Business - fmm.org.my...Uzbekistan from April 3 – 5, 2013. Four Malaysian companies namely Erapoly...

@FMMBusinessBusinessin in ActionAction

KDN NO: PP 16730/08/2012 (030376)

May/Jun 2013VOL 3/2013

www.fmm.org

2nd Hazards Asia Pacific Symposium

Switch Asia Project on Environmental Declaration Scheme

World Food Uzbekistan 2013

Visit to Singapore Manufacturing Federation

02 BIA@FMM | May – Jun 2013

PUBLISHED BYFederation of Malaysian ManufacturersWisma FMM No 3, Persiaran Dagang PJU 9Bandar Sri Damansara52200 Kuala LumpurTel: 03-62867200 Fax: 03-62741266/7288Email: [email protected]: www.fmm.org.my

FMM has eight branches andtwo representative offices located inKedah, Penang, Perak, Selangor,Negeri Sembilan, Malacca, Johor,Eastern, Sabah and Sarawak.

Any material extracted fromBusiness in Action @ FMM to bequoted or reprinted should containan acknowledgement to FMM or itsacknowledged sources.

Editorial

ADVISORDr Yeoh Oon TeanChief Executive Officer

EDITORIAL TEAMMadeline LohGeneral Manager (Trade)

Ng Lee LeeSenior ManagerInternational Business Division

Florance S GabrielAssistant ManagerCommunications and Publications Unit

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Contents

Special Feature

03 2nd Hazards AsiaPacific Symposium

News Highlights

04 Switch Asia Project onEnvironmental DeclarationScheme for Constructionand Building Materialsin Malaysia

05 FMM Manufacturer ofthe Year Award (SMIs)Kina Roof Industries (Sabah)Sdn Bhd

06 World Food Uzbekistan 201307 Over 26 Wood Products to be

Licensed by September 2013

08 Visit to SingaporeManufacturing Federation

10 Conference onMarketing & Branding

11 Updates on Industrial Designs(Amendment) Act 2013

Updates

12 Is Your Business CompetitionLaw Compliant?

16 Events in Pictures

Trade & Policy

18 Free Customs AdvisoryServices for FMM Members

Market Alerts

20 Updates on Production Costsof Mainland China

Happenings at Branches

22 Kedah/PerlisMalaccaSarawak

24 PerakPenang

26 SelangorNegeri Sembilan

28 Johor

FEDERATION OFMALAYSIANMANUFACTURERS

May – Jun 2013 | BIA@FMM 03

Cover Story

With the theme: “Achieving Operational Excellence ina Competitive Environment”, the Symposium provideda platform for process safety experts and regulators todiscuss the latest developments and challenges facedby companies in the Asia Pacific region on chemicalprocess safety.

Tan Sri Mohd Sidek Hj Hassan in his keynote addressreminded companies that to remain competitive in thelong run, chemical companies in the Asia Pacific regionwill need to contend with compliance to new regulationsand standards, rising energy and production costs andincreasing expectations to innovate and create sustainableproducts and businesses. He also stated that maintaininga good track record of health, safety and environmentperformance is a must and that it is considered as alicense for companies to continue operating.

In his welcome speech, CICM Chairman Dr Abd HapizAbdullah highlighted that “in the midst of enormous growthin the chemical industry, particularly in the Asia Pacificregion, process safety continues to be more relevant thanever. What’s more, with near instant communications, ifthe chemical industry wants to keepits license to operate, it must improve its health, safetyand environment performance by adopting a set of highstandards which are receptive to the views of the publicand other stakeholders”.

Keynote speakers featured in the three-day symposiumincluded Judith Hackitt, Chair of the British Health &Safety Executive, Hans Volkmar Schwarz, Group-wideVice President of Process Safety at BASF, Datuk WanZulkiflee, Chief Operating Officer and Executive VicePresident for Downstream Operations at PETRONAS.

Other speakers included Wang Haoshui, the Director-General in the Department of Hazardous Chemicalsand Work Safety Supervision, Lee Yang Soo, SeniorVice- President for Health, Safety and Environment atSK Innovation, John Bresland, President of ProcessSafety Risk Assessment, Ian Hamilton, who wasappointed to run the global human factors team atleading EHS consultancy practice, ERM, and JuanGabriel, Worldwide Managing Director of SustainableOperations for DuPont Sustainable Solutions.

Among the topics addressed by the keynote speakersincluded Complacency to Anxiety – the Road toProcess Safety Leadership, Achieving BusinessSustainability Through Effective Management ofProcess and Operational Risks, Supervision andAdministration of Safety in the Chemical Industry inChina, and Design of Buildings in PetrochemicalFacilities Using a Risk-Based Approach.

The Symposium also comprised a twin track technicalprogramme containing more than 40 peers reviewingpapers pertaining to process safety design and analysis,asset integrity, operational safety, challenges of regulatorycompliance, process safety management, learning frommajor hazards incidents and management of abnormaloperations; which highlighted the importance ofexchanging knowledge, learning from past mistakesand sharing of best practices.

The next Hazards Asia Pacific Symposium is scheduled totake place in May 2014 in Kuala Lumpur.

2nd Hazards Asia Pacific SymposiumAn international audience of 240 process safety experts and regulators gathered in Kuala Lumpur for the 2nd HazardsAsia Pacific (Hazards AP) Symposium held from April 16 – 18, 2013. The Symposium was jointly organised by theChemical Industries Council of Malaysia (CICM) and the Institution of Chemical Engineers. It was officiated by Tan SriMohd Sidek Hj Hassan, Chairman of the Petroliam Nasional Berhad (PETRONAS).

Group photograph of the Heads of Safety and Health inMalaysia, UK and China.

Some of the delegates who attended theHazards Asia Pacific Symposium


News Highlights

The Switch Asia project, funded by the European Union,aims to transfer existing best practice in sustainableconstruction materials, which is currently absent inMalaysia. It seeks to produce tools, guidelines and thesupporting mechanisms for product footprinting andlabelling that meet the needs of the local and internationalmarket and create the recognition for sustainable productsfrom SMEs in the Malaysian construction and buildingmaterials sector. The three-year project will involve aninternational collaboration with Carbon Trust, which is thepioneer of product carbon footprinting and carbonmanagement in United Kingdom.

Following the briefing in FMM, SIRIM Berhad as theproject leader conducted a brainstorming session onMarch 21, 2013 with FMM and other project partnersi.e Malaysian Green Building Confederation and BuildingMaterials Distributors Association of Malaysia to finalisethe product selection. The final product categories agreedto by all partners are as follows:

• Coatings such as paint, sealant, primers;

• Sanitary wares made of ceramic, metal & plastics;

• Plumbing pipes made of PVC, PE, copper and steel;

• Floor finishing e.g tiles, plasters, fiber cement,metal, timber;

• Wall panels such as Gypsum plasters, fiber cement,timber, metal, tiles, glass;

• Masonry units like concrete, clay, recycled materials;• Structural steel (truss & frame) – steel;• Ceilings such as Gypsum plasters, fiber cement,

timber, metal;

• Architectural metal – railing & lourves made of brass,steel and aluminum; and

• Architectural roofing made of clay, metal sheets,concrete & recycled materials.

FMM members especially the SMEs involved in themanufacturing of selected product categories areencouraged to participate in this Project as theycould be among the first ten SME market leaders inMalaysia to obtain carbon footprinting for constructionand building materials.

For further details on the project, please contactNur Hafizah of the FMM Secretariat at email:[email protected]

Switch Asia Project on EnvironmentalDeclaration Scheme for Constructionand Building Materials in Malaysia

John Lee Boon Haw, FMM Council member (left) and Letchumi Thannimalay from SIRIM Berhad during the Q&A session at the briefing

FMM had on March 14, 2013, organised a free briefing and dialogue session on Identification of EnvironmentalDeclaration Scheme for Construction and Building Materials in Malaysia chaired by John Lee Boon Haw, FMM CouncilMember. A total of 32 participants from 25 companies manufacturing construction and building materials attended thebriefing. The purpose of the briefing was to pre-screen ten product categories in the construction and building materialsindustry that would be selected for the project.


News Highlights

Established in 2008 by a group of businessmen with more than ten years experience in cold roll form industry, KinaRoof is currently equipped with the most up-to-date cold roll form machines available in the market that complywith the Australian Standards; AS1599 and AS 1365.

FMM Manufacturer of the Year Award (SMIs)Kina Roof Industries (Sabah) Sdn Bhd

Lau Lee Chung, Kina Roof’s CEO (right) after receiving the award fromDatuk Dr Rebecca Fatima Sta Maria, Secretary General,Ministry of International Trade and Industry (centre) while

FMM President Tan Sri Datuk Yong Poh Kon looks on

On March 7, 2013, 55 members led by FMM Council Member and Chairman of FMM-SMI Working Committee Tan SriDato’ Soong Siew Hoong visited PKT Logistics Group Sdn Bhd (PKT) at One Logistics Hub, Shah Alam. The group waswelcomed by PKT’s Chief Executive Officer/Managing Director, Dato’ Michael Tio and his management team.

Visit to PKT Logistics Group Sdn Bhd

Group photograph of members who visited PKT Logistics Group Sdn Bhd on March 7, 2013

PKT which was founded in 1974, specialisesin custom clearance for cars. Located atShah Alam, Selangor, it consists of The Ship(headquarters), The Wave (environment friendlywarehouse) and The Lighthouse (warehouseexpected to be ready end of this year).

FMM delegates were briefed on PKT’s strategyand expansion plan by the Group Chief OperatingOfficer, P’ng Tean Hau. Dato’ Michael Tio sharedon how he turned the company into a logisticsgiant and his unique management style,capitalising on the workforce of Generation Yand the social networking media, including usingFacebook as a tool to achieve his business goals.The visit ended with a tour to a pineapple farmlocated next to the headquarters, managed bythe staff of PKT Logistics.

Kina Roof is the leader in metal roofing industry inSabah. This family-owned business achievedoutstanding double digit sales growth and anexceptional nine-fold increase in profit after tax in2011. Kina Roof’s motto is “those in the market, weimprove it; those we don’t have, we do it”. Theirproducts are patented under the brand “ROFO”

On winning the award, Lau Lee Chung, Kina Roof’sCEO said that this recognition is a good start for theCompany to move in the right direction. Lau said thatKina Roof was established with very limited financialresources and manpower. “Focus and continuousimprovement were the most important factors thatcontributed to our success in winning the award”Lau further added.

The award was presented to Kina Roof Industries(Sabah) Sdn Bhd during FMM’s Annual Dinner heldon November 29, 2012.

News Highlights

Over 180 exhibitors from 25 countries participated in the World Food Uzbekistan 2013 which was held in Tashkent,Uzbekistan from April 3 – 5, 2013. Four Malaysian companies namely Erapoly Global Sdn Bhd, Inno-Wangsa Oilsand Fats Sdn Bhd, See Hau Gobal Sdn Bhd and WMA Trading Sdn Bhd participated for the first time in the Fair whichattracted over 6,000 trade visitors.

According to Abdulaziz A Yunusov, Regional Representativeand Marketing Officer of MATRADE in Tashkent, there arevast business opportunities for Malaysian companiesin Uzbekistan. Malaysian exporters can explore and workwith the local importers or purchasers who are interestedin their products.

World Food Uzbekistan 2013

News Highlights

Chow Kien Yu (left) of See Hau Global being interviewed by thelocal Uzbekistan TV station

Business matching discussion in progress at the Exhibition



News Highlights

The Customs Prohibition of Export and Import Order 2012 was gazetted on December 31, 2012. The new regulationrequires exporters of 26 types of wood products and importers of three types of wood products to be registered and toobtain export and import licenses from Malaysian Timber Industry Council (MTIB). Implementation of the new ruling wouldcome into effect on September 2013.

Over 26 Wood Products to be Licensed bySeptember 2013

FMM, in a letter dated April 18, 2013 to the Director-General of MTIB, highlighted the following concerns raised byFMM members on the imposition of the above new regulation:

• Additional cost incurred in applying for the license which adds to the cost of doing business. These include applicationfees and membership fees to join the associations as listed by MTIB;

• Requirement to be a member of the listed associations even through some of the members are already members ofFMM or other associations;

• Imposition of export taxes on finished wood products is unnecessary and acts as a non-tariff barrier to trade.It is also inconsistent with the Article XI of the World Trade Organisation’s General Agreement on Tariffs and Trade(GATT) which generally prohibits export restraints such as export licensing; and

• The Malaysian Government is currently negotiating comprehensive Free Trade Agreements (FTAs) such as the TransPacific Partnership Agreement and the Malaysia-European Union Free FTA that require the removal of NTBs such asexport licensing. This new export requirement on most wood products would only hamper the successful completion ofthe negotiations.

FMM also proposed the following:

• As the main objective of imposing the regulation is to collect data on raw timber and semi-finished timber, finishedproducts should be exempted from this requirement; and

• The requirement for applicants to be a member of any one of the listed associations in the MTIB Act should be removedas it effectively increases the cost of doing business.

For further information on The Customs Prohibition of Export and Import Order 2012, please contact Leong Soke Chingof the FMM Secretariat at [email protected].

FMM will be organising a Briefing on Updates on Requirement for Licenses for Export and Import on Tuesday, July 2,2013, from 9.00am to 4.30pm at Wisma FMM to update companies on the licenses requirement for wood products andother products listed in the Customs Prohibition of Export and Import Order 2012 i.e skin, leather, wool, milk basedproducts, rice flour, fish etc.

For further information on the Briefing, kindly contact Nur Hafizah of the FMM Secretariat at [email protected].


Visit to Singapore Manufacturing Federation

The main objective of the visit was to better understand issues affecting the manufacturing sector in Singapore, includingGovernment policies and incentives for SMEs. The delegation was received by SMF President, George Huang.

Key highlights of the visit include the following:

• Minimum Wage – Singapore does not have a minimum wage policy as the Government believes that supply anddemand would determine the right wages;

• Foreign Workers (FW) – There is a tightening of foreign worker employment in Singapore. The tightening was triggered inearly 2000 when the Singaporean economy overheated. The high growth was unsustainable as it was heavily dependenton foreign workers. Singapore decided to grow the economy by improving productivity. A huge fund was set asideeach year by the Government to assist industries increase productivity, including implementing ERP and automation.The growth in productivity and revenue is shared with companies and workers. To reduce FW dependence, theGovernment increases the levy each year. However, the levy is given back to industries to upgrade/automate. A quotais imposed on FW employment based on industry as some industries in Singapore still require FW as locals are notprepared to work over time;

• Employment Practices – The Singapore National Employers’ Federation formed a Tripartite Committee with representativesfrom the public and private sectors and unions to resolve all issues related to human resource. Retirement age inSingapore is 62 years old. The Government has a Retirement and Re-employment policy. Unemployment is 1.9%; and

• Assistance for SMEs – Singapore has over 160 finance and grant schemes for SMEs. Incentives given are alwaystied to productivity. Grants are given to activities such as investment in ICT and establishing operations in the Iskandarregion and Riau. Singapore has SME Centres to provide consultation.

SMF believes that political boundaries should not deter investments from both sides and looks forward to greater exchangeof visits and discussions, including setting up joint working groups to discuss issues affecting the manufacturing sector ofboth countries. The one-day visit ended with a tour to Makino Asia Pte Ltd, a precision engineering company producingmilling machines and electrical discharge machines.

The SMI Working Committee and Human Resource Management Committee jointly organised a visit to the SingaporeManufacturing Federation (SMF) on April 15, 2013. The 22-member delegation which included members fromJohor was led by Tan Sri Dato’ Soong Siew Hoong, Chairman of the FMM SMI Committee and Davies Danavaindran,FMM Vice President and Chairman of the FMM HRM Committee.

Group photograph of the visit to Singapore Manufacturing Federation on April 15, 2013

News Highlights

Contents

NOW ON SALE at FMM Head Office, Branches and Representative Offices

• Comprehensive and reliable one-stopbusiness sourcing handbook thatprovides in-depth profiles of over2,400 manufacturers, exporters andservice providers;

• Product index of over 11,500 itemsto provide importers, exporters andbuyers with quick and easy referencefor business opportunities;

• The latest information on the MalaysianEconomy, trade statistics;

• A list and contact details of Ministersand Ministries in Malaysia;

• Easy-to-refer index according tostates, industry groupings, products andservices and certified ISO companies,in alphabetical order; and

• Classification by industry groups basedon International Standard IndustrialClassification (ISIC) code.

NOW ON SALE!

Federation of Malaysian Manufacturers (7907–X)Wisma FMM, No 3, Persiaran Dagang, PJU 9, Bandar Sri Damansara, 52200 Kuala LumpurTel: 03-62867200 Fax: 03-62741266/7288 E-mail: [email protected] Website: www.fmm.org.myCommunications & Publications Unit (Attn: Ida Tan)

• Chemical and Petroleum; • Food, Beverage and Tobacco; • Electrical and Electronics;• Fabricated Metal;• Machinery;• Plastic;• Transport;• Basic Metal;

• Paper, Printing and Publishing;• Non-Metallic Mineral;• Rubber;• Medical, Precision and Optical Instruments;• Textile, Wearing Apparel and Leather;• Manufacture of Furniture Wood and

Wood Products; and

• Recycling.

Products & Services Catalogue for:



The event was officiated byDato' Saripuddin Kassim, SecretaryGeneral, Ministry of Domestic Trade,Cooperatives and Consumerism.

One of the issues raised during thedialogue session with Dato’ SaripuddinKassim was the inability of SMEsto supply to hypermarkets due tohigh listing and advertisement rates.The Secretary General requestedFMM to coordinate a meeting among itsmembers and to submit its proposals toreduce listing fees in hypermarkets.

Speakers at the Conference includedsenior representatives from RetailGroup Malaysia, Nielsen Malaysia andSingapore, Nelson’s Franchise,dunnhumby Malaysia, CBSA OnlineSdn Bhd and MYDIN.

Conference on Marketing & Branding

News Highlights

Atotal of 192 participants comprising Chief Executive Officers, Managing Directors, General Managers, MarketingManagers, Brand/Product Managers, Marketing Communication Managers, Customer Relationship Managers,Business Development Managers or Executives attended the FMM Conference on Marketing & Branding which washeld on April 18, 2013 with the theme Retail Marketing – Insights & Opportunities in Engaging Consumers.

MTDCC Secretary General, Dato’ Saripuddin Kassim (centre) receiving a tokenof appreciation from FMM President, Tan Sri Datuk Yong Poh Kon (left) while

YM Raja Dato’ Abd Aziz Bin Raja Muda Musa, Vice President of FMM looks on

FMM Marketing & Branding Conference 2013 attracted over 200 participants

Caroline Chong of dunnhumby Malaysia briefingparticipants on TESCO’s Loyalty Programme

Updates on Industrial Designs (Amendment)Act 2013

At a recent meeting of the FMM Branding and IntellectualProperty Rights Committee held on April 5, 2013, memberswere informed by Charmayne Ong of SKRINE that theIndustrial Designs (Amendment) Act 2013 (“Amendment Act”)was gazetted on January 22, 2013 and would come intoforce on July 1, 2013. The following are some of theamendments made to the Industrial Designs Act 1996under the Amendment Act which will have a significanteffect on the protection and exploitation of industrialdesigns in Malaysia:

• The new amendments will require prospectiveapplicants to ensure that the design they intend toregister with the Malaysian Intellectual PropertyOffice be new on a global basis. Currently anindustrial design has to be only new in Malaysia toqualify for registration. This requirement of novelty ona global basis will not apply retrospectively to caseswhere the design has already been registered.This would include cases where legal proceedingsin respect of such registered designs are pending.However, it is crucial to note that any application for theregistration of an industrial design pending on the date ofcoming into force of the amendments will be dealt withunder the IDA as amended by the Amendment Act. Thisbeing the case, although the amendments will only comeinto force on July 1, 2013 it would be necessary to ensurehenceforth that designs for which registration is sought, are novelon a global basis;

• The proposed amendments will enable the proprietor of an industrialdesign to protect an industrial design up till a maximum of 25 years(as compared to the current 15 years) provided renewal fees are paid before theexpiry of each term; and

• The new provisions are being included to clarify that a security interest can be created over a registered industrialdesign or an application for the registration of an industrial design.

For further enquiries, please contact Leong Soke Ching of the FMM Secretariat at [email protected].


News Highlights

Requirement of Certificate of Approval for Electrical EquipmentsIn order to enhance the safety of electrical equipments, the Energy Commission (EC) will now be regulating35 new electrical equipments. The manufacturers and importers of the electrical equipment are required to obtainthe Certificate of Approval from EC before they can be sold in the market. The effective date of the implementationhas been postponed from January 1, 2013 to January 1, 2014.

The affected electrical products include massagers, air conditioners, adaptors, chargers, door bell & chimes, portablecable reels, Edison screw holders & caps, LED lamps, bottle warmer sterilizers, water dispenser/filters, dish washerand other utensils, decorative fans, ionic facial sauna or similar to it, audio/video recorder up to four channels andetc. The complete list of regulated electrical equipment can be located at http://www.fmm.org.my-ResourceCenter/Announcements.

For enquiries, please contact Maygelah Siva of the FMM Secretariat at tel: 03-62867320 or Fax: 03-62741266/7288or e-mail: [email protected].


Where to Begin?As a preliminary step, you should ensure that the CA 2010applies to your business. The CA 2010 applies to “anycommercial activity”. This is a broad concept so it islikely that the activities of most businesses in Malaysia –big and small – will be caught by the Act.

What is the Purpose of a CompetitionLaw Compliance Programme?A competition law compliance programme is designed toperform a number of key functions:

• Identify any existing competition law breaches andrisk areas;

• Give the business an opportunity to rectify thosebreaches and manage the risk areas; and

• Ensure that ongoing competition compliance becomespart of the culture and ethos of the business.

The following steps set out how to achieve these functionsin practice.

STEP 1: Identifying Competiton LawBreaches or Risk AreasThis initial step will be the most critical for a businessundertaking a competition law compliance programmefor the first time. The aim of this step is to identify:

• existing agreements or practices that are, or may be,against the law; and

• the areas of the business which are most at risk ofbreaking the law in the future.

In practice, this step requires a comprehensive reviewof all of the legal arrangements your business has inplace. This will include written and verbal (gentleman’s)agreements, decisions of trade associations, as well asinformal ‘understandings’ reached (through a nod anda wink) that are not documented.

Written AgreementsIf your business has a ‘contract register’ (a formal recordof the agreements entered into by the business), then youshould be able to easily identify the written agreementsfor review. If the business does not have a record of itsagreements, this may present a good opportunity tocreate one.

Unwritten Agreements It will be much harder to identify verbal agreements orunderstandings that are reached as part of the day today activities of your business. A good way to identifyarrangements or practices that exist is to conductface-to-face interviews of relevant staff members.The interview should seek to build a picture of:

• who the staff member deals with outside the business;

• what meetings the staff member attends;

• where meetings are with competitors, what is thepurpose of those meetings;

• how prices are determined for goods;

• how decisions are made about production or investmentsin new technology or production facilities; and

• who makes decisions about which markets thebusiness operates in.

This is not an exhaustive list and more questions will nodoubt arise as the answers are provided to the above.

It will not be necessary to interview all of your staff, justthose in risk areas. For example, those responsible forbuying and selling, those who attend trade associationmeetings on behalf of your business, those involved inregular dealings with your competitors, as well as allsenior management. You may wish to have someoneindependent of the business conduct these interviews.

It should be made clear to staff members that theywill not face any consequences for disclosing anyarrangements or practices that are against the law.At this stage, the objective is not punishing staffmembers; it is to identify areas of concern for thebusiness so that you can decide how to deal with them.Once you have established an ongoing complianceprogramme, you may wish to include some consequencesfor staff members that break the law after appropriatetraining has been given.

"Published with permission of The Malaysian Current Law JournalSdn Bhd and CLJ Legal Network Sdn Bhd."

Is Your Business Competition Law Compliant?

Update on Competition Law (Part 1)

The Malaysian Competition Commission (MyCC) has made it clear that the beginning of 2013 will see the end ofits ‘soft touch’ approach to enforcement of Malaysia’s Competition Act 2010 (CA 2010), which came into force on1 January 2012. Now is the time to ensure your business is competition compliant. The best way to ensure complianceis to put in place a “competition law compliance programme”. This article sets out the steps involved in establishing acompliance programme and includes some practical tips.

Part two of the article will be published in thenext issue of the BIA.

Updates

• Taiwan – Food Taipei 2013, Taipei – June 26−29, 2013

• South Africa – Africa Big 7 and SAITEX, Johannesburg – June 30 – July 2, 2013

• Indonesia – Interfood, Jakarta – August 28 – 31, 2013

• Myanmar – Build-Con Myanmar, Yangon – September 25 – 27, 2013


Flooding at Teleflex Medical Sdn BhdThrough the efforts of the Branch, Majlis Perbandaran Taiping (MPT) convened a special meeting on February 25,2013 under the Taiping IPMC to discuss the acute flooding problem faced by Teleflex Medical Sdn Bhd (Teleflex).The meeting was chaired by Borhan bin Abdul Halim, Secretary for MPT and noted that the main reason for theflooding was the backflow of the water from two neighbouring factories which had weak drainage systems.

The representatives from the two companies who were present at this meeting were directed to improvetheir drainage system within three months failing which they would be compounded. At the Taiping RegionalSub-Committee meeting on April 2, 2013, Abdul Mutalib reported that one of the companies had complied andsince then there have been no reoccurrence of flooding.

Improving the Delivery of the State Immigration Department of PerakThe Branch wrote to the Director of State Immigration of Perak on February 27, 2013 to highlight the followingproblems faced by members in their applications for foreign workers:

• Queue numbers are taken up fast even though some companies arrive and queue from as early as 6.00am;

• Limited number of counters are opened during peak periods;

• The computer system frequently break downs; and

• Calling visas take up to two weeks or more to be approved although it is indicated as three days in theacknowledgment slip.

FMM made the following recommendations:

• Have separate counters to process applications for foreign workers by companies and agents;

• Look into the feasibility of establishing foreign workers division at regional immigration offices to ease theload at the Ipoh Immigration Office; and

• All counters should operate during the peak hours.

The new Director of State Immigration of Perak, Ahmed Syam bin Che Kub @ Ab Rasid in a letter dated April 1,2013, informed that queue numbers would be abolished and additional officers would be stationed at thecounters during the peak period from 8.00am to 10.00am. Efforts are also being taken to improve the reliabilityof the computer system.

Perak

Assistance to Members

For further details, please contact Ida or Sandy of the FMM Secretariat at 03-62867200

• Cambodia & Vietnam – FMM Focus ASEAN Series: Cambodia & Vietnam – June 18, 2013

EXPORT SEMINAR

INTERNATIONAL TRADE FAIRS

FMM EXPORT PROGRAMMES


Events in Pictures

Seminar on FMM-JETRO Energy Saving Audit, March 13, 2013

Kedah/Perlis Branch’s Seminar on ImplementingStrategic OSH-MP 15 & Overview of ProposedReview of OSH Legislation, December 6, 2012

Selangor Branch’s visit to Selangor State Investment Centre,March 14, 2013

Factory visit to Makino, Singapore, April 15, 2013


Hannover Fair in Germany, April 8 – 12, 2013

World Food Uzbekistan, April 3 – 5, 2013Briefing on Environmental Declaration Scheme,March 14, 2013

Events in Pictures

Trade & Investment Mission to Balikpapan, Indonesia, April 24 – 26, 2013FMM Marketing & Branding Conference,2013, April 18, 2013


Trade & Policy

Free Customs Advisory Services for FMM Members

Q Where can I locate the latest amendments to the Customs Acts or Regulations?

A The official portal e-Federal gazette will have the latest amendments to the Customs Act or Regulations.

Q What is the difference between the sales tax facilities for sales tax exemptions: CJ5 and CJP2?

A Sales tax exemption CJ5 is a facility given to a licensed manufacturer to import or buy raw materials, components andpackaging material from other licensed manufacturer to be used directly in the manufacturing process without payingsales tax as provided under section 9, Sales Tax Act 1972.

A Senior Customs Officer from the Royal Malaysian Customs Department, Choo Kim Foong is based at FMM toassist FMM members as a Customs Advisor. The services of the Customs Advisor are available at FMM from 9.00 amto 1.00 pm every Tuesday. The Customs Advisor will assist members with the following:

• Provide advisory services and guidance on Customs related policies, procedures and requirements;

• Resolve operational related issues encountered at the company level; and

• Assist with applications for licenses and Customs facilities.

Members are encouraged to have individual meetings on a ‘one-on-one’ basis with the Customs Advisor at FMMto resolve specific issues pertaining to their company. Common issues and enquiries will be published in theBusiness in Action@FMM for members’ information. For further enquiries, please contact Arasy Velayutham atFMM Secretariat at tel: 03-62867356 or e-mail: [email protected].

The Customs Department also allow sales taxexemption to institutions and individuals who are notlicensed under the Sales Tax Act 1972, to buy taxablegoods without paying sales tax as provided underthe Sales Tax (Exemption) Order 1980 by using theform CJ(P)2.

Some examples where CJ(P)2 can be used are:

• Sales Tax (Exemption) Order 1980, Schedule B,item 28: Trading company can apply for sales taxexemption when it buys from a sales tax licensedmanufacturer to sell to a licensed manufacturer undersection 65/65A of the Customs Act 1967 (LMW);

• Sales Tax (Exemption) Order 1980, Schedule B, item71: Trading company can apply for sales taxexemption when it buys from a sales tax licensedmanufacturer and exports the said products;

• Sales Tax (Exemption) Order 1980, Schedule B, item 85: These companies can apply for exemption to buy or importpacking and packaging materials from a licensed manufacturer to be used solely for the packing or packaging offresh eggs, fresh fruits, aquatic plants, aquarium marine life or cut flowers and then exported;

• Sales Tax (Exemption) Order 1980, Schedule B, item 89: All goods exported to a Free Industrial Zone or movedto a manufacturing warehouse licensed under sec 65/65A of the Customs Act 1967 for subcontract work andsubsequently re-imported or returned can apply to be exempted from sales tax; and

• Sales Tax (Exemption) Order 1980, Schedule C, item 1 – 13: Manufacturers who manufacture goods that are notsubject to sales tax can apply for sales tax exemption to buy/import raw materials/components and packaging material.This facility is only given to certain industries as stated in item 1 – 13.


Market Alert

Tight Labour Supply Amid Rising Labour CostsImmediately after the Chinese New Year, which fell in February this year, manufacturers generally felt the pressure oflabour shortages, in particular those operating in Guangdong. According to the Human Resources and Social-securityDepartment of Guangdong, there will be around 1.2 million shortage of workers this year after the Chinese New Year.The city of Dongguan, a major production base in Guangdong, was reportedly having a labour shortage of 150,000after the Chinese New Year.

According to a survey conducted by Hong Kong Trade Development Council (HKTDC) among Hong Kong manufacturersin the first quarter of 2013, 50% of respondents indicated that they experienced the problem of labour shortage after theChinese New Year. Among those having labour shortage problem 21% considered the situation to be much more seriousthan a year ago, while 38% considered the situation to be a bit worse than a year ago.

This development has persistently pushed up the general wage level. In 2012, 25 provinces or regions in China raisedthe minimum wage levels by an average of 20.2%. In Guangdong, the minimum wage level will be raised again effectivefrom May 1, 2013 by an average of 19.1%. The city of Shenzhen continues to have the highest level of minimum wagein China.

Companies need to employ different levels of staff for different jobs. According to official figures, in the first three quartersof 2012, the average wages of staff and workers in China on average increased by 12%, while in Guangdong province theyincreased by 11.5%. Some inland provinces recorded faster growth in the average wages of staff and workers, such asHunan at 14.4%, Sichuan at 13% and Jiangxi at 14.8%.

According to HKTDC surveys in the first quarter of 2013, 78% of the responding Hong Kong companies experienced arise in labour costs on the mainland compared to the previous quarter. For those respondents who experienced higherlabour costs on the Mainland, 33.3% said the increase was more than 10% and 51.3% said the increase was between5% to 10%. Compared to the first quarter of 2012, the rates of increase appear to be moderating but the general wagelevel is still moving upwards.

Updates on Production Costs ofChina Mainland

(continue on page 21


Market Alert

China’s Food Prices Surged in February 2013China’s inflation reached a recent low in October 2012 with the Consumer Price Index (CPI) increasing by 1.7% andfood prices increasing by 1.8%, but has begun to accelerate again since then. The CPI recorded a 3.2% increase inFebruary 2013 while food prices grew at 6%.

Gasoline and Diesel Prices Adjusted Upward In February 2013Following the rise in oil prices, China followed suit and also raised the retail price of gasoline and diesel in February 2013.The retail price of gasoline in Guangdong is now 10.6% higher than the level in July 2012. The increases in gasoline anddiesel prices will push up transportation costs.

Metal Prices Moderated on Entering February 2013Over the last 12 months, the general price level of metals has been volatile. Metal prices had been edging up sinceNovember 2012, but moderated on entering February 2013. According to the Economist Metal Price Index, in earlyMarch 2013 the general price level of metals declined by about 7% within a month. However, the level in early March wasstill 7.5% higher than the recent trough in mid-August 2012. Over the last six months, the prices of aluminium alloy havebeen fluctuating within the range of US$1,800 to US$2,000 per tonne while the prices of copper have been moving in therange of US$7,600 to US$8,400 per tonne.

Oil prices started to edge down after reaching a recent peak around mid-February 2013. However, prices in mid-March2013 were still about 21% higher compared to the ebb in June 2012. Prices of downstream products, such as plastics,have also declined since mid-February 2013. The price of polypropylene (PP) in mid-March 2013, for example, haddropped by about 5% from a month earlier. However, the price level of PP in mid-March 2013 was still about 11% higherthan the level in mid-June 2012.

The price of cotton has started to edge up again since November 2012. The average price of cotton in February 2013was about 11% higher than the level recorded in November 2012. The average price of pulp has also started to rise sinceSeptember 2012. The average price of pulp in February 2013 was up by 7.5% compared to the level in September 2012.

The Rmb Continued to AppreciateRmb appreciation has been a major challenge for Hong Kong manufacturers operating in China. Since June 2010,China has continued with its reform of the exchange rate mechanism of the Rmb by allowing more flexible movement inits exchange rate. Since the end of July 2012, the exchange rate of the Rmb against the US dollar has generally engagedin an upward trend. By mid-March 2013, the Rmb had appreciated by about 2.4% compared to the end of July 2012.

China’s Export Prices Stopped DecliningThe growth of China’s export price index continued to slow down in 2012 and recorded declines from September toNovember 2012, but the price index has moved back to positive growth since December 2012. On the other hand,import price index of the US with China as origin remained in decline in the first two months of 2013.

Source: Billy Wong, Senior Economist (Greater China) of the HKTDC – Research.



The Branch organised the following activities:

• Seminar on Implementing Strategic OSH-MP 15 & Overview of Proposed Review of OSH Legislation onDecember 6, 2012. The Seminar was conducted in collaboration with Department of Occupational Safety and Health;

• Seminar on GST: Getting Started on February 27 – 28, 2013.The speakers were Teh Kheng Ean, Senior AssistantDirector of Customs I and Nur Hanisah Dukes bt Abdullah Senior Assistant Director of Customs II of CustomsDepartment Putrajaya;

• SME Corp Seminar on Halal Certification and Workshop on Branding and Packaging on March 15 – 16, 2013 inconjunction with Kedah Halal Products Exhibition 2013; and

• FMM Branch Institute assisted Schaefer Kalk (M) Sdn Bhd to Develop and Implement Good Manufacturing Practices(GMP) for Pharmaceutical Excipients.

Kedah/Perlis

The Branch organised a training session on MalaysianCustoms Classification: The Right Way to Get theCorrect Tariff Code and Avoid Disputes” on March 18,2013. The event was facilitated by retired CustomsOfficer, Goh Kin Siang.

Malacca

The Branch organised a Workshop titled “BengkelPembungkusan & Penjenamaan” from February 28 –March 1, 2013. The Workshop attracted a total of300 participants who were briefed on how to fill in theGS1 application form, GS1 numbering system anddocuments required for application.

Sarawak Representative Office

Teh Kheng Ean, Senior Assistant Director of Customs speaking to the participants of the Seminar on GST held on February 27 – 28, 2013

The participants who attended the GS1 Briefing held atKedah/Perlis Branch


The Branch’s activities includethe following:

• Forum on Human ResourceManagement Updates facilitatedby Lingasparan KaruppaiahChairman of the FMM HumanResource Management (HRM)Sub-Committee on January 10,2013; and

• ICT, Biotech & Green TechFunding Workshop held onJanuary 30, 2013. The Workshopwas organised in collaboration withMalaysia Debt Ventures Berhad.

Penang

The Branch organised the following programmes:

• A two day seminar on GST for Industries: Getting Startedwas held from March 5 – 6, 2013 and facilitated byMohammad Sabri Saad, Senior Assistant Directorof Customs Department and Arvina binti Alwi,Assistant Director of Customs from the GST TaskForce Unit, Putrajaya; and

• Briefing on the Implementation of Guidelines on MinimumRetirement Age Act 2012 and The New Employment ActSection 81: Sexual Harassment on March 12, 2013.

The following Industrial Park Management Committeemeetings were held:

• IPMC Batu Gajah on March 13, 2013 which was co-chairedby Haji Dato’ Hj Jamry bin Hj Sury, Yang Dipertua(YDP) of Batu Gajah District Council (MDBG) andTeng Kim Ming, Committee Member of FMM Perak.Among the issues discussed were thefts at theindustrial estates and FMM’s objection to a cattle owner’sproposal to use the vacant plot next to Nihon Canpackfor grazing cattles;

• IPMC Ipoh on March 13, 2013 which was co-chairedby Dato’ Haji Roshidi bin Hashim, The Lord Mayor andTony Cheam, Committee Member FMM Perak. Issuesdiscussed at the meeting include FMM’s proposal ofutilising the road shoulders at industrial estates as aparking lot for heavy vehicles. Other issues discussedincluded flooding at the Ceramic Industrial Park; and

• IPMC Manjung on March 15, 2013 which was chaired byAzizan bin Haji Abd Muin, Secretary of Manjung MunicipalCouncil (MPM) with FMM representing the private sector.Issues affecting the industries like rubbish disposal,dust and air pollution were discussed at the meeting.The Committee was informed that lorries parked alongthe road near PGEO Group were from out of state andFMM’s proposal to provide a holding bay was noted.

Perak

Participants who attended the two-day Seminar on GST forIndustries: Getting Started at Perak Branch

Participants who attended the Forum on Human Resource Management Updatesat Penang Branch

Arvina binti Alwi (left) and Mohammad Sabri Saad briefing theparticipants on GST for Industries: Getting Started




Selangor


• Briefing on Certificate of Origin on February 26, 2013, in cooperation with the Ministry of International Trade andIndustry to discuss on Preferential & Non-Preferential Certificate of Origin;

• Briefing on Competition Act 2012 on February 28, 2013 conducted by Dhaniah binti Ahmad, Head of Legal Unit from theMalaysian Competition Commission;

• Courtesy call to Selangor State Investment Centre on March 14, 2013 led by the Branch Chairman Dato’ Soh Thian Lai;

• Seminar on GST for Industries: Getting Started from March 19 – 20, 2013 conducted by Wan Leng Whatt, DeputyDirector of Customs and Annie Thomas, Assistant Director of Customs Department; and

• Business Opportunities Networking Session on March 21, 2013 facilitated by Dr Neoh Vee Heng, Chairman of FMMSelangor SMI Working Sub-Committee.


• A visit to Danone Dumex (M) Sdn Bhd led by the Branch’s Vice Chairman Radzi Abdul Rashid held on March 19,2013; and

• The FMM Human Resource/ Industrial Relations (HI/IR) Forum & Consultancy Session held on Tuesday, March 12, 2013which was attended by 19 participants.

Negeri Sembilan

Group photograph of members who visited Danone Dumex (M) Sdn Bhd

MITI speakers (from left) Noraini Abrahim, Jaysiwanta Kaur andAizul Kamil Ibrahim at the Briefing

Members who attended the Business Opportunities Networking Sessionon March 21, 2013



• Courtesy Call on State Economic Planning UnitDirector on March 14, 2013. Branch Chairman Capt (R)Hj Abdullah Shariff met Tuan Hj Elias bin Hasran,State Director and Dr. Badrul Hisham Kassim, DeputyDirector of Economic Planning Unit (UPEN) Johor;

• Meeting of Industrial Park Management Committeeon February 1, 2013 which was chaired by Tuan Hj Eliasbin Hasran, State Director of UPEN Johor. Among theissues tabled by the Branch included the site of thedemolished building near General Electric Sdn Bhd,long term solution for the illegal stalls operating inindustrial estates, vacant land located between KamiElectronics and Malayan Sugar and scheduled cleaningat Sungai Kangkar and Sungai Tebrau; and

• Meeting with PEMUDAH Johor on January 18, 2013 –the Branch was represented by its Vice ChairmanEiap Eng Khoon. Issues discussed at the meetingincluded Tenaga Nasional Berhad’s tariff conversionfrom commercial to industry, on-line PreferentialCertificates of Origin, port security issues and delaysin issuance of Health Certificate.

Johor

• Arab Supplier Fabrication andRetail Sdn Bhd

• Bee Hua Industrial Gases Sdn Bhd• Bestgen Food Sdn Bhd• BI Technologies Corporation Sdn Bhd• De Luxe Circle (M) Sdn Bhd• Diptech Industries Sdn Bhd• Flexitech Sdn Bhd• Guava Soft• Hong Yang Hoo Pharma Sdn Bhd• Hung Thong Food Technology Sdn Bhd

Ordinary Members• Kein Hing Industry Sdn Bhd• KYM Industries (M) Sdn Bhd• Linkk Busway Systems (M) Sdn Bhd• Mackenzie Industries Sdn Bhd• Memscom Technology Sdn Bhd• NBC Ventures Sdn Bhd• Platinum Green Chemicals Sdn Bhd• PMI Pneumatic (M) Sdn Bhd• PTT Corporation Sdn Bhd• Rohde & Schwarz Technologies

Malaysia Sdn Bhd

• Saga Software Sdn Bhd• Solid Print Sdn Bhd• SPM Syarikat Permainan

(Malaysia) Sdn Bhd• Steriflow (Malaysia) Sdn Bhd• Summer Pacific Sdn Bhd• Sunhei Sdn Bhd• Trapia Malaysia Sdn Bhd• Trinitas Global Sdn Bhd• Trocellen S.E.A. Sdn Bhd• Vermi Industries Sdn Bhd

• Dagang Net Technologies Sdn Bhd• European Credit Investment Bank Ltd• Harvard Hotel (Jerai) Sdn Bhd

• HCK Capital Sdn Bhd• Malaysia Debt Ventures Berhad• Senawang Indah Medical Centre Sdn Bhd

Affiliate Members

New Members (March – April 2013)The FMM welcomes the following 36 new members into the organisation, 29 Ordinary Members and

7 Affiliate Members. The majority or 39% are from Selangor, 19% from Johor and Penang and 11% from Federal Territory,while the rest is from other states

Capt (R) Hj Abdullah Shariff (left), Branch Chairman presenting thetoken of appreciation to Tuan Hj Elias Hasran, UPEN State Director


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