Malaysia Update: Malaysia’s National Transformation 2050 (TN50) and Vision 2020

Malaysia Update | March 16, 2017
Authors: Kim Yaeger, Ezani Mansor, Emma Tabatabai, and Timotheos Tan
 
LOOKING AHEAD
 
 

March 27-29: 2017 Malaysia Business Mission

April 5-7: 2017 Mission to the ASEAN Finance Ministers and Central Bank Governors Meeting

 
THE COUNCIL'S TAKE
 
 

Malaysia’s National Transformation 2050 (TN50) and Vision 2020

Prime Minister Datuk Seri Najib Tun Razak, during a Parliamentary session on 8 March, provided assurances that Malaysia’s National Transformation 2050 (TN50) initiative was not a rejection of the Vision 2020 concept, but a continuation of those policies introduced by former Prime Minister Tun Dr Mahathir Mohamad.

The TN50 program, announced late last year, is aimed at developing an updated methodological approach to formulating the country’s post-2020 roadmaps for the economy, technological innovation, environmental efforts, and sociopolitical policies via a more grassroots centered approach to enable Malaysia to be amongst the top twenty countries on the international stage by 2050. These include town hall meetings and online outreach exercises. In particular, emphasis has been placed on youth engagement, with the government soliciting the opinion of approximately 1.5 million young Malaysians from a cross section of society for use as a baseline to draft forward looking policy objectives, in one of the nation’s largest public policy formulation consultations. The Minister of Youth and Sports, and United Malays National Organization (UMNO) youth wing president, Encik Khairy Jamaluddin Abu Bakar, has been tasked with managing the conversation with the country’s younger generation.

Prime Minister Najib added that a bottom-up approach, along with a national strategy and implementation plan, are required to ensure the propagation of the nation’s new vision for the benefit of the general populace. Furthermore, in a later consultation session with academic experts from Universiti Malaya, Prime Minister Najib remarked on the need for a structural change in Malaysia’s economy, necessitating more proactive national policies, and concluded with a call to action: “It will take a long time...before we see our plans beginning to materialize. This is why we must act now.”  A presentation on TN50 can be found here.

Increased Support for Green Technology in Malaysia

Malaysia has recently reaffirmed its growing commitment to green technology and energy alternatives, following the nation’s ratification of the United Nations Framework Convention on Climate Change’s (UNFCCC) Paris Agreement in November last year, which requires “nationally determined contributions” (NDCs) on the part of all signatories. A meeting of the Green Technology and Climate Change Council (MTHPI) on 2 March saw the government renewing its Green Technology Financing Scheme (GTFS) from 2018 to 2022 with a RM5b (approximately USD1.13b) allocation. The scheme’s second round ensures that green technology projects continue to receive funding and support, in order to promote the growth of the industry.

In addition, the Malaysian Biodiesel Association (MBA) reported that Malaysia is expected to produce between 800,000 and 900,000 tons of biodiesel following the implementation of the government’s B10 biodiesel mandate in 2017, a marked increase from the 500,000 tons produced in 2016. The expected mandate regulates the composition of biodiesel, governing the ratio between regular diesel and palm oil derivatives. The president of the MBA, U.R. Unnithan, has urged for its adoption in light of decreasing prices for crude palm oil (CPO) and a subdued palm oil market.

The Malaysian Investment Development Authority’s (MIDA) Chief Executive Officer, Datuk Azman Mahmud, has also announced that the Malaysian Solar Photovoltaic (PV) Roadmap 2030 will be launched at the end of the year, outlining the future development of the industry, and involving “key Malaysian stakeholders from industry associations, government departments, and academia”. This followed news of the Energy Commission of Malaysia’s (EC) plans to develop large-scale solar PV plants in Peninsular Malaysia and Sabah. The plants are expected to provide electricity for sale under Solar Power Purchase Agreements, as well as strengthen the country’s energy security by reinforcing electricity generation from renewable energy sources.

 
IN THIS UPDATE
 
 
Multilateral Trade Agreements
Malaysia in no rush to bury TPP, Mustapa says

National Affairs
North Korea, Malaysia to Enter Formal Talks Over Travel Ban
Malaysia ranks top in best countries to invest in
Najib: TN50 a continuation of previous policies
GE: Malaysia remains attractive to global firms
Malaysia Forces Out North Korean Ambassador
Malaysia-GCC trade deal on hold for now
PM: Good EPF payout despite challenges

Customs
Malaysia’s total trade up 14.8 pct to RM135.77 bln in January
January exports surge 13.6% to over RM70b
Malaysia-Saudi MoU on trade and investment to lead to diversification of imports, exports

Economics
Malaysia’s services exports to grow 8% per year on average - HSBC
GST and subsidy cuts are to prevent bigger Govt deficit
Malaysia has strong FDI prospects, says economist
King: Government will address ringgit depreciation
Najib urges IRB to further improve tax collection
Malaysia sees slower investments
Malaysia's currency curbs boomerang on bond markets
Malaysia's initiatives against terrorism funding boosts international confidence in economy

Energy
M'sian Solar PV Roadmap 2030 launched by year's end: Mida
Malaysia’s biodiesel production to rebound this year
Green tech financing scheme to continue with RM5bil funding
Exclusive: Petronas considers $1 billion stake sale in offshore gas project - sources
Energy Commission of Malaysia eyes building large-scale solar PV plants
SUPP urges state govt to lower electricity tariff
Phase 1 of INIR report concludes Malaysia is ready for nuclear power, minister says
Malaysia's renewables capacity to balloon by 150% in the next decade
‘Reducing carbon release: Malaysia on right track’
Malaysia to implement Euro 4M specifications for 95 RON gasoline in Oct 2018
Saudi Aramco to invest $7 billion in Petronas' RAPID oil refinery
Malaysia's gas projects to boost output to a peak of 70.6bcm by 2021
BIMP-EAGA tackles Sabah-Palawan energy connectivity
Malaysia's gas production in danger of falling after 2021

Financial Services
IOSCO launches APAC hub in Kuala Lumpur
Malaysia: General insurers in competition regulator's sights

Food & Agriculture
Malaysia minister upbeat on palm oil prices
Sugar price hike prompts CIMB Research to upgrade MSM

ICT
IDC: What will redefine the Malaysian ICT industry in 2017 and beyond?
Zalora invests US$4.2mil on regional e-fulfilment hub in Malaysia
Malaysia sees 56% y-o-y growth in average connection speed: Akamai report
Minister: Malaysia, Saudi Arabia cement cooperation in ICT

Infrastructure
Chinese investors to bring in whopping RM434bil

Manufacturing
Malaysia Jan factory output up 3.5% y-o-y, below forecast
Coca-Cola to invest RM500mil to scale up Nilai plant
Call for promotion on use of locally manufactured products
 
ARTICLE CLIPS
 
 
Multilateral Trade Agreements

Malaysia in no rush to bury TPP, Mustapa says The Malay Mail Online 13th Mar 2017
Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed, has made it clear that while the Trans-Pacific Partnership (TPP) was, at least for now, off the table, Malaysia was “in no hurry to bury the agreement”. Malaysia has been one such country which, while being disappointed by the US withdrawal from the TPP, has come to terms with what many Asian leaders describe as the “ground realities”. “The coming meeting of the trade ministers of the Asia-Pacific Economic Cooperation (Apec) in May in Vietnam will also discuss this issue and provide the direction for the future course on the TPP. "The TPP was pursued by us because Malaysia did not have a free trade agreement (FTA) with the US," said the minister in an exclusive interview with Bernama recently.

National Affairs

North Korea, Malaysia to Enter Formal Talks Over Travel Ban The Diplomat 14th Mar 2017
Malaysia’s foreign minister has said that the talks will take place bilaterally, without third-party mediation. Last week, in a major escalation of an ongoing diplomatic row, North Korea banned all Malaysian citizens with its borders from being able to leave the country. Reciprocating for the move, Malaysia similarly banned travel out of the country by North Korean citizens in the country.

Malaysia ranks top in best countries to invest in The Star Online 13th Mar 2017
Malaysia has emerged as the front-runner in the 2017 ranking for best countries to invest in, scoring at least 30 points more than any other country on a 100-point scale. The ranking is based on scores from over 6,000 business decision makers compiled on eight equally-weighted country attributes - corruption, dynamic, economically stable, entrepreneurial, favourable tax environment, innovative, skilled labor force and technological expertise.

Najib: TN50 a continuation of previous policies the star 8th Mar 2017
The National Transformation 2050 (TN50) initiative is a continuation of previous policies, including Vision 2020, which was introduced by Tun Dr Mahathir Mohamad during his tenure as premier.

GE: Malaysia remains attractive to global firms NST Online 8th Mar 2017
Malaysia is an attractive investment destination for multinational companies (MNCs) because of its cost of running businesses, local talent and diversity, said General Electric (GE) general manager of Asia Pacific Global Operations, Yuichiro Yamaguchi.

Malaysia Forces Out North Korean Ambassador The New York Times 4th Mar 2017
The government of Malaysia declared North Korea’s ambassador “persona non grata” on Saturday and gave him 48 hours to leave the country, a major break in diplomatic relations after the airport assassination of Kim Jong-nam, the half brother of North Korea’s leader. The decision to expel Ambassador Kang Chol came after he failed to appear at Malaysia’s Ministry of Foreign Affairs as requested. Earlier, Mr. Kang had ignored a request to apologize for several inflammatory statements, including questioning the police finding that Mr. Kim was murdered with a banned nerve agent. “It should be made clear — Malaysia will react strongly against any insults made against it or any attempt to tarnish its reputation,” Foreign Minister Anifah Aman said in a statement announcing the expulsion order.

Malaysia-GCC trade deal on hold for now NST Online 1st Mar 2017
The Free Trade Agreement between Malaysia and the Gulf Cooperation Council (GCC) has been placed on the back burner. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said Malaysia is keen to revive the framework agreement but there have been challenges.

PM: Good EPF payout despite challenges the star 20th Feb 2017
The Employees Provident Fund declared a good dividend despite challenging economic conditions, says Prime Minister Datuk Seri Najib Tun Razak. “EPF announced a dividend of 5.7%, amounting to RM37.08bil to contributors for 2016.

Customs

Malaysia’s total trade up 14.8 pct to RM135.77 bln in January BorneoPost Online 3rd Mar 2017
Malaysia’s total trade grew 14.8 per cent in January to RM135.77 billion from RM118.31 billion registered in the same month last year, said the Ministry of International Trade and Industry. The expansion in trade was seen with China, Asean, Japan, United States (US), Taiwan, Australia and the European Union (EU). Exports posted a double-digit growth of 13.6 per cent to RM70.24 billion, the highest monthly export value ever recorded in January, surpassing RM64.05 billion registered in January 2014. Imports expanded 16.1 per cent to RM65.53 billion, it said. “A trade balance of RM4.71 billion was recorded in January 2017 making it the 231st consecutive month of trade surplus recorded since November 1997,” the ministry said in a statement. Exports of manufactured goods for January grew 12.2 per cent, especially that of petroleum products, to RM56.77 billion, accounting for 80.8 per cent of Malaysia s total exports. “Exports of petroleum products surged by 81.7 per cent to RM6.09 billion, contributed mainly by exports of refined petroleum products,” it said.

January exports surge 13.6% to over RM70b The Star Online 3rd Mar 2017
Malaysia's exports surged 13.6% in January 2017 to RM70.24bil, underpinned by double-digit growth in all major sectors, the Ministry of International Trade and Industry (MITI) said on Friday. The 13.6% increase from a year ago was however, slightly lower than Bloomberg's survey of a15% increase. MITI said the January exports were the highest for the month of January, surpassing the RM64.05bil registered in January 2014.

Malaysia-Saudi MoU on trade and investment to lead to diversification of imports, exports NST Online 27th Feb 2017
Malaysia and Saudi Arabia today signed a Memorandum of Understanding (MoU) in the field of trade and investment to promote cooperation. The MoU involves five key areas, namely healthcare, construction, education, small and medium enterprises (SMEs) and the Halal industry.

Economics

Malaysia’s services exports to grow 8% per year on average - HSBC The Star Online 9th Mar 2017
Malaysia’s services exports should rise by an average of 8% annually over the next 15 years, with tourism continuing to contribute over a third of its overall growth. HSBC Bank Malaysia Bhd’s head of commercial banking, Andrew Sill, said India was forecast to be the fastest-growing destination for Malaysian services exports, with average growth projected of 11% yearly. “Malaysia’s services export growth would remain dominated by tourism, education and health services,” he told reporters on HSBC’s New Trade Report in Kuala Lumpur on Thursday.

GST and subsidy cuts are to prevent bigger Govt deficit the star 8th Mar 2017
The Goods and Services Tax (GST) and subsidy cuts were implemen­ted to prevent the Government’s deficit from increasing, said Second Finance Minister Datuk Seri Johari Abdul Ghani.

Malaysia has strong FDI prospects, says economist NST Online 7th Mar 2017
Malaysia holds strong prospects for foreign direct investments (FDI), thanks to mega infrastructure plans like the High-Speed Rail, East Coast Rail Link, and China’s One Belt One Road initiative. The weaker ringgit has made Malaysia a more attractive investment destination, said UOB Bank economist Julia Goh.

King: Government will address ringgit depreciation The Star Online 6th Mar 2017
The Yang di-Pertuan Agong Sultan Muhammad V has confidence that the Government will take immediate steps to address the ringgit depreciation. In his royal address to lawmakers in Parliament here Monday, the Ruler said the ringgit depreciation against the world's major currencies has affected the rakyat. "The depreciation is caused by external and internal factors. We are certain that the Government will act with full commitment to resolve the problem as soon as possible," he said when opening the fifth session of the 13th Parliament.

Najib urges IRB to further improve tax collection the star 3rd Mar 2017
Prime Minister Datuk Seri Najib Tun Razak (pic) wants the Inland Revenue Board (IRB) to improve its tax collection so that the country’s development will not be disrupted and that it will be able to provide better service to the people.

Malaysia sees slower investments The Star Online 3rd Mar 2017
Malaysia is expecting a sluggish year in total investments as global businesses continue to navigate headwinds and uncertainty. International Trade and Industry Minister Datuk Seri Mustapa Mohamed is projecting that the country’s services and manufacturing sectors, which pulled through a stormy 2016 to chart modest growth in investments and projects, could see up to a RM2bil to RM3bil decrease in overall investments this year. Total approved investments in Malaysia rose 11% to RM207.9bil in 2016 from RM186.7bil the year before.

Malaysia's currency curbs boomerang on bond markets Reuters 27th Feb 2017
The ringgit was the weakest currency in emerging Asia last year after China's yuan, prompting Malaysia's central bank to get a written commitment from foreign banks to stop trading ringgit non-deliverable forwards (NDFs), offshore contracts they use to hedge their exposure to the currency. The upshot has been a flood of money leaving Malaysian bonds as foreigners, who own $47 billion of them, were unable to hedge their risks in onshore markets because of a lack of liquidity.

Malaysia's initiatives against terrorism funding boosts international confidence in economy the star 20th Feb 2017
Malaysia’s legal and regulatory framework in fighting terrorism financing has gained the world’s confidence, said Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi.

Energy

M'sian Solar PV Roadmap 2030 launched by year's end: Mida NST Online 14th Mar 2017
The Malaysian Solar PV Roadmap 2030 will be launched at the end of the year, the Malaysian Investment Development Authority (Mida) said today. Mida chief executive officer Datuk Azman Mahmud said the roadmap will pave the way to drive the country's solar photovoltaic (PV) industry forward. "This collective effort will involve key Malaysian stakeholders from industry associations, government departments and academia. "They will specify how Malaysia will pave the way to drive our solar PV industry forward," he said in his welcoming address at the International Solar Conference – PV Celltech 2017 here today.

Malaysia’s biodiesel production to rebound this year The Star Online 7th Mar 2017
Malaysia is expected to produce between 800,000 and 900,000 tonnes of biodiesel in 2017 from 500,000 tonnes last year when the government implements the biodiesel mandate, said the Malaysian Biodiesel Association. Its president, U.R Unnithan said the B10 mandate implementation is expected to start anytime this year. The biodiesel B10 is a blend of 10% palm methyl ester (PME) and 90% regular diesel, while B7 is of a lower blend of 7% PME.

Green tech financing scheme to continue with RM5bil funding the star 2nd Mar 2017
The Green Technology Financing Scheme (GTFS) will continue until 2022 with the Government approving a RM5bil allocation, said Energy, Green Technology and Water Minister Datuk Seri Maximus Johnity Ongkili.

Exclusive: Petronas considers $1 billion stake sale in offshore gas project - sources Reuters 20th Feb 2017
Malaysian state-owned oil and gas firm Petronas is aiming to sell a large minority stake in a prized upstream local gas project for up to $1 billion as it seeks to raise cash and cut development costs, two sources familiar with the matter said. Petroliam Nasional Bhd (Petronas) is looking to sell a stake of as much as 49 percent in the SK316 offshore gas block in Malaysia's Sarawak state, the sources told Reuters, a move that would be among its first major recent sales as it grapples with oil prices that have slumped by half over two-and-a-half years. That slide has squeezed the cash flows of Petronas [PETR.UL], hurt its earnings and forced it a year ago to announce a 50 billion ringgit ($11.2 billion) cut in capital expenditure over four years.

Energy Commission of Malaysia eyes building large-scale solar PV plants Asian Power 13th Mar 2017
These will be located in Peninsular Malaysia and Sabah. As part of a wider strategy to strengthen Malaysia's electricity generation from renewable energy sources, the Energy Commission of Malaysia (EC) intends to build large scale solar photovoltaic plants in Peninsular Malaysia and Sabah/Labuan.  The EC said in a release that the plants will be connected to the grid and will sell energy to Tenaga Nasional Berhad or Sabah Electricity Sdn Bhd under the Solar Power Purchase Agreements. The EC has announced the second competitive bidding process to select developers/developer consortia with previous experience in implementing power or related projects (including project financing and operation of power plants or electrical installation) to participate in the bidding process for the development of the large scale solar photovoltaic plants. The capacity of plants to be tendered will be from 1 to 30MW, with a target aggregate capacity of 360MW in Peninsular Malaysia and 100MW in Sabah/Labuan, which is expected to be commissioned in 2019 – 2020. Foreign participation is capped at 49% which is consistent with recent Government policy.  

SUPP urges state govt to lower electricity tariff BorneoPost Online 10th Mar 2017
The state government should review existing electricity tariff following its takeover of the Bakun hydroelectric power dam (HEP). This suggestion came from Sarawak United People’s Party (SUPP) Youth Central publicity secretary Milton Foo who lauded the state government for taking over Bakun HEP from the federal government. “It is believed that the takeover would help to stimulate and promote Sarawak’s economic development in the forthcoming years. “The state government should review the existing electricity tariffs to a lower rate, even though Sarawak’s electricity is one of the cheapest in the region. “This is so that Sarawakians can enjoy cheaper energy, thus reducing the burden of the people,” he said in a press statement yesterday. Foo said Sarawakians should be given priority since Bakun HEP “is able to produce ample energy.” On Wednesday, Chief Minister Datuk Amar Abang Johari Tun Openg said the state government had reached an agreement to acquire the entire equity interest of Sarawak Hidro Sdn Bhd (SHSB), the owner and operator of Bakun HEP from the federal government. He added that the state government’s wholly owned company Sarawak Energy Berhad (SEB) would price the acquisition at RM2.5 billion. However, he said SEB would take over the servicing of SHSB’s outstanding loan amounting to about RM6 billion.

Phase 1 of INIR report concludes Malaysia is ready for nuclear power, minister says Malay Mail Online 7th Mar 2017
The final report of the Integrated Nuclear Infrastructure Review (INIR) Mission Phase 1 will be tabled to the Cabinet by next week, said Minister in the Prime Minister’s Department Datuk Seri Nancy Shukri. The three-phase assessment, initiated by the International Atomic Energy Agency (IAEA), concluded that Malaysia is thoroughly prepared and has developed a considerable base of knowledge to make an informed decision about introducing nuclear power. The minister said Malaysia has 30 days to respond to the recommendation made by the report that evaluates interested newcomer countries’ status and state-of-readiness in developing nuclear power programme. “Any further action will depend on the approval of the government,” she told the media after the opening session of the 8th Annual Nuclear Power Asia Conference here today. The report also acknowledged that Malaysia has completed most of the studies required for Phase 1 and demonstrated a good level of understanding of the 19 nuclear infrastructure issues described in the IAEA milestone. INIR also made five recommendations and 10 suggestions to assist the national authorities in making further progress in infrastructure development. “The main recommendations in the report are on strengthening government commitment and enhancing public awareness to progress further towards making a knowledgeable decision,” Nancy said. INIR also recommended to further developing a legal and regulatory infrastructure, as well as plans for financing the nuclear power plant and establishing owner-operator. This, said Nancy, is also in line with the recommendation of the study conducted by the Malaysia Nuclear Power Corporation as the way forward for the nuclear power infrastructure development. The comprehensive regulatory and legal framework for nuclear power programme,taking into account lessons learned from Fukushima tragedy, are currently being put in place.

Malaysia's renewables capacity to balloon by 150% in the next decade Asian Power 6th Mar 2017
Malaysia will emerge as an outperformer in the Asian renewables industry, in terms of the market's attractiveness for investment. While the scale of Malaysia's renewables sector remains limited compared to regional counterparts, the country's supportive regulatory environment for renewables and stable economic and political environment translates into an attractive destination for renewables investment, according to BMI Research. Malaysia's renewables industry will become increasingly attractive for investors in the Asia region and we expect robust growth in non-hydro renewables capacity over BMI's 10-year forecast period to 2026. We forecast total non-hydro renewables capacity to expand by nearly 150% between 2016 and 2026, with growth mostly in the biomass and solar segments. While at a regional level, the size of the market remains limited compared to regional counterparts - notably India, China and Thailand - we expect the market to outperform in terms of its attractiveness to investors and balance between rewards on offer and risks to investment. We also note that Malaysia has a well-developed grid network with relatively low transmission and distribution losses (T&D) - which will support the integration of renewables projects, has good access to finance and a well-established domestic manufacturing base for solar components that will support the development of new projects.

‘Reducing carbon release: Malaysia on right track’ BorneoPost Online 3rd Mar 2017
Malaysia is on the right track towards achieving its target of reducing the intensity of carbon dioxide release from 45 per cent of the Gross Domestic Product in 2030, said Natural Resources and Environment Minister Datuk Seri Dr Wan Junaidi Tuanku Jaafar. He said the dissatisfaction over the government’s efforts to resolve the problem of climate change, as shown in a Merdeka Center survey, was due to a  misperception. He said the government had taken various proactive measures, including in the Green Technology Master Plan which focused on six key areas, namely energy, manufacturing, transportation, building, waste management and water management. “Malaysia contributes very minimal emission when compared to other nations like America and China. That is why Malaysia is considered one of the successful nations,” he said at a press conference held after a meeting of the Green Technology and Climate Change Council chaired by Prime Minister Datuk Seri Najib Tun Razak at the Perdana Putra Building here yesterday. On Wednesday, a local newspaper reported the findings of a Merdeka Center survey which showed that 81 per cent of Malaysians expressed worry about climate change after 2016 recorded the hottest year ever. The survey which was conducted in December 2016 also showed that almost 50 per cent of the respondents were dissatisfied with the government’s handling of climate change issues. — Bernama

Malaysia to implement Euro 4M specifications for 95 RON gasoline in Oct 2018 S&P Global Platts 1st Mar 2017
Malaysia has set a timeline of October 1, 2018 to implement Euro 4M gasoline specifications for the 95 RON grade in the country, according to a Malaysian government official. Malaysia implemented Euro 4M for 97 RON gasoline at retail stations in September 2015, but has yet to make the switch for 95 RON gasoline. The country plans to implement Euro 5-compliant fuels for 95 RON and 97 RON gasoline on September 1, 2025, and Euro 5 diesel on September 1, 2020, according to the country's clean fuels roadmap, said Datuk Shahrol Halmi, director of Oil, Gas & Energy at the Performance Management and Delivery Unit in the Prime Minister's Department. Oil companies are free to introduce Euro 4M and Euro 5 gasoline and diesel specifications earlier than the stipulated timeline, Halmi said. Euro 4M specifications for both gasoline and diesel limit sulfur to 50 ppm, down from a Malaysia's current standard of 500 ppm. For gasoline, the maximum benzene level will be lowered to 3.5% from the current 5%, while the maximum limit for Reid Vapor Pressure will be reduced to 65 kPa from the current 70 kPa. The Refinery and Petrochemical Integrated Development project, or RAPID, which is scheduled for completion in 2019, will be central to Malaysia's move to cleaner fuels. The 300,000 b/d refinery was designed to produce 98,000 b/d gasoline, or a yield of about 33%, 88,000 b/d of gasoil, 28,000 b/d of Jet A1, and 5,000 b/d of fuel oil. The project has reached 54% mechanical completion, with commissioning expected in the second quarter of 2019 and commencement of commercial operations in the fourth quarter.

Saudi Aramco to invest $7 billion in Petronas' RAPID oil refinery Reuters UK 28th Feb 2017
Malaysia's Prime Minister Najib Razak announced on Monday that Saudi Arabia's state oil company Saudi Aramco will invest $7 billion (5.6 billion pounds) into an oil refinery and petrochemical project in Malaysia's southern state of Johor. Najib said the decision was made before noon on Monday after discussions between top executives from Saudi Aramco and Malaysia's state-owned energy company Petroliam Nasional Bhd (Petronas), the sponsor of the $27 billion Refinery and Petrochemical Integrated Development (RAPID) project. Najib's statement marks a dramatic reversal in RAPID's fortunes after industry sources familiar with the matter said in January that Aramco planned to drop its participation in a partnership with Petronas in the project. At the time, Petronas said it would move ahead in spite of Aramco dropping out. Najib did not give any details on the change of heart. Petronas and Saudi Aramco executives are scheduled to sign the agreement on Tuesday. An industry source familiar with the matter says Aramco will buy a stake in RAPID's refinery, cracker and petrochemical operations. Aramco will also supply at least 50 percent of the crude that will be processed at RAPID, with an option to increase the supply, the source said. The RAPID project, located at Pengerang in Johor, is expected to begin operations in the first quarter of 2019. RAPID will contain a 300,000 barrel-per-day oil refinery and a petrochemical complex with a production capacity of 7.7 million metric tonnes. The complex will sit alongside an existing oil storage site at Pengerang.

Malaysia's gas projects to boost output to a peak of 70.6bcm by 2021 Asian Power 27th Feb 2017
BMI Research expects Malaysia's gas production will continue on an upward slope over the first half of 2016-2021 forecast period. This is thanks to several large fields which came online over the past years and that are continuing to ramp-up their production, in addition to several small-to-mid-scale projects set to come online in the coming years. Nearly all of the new gas projects are offshore Sarawak, East Malaysia, which will raise gas production and in turn feed Petronas' LNG complex in Bintulu. Amongst others, projects to come online in the coming years boosting Malaysian gas production include: Hess' North Malay Gas Project; Shell's E6 Field; Rotan field; SapuraKencana's SK310; Petronas' Kumang cluster development in Block SK306 is currently under way, in two phases. Together, the project will likely peak around 2020, production between 3-4bcm of gas. Petronas is also currently laying the groundwork for the development of the K5 sour gas project, and has started receiving submissions by foreign contractors regarding the engineering, procurement and construction of big mobile offshore production unit that it aims to use at K5. Phase one will see production of 2.6bcm, with production start-up in 2020. Taken together, these projects will maintain production over the coming years and even boost output from 64.4bcm in 2016 to a peak of 70.6bcm by 2021.

BIMP-EAGA tackles Sabah-Palawan energy connectivity The Manila Times 27th Feb 2017
The possible energy interconnection of Sabah to Palawan has gained the support of the sub-regional organization business group from Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA) Power. The BIMP-EAGA Business Council (BEBC) presented to the Philippine delegates the proposed Sabah to Palawan Interconnection project. The BEBC, a private sector group, initiated the partnership with the Provincial Government of Palawan aiming to deliver electric power from Sabah to Palawan. The Department of Energy (DoE) expressed full support for BIMP-EAGA Power and Energy Cluster whose thrusts run parallel to the country’s own agenda of ensuring energy security, promoting a low carbon future, achieving total electrification, and improving energy efficiency and conservation. The key output of the cluster meeting is the formulation of the nine-year (2017-2025) Power and Energy Infrastructure Cluster (PEIC) Roadmap for the different sub-sectors such as: Power Interconnection, Renewable Energy (RE), Rural Electrification and Sub-Regional Energy Efficiency and Conservation (EE&C) rolling pipeline project as input to the final BIMP-EAGA Vision 2017-2025 (BEV2025).

Malaysia's gas production in danger of falling after 2021 Asian Power 23rd Feb 2017
Malaysian gas production is benefiting from a string of projects coming online over the 2017-2020 period, according to BMI Research. "We note significant upside risk by the end of our forecast period from several large-scale gas projects yet to reach FID. Malaysia has already seen several gas projects come online over the past years, boosting the country's gas production from about 60bcm around 2010 to an estimated 65bcm as of 2016," it said. Notable projects over the past years include the NC3 and NC8 Fields, the Telok field, the Bertam, Kanowit and Damar fields, in addition to several Enhanced Oil Recovery (EOR)/upgrade work at older producing fields to stabilise or increase output, notably in the Baram Delta PSC held by Royal Dutch Shell and Petronas. We forecast this trend will continue over the coming years, with several small to mi-size projects set to come online within the coming years. This string of projects will boost Malaysia's gas production from an estimated 64.4bcm in 2016 to a peak of 70.6bcm in 2021. Post 2021, we expect production will resume to the downside as the low oil and gas prices dissuade new FIDs on large greenfield developments over the coming years. Production will fall from a forecasted peak of 70.6bcm in 2021 to 63.7bcm by the end of our forecast period in 2026. Nevertheless, we note upside risk to this forecast exists from several large-scale projects that could be sanctioned in the coming years should prices recover sufficiently to justify the significant investment required for these large projects. Unfavourable oil and gas prices will see operators delay large project FIDs and slow efforts to ramp up output to meet peak production in exchange for prolonging the life of these fields. We do not expect new output from these projects to make up for falling production in more mature fields over the second half of our forecast period.

Financial Services

IOSCO launches APAC hub in Kuala Lumpur Enterprise Innovation 16th Mar 2017
The International Organization of Securities Commissions (IOSCO) today unveiled the IOSCO Asia Pacific Hub in Kuala Lumpur, hosted by the Securities Commission (SC) Malaysia.  This initiative aims to meet a growing demand among IOSCO members for enhanced capacity building, particularly in growth and emerging markets, given an increasingly complex market environment, growing financial and technological innovation and rapidly expanding cross-border activity. Such circumstances pose challenges for regulators, increasing the need for IOSCO members to strengthen their regulatory expertise and hone their ability to oversee and supervise markets.

Malaysia: General insurers in competition regulator's sights Asia Insurance Review 2nd Mar 2017
The Malaysia Competition Commission (MyCC) has issued a "proposed decision" against the General Insurance Association of Malaysia (PIAM) and its 22 members for being parties to an anti-competitive agreement. The proposed decision issued on on 22 February followed MyCC’s investigations conducted since last year regarding an agreement reached between PIAM and the Federation of Automobile Workshop Owners’ Association Of Malaysia (FAWOAM), said the competition agency in a statement.

Food & Agriculture

Malaysia minister upbeat on palm oil prices The Nation 8th Mar 2017
Malaysian Plantation Industries and Commodities Minister Mah Siew Keong hopes that crude palm oil (CPO) prices will continue to trend at higher levels, especially since the country has some 600,000 smallholders. He maintained his CPO price projection at RM2,700 (Bt2,130) to RM2,800 per tonne this year, higher than last year’s average price of RM2,653 per tonne and RM2,513 per tonne in 2015. “We hope that this year’s CPO price will continue to be good, but there are a lot factors that could impact it,” said Mah, adding that the Malaysian Palm Oil Board (MPOB) had not set any target on the number of stakeholders under the programme.

Sugar price hike prompts CIMB Research to upgrade MSM the star 2nd Mar 2017
CIMB Equities Research has upgraded MSM Holdings Bhd to Hold with a higher target price of RM4.43 on a news report the retail price for sugar in the country has been raised from RM2.84 a kg to RM2.95.

ICT

IDC: What will redefine the Malaysian ICT industry in 2017 and beyond? Digital News Asia 14th Mar 2017
IDC Malaysia has recently unveiled its annual predictions for 2017 and beyond, highlighting the impact of emerging technologies and market changes that will drive the future of the Malaysian ICT industry in the next one to three years. “Drawing on IDC's industry-defining research and insights, the predictions explore the user trends and vendor strategies that will redefine the ICT market, redistribute market share in Malaysia, and help leaders capitalize on emerging market opportunities and plan for future growth," says IDC Malaysia research director Pranabesh Nath. Malaysian organisations face the need to transform while steering past heightening economic pressures in 2017.

Zalora invests US$4.2mil on regional e-fulfilment hub in Malaysia Digital News Asia 10th Mar 2017
Online fashion retail business Zalora officially opened its new Regional e-Fulfilment Hub on March 3. The e-Fulfilment Hub fulfils thousands of orders per day – about four to 4.5 million items – and serves as Zalora’s sole fulfilment hub for Malaysia, Singapore, Brunei, Hong Kong, Macau and Taiwan, while providing stock support for the Indonesian and the Filipino markets. The e-Fulfilment Hub covers 470,000 square feet (approximately equivalent to nine FIFA football fields) and is split across five levels. The online retailer has invested heavily in building its e-commerce infrastructure from warehousing facilities to last mile delivery fleets to ensure the highest level of delivery experience for consumers across all markets.

Malaysia sees 56% y-o-y growth in average connection speed: Akamai report Digital News Asia 10th Mar 2017
Akamai Technologies, Inc on March 9 released its Fourth Quarter, 2016 State of the Internet Report. Based on data gathered from the Akamai Intelligent Platform, the report provides insight into key global statistics such as connection speeds, broadband adoption metrics, notable Internet disruptions, IPv4 exhaustion and IPv6 implementation. “Internet connection speeds continued to show positive long-term trends around the world, with particularly strong year-over-year increases across all broadband adoption metrics,” said David Belson, editor of the State of the Internet Report. “When Akamai first published the report in 2008, we defined ‘high broadband’ as 5 Mbps and above, which nine years ago had an adoption rate of 16% globally. We’re now seeing a 15 Mbps adoption rate of 25% worldwide. “The upward trends are encouraging as businesses create and deliver even richer experiences for bigger audiences across the Internet, but accentuate the need for organisations to optimise those experiences for the myriad connected devices their customers are using.”

Minister: Malaysia, Saudi Arabia cement cooperation in ICT Malay Mail Online 27th Feb 2017
In tandem with rapid global development in communications and information technology, Malaysia and Saudi Arabia have agreed to further enhance cooperation in the field, particularly those involving news exchanges.    Malaysian Communications and Multimedia Minister Datuk Seri Dr Salleh Said Keruak said the cooperation between Malaysia and Saudi Arabia would be strengthened with the signing of a memorandum of understanding (MoU) between the news agencies of both countries, Malaysian National News Agency (Bernama) and Saudi Press Agency (SPA), today. He said Malaysia and Saudi Arabia would also review the MoU signed by the two countries on December 16, 1982.

Infrastructure

Chinese investors to bring in whopping RM434bil the star 8th Mar 2017
Chinese mainland investors will pour RM434bil into three mega land development projects in Malaysia. Deputy International Trade and Industry Minister Datuk Chua Tee Yong identified the projects as Forest City in Johor, Melaka Gateway in Malacca and Bandar Malaysia in Kuala Lumpur.

Manufacturing

Coca-Cola to invest RM500mil to scale up Nilai plant The Star Online 13th Mar 2017
Coca-Cola Malaysia will invest RM500mil to expand the size and production capacity of its current plant at Bandar Enstek, near Nilai. Chief executive officer of Bottling Investment Group Singapore - Malaysia-Brunei, Stephen Lusk, said construction on another 4.047ha, adjacent to the 12.545ha of the current plant, was expected to begin in the first quarter of this year and be fully operational in 2020. “When completed, Coca-Cola Malaysia will have 1,000 direct employees, while creating another 10,000 indirect jobs in companies supporting the business supply chain,” he added.

Malaysia Jan factory output up 3.5% y-o-y, below forecast The Business Times 13th Mar 2017
Malaysia's industrial production in January rose 3.5 per cent from a year earlier, slowing in pace for the second month in a row, government data showed on Monday. Factory output was below the 5.7 per cent rise forecast in a Reuters poll, and down from the 4.7 per cent increase in December. The expansion was supported by strength in the manufacturing, mining, and electricity sectors, data from the Statistics Department showed.

Call for promotion on use of locally manufactured products the star 3rd Mar 2017
The usage of Malaysian manufactured products should be promoted as a measure to increase local sales and consumption. This comes on the heels of the local sales indicator in the Federation of Malaysian Manufacturers (FMM)-Malaysian Institute of Economic Research (Mier) Business Conditions Survey recording its lowest level, falling 12 points to 87, for the second half of 2016 as well as the first half of 2017.