MALAYSIA Opportunities in Malaysia

U.S. Commercial ServiceMalaysia

Malaysia - strategically located in the region

Trade and Investment Trade and Investment • Commercial relationship has historically been good, US companies

continue to export and invest in Malaysia.

• Malaysians love U.S. products and services specially franchises.

• Most of the natural resources located in E Malaysia, and electronic industry in Penang.

• Bilateral trade $33 billion, US exports to Malaysia are $10.4 billion.

• Major imports from US: aviation products, oil & gas equipment, medical & healthcare products, ICT, soybeans, fresh fruits, and other products and services

• Malaysia is 18th largest US trading partners and US is 3rd largest Malaysian trading partner (was 10th and 1st).

• US is the largest investor in Malaysia: total investment 14 billion in oil/gas, electronics and financial services.

• Recent success: Pratt and Whitney $750 Million engine deal, maintaining 2000 jobs across US.

IncentivesIncentives

• English is the commercial/business language

• Loosening restrictions on foreign exchange

• No restrictions on repatriation of capital and profits

• Established legal framework

• Excellent infrastructure

• WTO member

• Currently considering joining TPP

Best Prospects 2011Best Prospects 2011

1. Oil and Gas Equipment2. Aircraft and Parts3. Environmental Equipment4. Franchising 5. Health Care Services/Supplements6. Information and Communication Technology (ICT)7. Renewable Energy & Efficient Energy8. Other Services

Oil & Gas Equipment

• Malaysia’s crude oil production average 678,000 bpd in 2009, production of natural gas was 980,200 barrels of oil equivalent (BOE) per day.

• At current rates of production, Malaysia’s oil reserves of 5.52 billion barrels are expected to last another 22 years; and gas reserves of 14.66 billion BOE, another 41 years.

• US$6.0 billion was spent in Malaysian exploration and production in 2009 – US$4.0 billion of which on development and production projects and exploration activities, the balance on operations.

• Prospects for Malaysia’s oil and gas industry remain optimistic, especially in deepwater and ultra-deepwater areas.

• The Malaysian market for offshore oil and gas equipment (excluding rigs, platforms, modules, jackets, marine vessels) in 2009 was estimated at US$800 million. The market size could reach US$1.05 billion in 2015.

Aircraft & Parts

• Malaysian government has identified aerospace industry, particularly aerospace maintenance, repair and overhaul (MRO) services, as a new growth industry for Malaysia to exploit.

• Malaysia Airlines (MAS) is embarking on fleet modernization. It has a firm order of 35 B737-800 (delivery of aircraft between 2010 and 2014). It has another time order of 15 A330-300 (delivery between 2011 and 2014). It has optional orders for 20 B737-800 and 10 A330-300. MAS expects to receive six A380 in 2011-2012.

• Royal Malaysian air Force (RMAF) operates some 80 combat aircraft such as Hawks, MiG-29N, F/A-18D Hornets and Sukhoi Su-30MKM. Altogether, RMAF has about 200 aircraft of various makes.

• Malaysia is planning to purchase combat, search and rescue helicopters to replace the present fleet of 30 units of Sikorsky S61 helicopters.

• US exports of aircraft parts have consistently enjoyed a dominant position in this market, due to consistently superior quality and performance in comparison to other makes. Malaysia imported about SU1.4 billion worth of aircraft and parts in 2009. The imports could reach US$2.0 billion in 2015.

Environmental Equipment

• Malaysia’s daily waste generation is approximately 27,000 tonnes.

• Only 5% of these are recycled while 90% are disposed off in landfills, 2% incinerated or find its way into the river and water systems through illegal or indiscriminate dumping (3%).

• Food and Organic Waste makes up to 76% of the solid waste generated.

PROSPECT

- Waste Recovery- Waste disposal equipment new and replacement- Green disposal methods- Waste of energy

Franchising

• The Malaysian government has identified franchising as catalyst for increasing the number of entrepreneurs in Malaysia.

• Under the 9th Malaysian Economic Plan (2006-2010), the government of Malaysia has allocated about $5.7million for franchise development programs to establish new franchises in the country. The franchise business contribute 3.5% towards the Malaysian GDP.

• The Malaysian franchise industry has registered a healthy 15% growth for the past decade.

• As of November 2009, there are 46 local franchisors. The Malaysian government target is to have 50 local franchisors by December 2010.

• Almost 44% of the franchises operating in Malaysia are foreign franchises. American franchises account for around 34% of these franchises.

• Popular franchise concept are: food and beverage, apparel and accessories, education, services sector, health and beauty, retail, Information and Communications Technology.

Healthcare Services

2008 20092010*

Estimates

Public Drugs Expenditure (US$ million) 472 438 480

Market Size (US$ Million) 585 626 670

PROSPECT•Integration and digitization of national information/archive•Emergency response centre on communicable diseases•Promoting Health Tourism centre in the region for cosmetic, dental and heart surgeries•Dental implants, crown-bridges, orthodontic devices and consumables•Diagnostic medical devices, medical instruments, and surgical appliances•Health supplements and Nutraceuticals

2007 2008Public

HospitalsPrivate

HospitalsPublic

HospitalsPrivate

Hospitals

Health Expenditure (in US$ Billion) 4.2 5.2 5 5.9

Information and Communication Technology (ICT)

• Market Overview Malaysian IT spending is expected to grow to U$8.2bn in 2011, from US$4.8bn in 2010, when the market stabilized following the impact of a difficult economic and political situation.

• Malaysia is developing most ‘e-society’ indicators at a steady rate. The government is pursuing programmes to reduce the digital divide between urban and rural areas, with the Ministry of Rural and Regional Development cooperating with the Ministry of Science, Technology and Innovation and the national IT industry association on plans to establish more community PC centres in the country this year.

• Malaysia is one of the most mature mobile phone markets in the region, with penetration rate of 108.8% as of Q2 2010. In its efforts to become an industrialized nation by year 2020, the government is targeting 75% household penetration by 2011

Best prospects :

• Broadband technologies – Mobile broadband (HSDPA, WiMAX, Wifi), Fixed broadband (ADSL, SDSL, VDSL, ETTH, FTTH) and satellite;

• Networking equipment & solutions;

• Security and surveillance equipment;

• Support systems - OSS, BSS, SDP;

• Mobile TV, IPTV, digital TV and HDTV products & solutions.

Information and Communication Technology

(ICT)

OpportunitiesOpportunities(2011-2015)(2011-2015)

Investments by Sector– Oil and Gas ($20 billion)– Defense and Security ($10 billion)– Transportation ($10 billion)– Electricity ($10 billion)– Basic metal (US$9.6 Billion)– Electronics & Electrical Products (US$9 Billion)– Education and Training ($16 billion)– Medical Device ($1.4 billion)– Bio Technology ($1 billion) – ICT ($12 billion)

Website:www.buyusa.gov/malaysiawww.buyusa.gov/asianow/southeastasia_home.html

Let us help you close the dealLet us help you close the deal

U.S. Commercial Service – Kuala LumpurU.S. Embassy376 Jalan Tun Razak50400 Kuala Lumpur, MalaysiaTel: 603-2168-5050Fax: 603-2142-1866Email: Kuala.Lumpur.Office.Box@mail.doc.gov