Abstract
Market Overview
The chemicals industry is one of Malaysia’s key
industries, catering not only for its own national
requirements but also
exporting to a number of countries worldwide. The Malaysian chemicals and
chemical products industry has become the second largest contributor to the
manufactured exports sector,
after the electrical and electronics
industry. Vast petroleum and palm oil resources have enabled Malaysia
to
establish itself at the forefront of chemicals export. In 2008, MYR64,808mn
(US$18,021mn) worth of
palm oil and palm oil based products were exported
from Malaysia, according to the Department of
Statistics Malaysia.
Meanwhile, MYR43,698mn (US$12,156mn) worth of crude petroleum and
MYR28,635mn (US$7,962mn) worth of other petroleum based products were
exported, forming a large
part of Malaysia’s MYR663,494mn
(US$184,446mn) export total for 2008.
Projects And Expansions
In March
2009, Malaysia Chemicals major CCM launched a MYR10mn (US$2.8mn) hi-tech
R&D
facility, called Innovax. The new centre will be used to help the
manufacture and development of new
pharmaceuticals products. Meanwhile, in
May 2008, CCM entered into a strategic supply deal with
Jordan-based The
Arab Potash Company. CCM is looking to guarantee its supply potassium chloride
and
therefore help the smooth operation of its fertilisers division.
Trade Agreements
In December 2008, Malaysia’s minister of
international trade and industry bought the Association of
Southeast Asian
Nations (ASEAN) region closer to its goal of forming an integrated
economic
community after signing three agreements with Singapore.
Meanwhile, in February 2009, both Japan and Malaysia introduced the
ASEAN-Japan Comprehensive
Partnership Agreement (AJCEP). The AJCEP is
based on bilateral economic partnership agreements
between Japan and
individual ASEAN nations and is the third major regional agreement implemented
in
East Asia. The first was the China-ASEAN FTA, which was introduced in
2005, while in 2007 the Korea-
ASEAN FTA was agreed.
Industry
Forecast
The Malaysian chemicals industry witnessed 37% growth in domestic
sales value in 2004 and sustained
solid growth up until mid-2008. It
expanded rapidly and had been forecast to reach sales figures of
MYR60816mn by 2009. However, BMI has now revised our forecast downwards, as
recent events have
halted this rapid expansion, and we expect chemical
sales to contract in 2009 before recovering, alongside
the economy, in
2010. The output for petroleum, chemical, rubber and plastic products fell by
17.1%
year-on-year in January 2009. Production of rubber and plastic
products shrank 27.1%, while chemicals
and chemical products were the
worst hit with output shrinking by 29.9% y-o-y.
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