Malaysia Chemicals 2014
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MALAYSIA CHEMICALS 2014 Economy | Petrochemicals | Oleochemicals | Industrial and Specialty Chemicals | Distribution and Logistics CONTENTS FIGHTING FOR ITS MOMENT CHALLENGES AND Malaysia’s Chemical Industry OPPORTUNITIES Transport, Human Resources and 8. An Introduction to Malaysia: A brief Sustainability overview of the country and economy 10. Interview with the Malaysian 34. Chemical Barriers: Hurdles for the Investment Development Authority industry (MIDA) 35. Interview with the Malaysian Plastics 11. Finding its Place: The chemical industry Manufacturers Association (MPMA) of Malaysia 3 7. Interview with Brunel-Energy Malaysia 13. Interview with the Chemical Industries 38. Production to Consumption: Transport, Council of Malaysia (CICM) Logistics and Distribution 41. Interview with Finn Chemicals 42. Interview with Kerith Terminals 43. Interview with Suka Chemicals A DIVERSIFIED PORTFOLIO 44. Interview with Kuantan Port Consortium Malaysian Chemical Production 46. Interview with Leschaco Malaysia 4 7. Interview with Brenntag Malaysia 16. RAPID Growth: Refining and petrochemicals 18. Natural Products: The oleochemical industry INTO THE FUTURE 20. Interview with KLK Oleo Final Thoughts, Index and Credits 22. Interview with Evyap Sabun Malaysia Rubber and rubber gloves 50. Final Thoughts 23. Sector Support: Specialty and industrial 52. Index 24. chemicals 54. Credits Interview with BASF Malaysia 25. Interview with Schaefer Kalk 26. Interview with DuPont Malaysia 28. Interview with Linde Malaysia 29. Interview Hextar Chemicals 30. ANALYSIS: The New Face of the 31. Malaysian Chemical Industry This research has been conducted by Vanessa Acuna Chapela and Anita Kruger Edited by Barnaby Fletcher Graphic design by Gonzalo Da Cunha A Global Business Reports Publication For more information, please contact [email protected], follow us on Twitter @GBReports or check out our blog at gbroundup.com MALAYSIA CHEMICALS 2014 Industry Interviews Exclusive interviews with the leading industry figures in Malaysia’s chemical sector, including the Malaysian Investment Development Authority, KLK Oleo, and BASF Malaysia. 10, 20, 24 Analysis In-depth opinions from our on-the-ground team on the current state and changing trends of Malaysia’s chemical industry, taken from our weekly newsletter the GBRoundup. 31 Production Breakdown We explore each of the various subsectors of Malaysian chemical production in depth, from petrochemicals to oleochemicals to industrial and specialty chemicals. 16, 18, 24 AVERAGE AND MINIMUM MANUFACTURING WAGES IN ASEAN Quantitative Source: PwC MONTHLY IN USD Data AVERAGE MINIMUM MANUFACTURING WAGES WAGES The most relevant quantitative data Cambodia 101 43 presented in an easily Indonesiaaccessible format,182 132 Laos 45 64 allowing you to view economicMalaysia and66 market6 N/A statistics, identify prevailingMyanmar trends N/andA 17 Philippines 212 181 visualize infrastructure. Singapore 1,639 N/A Thailand 263 79 Vietnam 107 49 LITERACY RATE 9, 12, 17, 19, Source: CIA World Factbook 93.1 % 25, 35, 39 Total Popoulation 95.4% Final Thoughts Male 90.7% Industry leaders give their opinions on the Female future facing Malaysia’s chemical sector and their own companies: the challenges, the opportunities, and the changing trends. TOP UNIVERSITIES IN ASIA Source: QS University Rankings 2013 RANK UNIVERSITY 33 Universiti Malaya (UM) 57 Universiti Kebangsaan Malaysia (UKM) 50, 51 61 Universiti Sains Malaysia (USM) 68 Universiti Teknologi Malaysia (UTM) 72 Universiti Putra Malaysia (UPM) EDUCATION EXPENDITURE 5.9 % OF GDP Source: CIA World Factbook EDITORIAL Global Business Reports An Introduction to Malaysia Darwin PERLIS Indian A brief overview of the country and KEDAH South China Sea Ocean economy Derby PENANG LABUAN Cairns KELANTAN TERENGGANU SABAH Broome Ipoh Tennant Creek Pacic Ocean Mount Isa PERAK NORTHERN TERRITORY Port Hedland Mackay PAHANG Alice Springs SELANGOR Learmonth Gladstone KUALA LUMPUR Kuala Lumpur QUEENSLAND PUTRAJAYA SARAWAK WESTERN NEGERI Carnarvon AUSTRALIA SEMBILAN MALACCA Brisbane JOHOR SOUTH AUSTRALIA Johor Bahru Geraldton Cook Kalgoorlie Bourke Port Augusta Broken Hill NEW SOUTH Perth WALES Port Lincoln Adelaide Sydney Canberra VICTORIA 150km Melbourne On the 26th April 2014 United States Pres- population of over 30 million and a GDP 7.5% in 2012, with industry the lead con- ident Barack Obama visited Malaysia, the per capita of $17,500, it represents an at- tributor to GDP at 41%. This has driven first visit by a US head of state in 48 years. tractive market. Its GDP growth – 4.7% solid GDP growth since the country re- TASMANIA Economics were a focal point of his discus- in 2013 with an average of above 5% covered from the Asian financial crisis of 500km sions with Malaysian Prime Minister Na- over the past decade – ranks among the 1997/98 and the local business community Hobart jib Razak. Yet although the two countries best in the already-impressive Southeast often praises the government for seeking agreed to upgrade their bilateral relations, Asia. Pro-business policies and an improv- to promote investment and international Obama failed to secure clear support from ing infrastructure have seen investments trade. In an attempt to further Malaysia Razak for his proposed Trans-Pacific Part- pour in from around the world: capitaliz- on its path to become a high-income, nership. ing on its Islamic heritage and expertise developed country by the year 2020, the The idea that Malaysia would not pander in Sharia-compliant banking and finance Malaysian government is committed to to American requests would have been services has made it one of the favorite stimulate growth in the manufacturing surprising not too long ago. The US is, af- destinations of Gulf country investments. sector through the Economic Transforma- ter all, the largest source of foreign capital The transformation of Malaysia from an tion Plan (ETP). to Malaysia, investing $1.9 billion in 2013 agricultural to a diversified and knowl- The measures have laid the foundation for and with bilateral trade reaching $35 billion edge-based economy – started in the a bright economic future in Malaysia. GDP annually. Today’s Malaysia, however, can 1980s but arguably coming to fruition now growth in 2014 is expected to be 5.15%, afford to pick and choose its agreements – has made it a role model for many de- followed by 5.5% in 2015. Long the un- and its partners: on the 17th of April it veloping countries. After gaining indepen- derdeveloped cousin of its neighboring – signed a free trade agreement with Turkey. dence from British rule in 1963, the contri- and one-time federal partner – Singapore, The demand that Malaysia finds itself in bution of agriculture to GDP has dropped Malaysia now poses a competitive threat: is a telling indication of both its current from 28.8% in the 1970s to 11.2% in 2013. a manufacturing location that can offer economic strength and its growing poten- Malaysia continues to show a remarkable comparable quality at a cheaper cost and tial. As a middle-income economy, with a industrial production growth rate, reaching with a far larger domestic market. MALAYSIA CHEMICALS 2014 - 8 - Industry Explorations Global Business Reports FACTSHEET MALAYSIA AT A GLANCE Source: CIA World Factbook Population: 30,073,353 (July 2014 estimate) Capital: Kuala Lumpur Head of Government: Prime Minister Mohamed Najib bin Abdul Najib Razak Currency: Ringgit (MYR) Darwin GDP: $312.4 billion (2013 estimate) PERLIS Growth Rate: 4.7% (2013 estimate) GDP per Capita: $17,500 (2013 estimate) Economic sector breakdown: agriculture: 11.2%, Indian KEDAH South China Sea industry: 40.6%, services: 48.1% (2013 estimate) Ocean Exports: $230.7 billion (2013): electronic equipment, palm oil, petroleum and LNG, wood and wood products, Derby PENANG Cairns LABUAN palm oil, rubber, textiles, chemicals, solar panels KELANTAN TERENGGANU SABAH Imports: $192.9 billion (2013): electronics, machinery, Broome Ipoh petroleum products, plastics, vehicles, iron and steel Tennant Creek Pacic products, chemicals Ocean Mount Isa PERAK Major Trade Partners: China, Singapore, Japan, USA NORTHERN TERRITORY Port Hedland Mackay PAHANG Alice Springs SELANGOR Learmonth Gladstone KUALA LUMPUR Kuala Lumpur QUEENSLAND PUTRAJAYA SARAWAK $312.4 WESTERN NEGERI Carnarvon AUSTRALIA SEMBILAN billion MALACCA Brisbane JOHOR GDP SOUTH (current US dollars) 2013 AUSTRALIA Johor Bahru Geraldton Cook Source: CIA World Factbook Kalgoorlie Bourke Port Augusta Broken Hill NEW SOUTH POPULATION AND WORKFORCE Perth WALES INFORMATION Port Lincoln Source: CIA World Factbook Adelaide Sydney Canberra VICTORIA 150km Population 2014 30,073,353 Melbourne This bright outlook is not without its dark spots. Infrastructure still remains inade- Malaysia’s economy has historically quate in many parts of the country. Though been healthy and is expected to deliver TASMANIA the regulatory framework is constantly “ 500km a growth rate of between 4% and improving, companies still list the imple- Hobart 5% for 2013. When considering the mentation of that framework – carried out country’s growth potential one is really through inefficient government bureau- looking at a stable political situation, cracy – as a major hurdle for doing busi- educated labor force with an efficient ness. Corruption is also frequently cited infrastructure. There is little to no geo- as a challenge, with the country ranking at graphical threat like floods and earth- a respectable but room-for-improvement quakes and the availability of feedstock