18 theSun | FRIDAY OCTOBER 30 2009

business

Proton, autoparts
makers winners of
more open NAP
KUALA LUMPUR: National carmaker
Proton Holdings Bhd is seen as the im-
Lim, flanked by mediate beneficiary of the more open
Power (left) and National Automotive Policy (NAP) as it
Boots, with a already has available capacity for poten-
plaque marking tial auto manufacturers to capitalise on.
the opening of Other beneficiaries are the tier-1
TNT’s Penang autoparts suppliers as the industry
International consolidates further with the enforce-
Gateway facility. ment of mandatory standards on parts
and components, OSK Research said
yesterday.
“Overall, we think most players in
pioneer status and investment tax al-
lowance for the manufacture of critical
components will see potential foreign
candidates investing in Malaysia in a big
way rather than merely as assemblers,
it said.
OSK Research said the possibility
of a global OEM maker establishing its
manufacturing hub as a regional export
centre is favourable for Proton given the
ample capacity for 200,000 units (per
year) at its Shah Alam plant.
Proton currently has a total excess

TNT to double size of Asian the industry will potentially benefit as

network in four years
by Himanshu Bhatt
newsdesk@thesundaily.com
GEORGE TOWN: Freight forwarding
giant TNT Express Worldwide NV is
planning to double the size of its
7,620km-long Asia Road Network
(ARN) – the region’s first fully-man-
aged and operated scheduled road
express cargo service – within the
next four years.
Onno Boots, TNT regional man-
aging director for Asia said the
network, which covers over 127
cities across Malaysia, Singapore,
Thailand, Vietnam, Cambodia and
south China, would be expanded
through branches or “spin-offs”.
“The core of the main axis (of
the ARN) had already been laid.
We will now probably develop the
spin-offs,” he said yesterday, adding
that the company would announce
details by early next year.
The ARN is linked directly to
China through TNT’s acquisition of
China-based Hoau Logistics three
years ago, a move that allowed
TNT to have about 2,000 domestic
depots and hubs there, he said.
He said TNT was also working
to expand further in India with the
acquisition of ARC India Limited in
2006. Boots said this at a press con-
ference after the opening of TNT’s
Penang International Gateway by
Chief Minister Lim Guan Eng at
the Second Cargo Complex of the
Penang International Airport.
Also present was TNT Express
Worldwide Sdn Bhd managing
director for Malaysia and Brunei,
Gerry Power.
The RM6 million gateway is
northern Malaysia’s first integrated
air and road facility, connecting
TNT’s air network here to the ARN.
The facility is expected to provide
increased opportunities for the
high-tech industry, specifically the
electronic, computing, telecom-
munications and semi-conductor
sectors in Penang.
Power said TNT was also seeing
strong demand from the life sci-
ences sector in Penang. Measuring
1,300 sq m, the facility is capable of
conveying 2,500 parcels per hour
and 320 tonnes of cargo daily, and
augments the company’s existing
depot in the airport.
Power said despite the eco-
nomic uncertainties of the past 12
to 18 months, TNT Malaysia was
seeing a growth rate of 38% to 40%
a year. The company’s gateway at
the KL International Airport was set
up in 2007.
Boots said although the com-
pany’s main customer base three
years ago was from small- and
medium-scale enterprises (SMEs)
at about 80% to 90%, the ratio of
multi-national corporations (MNCs)
was increasing.
the NAP ensures the long-term viability
and competitiveness of the automotive
industry, thus transforming Malaysia
into a regional and global player,” it
said.
Under the policy, the government
informed that the potential partnership
with a global original equipment manu-
facturer (OEM) will be established.
Market talk is that the tie-up could
potentially involve a strategic tie-up with
a local assembler, and a likely candidate
is DRB-Hicom.
“However, our channel checks reveal
that the potential strategic tie-up will
merely be with a global OEM without
the inclusion of a local assembler,” said
OSK Research.
Potential candidates, it said, are likely
to come in on a bigger scale.
The lifting of the freeze on issuance of
new manufacturing licences to selected
manufacturers bodes well for the exist-
ing local manufacturers and assemblers,
notably those with ample excess capac-
ity, which are ready to be capitalised
on by foreign automakers, the research
firm said.
Furthermore, the additional incen-
tives such as tax exemptions on exported
goods and fiscal deductions from the
capacity of 57% from both its Tanjung
Malim and Shah Alam plants. The
carmaker once said it intended to shift
its main production to Tanjung Malim
given that some of its model line-ups
produced from the Shah Alam had been
discontinued.
Although Thailand is ahead of Ma-
laysia on incentives by offering lower
excise duties on vehicle prices, exemp-
tion of import duty on plant machinery
with the already established supply
chain, the downside is that this requires
a minimum investment of RM1 billion.
“We generally view the newly an-
nounced NAP positively as Malaysia will
be opening up the automotive industry
for value-added investments from global
OEMs and leading part manufacturers,
especially with the host of incentives
such as corporate tax holidays and tax
exemption on exported goods,” said OSK
Research.
To date, Thailand has seven global
OEMs – Toyota, Mitsubishi, Isuzu,
Honda, Nissan, Ford and General Mo-
tors – and a few smaller ones that have
set up plants with capacity totalling 1.625
million units as of 2008.
As none represents Europe, Malaysia
may try to attract global OEMs from this
region instead. – Bernama

Private sector to lead again

PETALING JAYA: Malaysia’s export
performance will be crucial in the
government’s projection of a real gross
domestic product (RGDP) of between
2% and 3% for 2010, says the research
team at Inter-Pacific Research Sdn Bhd
(Interpac).
“While we applaud the bold measures
taken by the government to trim the
Truth deficit, our underlying concern will be
the pace of economic recovery,” said the
pays in team in its report on Budget 2010.
advertising According to the report, there will be
pg 20 strong emphasis for the private sector
to take the lead again while domestic
activities are expected to act as a comple-
ment.
“Apart from consumer spending, roll-
out of projects in the construction and
infrastructure sectors will determine the
magnitude of the multiplier,” it said.
The team, which projected a 3% RGDP
growth for 2010, said Budget 2010 will
encourage local companies abroad to
remit their profits and reinvestment. The
government also has plans to provide a
more conducive business environment
and a more market-oriented economy
by establishing two new Commercial
Division Courts to expedite commercial
cases and to resolve them within nine
months.
It will also be giving PR status to
skilled individuals from abroad to accel-
erate technology transfers but Interpac’s
concern lies with the bureaucracy’s ef-
ficiency and labour productivity where
salaries act as a hurdle on investment.
Apart from continuing its focus on
projects such as the Integrated Immigra-
tion, Customs and Quarantine Complex
(CIQ) in Bukit Kayu Hitam, six UiTM
campuses and development of Matrade
Centre, the government has allocated
RM2.3 billion to construct and upgrade
infrastructure in rural areas.
According to Interpac, the drop in
economic expenditure coupled with the
issue of implementation will put a lid on
the construction sector but it remains
neutral on the sector, expecting com-
panies with good track record such as
WCT, Fajar Baru, Loh & Loh and others
to benefit.
Meanwhile, the reduction of personal
income tax to 26% only benefits the up-
per income bracket.
“The RM1,000 personal tax relief could
be of some help, while the impact of EPF
remains muted,” said Interpac.
In order for private consumption to
improve, several developments need
close attention namely employment op-
portunities; trend of the retail prices of
goods and services although consumer
price index remains low; commodity
prices especially crude oil; rate of suc-
cess for proactive measures; and the real
disposable income.
No tax cut for middle income bracket
plus higher service tax on credit, charge
and supplementary cards may curb
spending, especially to those in the low-
middle income bracket, it said.
In the property sector, the govern-
ment’s allocation of RM899 million next
year to intensify the tourism sector is
expected to attract more MM2H partici-
pants.
House buyers’ affordability would im-
prove as EPF contributors can withdraw
current and future savings in Account
2 for property purchases, although it is
limited to the purchase of one house at
any one time.
Property developers such as Sunrise,
E&O and Mah Sing are expected to ben-
efit from the boost in MM2H programme
while township developers in general
would benefit from further relaxation of
EPF withdrawal.
On the flip side, the real property
gains tax (RPGT) abolished in April 2007
is now back. A 5% tax will be imposed on
gains from the disposal of real property
beginning Jan 1, 2010.
“We think this move will have damp-
ening effect on the secondary property
market and may slow down the recovery
of property sector despite trying to curb
property speculation via RPGT,” said
Interpac.