Malaysia eyes bigger chemicals value-added share to GDP by 2030

SINGAPORE (ICIS)–Malaysia plans to boost the chemical industry’s value-added contribution to the overall economy to more than 4.5% by 2030 from 3.4% presently under a new roadmap.

Based on its Chemical Industry Roadmap 2030 (CIR2030) launched on 4 August, the industry is expected to generate some Malaysian ringgit (M$) 40bn ($8.8bn) in added-value contributions by the end of the decade, investment, trade & industry ministry Zafrul Aziz said.

The roadmap is aimed at “enhancing industry integration, as well as improving global competitiveness and sustainability in production”, the Ministry of Investment, Trade and Industry (MITI) said.

In 2022, the chemicals industry contributed 7% to Malaysia’s GDP, and provided employment to around 239,000 workers, representing12.5% of the 2.6m total for the manufacturing sector, it stated.

“The chemical industry has experienced a substantial shift catalysed by key global megatrends, changes in demand patterns, and the growing focus on environmental, social, and governance (ESG),” Zafrul said.

“We are also targeting for our chemical industry to be ranked first in ASEAN in terms of FDI [foreign direct investment] inflow by 2030,” he added.

The CIR2030 was developed by MITI, in collaboration with the Malaysian Investment Development Authority (MIDA), state energy firm PETRONAS, the Chemical Industries Council of Malaysia (CICM), as well as industry stakeholders.

“Eleven priority segments have been identified in base chemicals and intermediates; plastics and polymers; and specialty chemicals, where targeted investments, industrial development and export programmes will be enhanced to support the CIR2030 implementation,” MITI said.

The CIR2030 is set to complement Malaysia’s New Industrial Master Plan 2030 (NIMP 2030) which will also be launched this month.

“Within the NIMP 2030, the Chemical, Petroleum Products and petrochemicals sectors are provided for via several action plans that are all aligned to NIMP’s four missions, including a specific focus on deepening our specialty chemical verticals,” it added.

Malaysia’s current petrochemical production is primarily driven by a strong base for olefins, polymers, and aromatics, and there are strong ambitions to expand beyond the commodity products as industry players develop more complex, specialty downstream chemicals, the Malaysian Petrochemicals Association (MPA) said in a report released in May.

“The CIR is positioned to propel the chemical industry in increasing its value contribution to the Malaysian economy… The automotive, construction, electrical and electronics, as well as agriculture, are among the many industries that benefit from the adjacent success of Malaysia’s chemical industry,” it said.

Focus article by Nurluqman Suratman

($1 = M$4.56)