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Negeri Sembilan, Melaka, Johor, Pahang, Sabah and Sarawak business IN action @ FMM JAN – MAR 2019 VOL 1/2019 www.fmm.org.my KDN NO.PP 16730/08/2012 (030376) Challenging Times A heavy toll placed on global manufacturing as slower growth and contraction sets in "e Communicator Tech Talk Using Instagram for Establishing an business purposes ecosystem for IoT to + PG 17 thrive in Malaysia PG 23 Malaysian economy Brand Builder projected to grow Simple and e"ective FMM MIER Business anything from 4.5% tips to build your Conditions Survey to 4.9% in 2019 company branding PG 28 PG 12 PG 20 &RYHULQGG 30 Contents JANUARY - MARCH 2019 VOLUME 1/2019 PRESIDENT’S 3 MESSAGE COVER STORY: 4 CHALLENGING TIMES The US-China trade war is putting a toll on manufacturing countries as slower growth and contraction sets in BUSINESS 12 FEATURE: STILL UPBEAT ABOUT THE ECONOMY Malaysia is forecast to grow anything from 4.5% to 4.9% in 2019 THE 17 COMMUNICATOR: USING INSTAGRAM FOR BUSINESS Posted visuals remain a strong messaging PAGE method for companies to use to boost customer engagement, customer 4 search and sales BRAND BUILDER: DATA INFORMER: 20 EFFECTIVE 25 ECONOMIC BRAND BUILDING PROSPECTS FOR 2019 Simple guidelines to build The Organisation for your company and its Economic Co-operation products and Development (OECD) maps future scenarios for TECH TALK: ASEAN-5 countries 23 ESTABLISHING AN ECOSYSTEM FOR FMM-MIER IOT TO THRIVE 28 BUSINESS Stakeholders in the ICT CONDITIONS SURVEY: PAGE industry are working MANUFACTURING together to create an ideal PICKS UP IN 2018, platform for the technology EXPECTS TO SLOW 12 to grow in Malaysia DOWN IN 2019 PAGE NEW 17 32 MEMBERS FMMEA: 34 AF MANUFACTURING FMM 36 NEWS BRANCH NEWS 42 & EVENTS 52 DID YOU KNOW? &RQWHQWVLQGG 30 business IN action @ FMM EDITORIAL ADVISOR Chief Executive Of"cer Dr Yeoh Oon Tean EDITORIAL TEAM Manager – Membership Division Kenny Lee Senior Executive – Membership Division Natalie Ng Editor Roger Rodrigo PRINTER Legasi Press Sdn Bhd No 17A, (1st Floor) Jalan Helang Sewah Taman Kepong Baru, Kepong 52100 Kuala Lumpur Stay connected with FMM, follow us at www.fmm.org.my BUSINESS IN ACTION @ FMM IS PUBLISHED BY Federation of Malaysian Manufacturers (7907-X) Wisma FMM No 3, Persiaran Dagang, PJU 9 Bandar Sri Damansara 52200 Kuala Lumpur Tel: +603-62867200 Fax: +603-62741266/7288 Email: [email protected] FMM Branches/Representative Kedah/Perlis, Penang, Perak, Selangor, Negeri Sembilan, Melaka, Johor, Pahang, Sabah and Sarawak All rights reserved. No part of this publication may be reproduced in any form or by any means, including photocopying and recording without the written permission of the publisher. Opinions expressed or implied in Business In Action @ FMM are solely those of the writer/s and are not necessarily endorsed by the publisher. *ORU\3DJHLQGG 30 MESSAGE FROM THE PRESIDENT We live in a connected world, thus like the rest of the globe we are The on-going trade war between the United States and China, percentage points by 2020, then Malaysian economy could end up which started on July 6, 2018, has been driving slower growth and (The Edge Markets: The State of the Nation: GDP growth projected at 4.9%, exports 3.9% in 2019) the slowdown based on the FMM-MIER Business Conditions Survey a solid commitment to smoothen the implementation process We observe that production and capacity utilisation have improved and reduce costs and any imbalances that may exist between The SST, we believe, has addressed some of the burdens faced by However the outlook for 2019 was not as promising with the index for expected business activity declining by 6 points, (Current areas includes not having to pay input tax upfront but instead allows 2H2018:107, Looking Forward 1H2019:101) which translates into a application for sales tax exemption for raw materials, components and We also note from the survey that the cost factors generally Some important economic facts were also shown by the Ministry of Finance in its Economic Outlook 2019 released in November last The report projected our manufacturing sector to expand by Dato’ Soh Thian Lai 3UHVLGHQW V0HVVDJHLQGG 30 COVER STORY CHALLENGING TIMES The US-China trade war is putting a toll on manufacturing countries as slower growth and contraction sets in If anyone says that the world went into an 1. 25 percent on 2,493 products (agricultural, economic tailspin from July 6, 2018 he’s 284 Chinese products (worth US$16 billion). products, foods, textiles and products, probably right. chemicals, metal products, machinery); That date will go down in history as being included iron or steel products, electrical machinery, railway products, instruments and paperboard, chemicals, works of art); resulted in a global slowdown especially for apparatus. On July 10, 2018 the US released export dependent countries. products, chemicals, glassware); and China took retaliatory measures by 4. 5 percent on 662 products (chemicals, machinery, medical equipment). we will run through some of the countries originating from the US (worth US$34 billion), including agricultural products, automobiles our economy will cope should this impasse and aquatic products. on US$250 billion worth of Chinese products, continue. On August 3, 2018, China announced a On July 6, the US Customs and Border more. Protection (CBP) began collecting a 25 percent US$200 billion worth of products announced billion worth of US goods, and is threatening Commerce proposed a range of additional businesses operating in China. announced on June 15, 2018. There is indeed a grim picture looming. It the US (worth US$60 billion), including the appears that neither President Donald Trump following: nor Chinese President Xi Jinping are willing to 4 BIA @ FMM Q JAN - MAR 2019 &RYHU6WRU\LQGG 30 COVER STORY relent, US-China trade tensions could expand China’s economic growth slowed to into a full-blown trade war. China’s Ministry 6.5 percent in the third quarter of last year, the of Commerce has warned that the dispute may even lead to “the largest trade war in ZHDNHVWVLQFHWKHJOREDO¿QDQFLDOFULVLV economic history to date”. But of course it is not an untenable oriented countries are hurting,” said Irene situation as both countries understand the Cheung, Asia Strategist at ANZ. Data from Singapore showed its gross warfare that it would have severe implications domestic product grew more slowly than on their own economies in the long run. forecast in the fourth quarter as the city- While growth in the US has slowed a bit, state’s manufacturing contracted on a quarterly basis. greater for China. In Europe, PMI surveys showed Italy In December, 2018 China’s Caixin/IHS remained in contraction and was joined Markit PMI slipped into contraction territory China’s economic growth slowed to 6.5 months. percent in the third quarter of last year, the Manufacturing growth in both Germany and Spain was modest, easing to the weakest Reuters reported government advisers had in around two-and-a-half years. recommended a growth target of 6.0 to 6.5 In contrast, Britain increased its percent for this year. stockpiling as they prepared for likely delays News agency Reuters reported that when they depart from the European Union at China’s weakness have spread to other Asian the end of March. economies. Malaysian manufacturing slowed The UK manufacturing PMI rose to a six- to its weakest pace of expansion since the month high, stronger than all forecasts in a Purchasing Managers Index (PMI) began Reuters poll of economists. in 2012, and Taiwan fell to its lowest since IHS Markit cautioned the rise did not September 2015. Taiwan and South Korea, which are Britain’s struggling economy – it was caused leaning on tech production, also saw activity in large part by manufacturers stockpiling and coincides with a slowdown in demand for On a related development, Malaysia is smart phones globally. relying on free trade agreements (FTA) to “We are really seeing a global slowdown avoid anti-circumvention probes. into this year, and in Asia, particularly, export- Under such practises, US and Chinese 6 BIA @ FMM Q JAN - MAR 2019 &RYHU6WRU\LQGG 30 companies relocate production to the country import duties on some US$200 billion worth 7KHWUDGHFRQÀLFW of Chinese goods, forcing Beijing to retaliate between the US and Reuters reported on October 11, 2018 on in kind. a written interview with the Nikkei Asian “In response, Malaysia will pursue China will have global Review where Minister of International Trade FTA negotiations, because exporters have repercussions, not to stipulate the country of origin of their only will it inhibit the possibility that companies from the products. Malaysia has implemented 13 global trade and two countries will try to avoid the impact by FTAs and is negotiating four more, including growth but there will with the Regional Comprehensive Economic such as Malaysia, Thailand and Vietnam. Partnership. also be disruptions “This, however, could potentially result RCEP, which comprises the 10 Southeast to supply chains, in Malaysia [being] targeted as a country Asian countries plus China, Japan, South impacting businesses, Korea, India, Australia and New Zealand, jobs and consumers subject to some costly anti-circumvention accounts for about one-third of the world’s investigations,” he said. gross domestic product and half its Recent trade data suggests there has population. enterprises, and institutional provisions. so far been only limited impact from the The Star reported on November 3, 2018 escalating trade tensions between the on the stark realities should the trade war two major economies, but it is expected to to government procurement, customs prolong. increase. The administration of US President procedures and trade facilitation, economic “Over the period of 2018 to 2020, Donald Trump imposed a third round of and technical cooperation, small and medium Malaysia’s export risks will decline by 0.08 BIA @ FMM Q JAN - MAR 2019 7 &RYHU6WRU\LQGG 30 COVER STORY percentage points as a result of the US- China trade war, while the country’s gross domestic product (GDP) could decline by 0.02 percentage points.
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