’s Machinery & Equipment and Engineering Supporting Industries

THE MACHINERY AND EQUIPMENT (M&E) INDUSTRY

Malaysia hosts world renowned advanced and sophisticated M&E manufacturers such as AIDA, SKF, • Malaysia as the Regional Cohu, VAT, Oerlikon Balzers, Favelle Favco, Bromma, Production Hub for M&E Vitrox, Besi, Mühlbauer, SRM ,FMC that leverages on • To Promote High Technology & the nation’s conducive business eco-system. High Value Added M&E • Centre for Training, Malaysia - Your Location for M&E Investments Reconditioning & Upgrading of M&E, Sales and Distribution • Highly skilled manpower for research and Center development and engineering design activities. • A mature engineering supporting industry for the outsourcing of modules, parts & components and engineering services. • Attractive incentives for the manufacture and assembly of high technology and specialised M&E. • A strategic gateway to the ASEAN market population of 634 million people in 2017 and total GDP of US$6.7 trillion by 2030. • Well-developed infrastructures including excellent land, sea and air connectivity, and integrated telecommunication systems. Promoting M&E Growth

Machinery and Equipment (M&E) industry is one of the catalytic subsector identified under the 11th Malaysia Plan to spur the country’s economic transformation to greater prosperity, due to its cross cutting linkages with all economic segments such as the primary, manufacturing and services sectors. The adoption of technological advancement would steer the country’s progression to become a high income nation by 2020.

To enhance the growth and encourage investments in the M&E sector, the Government offers the following:- Opportunities

• Normal tax incentives : The M&E industry is highly competitive and consistently striving to innovate new production (a) Pioneer Status with tax exemption of systems and provide integrated solutions 70% of statutory income for a period of with the most advanced technologies and 5 years, or automation.

(b) Investment Tax Allowance of 60% on The Asia Pacific region is poised to be the qualifying capital expenditure incurred epicentre of business and trade in the future within a period of 5 years. This allowance coming years. An increasing number of MNCs can be offset against 70% of the statutory are choosing Asia Pacific as the hub to manage income for each year of assessment. their business and trade in Asia as well as considering alternative locations within this • Special tax incentives : region, outside China and India. ASEAN economies being the second-fastest growing in (c) Pioneer Status with tax exemption of Asia after China have the potential to be their 100% of statutory income for a period of second hub in Asia. 10 years, or From serving as contract manufacturers to (d) Investment Tax Allowance of 100% on Original Equipment Manufacturers (OEMs), qualifying capital expenditure incurred more local companies are already undertaking within a period of 5 years. This allowance R&D, engineering design, innovation and can be offset against 100% of the statutory system integration and developing proprietary income for each year of assessment. M&E for global exports. Thus Malaysia is increasingly becoming a choice destination for Targeted sub-sectors for these special incentives Multinational companies seeking to outsource are as follows: - their manufacturing processes. Malaysia’s − machine tools; engineering supporting companies have been − material handling equipment; also groomed to provide consistent quality of − robotics and factory automation equipment; production and on-time delivery. − packaging machinery; − specialised process machinery or Exports of M&E have exceeded more than RM40.2 billion (US$10.3 billion) in 2017 which equipment for specific industry; and stood at RM41.4 billion (US$9.5billion) in 2019. modules and components of the above − Export destinations include Singapore, the USA and Japan. • Reinvestment Allowance of 60% on qualifying capital expenditure for 15 years. Imports have also increased from RM31.9 billion (US$10.6 billion) in 2000 to RM69.7 billion • Import duty for machinery and equipment; (US$15 billion) in 2019, indicating Malaysia’s raw materials and components. dynamic and rapidly growing economy. Imports are mainly for advanced, high-tech machines and components and some general machinery & equipment that are not available locally.

2 Machinery & Equipment and Engineering Supporting Industries Exports

Sub-Sectors 2014 2015 2016 2017 2018 2019 Major Destinations RM bil RM bil RM bil RM bil RM bil RM bil (US$ (US$ (US$ (US$ (US$ (US$ bil)* bil)** bil)* bil)’ bil)’ bil)’’ Power Generating 2.3 2.6 2.6 3.4 3.3 3.9 Singapore, USA, M & E (0.7) (0.7) (0.6) (0.8) (0.8) (0.9) Japan, Germany, UK, Singapore, USA, 10.7 14.5 15.2 16.2 16.1 16.2 M & E for Specific Japan Indonesia, Industries (3.1) (4.1) (3.5) (4.2) (4.1) (3.7) Thailand Singapore, Hong Metalworking 1.7 1.6 1.5 2.0 1.9 1.5 Kong, M & E (0.5) (0.5) (0.3) (0.5) (0.5) (0.3) Japan, USA, Singapore, Hong General Industrial M&E, 15.3 17.6 18.4 18.6 19.2 19.8 Kong, Japan, USA, Components and Parts (4.4) (5.0) (4.3) (4.8) (4.9) (4.5) Australia 30.0 36.3 37.7 40.2 40.5 41.4 TOTAL (8.6) (10.4) (8.4) (10.3) (10.3) (9.5)

Imports Sub-Sectors 2014 2015 2016 2017 2018 2019 Major Sources RM bil RM bil RM bil RM bil RM bil RM bil (US$ (US$ (US$ (US$ (US$ (US$ bil)* bil)** bil)* bil)’ bil)’ bil)’’ USA, Japan, Power Generating 11.0 11.7 14.3 15.1 15.0 15.3 Singapore, China, M&E (3.1) (3.3) (3.3) (3.9) (3.8) (3.5) Thailand Japan, Germany, 16.3 17.2 17.3 25.1 23.9 21.0 M&E for Specific USA, Taiwan, Industries (4.7) (4.9) (4.0) (6.4) (6.1) (4.8) Singapore Japan, Germany, Metalworking 4.2 3.9 3.6 4.6 4.7 4.7 USA, Taiwan, M&E (1.2) (1.1) (0.8) (1.2) (1.2) (1.2) Singapore General Industrial Japan, USA, 23.1 26.7 29.9 33.7 30.1 28.7 M&E, Component and Germany, Singapore, (6.6) (7.6) (7.0) (8.6) (7.7) (6.6) Parts Taiwan 54.6 59.5 65.1 78.5 73.7 69.7 TOTAL (15.6) (17.0) (15.1) (20) (18.8) (16.0)

US$ 1 = RM3 *US$1 = RM3.5 **US$1 = RM4.3 ‘US$1 = RM3.9 ‘’US$1=RM4.35 Source: Malaysia External Trade Development Corporation (MATRADE)

The growth of Malaysia’s M&E industry is Malaysia’s M&E industry is forecasted to grow at driven by the continuous inflows of both foreign 10.1% per annum from 2018 until 2027. direct investments and domestic investments in various sectors; among the major sectors Not only will M&E production continue to be are the semiconductor, electrical & electronics, the field of interest for foreign investment, automotive, oil & gas, aerospace, medical and other areas of the value chain also provide food processing. The need for high-technology opportunities for profitable investment. Service M&E in these industries is key to their survival and maintenance, repair and overhaul (MRO) within a global environment and will accordingly are also in high demand due to high density of continue to grow in the future. According to IHS, plants and M&E installations in this region.

Machinery & Equipment and Engineering Supporting Industries 3 Malaysia’s M&E Sector Malaysia’s M&E manufacturing offers opportunities in four major sub-sectors: • Specialised process machinery or equipment for specific industry • Metalworking machinery • Power generating machinery and equipment • General industrial machinery & equipment, components and parts

1. SPECIALISED PROCESS M&E FOR SPECIFIC INDUSTRY

This sub-sector refers to M&E which is specifically Specialised M&E for Specific Industry designed and customized for use in a specific sector or process. Industries targeted include electrical & Major Companies in Production:- electronics, solar/ photovoltaic, semiconductor, (i) Electrical & Electronics M&E : oil and gas, automotive, packaging, plastic • Semiconductor extrusion & injection, agriculture, etc. − SRM − ViTrox In the electrical & electronics sector, Malaysia − Cohu is a production base for the world’s top electronics − Pentamaster companies such as , NXP, Renesas, Keysight, − MI Equipment − BESI Apac Agilent LDA, Hitachi, Infineon, , − ASM and X-Fab. In addition, world’s top solar companies − Visdynamics i.e. First Solar, Hanwa Q-Cells and Sunpower − Muehlbauer have set up their operations in Malaysia. M&E manufacturers have the advantage of producing (ii) Oil & Gas M&E : Exploration and production machinery at competitive prices and benefit from • − FMC the close proximity to clients for back-up service and − Aker Solutions after sales service. The local companies are capable − OneSubsea of producing various types of M&E with international − Halliburton quality standards for these manufacturers. − Asiaflex − Baker Hughes In the oil & gas sector, the world’s leading − Schlumberger manufacturers of machinery and equipment have • Engineering and fabrication located their operations in Malaysia for deep water − Sime Darby Energy production equipment. With increasing growth of − KNM Group deep water activities in the South China Sea and − SapuraKencana off North-West Australia, the market for subsea oil − MHB and gas production equipment and technology is • Solar expected to increase. − TT Vision − Greatech Integration In the packaging sector, they are increasing demand − Waftech for automated specialized packaging machine • Hard disc drive from the pharmaceutical and medical devices − Genetec industries. A well designed packaging machine in − Walta cleanroom environment for medical industry will − Ibronx provide effective sealing against bacteria and facilitate • LED aseptic presentation to the packaged product. − AGS Automation − Dominant Opto Technologies Local manufacturers are capable in providing various industrial packaging solutions for liquid, powder (iii) Packaging M&E : and other industrial products. This include bottling, • Fluidmech Engineering sealing, filling wrapping, boxing, cartoning and shrink • Serac Asia wrapping machines. • Master Hi-Tech • AFA Automation The industry is quite established and able to • MH Multipack engage in customize integrated packaging solutions • Easypack especially in food & beverages industry. (iv) Agricultural M&E : • Cultivation The increasing mechanization of the agriculture − Emdek Engineering sector has created vast investment opportunities − Howard Alatpertanian in the manufacturing of M&E to meet the needs − Changlin Machinery of the sector. Agricultural M&E manufactured/ − Sime Darby TMA assembled by the local companies include rotavators, • Poultry rotaslashers, fertilizer spreaders, tractors, mulchers, − BD Agriculture related attachments, poultry rearing & processing − Eurasia equipment, and egg cleaning, grading & packing − Nabel Asia machines. − GSI Asia − Kyoritsu GSI Group The plastic sector is considered a well established − industry in Malaysia. However, there are currently (v) Plastic Extrusion Machine : only three local companies manufacturing plastic • Micromagna Engineering extrusion machines. • Sunrich Engineering • Sama Plastic

4 Machinery & Equipment and Engineering Supporting Industries 2. METALWORKING MACHINERY

The metalworking machinery sub-sector presents vast Metalworking Machinery opportunities in the manufacture of M&E such as laser cutting machines, machining centres, electro- Major Companies in Production:- discharge machines (EDM), milling machines, drilling machines, lathes, shearing machines, • AIDA Engineering bending rolls, stamping machines, press brakes, • Sunfluid Engineering forging machines and presses. Hydra-Link Engineering • Several Malaysian and Malaysian/Foreign joint-venture • Eonmetall Technology companies are currently undertaking the manufacturing • Makino Asia of metalworking machinery for various industrial user such as automotive, electrical & electronics as well as other engineering supporting sectors.

AIDA, a world renowned leading Japanese metal forming system builder, is currently engaged in the manufacture of high precision single/ double crank mechanical and servo presses from 80 to 300 tonnes. It exports 90% of its products to Asia Pacific, North and South America and Europe.

Local company, Sunfluid Engineering manufactures various types of hydraulic machines, with press capacity ranging from 20 to 3,000 tonnes for the local market and for export to ASEAN countries, Saudi Arabia and Japan.

There is great potential for the manufacture of metalworking machinery and the government’s emphasis is on high technology, NC and CNC machines.

The government is also encouraging companies in the metalworking machinery sector to set up training, reconditioning, upgrading, sales and distribution centre to support their customers in this region.

Machinery & Equipment and Engineering Supporting Industries 5 3. POWER GENERATING MACHINERY AND EQUIPMENT

The power generating M&E sector mainly comprises Power Generating M&E boilers, condensers, electric generating sets, turbines and engines. Major Companies in Production:- Malaysia is currently the largest manufacturing hub of boilers in the South East Asia region. Most of the (i) Boilers : boilers manufactured cater for the local demand • Mechmar Boilers from various industries ranging from oil & gas, • Vickers Hoskins oleochemicals, petrochemicals, food and beverages, • Advance Boilers palm oil, rubber, wood, textile and hospitals. • Amalgamated Metal Corp. • Enco Systems Local producers have the capabilities to manufacture • Petra Boilers internationally acclaimed products and supply • Tenaga Tiub industrial boilers such as utility boilers, water • Transtherm Engineers tube boilers, fire tube boilers, package boilers and combination boilers. These boilers are exported (ii) Generators : to neighbouring countries such as Indonesia, the • Sime Darby Industrial Philippines, Thailand and Cambodia. • UMW Industrial Power • Hong Seng Generator Apart from boilers, four companies are producing • MTU Services generating sets for power plants, refinery, exploration platforms, petrochemical plants and commercial (iv) Turbines and components : buildings. The generators are also exported to • Turboservices Overhaul countries such as Singapore, Cambodia and Korea. • Noorisba Energy • Serba Dinamik Turbo Machinery Power generating M&E is projected to be among the • Galaxy Energy Technologies fastest growing M&E driven by energy needs from • CS Wind Malaysia expansion of facilities and operations across various industries. Opportunities also exist for local players to provide reconditioning/ refurbishing of power generating equipment such as industrial turbines and generators.

6 Machinery & Equipment and Engineering Supporting Industries 4. GENERAL INDUSTRIAL MACHINERY AND EQUIPMENT, COMPONENTS AND PARTS

The general industrial machinery and General Industrial M&E, Components and Parts equipment, components and parts sub-sector covers a broad category of products such as air- Major Companies in Production: conditioning plants, cold room equipment, elevators, cranes, conveyor systems, pumps, (i) Elevators : compressors, welding machines, fans & • MS Elevators blowers, heat exchangers, pressure vessels, • UWC Technology filtering equipment, valves, bearings, gears, actuators, etc. (ii) Conveyor/Factory Automation : • Cheng Hua Engineering General Industrial M&E is the largest subsector • BBS Automation and export contributor to the M&E sector. They are • AT Engineering Solution over 500 companies consisting local and foreign. In • GSE-M this subsector, Malaysia is recognized as a major • FlexMove System supplier of high speed heavy lifting tower cranes, oil • AFA Technologies & gas pedestal cranes, process automation system • TXMR and HVAC unit. Malaysia is currently one of the • Pentamaster Berhad largest exporters of air conditioning equipment. • Greatech Integration

Within the general industrial M&E product segment, (iii) Air-Conditioning Plants : automated material handling equipment (AMHE) • Dunham-Bush and factory automation is currently gaining traction • OYL Industries as the manufacturing sector is moving towards • TM Air Conditioning industry 4.0 and smart manufacturing. This is due to • Carrier International the fact that AMHE and factory automation are critical • Citec International factors when adopting smart manufacturing to help increase efficiency of the workflow in manufacturing (iv) Pressure Vessels/Process Equipment : process and enhanced product quality. • KNM Process Systems • Asturi Metal • Jutasama • Mechmar

(v) Cooling Towers : • BAC Cooling Technology • Linear Cooling Industries • Panwater Engineering

(vi) Cranes : • Favelle Favco • MHE Demag • Top Mech Provincial

Machinery & Equipment and Engineering Supporting Industries 7 Examples of Leading Local and Foreign M&E Companies in Malaysia

AIDA, a world renowned leading Japanese industry (i.e. Elevator) and industrial fabrication, metal forming system builder, is currently UWC made the strategic shift towards producing engaged in the manufacture of high precision parts, components and full turnkey assembly single/double crank mechanical presses from for high-applications in the semiconductors, 80 – 300 tonnes. The company is planning to telecommunications, life science, medical and further strengthen its presence in Malaysia and heavy-duty machinery. The company is also also has expanded worldwide market with more focusing on contract manufacturing and will competitive supreme quality products. AIDA equip themselves with state of the art machines exports 90% of its products to Asia Pacific, North and equipment to cater for the demand of MNCs & South America and Europe. from all over the world.

Cheng Hua specializes in providing total Oerlikon Balzers, the world leading supplier integrated engineering solutions for material of surface technologies through its new coating handling and conveyor system. The company centre in , Malaysia is currently serving is backed by a long and respectable legacy customers from the whole ASEAN region. spanning over four decades of automated The centre is one of the 109 coating centres material handling system design, manufacture, in 35 countries worldwide. Oerlikon balzers is installations and software solutions. The currently serving various clients from automotive, company’s capability and capacity to innovate aerospace, medical and engineering industries and serve their customers with highly reliable in Malaysia and Singapore. Oerlikon Balzers and cost effective customized solutions has is using Physical Vapour Deposition (PVD), allowed them to maintain a strong market Plasma-Assisted Chemical Vapour Deposition position as a ‘system integrator’ and partner- (PACVD), Heat treatment and Nitriding process of-choice with many of the key customers in in a vacuum condition to enable deposition automotive, tyre manufacturing and logistics of thin films with defined compositions and industries. 80% of the company’s total revenue specific characteristics. The full strength of comes from its export sales to ASEAN countries, Oerlikon Balzers’ high-end surface treatments Europe, India, Australia, South Africa, America, is especially apparent for stringent clients and Middle East. requirement i.e when process-acceleration is required, difficult materials must be cut, or UWC Group, started its operation in year 1990 when high-grade optics are important. Oerlikon and has evolved from a trading company to a Balzers, through their PVD and PACVD – based significant large local company (LLC) with 6 coating solutions are able to coat between 0.5 manufacturing plants all over the world. From µm and 14 µm which produce low-friction, wear initially focusing on only in vertical transport resistant, chemically inert thin film coatings.

8 Machinery & Equipment and Engineering Supporting Industries Pentamaster Corporation Berhad is a world parts manufacturing facilities in-house. The class automation and technology solutions company has also embarked on industrie provider serving MNCs from various part of the 4.0 technology by combining 100 different globe such as United States, Europe, Africa, Asia highly sophisticated production systems with Pacific & ASEAN Countries. With over 25 years intelligent software solutions for production providing integrated and customized solutions management and personalization. In addition in semiconductor, automotive, electrical & to the turnkey solutions for high-quality ID electronics, pharmaceutical, medical devices, document, Smart Card and RFID Smart Label food & beverages to general manufacturing, production, Mühlbauer also develop and their core competencies include mechanical manufacture innovative Die Sorting systems for engineering design, software programming the semiconductor industry. technologies, control engineering, imaging vision and instrumentation design. Jumping Sunfluid is Malaysia’s pioneer in manufacturing into the smart manufacturing race, all of their sheet-metal working machinery. Since 1988 the products such as semiconductor test handlers, company has made reliable and high quality hospital equipment and material handling hydraulic shear, hydraulic press brake, bending system are equipped with smart manufacturing machines and other custom-built machines. technology such as smart sensors and big Sunfluid’s range of products also includes data analytics. They are also providing Smart factory automation development and trading of Solutions such as shopfloor management machine tools. system, warehousing management system, computerized management systems and ViTrox Technologies specializes in the smart control management system. These manufacturing of high-speed vision inspection solutions are equipped with data traceability, systems for the semiconductor industry. online monitoring, alert system and predictive The company provides innovative 3D digital maintenance functions to the user industry. vision inspection solutions to a broad range of semiconductor IC packages for major Greatech Integration, a Malaysian owned semiconductor manufacturers from Malaysia, company which provides factory automation Thailand, the Philippines, China, Taiwan, Japan, solutions for various industries particularly in Korea, India, Europe and the United States solar, smart devices, semiconductor, energy of America. Vitrox provide a complete range storage, life science, consumer goods and of inspection system namely Machine Vision automotive. They provide innovative design and System (MVS) which provides reliable, high proof of concept process to solve customer’s speed and cost effective inspection solutions challenge during customer automated process to detect semiconductor and optoelectronic of their factory. With a fully capable in-house components’ dimensional and visual defects, manufacturing facility complete with precision Automated Board Inspection (ABI) which can machine shop, sheet metal fabrication, provides superior Advanced X-ray Inspection assembly, commissioning and world class (AXI) and Advanced Optical Inspection (AOI) service support, they are positioned to serve solutions for SMT and PCBA lines and the the Fortune 500 companies with innovative, cost V2000 AOI for flex and PCB bare boards and effective solutions and support services. The Electronic Communication System (ECS) for company currently employs 275 employees. high speed, reliable & cost effective I/O and motion embedded solutions for the automation Mühlbauer Group, which was founded in 1981 industries. ViTrox also invested in a Center has grown into a one-stop-shop technology of Excellence (CoE) for machine vision. The partner with nearly 3,000 employees, technology COE will create innovative communities and centers in Germany, Malaysia, the US and develop integrated supply chains via sharing Slovakia, and a worldwide sales and service and collaborative concept among automation network. Today, the group is the world’s market system integrators, MNCs and Institute of leader in innovative systems and software Higher Learning. Vitrox also provides a highly solutions for the production and personalization customizable one-stop platform which offers cards, passports and RFID applications. Other data driven decisions in manufacturing by business fields include the areas of die sorting, allowing stakeholders to remote, visualize, carrier tape as well as production solutions for monitor, control and implement condition- flexible solar technology. To support its M&E based alerts to reduce downtime and increase production, the group has its own precision throughput.

Machinery & Equipment and Engineering Supporting Industries 9 Conducive Environment for Investment

Malaysia’s market-oriented economy forms an Fluidmech Engineering Sdn. Bhd. encouraging backdrop for M&E companies. “Malaysia’s industry-friendly incentives and The pro-business policy of the Government, stable economic policies allow companies attractive incentives, good infrastructure, and tapping into the global market to remain educated and trained workforce and laws that competitive with countries like Korea, Taiwan, govern ethical business practices are among Japan and the EU.” the many reasons Malaysia stands tall as a leading investment centre in this region. The UWC Group following are comments from the industry “With more than 40 years of industrial experience players. and having been trained by global industry leaders, Malaysia has one of the strongest Oerlikon Balzers Coating Malaysia Sdn. Bhd. supply chains in the region. This makes “Malaysia offers investors a dynamic and Malaysia the preferred investment destination.” vibrant business environment with the ideal prerequisites for growth and profits. Mühlbauer Technologies Sdn. Bhd. Malaysia’s key strengths include well-developed “Malaysia’s industry-support incentives, the infrastructure and productive workforce. A economically driven policies as well as a politically stable country with a well-developed well-educated and reliable workforce have legal system, Malaysia also provides attractive enabled Mühlbauer to remain competitive in an incentives for investors through its local increasingly price-driven global market.” authority such as MIDA & IRDAsupported by a market-oriented economy and pro-business Greatech Integration Government policies.” “Malaysia is an attractive destination for investors as the Malaysian government is business Pentamaster Corporation Berhad friendly, supported by few government agencies “Relative to its global and regional peers, such as MIDA, MATRADE and etc. to provide Malaysia is highly rated for its open market- support to businesses. Strategic geographical oriented economy. With supportive government location further strengthen Malaysia position policies such as, among others, its liberal in attracting international corporations as investment policies and tax incentives coupled Malaysia is in the middle of ASEAN with with a sound and stable financial system, such access to worldwide airports and ports across conducive environment has enabled companies the country. Furthermore, Malaysia had more like us to grow by leaps and bounds. A special than 40 years of industry life with effective and thanks to MIDA for its supports and we are efficient supply chain on well-developed local heartened to witness our success in delivering suppliers, vendors and supporting industries. high technology and quality solution through our Malaysian government also plays a significant sustained R&D effort” role in enhancing and developing skills-based education and training to develop workforce Cheng Hua Engineering Works Sdn. Bhd. capability across the industry for better quality “Malaysia’s market-oriented economy, talents pool.” supportive government policies and a large local business community that is ready to do ViTrox Technologies Sdn. Bhd. business with international corporations have “Malaysia is ideal for equipment design and made Malaysia an attractive export-based development. It also has strong supporting manufacturing hub in the region.” industries to facilitate equipment manufacturing.”

10 Machinery & Equipment and Engineering Supporting Industries The ENGINEERING SUPPORTING Industry • Malaysia as the Global Outsourcing Centre • Strengthening the Engineering Support Industries • To Supply Integrated Services or Total Solutions • Moving Towards Complex & Diverse Products

In Support of Growth Malaysia has much to offer to companies searching for a strategic and cost effective Opportunities engineering supporting outsourcing destination. With its ideal location in the heart of Southeast The engineering supporting industry in Malaysia Asia, a mature and stable economy backed by has developed to be an important driving an integrated infrastructure, it is of little surprise force for growth of not only the M&E industry, that foreign interest has grown. There is also the but also for every industry sector. Malaysia’s added benefit of government-backed investment engineering supporting industry has earned incentives. strong international recognition for its world- class manufacturing standards. With the long- The key to considering Malaysia as the region’s standing presence of various MNCs within the engineering supporting outsourcing hub of country, the industry possesses the expertise choice is the concept of value and quality. and experience to supply products and services Foreign firms have chosen to remain in Malaysia that are globally competitive in quality, value and and many more are looking for joint ventures or delivery time. seeking to bring business in the country simply because they enjoy promising rates of return. There are over one thousand engineering Malaysia makes for an extremely competitive support and services companies in Malaysia destination for regional outsourcing of which include integrated or total solution engineering supporting services and the nation providers. These companies have advanced looks forward to welcoming future investors. themselves to supply low volume and high mix products as well as types of parts and modules to cater for the outsourcing and procurement needs of high technology industries. Incentives To enhance the growth and encourage investments in the engineering supporting Malaysia - Your Preferred sector, the Government offers the following: Location for Outsourcing ü Tax incentives : Non-equity mode of investments is currently (a) Pioneer Status with tax exemption of on the uprising trend, Malaysia’s engineering 70% on statutory income for a period supporting industry are currently positioning of 5 years, or themselves to become a ‘One Stop Centre’ (b) Investment Tax Allowance of 60% by offering total solutions to their customers. on qualifying capital expenditure This is made possible by upgrading of facilities incurred within a period of 5 years. and acquiring technologies to meet the This allowance can be offset against stringent requirements of Original Equipment 70% of the statutory income for each Manufacturers (OEMs) for parts and components year of assessment. and precision engineering services. These ‘One Stop Centres’ would offer integrated services ü Reinvestment Allowance of 60% on ranging from product conception, including qualifying capital expenditure for 15 years. design and prototyping to serial production and managing the entire process flow including ü Import duty exemption for machinery procurement, logistics, packaging, testing and and equipment; and raw materials and certification. components.

Machinery & Equipment and Engineering Supporting Industries 11 Mould, Tools and Dies

• This industry is recognized as a leading engineering supporting industry.

• Malaysian’s mould, tools and die industry has the capability to manufacture most Malaysia’s types of moulds, dies and tooling to complement the needs of the Engineering manufacturing sector. Supporting Sector • More than 350 companies are in Malaysia’s engineering supporting operations and some of the leading industry encompasses the mould, tools companies include Sum Hing Engineering and die, machining, metal stamping, Works, Miyazu (M), Ingress Katayama, metal casting, surface engineering, heat H&L Engineering, HH Precision Mould, treatment, forging and metal fabrication Fuji Dies Kogyo, Zeno Tech and HPMT. activities, provides vital support to the manufacturing and services sectors. • Opportunities and large market potential exist for large moulds & dies which is more than 10 MT and High Precision mould & dies for E&E

12 Machinery & Equipment and Engineering Supporting Industries Machining Metal Casting

• The local machining industry is able to • The foundry industry in Malaysia over the meet most of the machining needs and last 50 years has attained a significant provide total machining solutions to the level of technological expertise in serving manufacturing sector. More than 250 the traditional industries of tin, rubber and companies are in operation undertaking palm oil. specialized precision services and general supporting machining services. • About 70 companies are currently in operation, making castings for engineering • Companies in the industry have attained spare parts, quality machinery spare high levels of technological capabilities and parts, pumps and pump parts, palm oil mill utilize state-of-the-art CNC machine tools machinery parts, automotive components, for most of their operations. They are able to elevator parts and other machinery parts. undertake high precision multi-axes, large format, and free form machining activity. • Leading companies with comparatively modern facilities such as Yoonsteel, • A number of companies have diversified into MMC Metal, Swanmet Engineering, the design and manufacture of modules, Altum Precision, Hicom Die Castings and particularly for semiconductor, electrical Dynacast Malaysia produce castings of and electronics industries. They also have good quality and low dimensional tolerances move up the value chain from making in compliance with International Standards standard parts (high volume low mix) to for both local and export markets. more complex and precise parts (low volume, high mix) using exotic materials • Opportunities and large market potential especially for oil & gas, aerospace and exist for larger custom – made sand medical industries. casting and component casting for selected industries i.e. oil & gas aerospace and • Major companies include, UMS, Jecmetal, medical. New Billion, Kobay Technology, UPECA Group, Eng Teknologi, Curge Advanced, TNH Metal Engineering, UWC Holdings, AKTY Technologies, Alpha Precision, Wanjun Precision Machining, Synturn and SME Aerospace.

• Opportunities and large market potential exist for specialised machining services for selected industries i.e. oil & gas, aerospace and medical.

Machinery & Equipment and Engineering Supporting Industries 13 Metal Stamping Surface Engineering

• The metal stamping industry in Malaysia is • The industry has the capability and capacity an established industry supplying stamped to cater for most of the requirements of the parts to a wide range of industries such manufacturing industry, which include a as electrical and electronics, automotive, variety of plating operations such as batch machinery and equipment, precision and continuous precision electroplating, measuring and testing equipment. electroless plating, cathodic electrodeposit, phosphating, passivation, anodizing, • The industry has acquired the capacity and chromating, sinter plating ,physical vapor technical capabilities to serve the various deposition (PVD) and chemical vapor market needs of multinational corporations deposition (CVD), Plasma assisted chemical such as Panasonic, Sony, Hitachi, Toshiba, vapor deposition (PA-CVD). Dell, Yamaha, Thomson, Philips and Hewlett Packard. • About 110 companies are in operations which include leading companies such • There are about 140 companies in as ATC Surface Treatment, Asahai Aero, operations throughout Malaysia with such Optics Bazlers, Oerlikon Balzers, Wasco leading companies as JP Metal, Kobakin, Coating, SII Ishizaki and Jiwei. NJ Manufacturing, Cybron TL, Wong Engineering, Kein Hing, KM Precision, DZ • These companies are currently servicing Capital, VSP Technology, Tohoku-Wada and the needs of notable multinationals such Seksun Precision. as Panasonic, Toshiba, Hitachi, Infineon, Keysight, Agilent LDA, ON Semiconductor and Osram in the electrical and electronics and automotive industries.

• Opportunities and large market potential exist for services for the oil & gas, aerospace, medical, LED and solar/photovoltaic industries.

14 Machinery & Equipment and Engineering Supporting Industries Heat Treatment Forging

• Malaysia’s heat treatment industry offers • Malaysia’s forging industry comprises of continuous mesh-belt heat treatment, companies producing small and medium vacuum hardening, carburizing, forged parts for the automotive and carbonitriding, nitriding, nitro-carburizing, general manufacturing sector. Most of the annealing, normalizing and tempering for a companies have the capabilities to produce diverse range of metal products. components of up to 200mm in size and 50kg in weight with press machine capability • Heat treatment services or high carbon ranging from 16MT to 600MT. steel and alloy steel materials such as moulds and dies, critical parts for bearings • The forging industry in Malaysia has 7 and automotive components are the latest major companies in operation, namely additions to the list of products already Galperti, Billion Fortune, YMC Forging, serviced which include bolts, nuts, shafts, MKF Metal & Plastic Industries, Kentzu gears, pins and springs. Industries, Unique Forging & Components, Geen Screw Industries, and Power Steel & • The heat treatment service industry in Electroplating Works. Malaysia has about 17 companies in operation, which include leading companies • The setting up of many leading global oil such as Micromagna Engineering, Yeh and gas M&E manufacturers in Malaysia Chang Heat Treatment, Tohken, Oriental such as FMC, Aker Solutions, Halliburton, Heat Treatment, Umetoku, Vital Scale, HK Cameron International and Technip provides Lamination and Yong Shen Heat Treatment. opportunities and large market potential for large forgings, not only to support the oil • Expansion activities in the mould and & gas industry in the country but also to die, as well as the M&E manufacturing cater for the requirements of the region. All industries, and production of downstream requirements for large forgings are currently products of iron and steel, secondary being imported from overseas i.e. Korea, products, automotive parts and component Italy, Germany, India and other Eastern manufacturing offer good prospects for European countries. the growth of the heat treatment service industry. Investments in new ventures with state-of-the-art facilities that are also environmentally friendly are encouraged, especially those incorporating the latest vacuum carburizing and vacuum hardening technology.

Machinery & Equipment and Engineering Supporting Industries 15 Metal Fabrication Smart Manufacturing : The Way Forward • Metal fabrication activities in which Malaysian companies have developed Driven by industry trends including Industry world-class capabilities can be classified 4.0 and the Industrial Internet of Things (IoT), into four categories; namely fabrication for M&E companies in Malaysia are currently the offshore/onshore oil and gas industry; revolutionising their production processes, building and civil construction fabrication; adopting key Industry 4.0 technologies to fabrication of processing and manufacturing increase the level of automation, connectivity, plants and industrial machinery and and big data analytics (BDA) required in a smart equipment structures and component factory environment. This includes connecting fabrication. cyber and physical via ERP systems as well as MES, employing remote monitoring, machine- Local companies undertake fabrication for • to-machine (M2M) communication, and fully- the offshore/onshore oil & gas industry, which robotic, automated assembly lines in their includes fabrication works for the offshore production floors oil drilling platform requirements such as jackets, production modules, platform decks, Adoption of additive manufacturing technology accommodation modules, line-pipe & spool in creating parts or prototype are less time and related industrial onshore activities such consuming, cost reducing and will give more as petroleum refineries, petrochemical plants and storage facilities. flexibility in creating higher precision products. 4D simulation of machines, production process • In the building and civil construction or product life cycle through real time data will fabrication category local companies give engineers more space in doing testing and fabricate steel superstructures for high-rise development prior to commercialization. This buildings, bridges, flyovers, transmission will ensure seamless operation and full design towers and other infrastructural facilities optimization. such as ports and airports. Crucial data obtained from machines can spur • In the processing and manufacturing plant new data driven business such as providing fabrication, companies undertake turnkey feedback or alert for predictive maintenance, projects to build, install and commission result of diagnostic checking, recovery action, processing plants in the country. remote monitoring and traceability function through dashboard or platform. • As for the industrial machinery & equipment structures and components fabrication The Industry 4.0 solutions will enable M&E category, many companies have the capability companies in improving their operation via smart to supply the needs of the local machinery & processes, new business model innovation and equipment manufacturing industry. gaining insight into customizing the design of • The metal fabrication industry in Malaysia is next generation M&E. considered a fairly established industry. In the building and construction industry, many local fabrication companies have begun to source for jobs outside Malaysia. As a result, several local fabricators have gained international recognition in this industry.

• Leading Malaysian companies which are serving this sector include KNM Group, SapuraKencana, Dialog, Sumatec, Sime Darby Group and Scomi.

16 Machinery & Equipment and Engineering Supporting Industries MIDA Headquarters Malaysian Investment Development Authority, MIDA Sentral, No.5, Jalan Stesen Sentral 5, Sentral, 50470 Kuala Lumpur, Malaysia Tel: (603) 2267 3633 Fax: (603) 2274 7970 Email: [email protected] Website: www.mida.gov.my

Pahang MIDA Director Malaysian Investment Development Authority State Offices Suite 3, 11th Floor, Kompleks Teruntum P.O. Box 178 Johor 25720 Kuantan Director Pahang Darul Makmur Malaysian Investment Development Authority Tel: (609) 513 7334 No. 5, Level 13, Menara Tabung Haji Fax: (609) 513 7333 Jalan Ayer Molek 80000 Johor Bahru E-mail: [email protected] Johor Darul Takzim Tel: (607) 224 5500 / 226 5057 Perak Fax: (607) 224 2360 Director E-mail: [email protected] Malaysian Investment Development Authority Level 4, Perak Techno Trade Centre (PTTC) & Perlis Bandar Meru Raya, Off Jalan Jelapang Director P.O.Box 210 Malaysian Investment Development Authority 30720 Ipoh 4th Floor, East Wing, No. 88 Perak Darul Ridzuan Menara Bina Darulaman Berhad Tel: (605) 5269 962/ 961 Lebuhraya Darulaman Fax: (605) 5279 960 05100 Alor Setar E-mail: [email protected] Kedah Darul Aman Tel: (604) 731 3978 Pulau Pinang Fax: (604) 731 2439 Director E-mail: [email protected] Malaysian Investment Development Authority Unit 14.01, Level 14 Kelantan Menara Boustead Director 39, Jalan Sultan Ahmad Shah Malaysian Investment Development Authority 10050 Pulau Pinang Aras 5-C, Menara Pejabat Kelantan Trade Centre Tel: (604) 228 0575 Jalan Bayam Fax: (604) 228 0327 15200 Kota Bharu E-mail: [email protected] Kelantan Darul Naim Tel: (609) 748 3151 Fax: (609) 744 7294 Director E-mail: [email protected] Malaysian Investment Development Authority Lot D9.4 & D9.5, Tingkat 9 Melaka Block D, Bangunan KWSP, Karamunsing Director 88100 Kota Kinabalu Malaysian Investment Development Authority Sabah 3th Floor, Menara MITC Tel: (6088) 211 411/230 411 Kompleks MITC, Jalan Konvensyen Fax: (6088) 211 412 75450 Ayer Keroh E-mail: [email protected] Melaka Tel: (606) 232 2877 Fax: (606) 232 2875 Director E-mail: [email protected] Malaysian Investment Development Authority Room 404, 4th Floor, Bangunan Bank Negara Negeri Sembilan No. 147, Jalan Satok, P.O. Box 716 Director 93714 Kuching Malaysian Investment Development Authority Sarawak Suite 13.01 & 13.02, 13th Floor, Menara Zurich Tel: (6082) 254 251/237 484 70200 Seremban Fax: (6082) 252 375 Negeri Sembilan Darul Khusus E-mail: [email protected] Tel: (606) 762 7921 Fax: (606) 762 7879 E-mail: [email protected]

Machinery & Equipment and Engineering Supporting Industries 17 Osaka Director Director Malaysian Investment Development Authority Malaysian Investment Development Authority 22nd Floor, Wisma MBSA Mainichi lntecio 18F Persiaran Perbandaran 3-4-5 Umeda, Kita-ku 40000 Shah Alam Osaka 530-0001, Japan Selangor Darul Ehsan Tel: 81 (6) 6451 6661 Tel: (603) 5518 4260 Fax: 81 (6) 6451 6626 Fax: (603) 5513 5392 Email: [email protected] E-mail: [email protected]

Terengganu REPUBLIC OF KOREA Director Seoul Malaysian Investment Development Authority Counselor (lnvestment)/Director 5th Floor, Menara Yayasan Islam Terengganu Embassy of Malaysia Jalan Sultan Omar (Malaysian Trade and Investment Centre) 20300 Kuala Terengganu Malaysian Investment Development Authority Terengganu Darul lman Level 17, Standard Chartered Tel: (609) 622 7200 Bank Korea Limited Building Fax: (609) 623 2260 47, Jongro,Jongro-gu E-mail: [email protected] Seoul 110-702, Republic of Korea Tel: 82 (2) 733 6130/6131 Fax: 82 (2) 733 6132 MIDA E-mail: [email protected] TAIWAN Overseas Offices Taipei Director (Investment) Malaysian Investment Development Authority ASIA-PACIFIC Malaysian Friendship & Trade Centre 12F, Suite A, Hung Kuo Building No. 167, Tun Hua North Road AUSTRALIA Taipei 105, Taiwan Sydney Tel: 886 (2) 2713 5020 (GL) /2718 6094 Consul (lnvestment)/Director Fax: 886 (2) 2514 7581 Consulate of Malaysia (Investment Section) Email: [email protected] Malaysian Investment Development Authority Level 6, 16 Spring Street PEOPLE’S REPUBLIC OF CHINA Sydney NSW 2000 Shanghai Australia Director Tel: 61 (02) 9251 1933 Consulate General of Malaysia Fax: 61 (02) 9251 4333 (Investment Section) E-mail: [email protected] Malaysian Investment Development Authority Unit 807-809, Level 8 JAPAN Shanghai Kerry Centre Tokyo No.1515, Nanjing Road {West) Director Shanghai 200040 Malaysian Investment Development Authority People’s Republic of China 32F, Shiroyama Trust Tower Tel: 86 (21) 6289 4547 4-3-1,Toranomon,Minato-ku Fax: 86 (21) 6279 4009 Tokyo 105-6032, Japan E-mail: [email protected] Tel: 81 (3) 5777 8808 Fax: 81 (3) 5777 8809 Guangzhou Email [email protected] Director Malaysian Investment Development Authority Unit 1804B-05 CITIC Plaza Office Tower 233 Tianhe Bei Road Guangzhou 510610 People’s Republic of China Tel: (8620) 8752 0739 Fax: (8620) 8752 0753 E-mail: [email protected]

18 Machinery & Equipment and Engineering Supporting Industries Beijing FEDERAL REPUBLIC OF GERMANY Counselor (Investment)/Director Frankfurt Embassy of Malaysia (Investment Section) Consulate General of Malaysia Malaysian Investment Development Authority (Investment Section) Unit C, 12th Floor, Tower A, Gateway Plaza Malaysian Investment Development Authority No.18, Xiaguangli, East Third Ring North Road Level 9, HAT 64 Chaoyang District, Beijing 100600 Bleichstrasse 64-66 People’s Republic of China 60313 Frankfurt Am Main Tel: (8610) 8440 0071/0072 Germany Fax: (8610) 8440 0076 Tel: +49(0) 69 8700 679-0 E-mail: [email protected] E-mail: [email protected]

UNITED ARAB EMIRATES Munich Dubai Director Consul (lnvestment)/Director Malaysian Investment Development Authority Consulate General of Malaysia Level 6, Bürkleinhaus (Investment Section) Bürkleinstrasse 10 Malaysian Investment Development Authority 80538 Munich, Germany Unit 2205, 22nd Floor, Tower A Tel: (4989) 2030 0430 Business Central Tower Fax: (4989) 2030 0431-5 Dubai Media City E-mail: [email protected] (P.O.Box: 502876) Dubai United Arab Emirates SWEDEN Tel: (9714) 4343 696/697 Stockholm Fax: (9714) 4343 698 Economic Counsellor Email: [email protected] Malaysian Investment Development Authority c/o Embassy of Malaysia INDIA Karlavaegen 37, P.O. Box 26053 Mumbai S-10041 Stockholm, Sweden Consul (lnvestment)/Director Tel: (468) 440 8400 / 440 8416 Consulate General of Malaysia Fax: (468) 791 8761 (Investment Section) E-mail: [email protected] Malaysian Investment Development Authority 81 & 87, 8th Floor, 3rd North Avenue UNITED KINGDOM Maker Maxity London Bandra Kurla Complex, Bandra (E) Counsellor for Investment (Director) Mumbai 400051, India High Commission of Malaysia Tel: (9122) 2659 1155 / 1156 Malaysian Investment Development Authority Fax: (9122) 2659 1154 17 Curzon Street E-mail: [email protected] London W1J 5HR United Kingdom SINGAPORE Tel: (4420) 7493 0616 Consul (lnvestment)/Director Fax: (4420) 7493 8804 High Commission of Malaysia E-mail [email protected] Malaysian Investment Development Authority No. 7, Temasek Boulevard ITALY 26-01, Suntec Tower One Milan Singapore 038987 Consul (lnvestment)/Director Tel: (65) 6835 9326 / 9580 / 7069 Consulate of Malaysia (Investment Section) Fax: (65) 6835 7926 Malaysian Investment Development Authority E-mail: [email protected] 2nd Floor, Via Albricci 9 20122 Milan, Italy Tel: (39) 02 8909 382-4 EUROPE Fax: (39) 02 8909 545-418 E-mail: [email protected] FRANCE Paris Director Malaysian Investment Development Authority 42, Avenue Kleber 75116 Paris, France Tel: (331) 4727 6696 / 3689 Fax: (331) 4755 6375 E-mail: [email protected]

Machinery & Equipment and Engineering Supporting Industries 19 NORTH AMERICA

SAN JOSE Director Malaysian Investment Development Authority 226, Airport Parkway, Suite 480 San Jose, CA 95110 United States of America Tel: (1408) 392 0617/8 Fax: (1408) 392 0619 E-mail: [email protected]

NEW YORK Consul (lnvestment)/Director Consulate General of Malaysia (Investment Section) Malaysian Investment Development Authority 313 East, 43rd Street New York, NY 10017 United States of America Tel: (1212) 687 2491 Fax: (1212) 490 8450 E-mail: [email protected]

CHICAGO Director Malaysian Investment Development Authority John Hancock Center, Suite 1515 875, North Michigan Avenue Chicago, IL 60611 United States of America Tel: (1312) 787 4532 Fax: (1312) 787 4769 E-mail: [email protected]

20 Machinery & Equipment and Engineering Supporting Industries For more information, please contact:

MALAYSIAN INVESTMENT DEVELOPMENT AUTHORITY

Machinery and Metals Division Malaysian Investment Development Authority Level 28, MIDA Sentral, No.5, Jalan Stesen Sentral 5 50470 Kuala Lumpur, Malaysia Tel: (603) 2267 3599 Fax: (603) 2273 4190 E-mail: [email protected] Website: www.mida.gov.my

June 2020