In Support of Growth

Opportunities
Malaysias engineering supporting industry which
progressed in tandem with the countrys rise as a
global player in manufacturing, currently consists of
the following distinct sub-sectors:

Mould and Die

Machining

Metal Casting

Metal Stamping

Heat Treatment

Surface Treatment/Finishing

Metal Fabrication

Having evolved from the servicing of equipment for

the resource and agro-based industries in the 60s
and 70s to playing a key supporting role during the
nations rapid economic progress in the 80s and
90s, the industry is now positioning itself in the
direction of an enhanced role in the next phase of
Malaysias economic evolution. This scenario will
enable potential investors to favorably consider
Malaysia as an outsource destination.

1 Malaysias Engineering Supporting Industry

In addition, the countrys as well as the regions

fast growing automotive and electrical & electronics
sectors; attractive fiscal and non-fiscal incentives;
the countrys ideal geographic location; a vibrant
economy; a stable Government and localdeveloped infrastructure, when taken together
equals one attractive proposition.

 Ideal Location
The ASEAN countries, with a combined population
of over 583 million and a collective GDP of more
than US$1.5 trillion and a total trade of US$1.69
trillion for 2008, is a market with infinite potential
growth. Our location is not only an ideal base to
gain entry into the ASEAN markets but is also
appealing to companies with high value and lowcost strategies looking to outsource effectively.
A Choice Environment
Malaysia possesses the ideal environment for
foreign investors and companies looking for
outsourcing partners: political stability; strong
economic fundamentals; well-developed
infrastructure; English language proficiency; skilled
and productive workforce and quality of life.
Robust Engineering Supporting Industry
Malaysia is an ideal destination for multinational
corporations (MNC) looking for outsourcing or
investment opportunities in the engineering supporting
industry.
A Vital Link
Malaysia is linked to a vibrant manufacturing sector,
particularly in the electrical & electronics, computer
& computer peripherals; automotive & aerospace;
telecommunications and machinery manufacturing
sectors. As an outsource destination, we offer a
seamless link to these industries with vast
opportunities for structural and economic growth.
Outstanding International Presence
Our engineering supporting industry has earned a
strong international recognition for its world-class
manufacturing standards. With the long-standing
presence of various MNCs within the country, we
possess the expertise and experience to be able to
supply products and services that are globally
competitive in quality, value and delivery time.

Incentives for Growth

Malaysia has a corporate tax rate of 25% for both local
and foreign-owned companies. A wide range of tax
incentives are available to manufacturing companies in
Malaysia.
1. Incentives for Manufacturing Companies
Pioneer Status income tax exemption of 70% to
100% on statutory income for 5 years, or
Investment Tax Allowance of 60% to 100% on
qualifying capital expenditure incurred within 5
years
Reinvestment Allowance of 60% on qualifying
capital expenditure for 15 years.
2. Incentives for High Technology companies
Incentives for High Technology companies venturing
into the design, development and manufacturing of
high technology intermediate engineering products
and services.
Pioneer Status income tax exemption of 100% on
statutory income for 5 years, or
Investment Tax Allowance of 60% on qualifying
capital expenditure incurred within 5 years to be
offset against 100% of statutory income.

Malaysias Engineering Supporting Industry 2

Mould and Die

Industry
Malaysias mould and die industry is recognised as
the leading engineering supporting industry in the
country. Over the last three decades, the mould &
die industry has experienced rapid growth in
tandem with the overall growth of the
manufacturing sector. The increasing incorporation
of locally manufactured parts and components
has significantly fuelled the demand for moulds
and dies. Malaysian companies have the
capability to manufacture most types of moulds,
dies and toolings to complement the
manufacturing sectors.
The value of imports of moulds and dies
amounted to RM730.24 million in 2008. Imports
were mainly from Japan, Taiwan, Germany,
Singapore, China, United Kingdom, USA and South
Korea. These imports were mainly very high
precision and complex toolings, for which
opportunities exist for new manufacturing ventures.
Malaysia also exports moulds and dies, which has
shown an increasing trend over the last five years.
The Government has set up the Mould & Die Design
Centre to provide additional boost to the development
of the local mould & die industry. The Centre provides
R&D, design, technical consultancy, training and
facilities rental services to the local mould & die
industry and manufacturing sector in general.

Companies operating in Malaysia

The mould and die industry comprises about 350

companies involved in the manufacture of most types
of moulds, dies and tooling to complement the needs
of the E&E, plastics, telecommunication, automotive,
machinery, rubber and other industries. Foreign
companies that have established operations in
Malaysia include A-FOSS Zeno (Japan), Meiki
(Japan), Fuji Dies Kogyo (Japan), Tylon
Manufacturing (Japan) and Besi APac (Netherlands).
Prominent Malaysian companies include Interplex
Group, Lypometal, Sum Hing Engineering Works,
Topla Engineering (a Japanese-Malaysian joint
venture), D-R Engineering, Sun Tong Seng MouldTech, H&L High Tech, HH Precision Mould and
Dynamic Mould.
Opportunities for the Mould and Die Industry
The scope for the further development of the mould
and die industry in Malaysia remains bright
considering the high annual market demand and
significant imports of moulds and dies.
Export opportunities to the ASEAN region is
expected to increase significantly with the ASEAN
Free Trade Area (AFTA) which came into force in
January 2003.
Opportunities and a large market potential exist for:- high precision moulds and dies for E&E industries
- large moulds and dies for the automotive and
plastic industries.
High technology incentives for companies venturing
into the design, development and manufacturing of
trim & form dies, semiconductor cavity/encapsulation
moulds, suspension tooling for hard disk drive parts,
progressive tooling for lead frames and fibre optic
connector tooling, advanced toolings and equipment
for the production of precision components, moulds,
tools and dies for the automotive industry.

3 Malaysias Engineering Supporting Industry

Machining
Industry
Malaysias machining industry is a total solutions provider to all the
machining needs of the country, with most companies attaining high levels
of technological capabilities and using state-of-the-art CNC machine
tools in their operations.
The machining industry in Malaysia can be classified into two
categories:
Companies which provide machining services to other
industries on a jobbing basis.
Companies which produce precision machined parts such as
jigs & fixtures, turned parts, shafts, pins, bushes and other
machined components.
Most of the specialised machining companies possess state-of-theart CNC machining centers and provide integrated machining
solutions (including sub-assemblies), working to machining
tolerances as low as 1 to 5 microns with turning diameters ranging
from 1 to 550 mm. A number of companies have diversified into the
design and manufacture of automation systems and equipment,
particularly for semiconductor, electrical & electronics industries.

Companies Operating in Malaysia

There are about 150 companies in operation, providing
machined parts and components and machining
services. Catering to a number of multinationals in the
domestic and direct export markets in the USA, Japan,
Singapore, UK and France are prominent Malaysian
companies like Upeca Engineering, Eng Hardware
Engineering, Paradigm Precision Components, TNH
Metal Engineering, PSO Precision Machinist and
Edaran Precision Industries. Foreign companies that
have established operations in Malaysia include Synturn
(Spore), Swissmatic Precision Engineering (Spore),
Kenseisha (Japan), Kobe Precision Technology (Japan),
Ohta Precision (Japan), Naito Asia (Japan) and Kuroda
Precision Industries (Japan).
Opportunities for the machining Industry
It is envisaged that the expansion of Malaysias
aerospace parts and components manufacturing
industries will lead to the increased demand for
machined parts and components as well as machining
services.
Malaysias Engineering Supporting Industry 4

Metal
Casting
Industry
The industry is divided into four main areas: Foundries
Die casting
Magnesium Injection Moulding (Thixomoulding)
Investment casting

1. Foundry
The foundry industry in Malaysia over the last 50 years
has attained a significant level of technological
expertise in servicing the traditional industries of
rubber, tin and palm oil. Working with the local
engineering companies, the foundries have developed
their capabilities to re-engineer and adapt components
and sub-assemblies for imported machinery to suit
local conditions. Some of the more advanced foundries
today have automated casting facilities and are
producing castings (up to 10 tonnes) to international
standards for export.

Companies operating in Malaysia

These include prominent Malaysian companies like
MMC Metal Industries, Yoonsteel, Hicom Engineering,
Lestari Casting and a foreign-owned company,
Metalock Castings (Spore).

2. Die Casting
The die-casting industry in Malaysia is fast developing
as a major component supply source, supporting the
manufacture of computer, electrical appliances,
automotive components and hardware products. The
local companies have developed and acquired
adequate know-how and production capabilities in
producing die-cast components of very high quality
such as computer disc drive components, die-cast
parts for the domestic electrical appliances industry
and the electronics industry.

Companies operating in Malaysia

These companies are mainly foreign or joint-ventures
such as Hiroshige (Japan), Wincast Precision
Engineering (Spore), Dynacast SPM (United
Kingdom), MMI Precision Manufacturing (Spore),
MELCOM, Asahi Kosei (Japan), Kawamura (Japan),
Keseisha (Japan), Nakazawa Die Casting (Japan),
PDCI (Spore), Jomon Technology (Spore), Sansho
Giken (Japan) and Swanmet (Spore).

3. Magnesium Injection Moulding

(Thixomoulding)
Malaysia is one of the few countries in the world which
has this facility. Magnesium injection moulding, which

5 Malaysias Engineering Supporting Industry

is a revolutionary semi-solid
process for high speed injection
moulding of net-shape magnesium
alloy parts, is regarded as the most
advanced way of fabricating high quality,
high strength, high complexity and light weight
magnesium alloy parts and components to precision
tolerances. Parts and components presently
manufactured in Malaysia are for aesthetic, structural
and functional uses for the electronics,
telecommunication and automotive industries.
AB Technology is a local company which through its
intense R&D, has successfully integrated
thixomoulding into a one-stop process centre for
magnesium alloy parts and components.

4. Investment Casting
Investment casting industry in Malaysia supplies
components of accurate dimensional tolerances and
complex shapes, normally used in the aerospace,
automotive and machinery industries. There are four
companies presently producing precision investment
casting mainly for the export market. They are Rigel
Metalcraft (Taiwan), Swanmet (Spore) and Malaysianowned companies Nostalgia Investment Casting and
MMI Precision.
Opportunities in Metal Casting Industry
With the further development of the local automotive,
telecommunication and electrical and electronics
industries, there will be greater demand for metal cast
components. Expansion into manufacturing of larger
moulds and dies and the machinery and equipment
industry will offer good prospects for the growth of the
casting industry.
Metal casting is fast becoming a basic engineering
supporting industry. It is expected that more
established foundries would be seeking technology
and joint-venture partners to
diversify into this field.

Metal Stamping
Industry

The metal stamping industry is well-established in

Malaysia, supplying stamped/pressed parts to a
wide range of industries, including the electrical &
electronics, automotive, industrial machinery and
equipment, precision measuring and testing
equipment. The industry has developed significantly,
in capacity and technical capabilities, to serve the
various market needs of multinational corporations
such as Panasonic, Sony, Hitachi, Toshiba, Dell,
Yamaha, Thomson, Philips and Hewlett Packard.

The industry is now heading towards advanced

technologies and the provision of total solutions
including prototypes, moulds and dies and subassembled components. The steady increase in the
demand for electrical and electronic products and
automotive components will continue to spearhead
the growth in the metal stamping industry in
Malaysia.
Companies operating in Malaysia
There are over 300 companies engaged in metal
stamping activities as technological advances and a
steady increase in demand continue to drive the
need for expansion within the industry. Prominent
Malaysian companies include Cybron TL
Manufacturing, Kris Components, Kein Hing
Industry, Wong Engineering and NH Metal
Stamping.
Opportunities for the Metal Stamping Industry
The industry is expanding and developing towards
high speed stamping, fine blanking and into the
manufacture of higher precision and miniaturised
parts. New projects are also encouraged in the
less developed states of the Eastern Corridor of
Peninsular Malaysia, Sabah and Sarawak.

Malaysias Engineering Supporting Industry 6

Heat
Treatment
Industry
The heat treatment industry is expected to grow in
tandem with the development of the major industry
clusters of machinery and equipment, moulds and dies,
iron and steel secondary products and automotive
components. This industry offers services such as
continuous mesh-belt heat treatment; vacuum hardening;
carburizing; carbonitriding; nitriding; nitro-carburizing;
annealing; normalizing; and tempering for a diverse range
of metal products.
Heat treatment services for high carbon steel and alloy
steel products such as moulds and dies, critical parts for
bearings and automotive components are the latest
additions to the list of products already serviced which
include bolts, nuts, shafts, gears, pins and springs.
Companies Operating in Malaysia
Most of the companies in operation providing heat
treatment services are joint ventures with foreign
companies who supply both capital and technical knowhow support. Prominent companies in this industry
include Malaysian owned companies such as Upsilon
Heat Treatment Services, Belton Oriental Heat Treatment,
ProHeat Treatment Precision and foreign owned
companies such as Tohken (Japan), Umetoku (Japan)
and Yeh Chang Heat Treatment (Taiwan).
Opportunities for the Heat Treatment Industry
Expansion activities in the mould and die, as well as the
machinery and equipment manufacturing industries, and
production of downstream products of iron and steel,
secondary products, automotive parts and component
manufacturing offer good prospects for the growth of the
heat treatment service industry. Investments in new
ventures with state-of-the-art facilities that are also
environmentally friendly are encouraged especially those
incorporating the latest vacuum carburizing and vacuum
hardening technology.
7 Malaysias Engineering Supporting Industry

Surface Treatment /
Finishing Industry
The industry has the capability and capacity to cater for most of the requirements of the
manufacturing industry. These include a variety of plating operations such as batch and
continuous electroplating; precision electroplating; electroless plating; phosphating;
passivation; anodizing; chromating; electroplating for the semiconductor industry including
integrated circuits and lead frames; sinter plating and physical vapour deposition.
Malaysia is now focusing its efforts in establishing more modern plating plants with cuttingedge equipment and technology, while upgrading current facilities to complement the
countrys heightened industrial efforts and environmental concerns. There is an increasing
demand for surface treatment services from the electrical and electronics, automotive,
aerospace and machinery components industries, thus opening up vast opportunities for
new ventures in this area.

Companies Operating in Malaysia

There are about 35 companies in operation in this industry
which include Malaysian owned companies such as AKN
Technology, Ampmas and Metal Polishing Industries and foreign
owned companies such as Mitek Kitamura (Japan), Dipsol
Chemicals (Japan), Ueda Plating (Japan), and Jiwei Industries
(Taiwan). Most of these companies are presently servicing the
needs of notable MNCs.
Opportunities for the Metal Surface Treatment/
Finishing Industry
The industry is now focusing on establishing modern plating
plants with the state-of-the-art equipment and technology for
high precision surface treatment and coating for the electrical
and electronics and aerospace industries. These will also have
to address the environmental concerns linked to the industry.

Malaysias Engineering Supporting Industry 8

Metal Fabrication
Industry
Metal fabrication activities in which Malaysian
companies have developed world-class capabilities
can be classified into four categories; namely
fabrication for the offshore/onshore oil and gas
industry; building and civil construction fabrication;
fabrication of processing and manufacturing plants
and industrial machinery and equipment structures
and component fabrication.
Local companies undertake fabrication for the
offshore/onshore oil & gas industry which includes
fabrication works for the offshore oil drilling platform
requirements such as jackets, production modules,
platform decks, accommodation modules, line-pipe &
spool and related industrial onshore activities such as
petroleum refineries, petrochemical plants and
storage facilities.
In the building and civil construction fabrication
category local companies fabricate steel
superstructures for high-rise buildings, bridges,
flyovers, transmission towers and other infrastructural
facilities such as ports and airports.
In the processing and manufacturing plant fabrication,
companies undertake turnkey projects to build, install
and commission processing plants in the country.
As for the industrial machinery & equipment
structures and components fabrication category,
many companies have the capability to supply the
needs of the local machinery & equipment
manufacturing industry.
The metal fabrication industry in Malaysia is
considered a fairly established industry. In
the building and construction industry many
local fabrication companies have begun to
source for jobs outside Malaysia. As a result,
several local fabricators have gained
international recognition in this industry.
Companies Operating in Malaysia
Leading Malaysian companies which are
serving this sector include Malaysia Shipyard
and Engineering, Shin Eversendai Engineering, Nam
Fatt Fabricators, Wong Heng Engineering, KKB
Engineering and KNM Process Systems.

9 Malaysias Engineering Supporting Industry

An Opportunity
Not To Be Missed
Malaysia has much to offer to companies searching for
a strategic and cost effective engineering supporting
outsourcing destination. With its ideal location in the
heart of Southeast Asia, a mature and stable economy
backed by an integrated infrastructure, it is of little
surprise that foreign interest has been growing. There
is also the added benefit of government-backed
investment incentives.
The key to considering Malaysia as the regions
engineering supporting outsourcing hub of choice is
the concept of value and quality. Foreign firms have
chosen to remain in Malaysia and many more are
looking for joint ventures or seeking to bring business
to the country simply because they enjoy promising
rates of return. Malaysia makes for an extremely
competitive destination for regional outsourcing of
engineering supporting services and the nation looks
forward to welcoming future investors.

Malaysias Engineering Supporting Industry 10

MIDAs Headquarters
Malaysian Industrial Development Authority, Plaza Sentral, Jalan Stesen Sentral 5, 50470 Kuala Lumpur, Malaysia
Tel: (603) 2267 3633 Fax: (603) 2274 7970 E-mail: investmalaysia@mida.gov.my Website: www.mida.gov.my

MIDAs Overseas Offices

ASIA-PACIFIC
AUSTRALIA
Consul-Investment/Director
Consulate of Malaysia
Malaysian Industrial Development Authority
Level 6, 16 Spring Street
Sydney, NSW 2000
Australia
Tel:
61 (2) 9251 1933
61 (2) 9251 4333
Fax:
E-mail:
midasyd@bigpond.net.au
JAPAN
Director
Malaysian Industrial Development Authority
32F, Shiroyama Trust Tower
4-3-1,Toranomon, Minato-ku
Tokyo 105-6032, Japan.
Tel:
81 (3) 5777-8808
81 (3) 5777-8809
Fax:
E-mail:
midatokyo@midajapan.or.jp
Website: www.midajapan.or.jp
Director
Malaysian Industrial Development Authority
Mainichi Intecio 18F
3-4-5 Umeda, Kita-ku
Osaka 530-0001, Japan.
Tel:
81 (6) 6451-6661
81 (6) 6451-6626
Fax:
E-mail:
midaosaka@mida.or.jp
PEOPLES REPUBLIC OF CHINA
Consul (Investment)
Consulate General of Malaysia
Malaysian Industrial Development Authority
Units 807-809, Level 8,
Shanghai Kerry Centre
No. 1515, Nanjing Road (West)
Shanghai, 200040, China
Tel:
86 (21) 6289 4547 /
5928 6335
Fax:
86 (21) 6279 4009
E-mail:
midash@online.sh.cn
Director
Malaysian Industrial Development Authority
Unit 1804B-05
CITIC Plaza Office Tower
233 Tianhe Bei Road Guangzhou,
510610, China
Tel:
(8620) 8752 0739
Fax:
(8620) 8752 0753
E-mail:
midagz@mida.org.cn
TAIWAN
Director (Investment)
Malaysian Friendship & Trade Centre
Malaysian Industrial Development Authority
12F, Suite A, Hung Kuo Building
No. 167, Tun Hua North Road
Taipei 105, Taiwan
Tel:
886 (2) 2718 6094 /
2713 5020 (GL)
Fax:
886 (2) 2514 7581
E-mail:
midatpe@ms18.hinet.net

KOREA, REPUBLIC OF
Counselor (Investment)
Embassy of Malaysia (Investment Section)
Malaysian Industrial Development Authority
17th Floor, SC First Bank Building
100, Gongpyung-dong, Jongro-gu,
Seoul 110-702, Republic of Korea
Tel:
82 (2) 733 6130 / 6131
82 (2) 733 6132
Fax:
E-mail:
midasel@chollian.net
UNITED ARAB EMIRATES
Director/Consul Investment
Malaysian Industrial Development Authority
Consulate General of Malaysia
(Investment Section)
Unit 2204-2206, 22F Tower A
Business Central Tower
(P.O. Box: 4598)
Dubai
United Arab Emirates
Tel:
00 971-4-4343-696 /697
Fax:
00 971-4-4343-698
mida_dxb@eim.ae
E-mail:
INDIA
Director/Consul Investment
Malaysian Industrial Development Authority
Consulate General of Malaysia (Investment
Section)
81 & 87, 8th Floor, 3rd North Avenue, Maker
Maxity
Bandra Kurla Complex, Bandra (E)
Mumbai 400051
India
00 91 22 2659 1155 /
Tel:
2659 1156
Fax:
00 91 22 2659 1154
E-mail:
mida.mumbai@mida.ind.in

EUROPE
SWEDEN
Economic Counsellor
Malaysian Industrial Development Authority
c/o Embassy of Malaysia
Karlavaegen 37
P.O. Box 26053
S-10041 Stockholm, Sweden
Tel:
+46 (8) 791 7942/4408 400
Fax:
+46 (8) 791 8761
E-mail:
mida@malemb.se
UNITED KINGDOM
Director
Malaysian Industrial Development Authority
17, Curzon Street
London W1J 5HR
United Kingdom
Tel:
+44 (0) 207493 0616
Fax:
+44 (0) 20 7493 8804
E-mail:
midalon@btconnect.com
GERMANY, FEDERAL REPUBLIC OF
Director/Consul Investment
Malaysian Industrial Development Authority
Consulate General of Malaysia
(Investment Section)
17th Floor, Frankfurt Kastor
Platz der Einheit 1
60327 Frankfurt am Main
Germany
Tel:
0049 (0) 69 76807080
Fax:
0049 (0) 69 7680708-20
E-mail:
mida.frankfurt@t-online.de

FRANCE
Director
Malaysian Industrial Development Authority
42 Avenue Kleber,
75116 Paris, France.
Tel:
+33 (1) 47276696 / 4727 3689
+33 (1) 4755 6375
Fax:
E-mail:
mida.paris@wanadoo.fr
ITALY
Consul-Investment,
Consulate of Malaysia (Investment Section)
Malaysian Industrial Development Authority
5th Floor,
Piazza Missori 3,
20123 Milan (MI), Italy
(3902) 3046 521
Tel:
Fax:
(3902) 3046 5242
midamln@tin.it
E-mail:

NORTH AMERICA
LOS ANGELES
Consul-Investment
Consulate General of Malaysia (Investment
Section)
Malaysian Industrial Development Authority
550, South Hope Street
Suite 400, Los Angeles, California 90071
United States of America
1 (213) 955 9183,
Tel:
1 (213) 955 9877
1 (213) 955 9878
Fax:
E-mail:
lacamida@aol.com
SAN JOSE
Director
Malaysian Industrial Development Authority
226 Airport Parkway, Suite 480
San Jose, California 95110
United States of America
Tel:
1 (408) 392 0617/8
Fax:
1 (408) 392 0619
E-mail:
midasanjose@aol.com
NEW YORK
Consul-Investment
Consulate General of Malaysia (Investment
Section)
313 East, 43rd Street
New York, NY 10017
United States of America
Tel:
1 (212) 687 2491
Fax:
1 (212) 490 8450
E-mail:
mida@midany.org
BOSTON
Director
Malaysian Industrial Development Authority
One International Place, Floor 8
Boston, MA 02110
United States of America
Tel:
1 (617) 338-1128 / 338-1129
Fax:
1 (617) 338-6667
E-mail:
midaboston@aol.com
CHICAGO
Director
Malaysian Industrial Development Authority
John Hancock Center, Suite 1515
875, North Michigan Avenue
Chicago, Illinois 60611
United States of America
Tel:
1 (312) 787 4532
Fax:
1 (312) 787 4769
E-mail:
mida@midachicago.org

For more information on investment opportunities, please contact:

Machinery and Engineering Supporting Industries Division
Malaysian Industrial Development Authority
Block 4, Plaza Sentral, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur, Malaysia
Tel: (603) 2267 3633 Fax: (603) 2273 8467
E-mail: investmalaysia@mida.gov.my Website: www.mida.gov.my

July 2009