Ministry optimistic cocoa industry can hit RM6b export target

SERDANG: The Primary Industries Ministry is optimistic that the cocoa industry would achieve the target of RM6 billion export value by 2020 as outlined in the 11th Malaysia Plan (11MP).

As of 2018, the nation’s cocoa exports have hit RM5.55 billion.

Ministry secretary-general Datuk Dr Tan Yew Chong said the 4.6% rise in the sector’s contribution to gross domestic product (GDP) in 2018 from 2017 is a positive sign that the target is achievable.

He said cocoa has good potential with the right business model as well as commercialisation and downstream activities.

“The cocoa sector contributed RM5.55 billion to the nation’s export revenue in 2018, accounting for RM1.44 billion or 0.1% of GDP.

“The amount is a 4.6% increase from RM1.38 billion the previous year,” he said at a media conference after launching ‘Innovation to Market’ (I2M), the Malaysian Cocoa Board’s (LKM) commercialisation of research findings programme at the UPM-MTDC Technology Centre here today.

The four-day programme is the first in a series of seven planned over the next six months on technology transfer and commercialisation for LKM researchers.

Also present was Malaysian Technology Development Corporation (MTDC) chief executive officer Datuk Norhalim Yunus.

Tan said amid the cocoa industry’s very encouraging performance, cocoa has great potential for the export market.

However, he said, cooperation is still needed with the relevant agencies for research and development (R&D) as well as commercialisation in order to make it globally competitive.

“We cannot focus only on the local market, we also have to penetrate global markets.

“The export value of chocolate rose to RM1 billion last year. So besides oil palm cultivation, we can probably return to cultivating cocoa, which also gives a good income,” he noted.

Meanwhile, he said between 20 to 30 technologies and products will be commercialised for the cocoa industry.

“LKM has so far conducted 89 research projects since the 8th Malaysia Plan, with total allocation amounting to RM54.4 million.

“A total of 19 LKM products and technologies have been commercialised, and the agency has identified 63 R&D products such as cosmetics, self-care and food products with commercial potential,” he said.

Meanwhile, Norhalim said Malaysia’s cocoa products have also penetrated international markets such as Morocco.

“With the cooperation of researchers and entrepreneurs, we are exploring new markets especially in Asean and Oceania.

“We have the products, and we are confident the technology has reached the required level. What is important now is cooperation with entrepreneurs to commercialise and market the products,” he said.

The programme was attended by 26 LKM staff including research officers and marketing officers.


Bursa Malaysia to benefit from another Fed rate cut – Standard Chartered

KUALA LUMPUR: Bursa Malaysia will be among the emerging market beneficiaries if the US Federal Reserve (Fed) lowers interest rates by at least once more by end-2019, according to Standard Chartered Bank Malaysia Bhd.

Managed Investments and Products Management head Danny Chang said market players were expecting a nearly a 100% chance of one Fed rate cut, and a 93% probability of two, by end-2019.

“Historically, when there is a US Fed rate cut which will not lead to a recession in the country, which is what we expect, it will be good for emerging equity markets, including Bursa Malaysia,” he told reporters on the sidelines of the Standard Chartered’s Global Market Outlook for the Second Half of 2019 briefing here today.

However, Chang admitted that Northeast Asian emerging markets such as Hong Kong, China and South Korea would benefit first, subsequently followed by Bursa Malaysia due to the local bourse‘s higher valuation and the low beta nature.

He added that the lower corporate earnings in Malaysia, which grew less than 10% as compared with 11-12% registered by Northeast Asian markets thus far also made the local exchange less attractive.

“It is not the government’s policies or political risks that affect the Bursa Malaysia, but (because) the local equity market is still expensive compared with others,” he said, adding that the benchmark FTSE Bursa Malaysia KLCI’s (FBM KLCI) price-to-earnings (P/E) ratio currently stood at about 16-17 times, much higher than the 10-11 times P/E ratio of Northeast Asian markets.

On the Overnight Policy Rate (OPR) adjustment, Chang said Standard Chartered expects Bank Negara Malaysia to maintain the rate at the current level of 3% at year-end.

“The economy is not slowing to a level where the central bank has to do another immediate rate cut after 25 basis points cut in May this year,” said Chang.

However, he said the central bank could cut the rate of the OPR if it wanted to mainly due to the low inflation rate in the country.

On the ringgit’s performance, Standard Chartered projected the local unit to trade at 4.15 level against the US dollar by year-end despite expectations of the weakening of the greenback following the Fed rate cuts.

Chang said the weaker forecast was due to the anticipation of lower foreign inflows as compared with the Northeast Asian markets.

“The saga of Malaysian bonds to be removed from the FTSE World Government Bond Index (WGBI) in April this year had also caused some restrictions in foreign inflows,” he added.

On the global front, the bank said it continues to have a preference for equities over bonds, and emerging market and corporate bonds over developed market government bonds.

“Within equities, we have a tilt towards the US,” it said in a statement today.


Malaysia retail sales growth rises 3.8% in Q1

KUALA LUMPUR: The Malaysian retail industry achieved a better-than-expected growth rate of 3.8% in retail sales for the first quarter of 2019 (1Q19) as compared with the same period in 2018, said the Domestic Trade & Consumer Affairs Ministry (KPDNHEP).

Deputy Minister Chong Chieng Jen (pix) said as of 1Q19, the services sector contributed 57% to gross domestic product (GDP) and the wholesale and retail sub-sector was the main growth momentum for the services sector.

“At the same time, the sales of wholesale and retail trade in May 2019 contributed an amount of RM110.8 billion to national GDP and accounted for approximately 1.8 million in manpower as a whole,” he said in his keynote speech at the Malaysia Retail Chain Association (MRCA) Retail Conference 2019 here today.

The conference was held in conjunction with MRCA’s Malaysia International Retail & Franchise 2019 taking place from July 18 till 20.

Chong said the liberalisation of the Malaysian retail sector in 2012 continues to encourage more foreign retailers to invest and set up their retail stores within shopping malls in Malaysia.

He said six foreign large retailers are operating in Malaysia namely Tesco, Giant, AEON, AEON Big, Isetan and Lulu.

However, Chong said the supermarket/hypermarket sub-sector saw a negative growth at -2.3%, but it was better than the -3.8% growth rate in 1Q18.

“I see this phenomenon as an inevitable global trend, with the retail sector in Japan and Thailand now also dominated by the convenience store,” he added.

Founded in 1992, MRCA is an association for chain store retailers and franchisors determined to enhance the retail and franchise environment in Malaysia and abroad.

Today, MRCA has grown to become an influential entity comprising more than 500 leading retail chain stores and franchisors, including established brands such as Poh Kong, Secret Recipe, Focus Point, Subway, Senheng, 7-Eleven, OSIM, Bonia, Naza Motor, Mydin, Bently Music and others.


Strengthen MM2H programme to ease property glut: MIPEAC

KUALA LUMPUR: The Malaysian Institute of Professional Estate Agents and Consultants (MIPEAC) is of the view that encouraging more foreigners to take up the MM2H (Malaysia My Second Home) programme and to invest in Malaysian properties could help ease the glut in the property sector.

In a statement today, MIPEAC said it would be a waste not to strengthen the promotion of MM2H and encourage more foreign investments in the country’s property sector.

“With RM20 billion worth of residential overhang, we should be more open to foreign buyers with higher spending power to enter the market,” it said.

International Real Estate Federation (FIABCI) Malaysian chapter president Michael Geh reportedly said in a news portal recently that Malaysia must encourage more foreign buyers of local real estate to resolve the issue of unsold units in the country.

“In general, efforts to drive in foreign investments in other segments like commercial and industrial properties should be taken more seriously as well. MIPEAC believes that more can be done to encourage foreign buyers and investors to enter Malaysia’s property market.

“High-end developments can be marketed more intensively globally, together with the ongoing efforts done in the tourism sector,” it added.

Although stricter background checks for MM2H applications have been implemented recently, MIPEAC applauds the Tourism, Arts and Culture Ministry’s efforts to speed up the approval process of the backlogged applications by setting up a special task force.

Concurrently, it said growth in the ICT sector in Malaysia will also pull in more professional foreign workers which will in turn encourage more property purchases by expatriates.


Asia invests in power infrastructure to meet energy transition needs

KUALA LUMPUR: Governments across Asia are tapping on innovations in generation, transmission and distribution technologies to fulfil their energy transition ambitions, says Black & Veatch in a statement.

Black & Veatch is an employee-owned, global leader in building critical human infrastructure in energy, water, telecommunications and government services.

At the core of the energy transition is the need to address the increasing power demand, following rapid population and economic growth along with the continued need for conventional power sources.

Black & Veatch executive vice-president (Asia Power Business), Narsingh Chaudhary said regional governments made good progress in supplying affordable and reliable energy for their population as they also implemented emerging technologies to offer more sustainable solutions.

The leader in energy transformation strategies is helping regional leadership to identify integrated power infrastructure possibilities, as they re-balance their energy portfolios to meet universal electrification and carbon emission reduction goals.

An integrated power infrastructure helps utilities to overcome the pitfalls of aging infrastructure assets while meeting rising customer demand for renewable and reliable energy.

The right energy portfolio mix offers improved operation efficiencies.

Chaudhary leads Black & Veatch Power teams in Asia, including India, where the company offersconventional, renewable, and distributed power generation, transmission and distribution, micro-grids, and behind the metreservices.


Supermax buys land, property for future expansion

KUALA LUMPUR: Supermax Corporation Bhd’s wholly owned unit, Maxter Glove Manufacturing Sdn Bhd, has entered into a deal to acquire Leader Cable Industry Bhd’s land for RM65 million.

In a statement, Supermax said the 6.55ha freehold land with industrial premises is located in Meru, Klang.

“The proposed acquisition is for the future expansion of the group’s manufacturing capacity, as it is strategically located near Maxter’s existing cluster of manufacturing plants, which will facilitate management control, operational synergies and efficiency,” it said.

The natural rubber and nitrile gloves manufacturer said it plans to construct three large nitrile glove manufacturing plants on the land at an approximate cost of RM550 million over the next five years, which will increase the company’s production capacity to 42.6 billion pieces per year.

“The new plants will generate revenue growth as a result of increased operational efficiency derived from the new production lines,” it said.

The acquisition will enable the company to expand its manufacturing capacity, grow its business and ultimately accrue long term benefits to the shareholders, and will be funded through internally generated funds and bank borrowings.

Supermax added that the proposed acquisition will not have any effect on the share capital and substantial shareholder’s stake in the company nor will it affect earnings per share and net assets per share.


Malaysia can exceed RM1 trillion total exports target: Minister

KUALA LUMPUR: Malaysia is capable of exceeding the RM1 trillion total exports target this year, boosted by strong collaboration between various government agencies and private sectors, said International Trade and Industry Minister Datuk Darell Leiking.

Last year, Malaysia according to him recorded RM998 billion in total export, about 0.2% short of surpassing the RM1 trillion threshold.

“But this year we believe we will have an export growth around 3.4% and hopefully we will be able to meet the said (RM1 trillion) target,” he told reporters on the sidelines of the Beyond Paradigm Summit today.

Darell’s bullish statement today was in line with the optimism expressed by Malaysia External Trade Development Corporation (Matrade) on Tuesday, that the country’s total exports could breach the RM1 trillion mark this year due to all-round positive catalysts and economic outlook.

Its CEO Wan Latiff Wan Musa said from January to May this year, Malaysia’s total exports stood at RM405.36 billion, which was an increase of 0.3% compared with the corresponding period last year.

Malaysia according to Darell has a different kind of market and due to that unique feature has enticed many investors to set up their business here.

Meanwhile, the minister was also asked on negotiations to create the world’s largest free trade agreement, the Regional Comprehensive Econo­mic Partnership (RCEP) and said, the member countries have just concluded their latest rounds of discussion in Australia recently.

“We are finding common grounds for reasons to conclude it for Malaysia as well as the other nine Asean countries plus the six dialogue countries.

“We will have a meeting just after next week in Beijing, where I will be attending on behalf of the government, to try and close some chapters and to give better directions of Asean so that hopefully we can conclude it by the end of the year,” he said.

RCEP is a proposed free trade agreement between 10 Asean member countries and six Asia Pacific nations, namely Australia, China, India, Japan, South Korea and New Zealand.

The free trade agreement was officially launched at the 2012 Asean Summit in Cambodia.

RCEP has a combined population of 3.4 billion with the gross domestic product (GDP) valued at US$49.5 trillion (RM203.2 trillion) or 39% of the global GDP.

Since Pakatan Harapan coalition of political parties took over the government administration from Barisan Nasional, it has managed to close a few chapters in the RCEP’s negotiation without risking the sovereignty of the country, said Darell.


Penang’s manufacturing sector records investments of RM8.8b for 1Q19

GEORGE TOWN: Penang recorded RM8.8 billion in total approved investments in the manufacturing sector in the first quarter of 2019 (1Q19), maintaining the state’s reputation as one of top investment destinations in the country.

Deputy Chief Executive Officer II of the Malaysian Investment Development Authority (MIDA), Zabidi Mahbar said the investments are 780 per cent higher, compared with RM1.0 billion approved in the same period last year.

“Of this, RM8.5 billion was from foreign investments, representing 42.1 per cent of Malaysia’s total approved foreign direct investments (FDIs) in the manufacturing sector for January-March 2019.

Notable approved manufacturing projects in Penang include projects involving Micron Technology and Jabil Circuit,“ he disclosed when speaking at the Penang Domestic Seminar here today.

According to Zabidi, to encourage more investments, MIDA continued to undertake various activities and programmes in paving the way for further growth, particularly among the domestic players.

“In 2018, MIDA set up a dedicated team called the Investment Coordination Platform (ICP) to facilitate companies to expand their businesses and investment portfolio.

“This unit works closely with equity and corporate advisory firms, as well as local regulators and technology providers, in assisting companies in conducting business-to-business matching, capital raising exercises through debt and equity, mergers and acquisitions, divestment and initial public listing or initial public offerings (IPOs),“ he added.

He said Penang had consistently been ranked among the top investment destinations in the country as from 1980 to 2018, MIDA approved 4,084 manufacturing projects with investments worth RM129.1 billion.

These projects created more than 380,000 job opportunities, mainly in electrical and electronics, machinery and equipment and fabricated metal products industries.