Download a summary about the domestic manufacturing industry in Malaysia
About a quarter of the Malaysian GDP is from the manufacturing industry. This report will briefly explain the overall outlook on the country's manufacturing industry. style="color:#e74c3c;">You can download upon login.
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- Malaysia's domestic manufacturing industry
- Real GDP growth and industry structure in recent years
- Number of companies by industry
- Overall manufacturing industry
- GDP contribution by state and number of companies
- Industrial Structure and Manufacturing Sales by State
- Major industrial facilities in Malaysia
- Manufacturing industry in each state (Selangor, Penang, Johor)
1.Malaysia's domestic Manufacturing Industry: Summary
Malaysia's GDP composition by industry
Half of the country's GDP comprised from the manufacturing industry while a quarter goes to the manufacturing industry. 90% of businesses are from the service industry (small to mid size enterprises), and the remainng, around 5%, are from the manufacturing industry with 50,000 firms in the country. Of these, 45,000 are micro to small enterprises, with 2,5000 as mid sized enterprises and 1,400 large enterprises.
Malaysia's GDP composition by state
5 major states that contributed to more than 60% are Selangor (24.2%), Kuala Lumpur (16.4%), Sarawak (9.6%), Johor (9.4%), Penang (6.7%). Streamlining it based on the manufacturing industry contribution by state: Selangor (28.9%), Penang (12.9%), and Johor (12.6%) which totaled to half of the contribution amount.
2.Real GDP growth and industry structure in recent years
- Malaysia's real GDP for 2019 was +4.3% higher than the previous year but slower than 2018's +4.8% growth rate.
- Many sectors including manufacturing, wholesale, retail, and the construction sector experienced positive growth although small, excluding the mining sector that was been in the negatives for two years.
- In recent years, the minimization of the agricultural industry as opposed to the expansion of the service industry is obvious in the country's domestic industry make up.
- As of 2016, the country's local industry is mainly consists of the service industry (53.7%) with the manufacturing industry also standing tall at (23.0%).
3.Number of companies by industry
- The number of manufacturing companies in Malaysia are approximately 50,000 or in total, 5%.
- 97.1% are micro to small enterprises with sales of RM15 million (≒JPY 380 million) or less or 75 or less employees.
- There are about 2,5000 mid sized companies with sales of around RM 15 million - RM 50 million (≒JPY 380 million) or 75-200 employees.
- Big enterprises are around 1,4000 with sales of more than RM 50 million or more than 200 employees.
4.Overview of country's manufacturing industry
5.GDP contribution by state and number of firms
- Malaysia has 13 states and 3 federal territories
- SME companies mainly are from Selangor (19.8%) and Kuala Lumpur (14.7%)
- Six major states have contributed to 70% of the country's GDP in the past five years.
- In 2018, Selangor was the in the lead (24.2%) followed by Kuala Lumpur (16.4%), then Sarakwak (9.6%), and Penang (6.7%).
6.Industrial Structure and Manufacturing Sales by State
Each state has its own industrial structure. The manufacturing sector is the largest industry in each state in chronological order, Penang (44.6%), Malacca (40.7%), Negeri Sembilan (40.4%). A closer breakdown of sales by states is Selangor (28.9%), Penang (12.9%), and Johor (12.6%).
7.Major industrial facilities in Malaysia
There are more than 200 industrial parks and 18 free industrial zones in Malaysia.
8.(1)Manufacturing industry in Selangor
- Selangor is a region around the federal territory of Kuala Lumpur.
- As of 2015, there are 10,027 manufacturers in the state.
- The following five sectors stand for 70% of the state's manufacturing segment. It aims to move up the value chain through investment of new forms of R&D innovations.
Machinery and Equipment, Manufacturing of food and beverage, Transportation Equipment, Life Sciences, and Electronics.
- Selangor has received investments from more than 65 countries around the world.
- Japanese manufacturing investments started back in 1960s. Although investments have been declining in recent years, Japan remains as one of the largest investors (30% of total).
8.(2)Manufacturing industry in Penang
- Foreign direct investment (FDI) accounted for 89% of total investment inflows in 2019. It accounted for 20% of total investment in Malaysia's manufacturing sector and 28% of Malaysia's total FDI, making it the country's top FDI destination.
- Investments are mainly from U.S and U.K companies (Intel Technology、Jabil Circuit、Lam Research、Micron Technology、Smith+Nephew etc).
8.(3)Manufacturing sector in Johor
- Iskandar Malaysia (IM) was established in 2006 as the first economic corridor in Malaysia.
- The Iskandar Regional Development Authority (IRDA) was established as a statutory body of the Malaysian federal government to drive infrastructure investment and is responsible for the regulation of both public and private sectors in realizing the vision of developing Iskandar Malaysia into a strong and sustainable nation among international standings.
We hope this article will be useful for those who are considering of doing business in Malaysia.
You can download more this material upon login.
This article was written by Bridge International Asia Sdn Bhd based on locally gathered information.
While we try our best in making sure the information provided in the contents and articles of this site is as accurate as possible, we do not necessarily guarantee the accuracy of the content. Unauthorized reproduction of content is prohibited.
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