Mida Casting Industry

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Malaysia’s engineering supporting industry whichprogressed in tandem with the country’s rise as aglobal 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 forthe resource and agro-based industries in the ‘60sand ‘70s to playing a key supporting role during thenation’s rapid economic progress in the ’80s and‘90s, the industry is now positioning itself in thedirection of an enhanced role in the next phase ofMalaysia’s economic evolution. This scenario willenable potential investors to favorably considerMalaysia as an outsource destination.

In addition, the country’s as well as the region’sfast growing automotive and electrical & electronicssectors; attractive fiscal and non-fiscal incentives;the country’s ideal geographic location; a vibranteconomy; a stable Government and local-

developed infrastructure, when taken togetherequals one attractive proposition.

In Support of GrowthOpportunities

1 Malaysia’s Engineering Supporting Industry



Robust Engineering Supporting Industry

Malaysia is an ideal destination for multinationalcorporations (MNC) looking for outsourcing orinvestment opportunities in the engineering supportingindustry.

• A Vital Link

Malaysia is linked to a vibrant manufacturing sector,particularly in the electrical & electronics, computer& computer peripherals; automotive & aerospace;telecommunications and machinery manufacturingsectors. As an outsource destination, we offer aseamless link to these industries with vastopportunities for structural and economic growth.

• Outstanding International Presence

Our engineering supporting industry has earned astrong international recognition for its world-classmanufacturing standards. With the long-standingpresence of various MNCs within the country, wepossess the expertise and experience to be able tosupply products and services that are globallycompetitive in quality, value and delivery time.

• Ideal Location

The ASEAN countries, with a combined populationof over 583 million and a collective GDP of morethan US$1.5 trillion and a total trade of US$1.69trillion for 2008, is a market with infinite potentialgrowth. Our location is not only an ideal base togain entry into the ASEAN markets but is alsoappealing to companies with high value and low-cost strategies looking to outsource effectively.

• A Choice Environment

Malaysia possesses the ideal environment for

foreign investors and companies looking foroutsourcing partners: political stability; strongeconomic fundamentals; well-developedinfrastructure; English language proficiency; skilledand productive workforce and quality of life.

Incentives for Growth

Malaysia has a corporate tax rate of 25% for both localand foreign-owned companies. A wide range of taxincentives are available to manufacturing companies inMalaysia.

1.Incentives for Manufacturing Companies

• Pioneer Status – income tax exemption of 70% to100% on statutory income for 5 years, or

• Investment Tax Allowance of 60% to 100% onqualifying capital expenditure incurred within 5years

• Reinvestment Allowance of 60% on qualifyingcapital expenditure for 15 years.

2.Incentives for High Technology companies

Incentives for High Technology companies venturinginto the design, development and manufacturing ofhigh technology intermediate engineering productsand services.

• Pioneer Status – income tax exemption of 100% onstatutory income for 5 years, or

• Investment Tax Allowance of 60% on qualifyingcapital expenditure incurred within 5 years to beoffset against 100% of statutory income.

Malaysia’s Engineering Supporting Industry 2



Malaysia’s mould and die industry is recognised asthe leading engineering supporting industry in thecountry. Over the last three decades, the mould &die industry has experienced rapid growth intandem with the overall growth of themanufacturing sector. The increasing incorporationof locally manufactured parts and componentshas significantly fuelled the demand for mouldsand dies. Malaysian companies have thecapability to manufacture most types of moulds,

dies and toolings to complement themanufacturing sectors.

The value of imports of moulds and diesamounted to RM730.24 million in 2008. Importswere mainly from Japan, Taiwan, Germany,Singapore, China, United Kingdom, USA and SouthKorea. These imports were mainly very highprecision and complex toolings, for whichopportunities exist for new manufacturing ventures.Malaysia also exports moulds and dies, which hasshown an increasing trend over the last five years.

The Government has set up the Mould & Die DesignCentre to provide additional boost to the developmentof the local mould & die industry. The Centre providesR&D, design, technical consultancy, training andfacilities rental services to the local mould & dieindustry and manufacturing sector in general.

Mould and Die

Industry

Companies operating in Malaysia

The mould and die industry comprises about 350companies involved in the manufacture of most typesof moulds, dies and tooling to complement the needsof the E&E, plastics, telecommunication, automotive,machinery, rubber and other industries. Foreigncompanies that have established operations inMalaysia include A-FOSS Zeno (Japan), Meiki(Japan), Fuji Dies Kogyo (Japan), TylonManufacturing (Japan) and Besi APac (Netherlands).Prominent Malaysian companies include InterplexGroup, Lypometal, Sum Hing Engineering Works,

Topla Engineering (a Japanese-Malaysian jointventure), D-R Engineering, Sun Tong Seng Mould-Tech, H&L High Tech, HH Precision Mould andDynamic Mould.

Opportunities for the Mould and Die Industry

• The scope for the further development of the mouldand die industry in Malaysia remains brightconsidering the high annual market demand andsignificant imports of moulds and dies.

• Export opportunities to the ASEAN region is

expected to increase significantly with the ASEANFree Trade Area (AFTA) which came into force inJanuary 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 venturinginto the design, development and manufacturing oftrim & form dies, semiconductor cavity/encapsulationmoulds, suspension tooling for hard disk drive parts,

progressive tooling for lead frames and fibre opticconnector tooling, advanced toolings and equipmentfor the production of precision components, moulds,tools and dies for the automotive industry.




Machining

IndustryMalaysia’s machining industry is a total solutions provider to all themachining needs of the country, with most companies attaining high levelsof technological capabilities and using state-of-the-art CNC machinetools in their operations.

The machining industry in Malaysia can be classified into twocategories:

• Companies which provide machining services to otherindustries on a jobbing basis.

• Companies which produce precision machined parts such as

jigs & fixtures, turned parts, shafts, pins, bushes and othermachined components.

Most of the specialised machining companies possess state-of-the-art CNC machining centers and provide integrated machiningsolutions (including sub-assemblies), working to machiningtolerances as low as 1 to 5 microns with turning diameters rangingfrom 1 to 550 mm. A number of companies have diversified into thedesign and manufacture of automation systems and equipment,particularly for semiconductor, electrical & electronics industries.

Companies Operating in Malaysia

There are about 150 companies in operation, providingmachined parts and components and machiningservices. Catering to a number of multinationals in thedomestic and direct export markets in the USA, Japan,Singapore, UK and France are prominent Malaysiancompanies like Upeca Engineering, Eng Hardware

Engineering, Paradigm Precision Components, TNHMetal Engineering, PSO Precision Machinist andEdaran Precision Industries. Foreign companies thathave established operations in Malaysia include Synturn(S’pore), Swissmatic Precision Engineering (S’pore),Kenseisha (Japan), Kobe Precision Technology (Japan),Ohta Precision (Japan), Naito Asia (Japan) and KurodaPrecision Industries (Japan).

Opportunities for the machining Industry

It is envisaged that the expansion of Malaysia’saerospace parts and components manufacturingindustries will lead to the increased demand formachined parts and components as well as machiningservices.




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 yearshas attained a significant level of technologicalexpertise in servicing the traditional industries ofrubber, tin and palm oil. Working with the localengineering companies, the foundries have developedtheir capabilities to re-engineer and adapt componentsand sub-assemblies for imported machinery to suitlocal conditions. Some of the more advanced foundriestoday have automated casting facilities and are

producing castings (up to 10 tonnes) to internationalstandards for export.


These include prominent Malaysian companies likeMMC Metal Industries, Yoonsteel, Hicom Engineering,Lestari Casting and a foreign-owned company,Metalock Castings (S’pore).

2. Die Casting

The die-casting industry in Malaysia is fast developingas a major component supply source, supporting themanufacture of computer, electrical appliances,automotive components and hardware products. Thelocal companies have developed and acquiredadequate know-how and production capabilities inproducing die-cast components of very high qualitysuch as computer disc drive components, die-castparts for the domestic electrical appliances industryand the electronics industry.


These companies are mainly foreign or joint-venturessuch as Hiroshige (Japan), Wincast PrecisionEngineering (S’pore), Dynacast SPM (UnitedKingdom), MMI Precision Manufacturing (S’pore),MELCOM, Asahi Kosei (Japan), Kawamura (Japan),Keseisha (Japan), Nakazawa Die Casting (Japan),PDCI (S’pore), Jomon Technology (S’pore), SanshoGiken (Japan) and Swanmet (S’pore).

3. Magnesium Injection Moulding(Thixomoulding©)

Malaysia is one of the few countries in the world whichhas this facility. Magnesium injection moulding, which

is a revolutionary semi-solidprocess for high speed injectionmoulding of net-shape magnesiumalloy parts, is regarded as the mostadvanced way of fabricating high quality,

high strength, high complexity and light weightmagnesium alloy parts and components to precisiontolerances. Parts and components presentlymanufactured in Malaysia are for aesthetic, structuraland functional uses for the electronics,telecommunication and automotive industries.

AB Technology is a local company which through itsintense R&D, has successfully integratedthixomoulding© into a one-stop process centre formagnesium alloy parts and components.

4. Investment Casting

Investment casting industry in Malaysia suppliescomponents of accurate dimensional tolerances andcomplex shapes, normally used in the aerospace,automotive and machinery industries. There are fourcompanies presently producing precision investmentcasting mainly for the export market. They are RigelMetalcraft (Taiwan), Swanmet (S’pore) and Malaysian-owned companies Nostalgia Investment Casting andMMI Precision.

Opportunities in Metal Casting Industry

With the further development of the local automotive,telecommunication and electrical and electronicsindustries, there will be greater demand for metal castcomponents. Expansion into manufacturing of largermoulds and dies and the machinery and equipmentindustry will offer good prospects for the growth of thecasting industry.

Metal casting is fast becoming a basic engineeringsupporting industry. It is expected that moreestablished foundries would be seeking technology

and joint-venture partners todiversify into this field.


Metal

CastingIndustry



The metal stamping industry is well-established inMalaysia, supplying stamped/pressed parts to awide range of industries, including the electrical &electronics, automotive, industrial machinery andequipment, precision measuring and testing

equipment. The industry has developed significantly,in capacity and technical capabilities, to serve thevarious market needs of multinational corporationssuch as Panasonic, Sony, Hitachi, Toshiba, Dell,Yamaha, Thomson, Philips and Hewlett Packard.

The industry is now heading towards advancedtechnologies and the provision of total solutionsincluding prototypes, moulds and dies and sub-assembled components. The steady increase in thedemand for electrical and electronic products andautomotive components will continue to spearheadthe growth in the metal stamping industry inMalaysia.


There are over 300 companies engaged in metalstamping activities as technological advances and asteady increase in demand continue to drive theneed for expansion within the industry. ProminentMalaysian companies include Cybron TLManufacturing, Kris Components, Kein HingIndustry, Wong Engineering and NH MetalStamping.

Opportunities for the Metal Stamping Industry

The industry is expanding and developing towardshigh speed stamping, fine blanking and into themanufacture of higher precision and miniaturisedparts. New projects are also encouraged in theless developed states of the Eastern Corridor ofPeninsular Malaysia, Sabah and Sarawak.


Metal StampingIndustry



The heat treatment industry is expected to grow intandem with the development of the major industryclusters of machinery and equipment, moulds and dies,iron and steel secondary products and automotivecomponents. This industry offers services such ascontinuous mesh-belt heat treatment; vacuum hardening;carburizing; carbonitriding; nitriding; nitro-carburizing;annealing; normalizing; and tempering for a diverse rangeof metal products.

Heat treatment services for high carbon steel and alloysteel products such as moulds and dies, critical parts forbearings and automotive components are the latestadditions to the list of products already serviced which

include bolts, nuts, shafts, gears, pins and springs.


Most of the companies in operation providing heattreatment services are joint ventures with foreigncompanies who supply both capital and technical know-how support. Prominent companies in this industryinclude Malaysian owned companies such as UpsilonHeat 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 themachinery and equipment manufacturing industries, andproduction of downstream products of iron and steel,secondary products, automotive parts and componentmanufacturing offer good prospects for the growth of theheat treatment service industry. Investments in newventures with state-of-the-art facilities that are also

environmentally friendly are encouraged especially thoseincorporating the latest vacuum carburizing and vacuumhardening technology.


Industry

HeatTreatment



The industry has the capability and capacity to cater for most of the requirements of themanufacturing industry. These include a variety of plating operations such as batch andcontinuous electroplating; precision electroplating; electroless plating; phosphating;passivation; anodizing; chromating; electroplating for the semiconductor industry includingintegrated circuits and lead frames; sinter plating and physical vapour deposition.

Malaysia is now focusing its efforts in establishing more modern plating plants with cutting-edge equipment and technology, while upgrading current facilities to complement thecountry’s heightened industrial efforts and environmental concerns. There is an increasingdemand for surface treatment services from the electrical and electronics, automotive,aerospace and machinery components industries, thus opening up vast opportunities fornew ventures in this area.


There are about 35 companies in operation in this industrywhich include Malaysian owned companies such as AKNTechnology, Ampmas and Metal Polishing Industries and foreignowned companies such as Mitek Kitamura (Japan), DipsolChemicals (Japan), Ueda Plating (Japan), and Jiwei Industries

(Taiwan). Most of these companies are presently servicing theneeds of notable MNCs.

Opportunities for the Metal Surface Treatment/ Finishing Industry

The industry is now focusing on establishing modern platingplants with the state-of-the-art equipment and technology forhigh precision surface treatment and coating for the electricaland electronics and aerospace industries. These will also haveto address the environmental concerns linked to the industry.

Surface Treatment / Finishing Industry




Metal fabrication activities in which Malaysiancompanies have developed world-class capabilitiescan be classified into four categories; namelyfabrication for the offshore/onshore oil and gasindustry; building and civil construction fabrication;fabrication of processing and manufacturing plantsand industrial machinery and equipment structuresand component fabrication.

Local companies undertake fabrication for theoffshore/onshore oil & gas industry which includesfabrication works for the offshore oil drilling platformrequirements such as jackets, production modules,platform decks, accommodation modules, line-pipe &spool and related industrial onshore activities such as

petroleum refineries, petrochemical plants andstorage facilities.

In the building and civil construction fabricationcategory local companies fabricate steelsuperstructures for high-rise buildings, bridges,flyovers, transmission towers and other infrastructuralfacilities 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 & equipmentstructures and components fabrication category,many companies have the capability to supply theneeds of the local machinery & equipmentmanufacturing industry.

The metal fabrication industry in Malaysia isconsidered a fairly established industry. In

the building and construction industry manylocal fabrication companies have begun tosource for jobs outside Malaysia. As a result,several local fabricators have gainedinternational recognition in this industry.


Leading Malaysian companies which areserving this sector include Malaysia Shipyardand Engineering, Shin Eversendai Engineering, NamFatt Fabricators, Wong Heng Engineering, KKBEngineering and KNM Process Systems.


Metal FabricationIndustry



Malaysia has much to offer to companies searching fora strategic and cost effective engineering supportingoutsourcing destination. With its ideal location in theheart of Southeast Asia, a mature and stable economybacked by an integrated infrastructure, it is of littlesurprise that foreign interest has been growing. There

is also the added benefit of government-backedinvestment incentives.

The key to considering Malaysia as the region’sengineering supporting outsourcing hub of choice isthe concept of value and quality. Foreign firms havechosen to remain in Malaysia and many more arelooking for joint ventures or seeking to bring businessto the country simply because they enjoy promisingrates of return. Malaysia makes for an extremelycompetitive destination for regional outsourcing of

engineering supporting services and the nation looksforward to welcoming future investors.


Not To Be Missed An Opportunity



July 2009

For more information on investment opportunities, please contact:

Machinery and Engineering Supporting Industries DivisionMalaysian 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: [email protected] Website: www.mida.gov.my

MIDA’s HeadquartersMalaysian Industrial Development Authority, Plaza Sentral, Jalan Stesen Sentral 5, 50470 Kuala Lumpur, Malaysia

Tel: (603) 2267 3633 Fax: (603) 2274 7970 E-mail: [email protected] Website: www.mida.gov.my

MIDA’s Overseas Offices

ASIA-PACIFICAUSTRALIAConsul-Investment/DirectorConsulate of MalaysiaMalaysian Industrial Development AuthorityLevel 6, 16 Spring StreetSydney, NSW 2000AustraliaTel: 61 (2) 9251 1933Fax: 61 (2) 9251 4333E-mail: [email protected]

JAPANDirectorMalaysian Industrial Development Authority

32F, Shiroyama Trust Tower4-3-1,Toranomon, Minato-kuTokyo 105-6032, Japan.Tel: 81 (3) 5777-8808Fax: 81 (3) 5777-8809E-mail: [email protected]: www.midajapan.or.jp

DirectorMalaysian Industrial Development AuthorityMainichi Intecio 18F3-4-5 Umeda, Kita-kuOsaka 530-0001, Japan.Tel: 81 (6) 6451-6661Fax: 81 (6) 6451-6626E-mail: [email protected]

PEOPLE’S REPUBLIC OF CHINAConsul (Investment)Consulate General of MalaysiaMalaysian Industrial Development AuthorityUnits 807-809, Level 8,Shanghai Kerry CentreNo. 1515, Nanjing Road (West)Shanghai, 200040, ChinaTel: 86 (21) 6289 4547 /

5928 6335Fax: 86 (21) 6279 4009E-mail: [email protected]

DirectorMalaysian Industrial Development Authority

Unit 1804B-05CITIC Plaza Office Tower233 Tianhe Bei Road Guangzhou,510610, ChinaTel: (8620) 8752 0739Fax: (8620) 8752 0753E-mail: [email protected]

TAIWANDirector (Investment)Malaysian Friendship & Trade CentreMalaysian Industrial Development Authority12F, Suite A, Hung Kuo BuildingNo. 167, Tun Hua North RoadTaipei 105, TaiwanTel: 886 (2) 2718 6094 /

2713 5020 (GL)Fax: 886 (2) 2514 7581E-mail: [email protected]

KOREA, REPUBLIC OFCounselor (Investment)Embassy of Malaysia (Investment Section)Malaysian Industrial Development Authority17th Floor, SC First Bank Building100, Gongpyung-dong, Jongro-gu,Seoul 110-702, Republic of KoreaTel: 82 (2) 733 6130 / 6131Fax: 82 (2) 733 6132E-mail: [email protected]

UNITED ARAB EMIRATESDirector/Consul InvestmentMalaysian Industrial Development AuthorityConsulate General of Malaysia(Investment Section)Unit 2204-2206, 22F Tower ABusiness Central Tower(P.O. Box: 4598)DubaiUnited Arab EmiratesTel: 00 971-4-4343-696 /697Fax: 00 971-4-4343-698E-mail: [email protected]

INDIADirector/Consul InvestmentMalaysian Industrial Development AuthorityConsulate General of Malaysia (InvestmentSection)81 & 87, 8th Floor, 3rd North Avenue, MakerMaxityBandra Kurla Complex, Bandra (E)Mumbai 400051IndiaTel: 00 91 22 2659 1155 /

2659 1156Fax: 00 91 22 2659 1154E-mail: [email protected]

EUROPE

SWEDENEconomic CounsellorMalaysian Industrial Development Authorityc/o Embassy of MalaysiaKarlavaegen 37P.O. Box 26053S-10041 Stockholm, SwedenTel: +46 (8) 791 7942/4408 400Fax: +46 (8) 791 8761E-mail: [email protected]

UNITED KINGDOMDirectorMalaysian Industrial Development Authority17, Curzon StreetLondon W1J 5HRUnited KingdomTel: +44 (0) 207493 0616Fax: +44 (0) 20 7493 8804E-mail: [email protected]

GERMANY, FEDERAL REPUBLIC OFDirector/Consul InvestmentMalaysian Industrial Development AuthorityConsulate General of Malaysia(Investment Section)17th Floor, Frankfurt KastorPlatz der Einheit 160327 Frankfurt am MainGermanyTel: 0049 (0) 69 76807080Fax: 0049 (0) 69 7680708-20E-mail: [email protected]

FRANCEDirectorMalaysian Industrial Development Authority42 Avenue Kleber,75116 Paris, France.Tel: +33 (1) 47276696 / 4727 3689Fax: +33 (1) 4755 6375E-mail: [email protected]

ITALYConsul-Investment,Consulate of Malaysia (Investment Section)Malaysian Industrial Development Authority5th Floor,Piazza Missori 3,20123 Milan (MI), ItalyTel: (3902) 3046 521Fax: (3902) 3046 5242E-mail: [email protected]

NORTH AMERICA

LOS ANGELESConsul-InvestmentConsulate General of Malaysia (InvestmentSection)Malaysian Industrial Development Authority550, South Hope StreetSuite 400, Los Angeles, California 90071United States of AmericaTel: 1 (213) 955 9183,

1 (213) 955 9877Fax: 1 (213) 955 9878E-mail: [email protected]

SAN JOSEDirectorMalaysian Industrial Development Authority226 Airport Parkway, Suite 480San Jose, California 95110United States of AmericaTel: 1 (408) 392 0617/8Fax: 1 (408) 392 0619E-mail: [email protected]

NEW YORKConsul-InvestmentConsulate General of Malaysia (InvestmentSection)313 East, 43rd StreetNew York, NY 10017United States of AmericaTel: 1 (212) 687 2491Fax: 1 (212) 490 8450E-mail: [email protected]

BOSTONDirectorMalaysian Industrial Development AuthorityOne International Place, Floor 8Boston, MA 02110United States of AmericaTel: 1 (617) 338-1128 / 338-1129Fax: 1 (617) 338-6667E-mail: [email protected]

CHICAGODirectorMalaysian Industrial Development AuthorityJohn Hancock Center, Suite 1515875, North Michigan AvenueChicago, Illinois 60611United States of AmericaTel: 1 (312) 787 4532Fax: 1 (312) 787 4769E-mail: [email protected]

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