Could you summarize the outcomes of the Chemical Industry Roadmap (CIR) 2030? 

CIR 2030 represents a significant stride towards a dynamic, sustainable, and innovative chemical sector. It aims to elevate the industry's value chain, enhance integration, boost competitiveness, and pivot towards carbon neutrality through cutting-edge technology.

Central to this vision are 11 key focus areas spanning base chemicals, plastics, polymers, and specialty chemicals, poised to position Malaysia as a leading chemical hub in the Asia Pacific.

Could you elaborate on Malaysia’s “Plus One” strategy and how could the country capitalize on strained US-China relations? How do you see this panning out in 2024?

The geopolitical tension between the USA and China has led Multinational Companies (MNCs) to diversify their supply chain beyond China, also known as China Plus One (‘China+1’) Strategy. Besides the geopolitical tension, the pandemic also triggered MNCs to adopt more secure supply chain strategies including nearshoring, friendshoring and reshoring. Malaysia’s Leadership has repeatedly advocated its neutral stance when it comes to geopolitics with all countries, including the USA and China. 

Neutrality and the possible benefits from the ‘China+1’ Strategy aside, we strongly believe that no MNC or global company would want to diversify their operations in Malaysia without our strong value proposition. In fact, we are fast being recognised as a preferred investment destination in Asia, not only due to our strategic location within Southeast Asia, but also our multi-cultural, multi-lingual and highly trainable workforce, rule of law, investor-friendly policies and ecosystem, political stability, as well as a well-developed physical and digital infrastructure. 

As part of efforts to attract companies that intend to relocate their operations in Malaysia, the Malaysian government has introduced the Special Tax Incentive (Relocation) scheme where investors may enjoy 0% tax rate for 10 years for new investment in the manufacturing sector with capital investment (excluding land) between RM300 million to RM500 million; or 0% tax rate for 15 years for new investment in the manufacturing sector with capital investment (excluding land) above RM500 million. For Existing Companies, Malaysia also offers income tax exemption equivalent to Investment Tax Allowance (ITA) of 100% on the qualifying capital investment (excluding land) above RM300 million incurred within 5 years for an existing company in Malaysia relocating overseas facilities into Malaysia. The allowance can be offset against 100% of statutory income for each assessment year.

Aside from continuous skilling and upskilling programmes, we are also ramping up our efforts to ensure a robust talent pipeline with relevant, industry-required skills in the Science, Technology, Engineering and Mathematics (STEM) and TVET tracks that could feed into these industries.

What investment opportunities does Malaysia’s net-zero strategy 2050 entail? Do you observe a trend for more investments in renewables, BEES, green hydrogen, carbon capture etc?

In 2023, Malaysia launched the New Industrial Master Plan 20230 (NIMP2030), which is the first Malaysian policy, and the first Malaysian industrial policy to take a mission-based approach. 

One of the four key missions of NIMP2030 is the “Push Net Zero” (Mission 3). This mission has a dual-track strategy to tackle climate change: first, to accelerate decarbonization of our industry, which include enhancing adoption scheme for energy efficiency or renewable energy, and introducing carbon-related policy, accounting and tax. These are expected to drive investment in decarbonization and energy-efficient technologies, as well as encourage industry players to adopt sustainable practices to reduce carbon emissions, such as installing solar panels on their factory rooftop, and using thermoelectric generator to transform industrial waste heat into electricity. All these initiatives are supported by existing green incentives.

Secondly, to catalyze new green growth areas by identifying and facilitating the development of key emerging sectors that Malaysia can leverage on, particularly Electric Vehicles (EV) and Carbon capture, Usage, and Storage (CCUS). The catalytic effect of EV will further boost the growth of related sectors in equipment supply, charging infrastructure and software development for an EV ecosystem. These would harness cross-sectoral collaboration across industries including metal, E&E, digital and ICT and chemical. Meanwhile, CCUS is a potential solution for carbon management, especially for the hard-to-abate sectors. By leveraging on our sizeable number of depleted oil fields, Malaysia could be among the first movers and regional leaders in CO2 management via CCUS. The CCUS hubs in Bintulu and Kerteh will support the green and renewable energy needs under NIMP 2030. 

In 2023, Malaysia also launched the National Energy Transition Roadmap (NETR) as a comprehensive strategic plan to reengineer our energy systems from conventional, fossil-fuel-based sources towards cleaner, more sustainable alternatives. The NETR is aimed at addressing the challenges posed by climate change holistically, including ensuring energy security and sustainability. Spanning multiple sectors, it includes power generation, transportation, industrial processes, and residential energy consumption. The NETR aims to achieve net-zero emissions by 2050. The plan is comprehensive and outlines a gradual increase in renewable energy generation, targeting 31% by 2025, 40% by 2035, and 70% by 2050.

Could you comment briefly on the Johor-Singapore Special Economic Zone (JS-SEZ) initiative? Do you think there is scope for further integration between Southeast Asian nations?

Malaysia and Singapore’s total trade amounted to USD80 billion in 2023. Singapore is also one of the top sources of foreign direct investment for Malaysia, amounting to RM43.7 billion or 13.3% of Malaysia's total approved investment in 2023.

The close geographical proximity between Malaysia, particularly Johor, and Singapore is seen as a crucial factor that allows capitalization on each other's strengths and advantages in boosting trade and investment. Apart from goods, the people-to-people ties between both nations also remain strong, with more than 300,000 Malaysians entering Singapore daily, making the Malaysia-Singapore causeway one of the busiest land crossings in the world.

Malaysia and Singapore signed a Memorandum of Understanding (MOU) to create a Johor-Singapore Special Economic Zone (JS-SEZ) to strengthen economic ties between both countries. The JS-SEZ is expected to ride on the strong growth of Johor and significant investments in the region by Singapore. While the JSSEZ is still in its planning stages, once implemented, it is expected to be a game changer, heralding a new level of economic cooperation between the two countries. This, in turn, will promote further stability in the region which oversees one of the world's busiest shipping routes.