Palm | Kelapa Sawit

The inflows of foreign direct investments in the manufacturing sector over the last four decades has resulted in the growth and development of many Malaysian engineering companies with acquired and grown expertise ina variety of sectors.

The accumulated wealth of experience and technology have created companies that are currently global players in their own right.

These companies have become reliable suppliers to foreign companies operating in the country and have also carved a niche for themselves globally.

Malaysian companies have been recognised internationally for their capabilities and quality production in a diverse range of engineering activities, particularly in machining and fabrication.

The wide range of supporting companies with more than 30 years experience are able to meet the stringent demands of OEMs and their requirements for parts and components and precision engineering services.

The existing capabilities in sourcing parts, components and services in Malaysia include more than a thousand engineering supporting companies in mould and die, metal casting, machining, metal stamping, surface engineering, heat treatment as well as metal fabrication.

Added to that is the existence of more than 60 semiconductor companiesthat specialise in silicon wafer, wafer fabrication, integrated circuitpackaging and testing, as well as design houses. There are also more than 300 electronics component manufacturers focusing on printed circuit boards (PCBs), printed circuit board assembly (PCBA), LED, capacitors and resistors.

Malaysia's expertise in precision plastics and rubber components is translated into more than 600 companies equipped in those areas.

As manufacturing in the global scenario become more and more competitive, major manufacturers are looking for total solution or manufacturing solution providers and global suppliers who will manage the smaller components, parts and services suppliers.

As the global outsourcing market is expected to grow rapidly in the coming decade, Malaysia needs to have in place many more total solution or manufacturing solution providers to secure a larger share of the global market demand.

A study by Frost & Sullivan reported that the market size for the global machinery and equipment (M&E) in 2009 was estimated at US$370 billion (RM1.295 trillion), and according to industry sources, 20 to 30 per cent of manufacturing requirements are outsourced.

While companies in the engineering supporting industry are realigning themselves to provide multiple or total engineering services, the government is also intensifying efforts to encourage major players in the outsourcing activities in the country to transform themselves into high-end solution providers.

This transformation will enable companies to provide a cost competitive packaged services from product conception andR&D to serial production and if required, management of entire processes including logistics, packaging, testing and certification.