Key opportunities for Middle East firms in Malaysia are in refining and petrochemicals, RE, and retail and consumer goods 

By TMR / Pic by BERNAMA

MIDDLE East companies focusing on the Asean market are positive about business growth in the region and a significant 78% view Malaysia as their top Asean market for expansion. 

This was among the findings of a survey commissioned by Standard Chartered (StanChart) for its Borderless Business: Middle EastAsean Corridor report, a strategic report that explores high-potential opportunities for cross-border growth in this corridor. 

A similar sentiment was shared in another survey conducted by StanChart in the Borderless Business: India-Asean Corridor survey for Indian companies with an Asean focus. 

Malaysia is tied in third place with neighbour Singapore as the top three most preferred destinations among Indian companies looking at expansion in Asean.

With Asean a fast-growing trade bloc with increasing economic and financial influence, StanChart sees a growing number of opportunities for businesses in the region.

“We foresee these trade corridors growing rapidly on the back of a strong government impetus and a perceptible shift in consumer demand in favour of clean technology,” StanChart Bank Malaysia Bhd MD and CEO Abrar A Anwar (picture) stated in a release yesterday. 

Key opportunities for Middle East companies in Malaysia are in refining and petrochemicals, renewable energy (RE) and retail and consumer goods. 

“In this regard, Malaysia has established integrated petrochemical zones that offer centralised utilities, storage services and a comprehensive transportation network, to help reduce capital and operations costs for companies. 

“The country has also emerged as a major hub for solar photovoltaic (PV) production and is a key market for halal goods as it works towards building a stronger halal ecosystem between Asean and the Middle East,” the report noted. 

Senior executives of Middle East companies surveyed stated factors such as access to the large and growing Asean consumer market (60%), access to a global market enabled by a network of Free Trade Agreements (58%) and diversification of production footprint (51%) were important drivers for expansion into the region. 

All surveyed Middle East companies expect business growth over the next 12 months, with over 80% of them projecting an annual increase in both revenue (82%) and production (81%) of over 10%. 

Key growth sectors that are drawing Indian companies to Malaysia are digitalisation, RE and electric vehicles. 

India-based technology companies have made inroads into Malaysia as part of the national MyDigital initiative and the country’s response to the Covid-19 pandemic included measures to boost digital payments and e-commerce. 

Malaysia has also emerged as a major destination for the manufacturing of PV systems. Such expansion plans are creating new opportunities for Indian businesses seeking to invest or provide solutions to help attain Asean’s sustainability objectives, the report noted. 

The StanChart report added as Asean governments start offering incentives and building support infrastructure to facilitate growth, measures such as Malaysia’s tax incentives to EV buyers under its National Automotive Policy 2020, has led Indian companies to express plans to expand their footprint in South-East Asia in the coming years.