Globally, the chemical industry has had a tough year. How has the Malaysian industry performed?

Since the Malaysian chemical sector is heavily focused on the production of intermediates and we rely mostly on local raw materials, both oil and gas as well as palm oil, production has, so far, been steady. Approved investments in the chemical sector have also continued to grow, amounting to 8.9 billion Ringgit for the year 2023, according to official MITI figures. 69.8% of this is foreign-led, proving that Malaysia remains a strong candidate for FDI. Investor confidence has also improved under the current “unity government,” led by Prime Minister Anwar Ibrahim. The challenge for the Malaysian chemical industry is different: We must question where we go from here onwards and push forward into the specialty space. There is a lot of resistance from basic raw material producers to investing in specialty chemicals. However, to stay competitive, we need to move up the value chain. Oil and gas will eventually deplete and strength in feedstock availability and competitiveness is no longer as it was. The industry needs to add knowledge-based value.

CICM is the steward of Responsible Care in Malaysia. How has this initiative evolved over the years in terms of its key focuses?

CICM has become the steward for Responsible Care in Malaysia since 1994. This global initiative started off from a principle of safety, triggered by the tragic explosion in Bhopal, India. The danger of chemicals came into the public eye, staining, to a great extent, the image of the industry. The global chemical sector reacted to the incident by devising ways how to do better to prevent such disasters. Responsible Care emerged in the mid-1980s in Canada, and was centered around safety, health, and the environment. It took two more decades before sustainability issues were brought to the fore, primarily in terms of disposing and reusing waste. Today, circularity has taken center stage, evolving into carbon credit systems whereby large companies, like PETRONAS, have dedicated reservoirs to mitigate their carbon footprint. Most recently, there have been more discussions about chemical security and how to prevent the smuggling and weaponization of certain chemicals. Another modern variant of safety and security is cybersecurity, especially as chemical operations are digitalized, making it vulnerable to potential cyberattacks.

Could you elaborate on the aspect of chemical security – what drives the risk of chemicals being weaponized in today’s environment and how is the government reacting to ward off the risk?

The assassination of Kim Jong-Nam at the Kuala Lumpur airport in 2017 using a chemical substance further raised attention to the issue of chemical security and the need to enforce greater controls in Malaysia. In Malaysia, the government agency monitoring toxic chemicals and their precursors to chemical weapons is the National Authority Chemical Weapons Convention (NACWC), under the Ministry of Foreign Affairs. Regulations are still in their infancy, having started with an emphasis on reporting. The industry is required to report on the use of certain chemicals to prevent these chemicals from getting into the wrong hands. The NACWC also has the power to inspect any facility.

What are the most important outcomes deriving from the recently published Chemical Industry Roadmap (CIR)?

One of the main outcomes is the move to create a central body for the handling of chemicals. While the rubber or palm oil sectors have dedicated boards governing everything related to these spaces, the chemicals industry fits under multiple authorities. For example, the Department of Environment (DOE) falls under the Ministry of Natural Resources and Environmental Sustainability; the Department of Organizational Safety and Health (DOSH) is under the Ministry of Human Resources, while the Ministry of International Trade and Industry (MITI) covers everything from investment to circular economy and digitalization. As a result of the CIR exercise (in which CICM was involved), the government is addressing this concern raised by the industry by initiating the creation of a central chemical management system.

Is the CIR delivering on what the industry expected?

Like the name says, the roadmap is a plan, rather than legislation cast in stone. In some respects, we are already there. For instance, there is an ongoing effort to streamline vocational training. Other areas are vaguer. People talk about sustainability from too many different angles and with different components, without uniformity. Importing nations are introducing their own ESG standards. So do financial institutions that require ESG criteria to be met before granting loans. These changes raise barriers to Malaysian chemical manufacturers and exports, which is why we must also create a uniform standard that will enable us to continue to be competitive, and compliant as well as being able to attract financing for the local chemical industry.

Is there any final message you’d like to send to our readers?

Chemistry is fundamental to our everyday lives. The chemical industry is very mature, but it is also highly dynamic, and continuously transforming. There is a push to always innovate along the way, to do things better, more efficiently, and more sustainably. At the same time, we cannot wait for a spillage or a cyberattack, for example, to occur before starting to take remedial action. Instead, we must undergo a continuous process of self-improvement, to do things differently, more innovatively, and more safely. Reacting can be much more expensive than being proactive. In my opinion, we need to go back to education and raising awareness, focusing on the basics. Our efforts to create awareness of having to act responsibly with regard to safety, health, and environmental protection in general, should go beyond the industry. We must reach out to schools and institutions of higher learning, where the next generation of industry leaders is being nurtured. From there, we can instill safety, sustainability, and other Responsible Care principles as second nature by the time they enter the workplace. That way, they will start questioning whether everything is in place and safe before something goes wrong to alert them.