OSH Classification, Labelling & Safety Data Sheet of Hazardous Chemicals CLASS Regulations 2013 on December 4, 2013. The Seminar was facilitated by senior officers from the Chemical Management Division of the Jabatan Keselamatan dan Kesihatan Perkerjaan, Putrajaya and Perak. A total of 124 participants from 66 companies attended the Seminar.

• Briefing on Essential 2014 Tax Guide: Preparing for Change on December 6, 2013. It was conducted by Yong Mei Sim, Senior Assistant Director of Inland Revenue Board. A total of 85 participants from 51 companies attended the Seminar.

The Branch Committee Chairman Dato’ Gan Tack Kong (left) presenting a token of appreciation to Jayasiri Jayasena.

• Briefing by Jayasiri Jayasena, Senior Director of Strategy and Monitoring, Ministry of International Trade and Industry on the Trans Pacific Partnership Agreement and Its Impact on Manufacturers. The Briefing, held on December 17, 2013 was attended by 26 participants from 21 companies.

Participants who attended the New OSH Classification, Labelling & Safety Data Sheet of Hazardous Chemicals CLASS Regulations 2013 Seminar

Selangor

The Branch organised the following activities:

• Hi-tea session with Menteri Besar of Selangor, YAB Tan Sri Dato’ Seri Abdul Khalid bin Ibrahim on December 2, 2013. Among those who attended the hi-tea were the Selangor State Executive Councillor for Investment, Industry and Trade YB Ean Yong Hian Wah, FMM President Dato’ Saw Choo Boon and Branch Committee Chairman Dato’ Soh Thian Lai together with representatives from 84 member companies.

• Visit to Monash University Malaysia on December 9, 2013 to discuss potential areas of collaboration between the University and the manufacturing industry. FMM President Dato’ Saw Choo Boon, (left) presenting a token of appreciation to YAB Tan Sri Dato’ Seri Abdul Khalid bin Ibrahim, Selangor Menteri Besar during the Hi-Tea. Looking on is Branch Committee Chairman Dato’ Soh Thian Lai (continued on page 23)

20 BIA@FMM I Mar _ Apr 2014

Assistance to Members

Pahang

The Branch organised the following activities:

• Seminar on EPF: e-Contribution & Type of Withdrawals on February 13, 2014. This Seminar was conducted in collaboration with the Kumpulan Wang Simpanan Pekerja Pahang Branch.

• Human Resource Workshop on Understanding and Handling Misconduct and Discipline on February 25, 2014. Heng Poh Suan, Human Resource & Industrial Relations Advisor of FMM facilitated the Workshop.

Participants who attended the Seminar on EPF: e-Contribution & Type of Withdrawals

(continued from page 20)

• Commuting Accidents Prevention Seminar 2013 on • Workshop on Industrial Security Management December 9, 2013 towards improving the management on December 18, 2013 conducted by Major (R) of commuting safety and reduce commuting accidents. Subramaniam Kumaravehlu a retired military officer. It was jointly organised with PERKESO, Monash The Workshop was held to create awareness on the University Malaysia. Dato’ Nathan Suppiah, Branch key elements of industrial security management and Vice-Chairman was invited to present a paper on conduct snapshots evaluation of the system. Business Impacts of Commuting Accidents. • 1st Meeting of Security Management Working Sub- • Half-day briefing on Preferential Certificates of Origin Committee on January 8, 2014. The meeting was on January 9, 2014. It was jointly organised with the chaired by Dato’ Ir Hj Ahmad bin Hasan, Chairman MITI. The Briefing was attended by 54 participants of FMM Selangor Security Management Working from 27 companies. Sub-Committee.

Dato’ Soh Thian Lai, Branch Committee Chairman (5th from left) receiving a token of appreciation from Professor Mahendhiran Nair (5th from right), Deputy President (Strategy) and Head of the School of Business, Monash University Malaysia

Mar _ Apr 2014 I BIA@FMM 23 Branch Events

Kedah / Perlis

The Branch organised the following activities:

• FMM Kedah/Perlis CEO Luncheon Talk: A Business Talk with YAB Dato’ Seri Hj. Mukhriz Tun Mahathir, on December 10, 2013. This event was attended by 120 participants including industry leaders and key government agencies. The event also saw the MOU signing between The Branch and The AIMST University on training collaboration.

• Workshop on Import & Export Requirements - Correct, Quality Declaration and Mandatory Compliance on December 17, 2013. The Workshop, attended by 18 participants was organised to update employers on import-export declaration procedures. Group photo of the participants who attended the Workshop on Import & Export Requirements – Correct, Quality Declaration and • Factory visitation to Green Orange Sdn Bhd on Mandatory Compliance December 17, 2013. Kedah State Industry Exco Dato’ Dr Ku Abdul Rahman Ku Ismail paid a courtesy visit to the member company to discuss the Company’s expansion plan to bring in investments from China.

• Gotong Royong Event at Industrial Area on December 30, 2013 organised in collaboration with Avantis Technologies Sdn Bhd. A total of 70 employees from neighbouring factories, Sungai Petani Local Council, Perbadanan Pengurusan Sisa Pepejal dan Pelupusan Awam and Environment Idaman participated in the Event.

• Branch Sub-Committee meeting with Local Councils, Federal Agencies and Utility Companies on January 15, 2014 to discuss infrastructure and utilities problems affecting members.

Gotong Royong session in progress at the Sungai Petani Industrial Area

Congratulations

FMM congratulates the Branch Committee Chairman, Dato’ Dr Haminnuddin Abd Hamid on being conferred the award Darjah Kebesaran Setia DiRaja Kedah (D.S.D.K), by DYMM Tuanku Sultan Abdul Halim Mu’adzam Shah, Sultan of Kedah on January 19, 2013.

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Branch Events

Johor

The Branch organised the following activities:

• Meeting on the establishment of Johor Investment • Industrial Development Secretariat Committee on December 2, 2013 which was chaired Meeting on December 17, 2013 chaired by Tuan Haji by the , YAB Dato’ Khaled Ismail bin Abdul Rahman, Secretary from Majlis Nordin. Among the topics discussed included Bandaraya Johor Bahru. The meeting discussed appointment of government agencies e.g. MIDA and problems related to illegal traders and the need to MITI to the pre-investment committee, current water improve road conditions. tariff rates and infrastructure problems affecting members in the State. • Industrial Park Management Committee Meeting on December 30, 2013 chaired by Tuan Hj. Md Rofiki • Industrial Park Management Committee bin Dato’ Hj A. Shamsudin, Yang Di Pertua of Majlis Meeting on December 10, 2013 which was chaired by Perbandaran Kulai. Tuan Haji Onn bin Jabar @ Jaafar, Yang Di Pertua, Pasir Gudang Municipal Council.

Negeri Sembilan

The Branch organised the following activities:

• Seminar on Compliance Towards Food Regulatory Energy Regulations 2008 on November 20, 2013. It in Malaysia on November 19, 2013 which attracted 19 was attended by 15 participants. participants. The Seminar was organised to provide guidance to companies on compliance with the • Visit to Akzo Nobel Paints (M) Sdn Bhd on December Malaysian Food Legislation. 18, 2013 to learn the company’s best practices on safety and environmental sustainability. Over 11 • Seminar on Energy Audit Best Practices and companies participated in the visit. Recommendations for Industry in Line with Electrical

A group photo of the participants who attended the Seminar on Compliance Towards Food Regulatory in Malaysia

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Branch Events

Penang Sabah

The Branch organised the following activities: The Representative Office organised visits to Sepangar Chemical Industry Sdn Bhd, Steel Industries (S) Sdn Bhd • Business Networking Session on November 12, and Sabah International Dairies Sdn Bhd on February 2013. Mohd Iqbal Mohd Noor, director of MITI Penang 27, 2014. Representatives from the United Nations shared with the participants the ASEAN Economic Industrial Development Organisation and EnMS USA also Community 2015 and issues related to rules of origin. participated in the visits to the factories.

• Seminar on Duty Exemption, Drawback & Refund on November 14, 2013. Representatives from the Malaysian Investment Development Authority presented papers on application procedures and requirements as well as on-line submission for duty exemption on machinery, equipment, raw materials and components. A senior official from the Royal Malaysian Customs Department presented a paper on the duty refund and duty drawback facility.

• Briefing on TNB Special Industrial Tariff on November 20, 2013. Jude Ignatius Lazaroo from Special Industrial Tariff, Customer Service Department, Distribution Division, TNB, briefed the participants on the eligibility, criterions and procedures to apply for the TNB Special Industrial Tariff.

The Branch with the help from MITI assisted a member company, Malayan Metal Works Sdn Bhd which was imposed with an anti-dumping duty of 25% when it imported tinplates from GS Global, a trading agent of a mill, TCC Steel from Korea. With the assistance from MITI office in Penang and Kuala Lumpur, the member Bill Meffert (left) and Kaveta Chelliah (right) being briefed by company paid only 4.46% anti-dumping duty instead of Wallter Joe Peter, Electrical Engineer of Steel Industries (S) Sdn Bhd initial 25% charged earlier. during the factory visit

Jude Ignatius Lazaroo presenting his paper during the TNB Special Industrial Tariff briefing

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Sarawak

The Representative Office organised the Occupational Emergency First Aid Skills and CPR workshop from December 19 to 20, 2013 at Nestle Manufacturing (M) Sdn Bhd Kuching, Sarawak. A total of 20 participants attended the workshop. First Aid Certificates and Competency Cards were awarded to participants who successfully attended both the theory and practical examination as part of the requirements of the Workshop.

A participant taking part in the Occupational Emergency First Aid Skills and CPR Workshop

Malacca

The Branch organised a Briefing on 2014 Tax Updates on December 9, 2013. Yong Mei Sim, Principal Assistant Director of Inland Revenue Board from the Bukit Mertajam Branch highlighted to the participants on the eligibility of companies for double deductions, relief on tax deductions and various other updates. Yong Mei Sim, Principal Assistant Director of Inland Revenue Board facilitating the Seminar

New Members (February 2014) The FMM welcomes the following 26 new members into the organisation - 23 Ordinary Members and 3 Affiliate Members. The majority or 35% are from Selangor, 19% from Johor and 12% from Federal Territory, Negeri Sembilan and Penang, while the rest are from other states

Ordinary Members • LTO Injection Sdn Bhd • Mayair Manufacturing (M) Sdn Bhd • Messier-Bugatti-Dowty Malaysia Sdn Bhd • Alliance Contract Manufacturing Sdn Bhd • Naue Asia Sdn Bhd • Almer Malaysia Sdn Bhd • Palsgaard Malaysia Sdn Bhd • Award Packaging Industries Sdn Bhd • Rapid Growth Technology Sdn Bhd • Besteel Berhad • Samsung SDI Energy Malaysia Sdn Bhd • Casima (Malaysia) Sdn Bhd • Southern Nissha Sdn Bhd • Dura Technology Sdn Bhd • Teem Well Industries Sdn Bhd • Eco Paper Products Manufacturing (M) Sdn Bhd • Titan Metal Works Sdn Bhd • Emerson Process Management Manufacturing (M) Sdn Bhd • Finnscrew (Malaysia) Sdn Bhd Affiiliate Members • Haewaytian Cake House Sdn Bhd • Health Paradise Sdn Bhd • Aims Data Centre Sdn Bhd • Leader Universal Aluminium Sdn Bhd • Q Express Line Sdn Bhd • Lippotex Industries Sdn Bhd • Schenker Logistics (Malaysia) Sdn Bhd

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