Malaysia’s successful shift from an agricultural to a middle-income, knowledge-based economy has made the Malaysian economy a role model for many developing countries. Malaysia continues to show a remarkable industrial production growth rate, reaching 7.5% in 2012, with industry the lead contributor to GDP at 41%. This has driven solid GDP growth since the country recovered from the Asian financial crisis of 1997/98 and the local business community often praises the government for seeking to promote investment and international trade. In an attempt to further Malaysia on its path to become a high-income, developed country by the year 2020, the Malaysian government is committed to stimulate growth in the manufacturing sector through the Economic Transformation Plan (ETP). Despite the central bank’s (Bank Negara Malaysia) announcement of a downwardly revised GDP growth forecast for 2013 to between 4.5% and 5% from the previously projected 5% to 6%, Malaysia’s economic outlook remains positive.
Malaysia’s diverse chemical industry includes one of the largest oleochemical sectors in in the world, accounting for 20% of global capacity, and a petrochemical industry that is world-renowned and an integral part of the wider chemicals industry providing a steady supply of feedstock material to the sector. Until now, the three world-scale petrochemical zones in Gebeng, Kertih and Pasir Gudang have been the country’s petrochemical manufacturing hubs. However, the refinery and petrochemical integrated development (RAPID) project in Pengerang is poised to change the face of Malaysia’s and South East Asia’s chemical industry.
There is no doubt about the staying power of the Malaysian chemical industry and, with the RAPID project, the country is showing its continued commitment to the industry and to attracting foreign investors. In the past, the Malaysia’s unique characteristics were driving growth in the sector, but with growing competition in the region, innovation will be pivotal if the industry is reach its targeted growth levels and for Malaysia’s transformation to high-income developed country.