EUMCCI ReviewThe Business Digest of the European Union-Malaysia Chamber of Commerce and Industry KDN PP 14083/4/2008

Volume IV No. 2 April 2008

MIFF 2008 DeliversSubstantial Progress

Construction Sector Showing Positive Growth

MIFF 2008 DeliversSubstantial Progress

ContentsEUMCCI REVIEWwww.eumcci.com

Volume IV No.2April 2008

4 EDITORIAL

5 CHAMBER@WORKEUMCCI Lobbying Trade Issues

‘Bridging the Gap BetweenAcademia and Industry’

CSR in Malaysia GainsMomentum

8 EUROPE NEWS

11 FEATUREConstruction Sector Showing

Positive Growth

Property Development - Trendand Outlook of the OfficeSector

MIFF 2008 Delivers SubstantialProgress

16 EVENTSEU-Malaysia Golf Challenge 2008

EUMCCI-FMM Networking

Event

21 MEMBERS’ CORNER

24 NEW MEMBERS

26 MALAYSIA NEWSTaxes on Property in Malaysia

27 INDICATORS

28 ADVERTISE WITH US

Published byEU-Malaysia Chamber of Commerce & Industry(EUMCCI)

Office AddressSuite 15.02, Level 15Menara CMY (Kemayan)160 Jalan Ampang, 50450 Kuala Lumpur, MalaysiaTel: +603-2162 6298Fax: +603-2162 6198E-mail: eumcci@eumcci.comWebsite: www.eumcci.com

Editorial CommitteeMinna Saneri - Editor Geert AnckaertMarco Winter Patricia ChinPaul Vincent Galea

SubmissionsArticles and other materials of interest to the generalmembership are actively solicited and may be sent tothe Chamber. All materials submitted for publicationare subject to editorial review and revisions.

ReproductionNo part of the EUMCCI Review may be reproducedor transmitted in any form or by any means, electronicor mechanical without prior written permission.

Circulation3,000 copies of the EUMCCI Review are distributed,on quarterly basis to EUMCCI members, allEmbassies, industry associations and governmentofficials with whom the Chamber has dealings as wellas European Chambers Worldwide

Subscription ServiceSubscriptions from non-members are also accepted atRM80.00 (€28.00 abroad) for 4 issues. Individualcopies may be purchased at RM25.00 (€8.00 abroad).

EUMCCI BoardChairmanDavid Jones

Deputy ChairmanJean-Francois Jadin

Honourary TreasurerDato’ Robert Teo

Directors /AlternatesAustria Franz SchröderBelgium Rene HeymansCyprus Wan Azuar Dato Wan DaudCzech Republic Milan VagnerDenmark Kim HansenFrance Michel LozachFinland Jari SilventoinenGermany Alexander Stedtfeld / Knut HerzerGreece Andreas VogiatzakisHungary Robert PappIreland Michael GarveyItaly Alberto CiaramicoliLuxembourg Wolfgang HeidkampMalaysia Caesar LoongMalta Paul Vincent GaleaThe Netherlands Marco WinterPoland Czeslaw KlimczakPortugal Datuk Eugenio Campos /

Maria LiewSlovak Republic Patricia DudovaSpain Antonio GarciaSweden Nils NordhUnited Kingdom Datuk Peter Wentworth

Ramesh Menon

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Dear Members

As the freshly instated Editor, I am very happy to bring you a wide array of news fromEUMCCI.

The recently concluded 12th General Elections heralds a new phase of governance inMalaysia, and EUMCCI is looking forward to working closely with the new administrationand EU investors who have high expectations from the government. The aftermath of theelections is seeing exciting times and responding to this sense of newness, the Chambercontinued its series of VIP Luncheon Talks on the topic “Malaysia Moving Forward” with adistinguished panel of speakers giving their views on the evolving political landscape andits impact on the economic climate. We also have a new Events Manager, Geetha, who willcontinue bringing up good speakers and organising interesting events.

Under “Chamber@Work”, you can read about an exciting project which allows EUMCCI toconcentrate on helping you, our Members, to raise Trade issues and Recommendations tothe Government and to other relevant stakeholders. We have re-organised our Committees:fresh start for Construction and Building Materials Committee and the IPR Committee bothunder new leadership! Congratulations to the new Heads of Committee. We will also bestarting Committees for Financial Services and Information Technology in order to providea platform to raise issues and lobby as we see these as two very important sectors inMalaysia. Welcome to Wendy: our Project Manager who is handling the issues faced by ourmembers. So do send her issues affecting your business - we are here to provide value, dearMember.

Our Corporate Social Responsibility Committee has started work on a publicationhighlighting best practices in CSR - read more about it and the upcoming InternationalConference we are co-organising on pg.8 as well as from the brochure enclosed.

In addition to collecting all Trade issues and recommendations which we will publish in abook later this year, EUMCCI together with the other members of the European BusinessOrganisations - EBO - network in the region, will be uploading the issues under one e-platform, www.eboasia.eu; which will become a valuable database of trade issues for newand existing investors, as well as providing input for the EU-ASEAN Free Trade Agreementtalks which began last year.

Anywhere in Kuala Lumpur, and much of Klang Valley, one can see construction sites,cranes, armies of construction workers climbing, drilling, hammering. Here we talk aboutwhat’s in store for the construction sector, and whether all this development is sustainable,and not forgetting trends for the office sector. Our second feature reveals how Malaysia’sfurniture sector is coping with the challenges of the stormy global markets.

I hope you enjoy this issue.

Minna SaneriGeneral Manager

The Changing Landscape…

During the Luncheon organised on 18th

February, Raffaele Quarto, Head of Tradeand Economic section of the EuropeanCommission Delegation to Seoul , gave apresentation on “Market Access Teams”,which is an initiative by the European Com-mission, supporting the access of the Euro-pean companies to 3rd countries markets.

During the Dinner the representatives fromKorea, Taiwan and Vietnam gave an over-view of the market opportunities and out-look for 2008 of their respective countries.

The project has two main purposes. Firstpurpose is to build an e-platform with allmarket information about trade issues forEuropean Business in Asia. The websitewww.eboasia.eu will be updated regularly

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EUMCCI LobbyingTrade IssuesRegional Free Trade Agreement betweenthe EU and the ASEAN region strengthensthe need for an Asia-wide sectoral reviewof the business environment. Europeancompanies, approaching the increasinglyintegrated Asian market, are facing apatchwork of business environments andregulatory frameworks making it difficult

for them to decide where to start and howto expand regionally according to a fact-based regional business strategy. There is aneed to compare the trade and investmentenvironment between countries in theregion. A co-ordinated promotion ofEuropean business practices, standards andnorms contributes to Europe’s political andeconomical presence in Asia.

To address this need, the European BusinessOrganizations (EBOs) in the region, spear-headed by EUMCCI, applied for a project tostrengthen the capacity of EBO Malaysiaand EBO Vietnam by benchmarking otherEBOs’ experience in research of trade andregulatory issues, the organization ofsectoral working groups, and thedevelopment, publication and promotionof annual “Trade Issues and Recommenda-tions”. The European Chambers in Koreaand Taiwan will be tutors for Malaysia andVietnam during the whole duration of theproject.

EUROPEAIDCO-OPERATION OFFICE

back row from left: Dieter Schmitt (Senior Director EUCCK),Jean Jacques Grauhar (Secretary-General EUCCK), JerryFong (Government Liaison Director ECCT), Guy Wittich (CEOECCT), Nicholas Greenfield (Executive Director EurochamVietnam). Front row : Pascale Youn (Executive DirectorEUKICA), Minna Saneri (General Manager EUMCCI), QuynhTram Nguyen (Director Eurocham Vietnam Ho Chi Minhoffice), Wendy van Dijck, (Project Manager EUMCCI)

The kick-off meeting had an intensive agenda

EUMCCI chairman David Jones welcomed the project team

Raffaele Quarto from European CommissionDelegation to Seoul, Korea giving presentationof Market Access Teams

Partners discussing

On Monday 18th February 2008 the kick-offmeeting of the project ‘European BusinessOrganizations Capacity Building in Marketinformation and Dissemination’ , co-financed by the European Commission un-der Asia Invest program, took place at theGrand Millennium Hotel in Kuala Lumpur.For the occasion all the project partners,namely: Eurocham Vietnam, EuropeanUnion Chamber of Commerce in South-Korea (EUCCK) and European Chamber ofCommerce in Taipei (ECCT) as well as theEU-Korea Industrial Cooperation Agency(EUKICA), based in Europe, had come toKuala Lumpur for 3 days.

In the end, the results of the project willbenefit our members. To achieve that goalit is necessary intensely interact in order tofind out which committees are needed andto address the issues properly. Thereforewe will contact the members of differentindustry sectors by email asking for theircooperation and/or input. Subsequently wewill deliver the position paper to theMalaysian Government for furtherdiscussion and hopefully solving most ofthe issues.

For more enquiries about the project,please contact:Wendy van Dijck - Project ManagerTel: 603-2162 6298, Fax: 603-2162 6198E-mail: wendy@eumcci.comWebsite: www.eboasia.eu

on new issues. We would like to ask all ourmembers to visit the Malaysia site, whichconcludes a short (5 minutes) question-naire. With the results of this questionnairewe will be able to get a better overview ofindustry-issues in Malaysia. Thank you inadvance for filling in the questionnaire.

The second purpose is to develop sectorcommittees in Malaysia and in Vietnam inorder to collect issues to be lobbied to theGovernment. The aim is to have a positionpaper for both Malaysia and Vietnamcontaining issues per sector to discuss withthe local government.

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Ahmad Zakie from UEM, Jean Francois Jadin Deputy Chairmanof EUMCCI and Professor Saran Kaur , Deputy Vice Chancellorof UKM

Secretary-General of MOHE consigning token ofappreciation to EUMCCI chairman David Jones.

Caesar Loong, EUMCCI Director exchanging views withDatuk Rafiah Salim, Vice chancellor of UM.

Participants discussing at the workshop

Putrajaya International ConventionCenter, January 28, 2008Following a dialogue session with theindustry held by the Honourable Minister ofHigher Education, Malaysia in 2007,EUMCCI and MOHE decided to jointlyorganize a one-day workshop with the aimto explore ideas and develop concretestrategies to bridge the gap betweenindustry and academia.

From the academia perspec-tive, developing graduatesthat are employable is ofkey importance. From theindustry perspective, havinga pool of readily employableprofessionals is equally im-portant. Yet, we witnessgraduates that are andremain unemployed whilewe hear the industry strug-gling to recruit suitable can-didates in key areas. From aforeign direct investmentperspective, it is critical forinvestor to be assured of areadily available supply of asuitable qualified workforce for them tochoose Malaysia as the place for theirinvestment.

Three key enablers were jointly identified byEUMCCI and MOHE to be the focus of the

workshop, which saw a sizable crowd ofrepresentatives from Malaysian universities,mainly Vice Chancellors, Deputy ViceChancellors and Heads of the IndustryRelations to come together and discuss:

1) Industrial Attachment of Under-Graduate Students in Industry

2) Industrial Attachment of AcademicFaculty in Industry

3) Industry Representation in AcademicDecision Making Bodies (with a Focus

at Course Level)

For each topic, a repre-sentative of academia anda representative of industryset the stage for adiscussion aimed atdeveloping action points.Following the discussionamong participants, keyactions points were agreedfor implementation.

EUMCCI Chairman DavidJones and Secretary-General of MOHE YBhg

Dato’ Prof Dr Hassan Bin Said deliveredtheir welcome addresses after whichEUMCCI Deputy chairman Jean FrancoisJadin took the stage. He facilitated theworkshop throughout the day, encou-raging participants to bring up their views.

The first Workshop focused on IndustrialAttachment of Under-Graduate Students inIndustry. The panelists were Prof. Dr. SaranKaur Gill, Deputy Vice-Chancellor (Industry& Community Relations), UniversitiKebangsaan Malaysia and Nik-MustapaNik-Mohamed, Head of HR & CorporateCommunications, Unilever.

The second workshop focused on IndustrialAttachment of Academic Faculty inIndustry. The panelists were Y. Bhg. DatukRafiah Salim, Vice Chancellor, UniversitiMalaya and Ahmad Zakie b. Hj. AhmadShariff, Senior General Manager, GroupBusiness Development, UEM GroupBerhad.

The third Workshop focused on IndustryRepresentation in Academic DecisionMaking Bodies where Caesar Loong, ChiefExecutive Partner, Raslan Loong, Advocates& Socilitors presented his view of the issue.

‘Bridging the Gap’Between Academia and Industry

A One-Day Workshop Jointly Organized by the EU-Malaysia Chamber ofCommerce and Industry and the Ministry of Higher Education

EUMCCI Deputy Chairman JeanFrancois Jadin was the facilitator of theevent.

At each workshop both the academicrepresentative and industry representativeset the stage after which the participantsdiscussed in small groups and presentedthe outcome of their discussions. Theoutcome was then commented by thepanelists. Jean Francois Jadin closed theConference and invited the participants towork together with EUMCCI building onthe results of the day.

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CSR in Malaysia GainsMomentum“International Corporate SocialResponsibility Conference 2008 -Responsibility Meets the Bottomline”

From 29 to 31 July 2008 OWW Consulting,RUSS Consulting and the EU-MalaysiaChamber of Commerce and Industry willbe hosting the first international CSR Con-ference in Malaysia: “International Corpo-rate Social Responsibility Conference -Where Responsibility Meets Bottomline” inrecognition of Malaysia’s fast growth andleadership in CSR.

According to Dr Geoffrey Williams,EUMCCI CSR Committee member andManaging Director of OWW Consulting :“The Malaysian business community’sadoption of CSR practices is far-sighted andmany Malaysian companies are now aheadof the curve in comparison with other Asiancountries. This is in step with the globaltrend towards more responsible and res-ponsive corporate behaviour. So, there hasnever been a better time for Malaysia tohost an International CSR conference tokeep the momentum going and to buildon the sophistication of Malaysian CSRpractices.”

The CSR Conference will have three majorhighlights. This is the first time world-classCSR specialists from 4 continents will begathering in Kuala Lumpur to share theircutting-edge expertise with the Malaysianbusiness and corporate community. Theywill also be exchanging solutions anddebating ideas on hot button CSR issueswith homegrown Malaysian experts fromacross the corporate and NGO sectors. Awide range of issues from communityaffairs to environmental challenges toHuman Resource management will beaddressed at this conference.”

Flying in especially to participate at theevent will be CSR luminaries from 4 con-tinents. Currently, the confirmed panel ofspeakers include: Graham Sinclair, Directorof UNPRI (United Nations); Simon Collins,CEO of Resource Alliance (UK); Dr StephenBrammer, Deputy Director of the Centre for

Business Organisations and Society, Uni-versity of Bath (UK); Kee Kim Boon, Inter-national Labour Organisation (Jakarta); andAnne-Marie O’Connor, Head of SRI at theNew Zealand Superannuation Fund.

David Jones, Chairman of the EU-MalaysiaChamber of Commerce and Industry(EUMCCI) said: “The EU-Malaysia Chamberof Commerce and Industry is strongly in-volved in CSR through our CSR Committee,which is also publishing a book of Bestpractices in CSR by our member compa-nies. EUMCCI is happy to be part of thisgroundbreaking conference because it isdesigned to facilitate not just normal net-working and knowledge exchange oppor-tunities but will also include a formal“Business Matching” programme forMalaysian companies and Fund managersfrom overseas who specialize in SociallyResponsible Investment (SRI). This wouldnot only make it simple for both sides toforge connections, but is also a first steptowards getting more Malaysian companiesto pro-actively get involved with SRI whilefostering excellent bilateral businessrelations.”

Dr Williams added: “Our emphasis on SRI isthe third element which distinguishes thisparticular CSR Conference from othersimilar events around the region. While CSRhas become a buzzword and is definitely onthe radar of more corporations and NGOs,SRI is lesser known and there is a hugescope for Malaysian companies to benefitfrom adopting SRI. As SRI is essentially thenext step up from basic CSR practices, wehope that this Conference will kick off astrong interest in Malaysian companieslooking to build a more deep-seated CSRframework in their business practices.”

SRI is big business as there is around US$4trillion (RM12.9 trillion) in Global SRI Funds,an additional US$300-500 billion (RM1-1.7trillion) in Syariah compatible funds and inAsia around US$32.3 billion (RM104billion) in 180 funds. Global SRI Funds areequivalent to twenty-times the size of themarket capitalisation of the entire Malay-sian PLCs listed on Bursa Malaysia. If justUS$1 in every US$1,000 of these funds canbe attracted into Malaysia there would beextra capital worth twice the size of thetop-100 companies on Bursa. There is defi-nitely enormous untapped potential thereand we hope to help Malaysian companiesunlock it beginning with this Conference.

The EU-Malaysia Chamber of Commerceand Industry CSR Committee is preparing abook for publication to be launched at theInternational CSR Conference in July. Thebook will contain case studies of good CSRpractices and episodes in Malaysia, basedon a number of case studies and will coverthe development of CSR in Malaysiancompanies especially those with businesslinks to the EU. The book will be dividedinto various sections representing thevarious corporate social responsibilityactivities that would be of interest to ourmembership, including:• ethical practices and investment • environmental practices • health and safety practices • employment practices • community projects

The objective is to include a range of wellaccepted aspects of CSR in the EuropeanUnion and Malaysia. The book will bedistributed nationally as well as regionallythrough the European Business Organisa-tions network so this will be a greatopportunity for you to highlight your CSRsuccesses to a wide audience. We urge ourmembers to submit stories! For moreinformation contact:

minna.saneri@eumcci.com

EUMCCI CSR Book

EUMCCIvisits ECCPIn the framework of

cooperation and capacity-building betweenEuropean Business Organisations (EBO)network, EUMCCI, together with theEuropean Chamber of Commerce Taipei(ECCT) and the European Union Chamberof Commerce in Korea (EUCCK) , visited theEuropean Chamber of Commerce inPhilippines (ECCP). The 3-day study visitconcentrated on benchmarking the servicesof the Chamber.

(l) Gerry Constantino, Manager, Membership and BusinessInformation Services, ECCP; Elaine Garcia-Gatchalian,Marketing Services Manager, ECP; Jean-Jacques Grauhar,Secretary-General, EUCCK; Henry Schumacher, ExecutiveVice President, ECCP; Minna Saneri, General Manager,EUMCCI; Guy Wittich, CEO, ECCT

WTSH (Business Development and Techno-logy Transfer Corporation of Schleswig-Holstein). The Malaysian-German Chamberof Commerce and Industry (MGCC) had -prior to the journey to Malaysia - coope-rated with WTSH to organize a BusinessMatching for companies from the northernGerman state with Malaysian companies.

UK-Your StrategicPartner in Europe semi-nar on 17th March 2008The UK has becomethe European hubof the emergingglobal economy, and is the number onelocation for European Headquarters (EHQ).More companies have established theirEHQs in the UK than any other country.Today the UK is home to 57 per cent of allEHQs for companies from around theworld, and the number of companieschoosing the UK is increasing. In 2004-2006 over 50 per cent of global companieswho set up or relocated their EHQs did soin the UK.

UK Trade & Investment held a seminar at aleading hotel in Kuala Lumpur recentlyflying in speakers from the UK to provideinformation to potential investors to theUK. Topics covered included understandingthe appropriate UK legal structure; the UK

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Minister-President ofSchleswig-HolsteinLeads Delegation toMalaysiaFrom 10 to 13 November 2007, Minister-President of the Federal State of Schleswig-Holstein, Germany, H.E. Peter HarryCarstensen, led a delegation comprisingofficials from the State as well as repre-sentatives from the private sector to Malay-sia. Also accompanying the delegation wasDr. Bernd Bösche, Managing Director of

The Schleswig-Holstein delegation was welcomed toMalaysia by MGCC

Occidental Studies, UKM (IKON): “Malay-sia-Netherlands Bilateral Relations: The last50 Years” and by Dr. Farish Ahmad Noor,Senior Fellow, Rajaratnam School of Inter-national Studies, NTU Singapore: “Inter-Civilizatian Dialogue in the context of theNether/ands”

Dato’ Noor Farida Arrifin, Former Ambassa-dor of Malaysia to the Netherlands (2000-2007) and Lody Embrechts, Ambassador ofthe Kingdom of Netherlands to Malaysia,responded to both presentations.

Also participating in the roundtable wereTan Sri Hasmy Agam, Executive Chairmanof IDFR and Moderator Tan Sri RastamMohd Isa, Secretary General, Ministry ofForeign Affairs.

Interest of Czech com-panies in cooperationwith Malaysian partnersis growingCzech companies will be participating in 3exhibitions and trade fairs in Malaysia thisyear. First opportunity to meet nearly 15manufacturers from defense and securityindustry will be during exhibition DSA 2008organized from 21st April 2008 in PWTC inKuala Lumpur. Czech energy industry willbe introduced on ElerctricAsia 2008 whichwill be held from 17th June 2008 in KLCCConvention Centre. Malaysian partnersinterested in technology and projects suchas renewable energy sources, water treat-ment etc. are welcomed to visit CzechRepublic stand. Finally Czech nanotech-nology sector will be presented duringexhibition and forum NanotechnologyMalaysia 2008 from 26th August 2008 inKuala Lumpur. Czech participation willinclude exhibition stand and specialseminar: “Czech Republic Nanotechnology:Excellent Results and Opportunities forCooperation”. Czech Academy of Scienceand Czech companies and institutes willdemonstrate not only up-to-date researchresults but also conducting matchmakingsessions where specific offers for coopera-tion will be introduces.

All above mentioned Czech participationon trade fairs are supported and co-organised by Embassy of the CzechRepublic in Kuala Lumpur. For moreinformation, please don’t hesitate tocontact: commerce_kualalumpur@mzv.cz.

Roundtable discussion between Malaysia and theNetherlands

Dutch - Malaysianseminar on plantsThe Agricultural Office of the Embassy ofthe Kingdom of the Netherlands in KualaLumpur jointly with the Department ofAgriculture, Malaysia and Dekker Chry-santen BV successfully organised on 28February 2008 a seminar entitled: Deve-loping the Plant Breeding Industry in theCameron Highlands, a major centre of tem-perate flower growing in South East Asia.

The one-day Seminar with presentationsfrom both Malaysia and Dutch expert from Naktuinbouw revisited the issue of con-formity to UPOV ’91 (International Unionfor Protection of New Varieties of Plants)requirements and its attendant benefits.Presently Malaysia’s PvP (plant varietyprotection) laws are adapted and based onUPOV model law, provisions of CBD(Convention of Biological Diversity) andIPRs (Intellectual Property Right) of othercountries.

Seminar-participants came away with themessage that conformity to UPOV ’91 willfurther strengthen Malaysia’s position asthe region’s leading exporter of chrysan-themum to Japan.

Participants came from a cross-section ofthe industry: flower and vegetable growers,representatives of seed companies,research institutions, tertiary institutions,legal firms and specialists in intellectualproperty rights.

50 Years of DiplomaticRelations BetweenMalaysia and theNetherlands Roundtable

Recently the roundtable “50 years ofdiplomatic relations between Malaysia andthe Netherlands: Lessons learnt” was orga-nised at the Institute of Diplomacy andForeign Relations.

Presentations were given by Prof. Dr.Nordin Hussin, Deputy Director, Institute of

regulatory framework; the question ofrecruiting staff; financial issues coveringbanking, incentives & taxation. A speakerfrom the London Stock Exchange providedinformation on raising capital and under-standing listing requirements.

4 Malaysian companies are listed on theLondon Stock Exchange and another 13listed on the Alternative Market or AIM.There is a growing interest from Malaysiancompanies raising capital in the UK.

UK Trade & Investment is the Governmentorganisation that helps UK based compa-nies succeed in international markets. Weassist overseas companies to bring highquality investment to the UK’s vibranteconomy.

For further information, please visit:www.uktradeinvest.gov.uk or email:Angie.Yen@fco.gov.uk

Austrian TourismWorkshop in KualaLumpur

Austrian Trade and the Austrian NationalTourist Office held their yearly workshopfor Malaysian Travel Agents on March 10th

in Westin Hotel. Austria being a majortourist destination in Europe attractedagain a large crowd of interested travelagents who wanted to get to know thelatest travel news on EURO 2008 but alsoabout special offers for 2008 and 2009,celebrating the famous Austrian composerHayden.

A special focus of the workshop was thelaunch of the ACTS (Austrian CertifiedTravel Specialist) Program, which is a freeonline trainings course on Austrian tourism.The training is attractively presented withengaging and fun interactive components

but also valuable marketing tips andsupport. Agents who successfully completethis training will be allowed to use theACTS logo in their promotions and enjoyspecial benefits that come with it. The tenbest Asian travel agents in this training willbe invited also to a fam trip. Interest washigh and many participants during theworkshop subscribed already to thistraining program.

ACERINOX, S.A. andNISSHIN STEEL decide tobuild a new stainlesssteel production plant inMalaysiaACERINOX, S.A. and NISSHIN STEEL havedecided, after having carried out a feasibili-ty study and considering various alterna-tives, to build a new stainless steel produc-tion plant in Malaysia.

It will be located in Johor Bahru (Malaysia),in a 140 Has (350 acres) land by the sea.The plant will be constructed with highefficiency criteria, similar to those of NorthAmerican Stainless in Ghent (Kentucky -U.S.A), owned by ACERINOX. The newplant will be constructed in successivestages and in the last one it will be anintegrated stainless steel production plant,with a melting capacity of 1 million Mt/yearand 600.000 Mt/year of cold rolledproduction. The estimated total investmentamounts to 1,500 million USD.

The first stage, which investment will total320 million USD, already approved, willconsist of a cold rolling mill with a 1,500mm width Sendzimir, a combined anneal-ing and pickling line, a skinpass and afinishing shop. Its production capacity willamount to 240.000 Mt/year, out of which182,000 Mt/year will be cold rolledproduction.

Its construction will start immediately afterhaving finished the legal proceedings. Theput into operation is forecasted for 2011.During the construction and assemblystage many native workers and localcompanies will be employed and when theplant will be on stream it will create about300 direct jobs in the first stage.

For this project, a new society will beincorporated in Malaysia, where ACERINOXwill hold a majority stake.

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In this area ACERINOX GROUP has a strongcommercial presence for many years, whichwill be definitely consolidated by thisinvestment.

ACERINOX, AND NISSHIN STEEL, whichalready have a long cooperation togetherfor 38 years, show in this way their firmdecision to continue with this alliance andto open new fields of mutual cooperation.

With this investment, ACERINOX andNISSHIN STEEL will enhance significantlyMalaysia development, its exports and thestainless steel market expansion in theASEAN countries, contributing to offer aclose supply source, with competitivematerials manufactured with the highestquality levels.

For ACERINOX GROUP this factory inMalaysia, once completed, will be addedto the other three factories in Spain, theUnited States and South Africa and willincrease the Group installed capacity to 4.5million Mt.

This decision represents a very importantstrategic step in ACERINOX GROUP deve-lopment, improving the assets distribution,which is already unique in the sector.

Eleven of Europe’sLargest Economies Well-Placed to Meet LisbonTargetsNew study shows overall strong perfor-mance in most EU countries, but futureprospects threatened by global uncertain-ties Productivity growth in 11 Europeancountries now rising faster than in USFinland and Ireland rank Nos. 1 and 2;Austria, France and Italy lag; UK and Ger-many most improved; Netherlands sufferssteep downgrade Improved energy efficien-cy will be a driver of future growth.

Allianz SE, one of Europe’s leading financialservice providers, and the Lisbon Council, aBrussels-based think tank, released recentlyThe 2008 European Growth and JobsMonitor: Indicators of Success in theKnowledge Economy, the second editionof its authoritative competitiveness ranking.The study looks at how the EU’s 14 largesteconomies - Austria, Belgium, Denmark,Finland, France, Greece, Germany, Ireland,Italy, Netherlands, Poland, Spain, Swedenand the United Kingdom - perform in

Seminar participants gaining information about investmentopportunities in UK

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reaching goals set out in, or derived from,the so-called Lisbon Agenda. It ranks coun-tries according to key criteria decisive forsuccess in the 21st century: economicgrowth, productivity growth, employment,human capital, future-oriented investmentand fiscal sustainability.

In a special section prepared for this year’sedition, the study looks at the economicimpact of strong environmental standards,and shows that - far from harming Europe’slong-term competitiveness - energy effi-ciency will be a driver of future growth. Itadds that the EU can benefit from “first-mover advantage” with regards to eco-innovation and application of newtechnologies.

States - a remarkable shift, particularlyin view of Europe’s “jobs miracle”, thecreation of six million new jobs in the lasttwo years alone.

- A highly skilled workforce is becoming akey competitive advantage, with Finland,Belgium and Ireland scoring highest onthe respective Lisbon sub-indicator.

- Many European countries have not usedthe recent economic recovery to conso-lidate their public finances sufficientlyand prepare for future challenges, parti-cularly the coming demographic crunch.

Says Prof. Dr. Michael Heise, chief eco-nomist of Allianz SE and principal author ofthe study: Our unequivocal message forEurope is: stay the course and use theLisbon Agenda to strengthen our lead andconsolidate our advances.” Adds PaulHofheinz, president of the Lisbon Council:“We welcome the increased emphasis onhuman capital and energy efficiency in theLisbon cycle 2008-2010. As our studyshows, high environmental standards arenot a brake on Europe’s competitiveness. Tothe contrary, these standards will createnew markets and give innovative com-panies the opportunity to develop trueglobal leadership in this field. Over time,higher energy efficiency promotes highertotal factor productivity - and that can onlybe a good thing: high productivity gene-rates wealth, creates jobs and contributesto our overall economic well-being.”

Source: www.lisboncouncil.net.

Denmark Tops the Glo-bal Information Techno-logy Report 2007-2008Denmark is the most networked economyin the world, followed by Sweden and Swit-zerland, according to The Global Informa-tion Technology Report 2007-2008, releas-ed on 9th April by the World EconomicForum. Among the top ten, the Republic ofKorea (9) and, to a lesser extent, the UnitedStates (4) post the most notable improve-ments (moving up 10 and 3 positions,respectively).

“The successful experience of the Nordiccountries, Singapore, the United States orKorea shows that a coherent governmentvision on the importance of ICT, coupledwith an early focus on education andinnovation, are key not only for spurringnetworked readiness, but also to lay thefoundations for sustainable growth,” said

Irene Mia, Senior Economist of the GlobalCompetitiveness Network at the WorldEconomic Forum and Co-Editor of theReport.

Published for the seventh consecutive yearwith record coverage of 127 economiesworldwide under the theme FosteringInnovation through Networked Readiness,this year’s Report places a particular focuson the role of networked readiness inspurring innovation through topics coveredin the analytical chapters.

The Networked Readiness Index (NRI), fea-tured in the Report, examines how prepar-ed countries are to use ICT effectively onthree dimensions: the general business,regulatory and infrastructure environmentfor ICT; the readiness of the three keystakeholder groups - individuals, businessesand governments - to use and benefit fromICT; and their actual usage of the latestinformation and communication technolo-gies available.

The NRI uses a combination of data frompublicly available sources, as well as theresults of the Executive Opinion Survey, acomprehensive annual survey conducted bythe World Economic Forum with its net-work of Partner Institutes (leading researchinstitutes and business organizations) in thecountries included in the Report.

Source: www.weforum.org/gitr.

Networked Readliness Index 2007-2008(Top Ten)

Economy Rank Rank Change2007-2008 2006-2007

Denmark 1 1 -Sweden 2 2 -Switzerland 3 5 +2United States 4 7 +3Singapore 5 3 -2Finland 6 4 -2Netherlands 7 6 -1Iceland 8 8 -Republic of Korea 9 19 +10Norway 10 10 -

Among the study’s key findings:- Assuming that current performance can

be upheld, the EU-15 looks to be oncourse to meet its Lisbon Agenda goals,as demonstrated by the current overallscore of 1.05 - up from 0.89, or 89%, atthe end of 2006.

- Only three of the countries surveyed -France, Austria and Italy - are currentlynot on track to meet their Lisbon targets.

- Finland tops the ranking, with highmarks on economic growth, labour pro-ductivity, human capital and fiscalsustainability; the study suggests thatFinland will comfortably overshoot theLisbon targets.

- Italy is at the bottom of the list, scoringparticularly poorly in economic growth,skilled labour, labour productivity andsustainability of public finances.

- France comes in at No. 12 (third to last).The main reasons: sluggish growth andweak public finances.

- The first new EU member state to beincluded in the ranking, Poland, debutsat No. 5, despite a very mixed per-formance on sub-indicators. Poland isstrong on economic and productivitygrowth, but scores poorly on employ-ment rate and educational qualifications.

- Eleven countries currently boast fasterproductivity growth than in the United

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Following three consecutive years ofdecline, the construction sector turnedaround to record apositive growth of 4.6%.The expansion was driven mainly by thecivil engineering sub-sector,and supportedby expansion in the non-residential andresidential sub-sectors.

In the civil engineering sub-sector, thepositive effects from the increased imple-mentation of projects under the NinthMalaysia Plan (9MP) gradually filteredthrough the economy during the course ofthe year. Federal Government developmentexpenditure rose by 13.3% to RM40.6billion in 2007 (2006: RM35.8 billion), tofinance construction of new projects andupgrading of existing infrastructure facili-ties, such as roads, schools, hospitals andgovernment quarters. The civil engineeringsub-sector also benefited from increasedconstruction activity in the oil and gasindustry, comprising development andproduction of new oil facilities includingrigs, platforms and storage terminals.

In addition, the order books of some do-mestic construction companies were alsoaugmented by overseas projects, especiallyin the Middle East, India and Thailand.

Growth in the non-residential segmentpicked up further during the year in tan-dem with robust business activity. Increaseddemand from new businesses as well asexpansion by existing companies in thefinancial services, information technology,and oil and gas-related sectors caused asharp increase in demand for office space,particularly in Kuala Lumpur. The strongdemand was further reinforced by interestsfrom foreign institutional investors. Mean-while, new incoming supply of office spaceincreased to 1.6 million square metres as atend-September 2007, of which almost halfwas recorded in Kuala Lumpur. Despite theincrease in supply, the occupancy rate ofoffice space increased further to 83% as atend-September 2007 (end-2006: 81.8%).The strong demand was also evidenced byincreases in rentals.

The strong growth in private consumptionhad stimulated demand for retail proper-ties. During the year, about 31 new shop-ping complexes were completed, of whichnine were in the Klang Valley, resulting inthe total number of let table commercial

2007. However, given the renewed enthu-siasm in 2007, future planned supply roseby 1.5% to 644,354 units. In line with thedemand and supply trends, overhang ofresidential properties declined from a highof 28,827 as at end-September 2006 to24,488 units at end-September 2007.

Overall, national house prices as measuredby the Malaysian House Price Indexincreased by 3.8% in the first half of 2007(2006: 1.9%). One of the factors thatcontributed to the increase is the rising costof building materials. Prices of steel barswere revised upwards three times duringthe course of the year by a total of 45%,while the price of cement was revised atend- 2006, and for the first time, was diffe-rentiated across the states based on trans-portation and other costs, with the quan-tum of increase varied between 10-78%.

During the year, the Government under-took several measures to enhance thepublic delivery system related to the con-struction sector. A One-Stop Centre wasestablished to enable “fastlane” approvalfor certain categories of projects such asthose under the build-then-sell concept,Government projects, high-impact projects,and those that have potential to attractforeign investment. The framework enablessimultaneous processing by the differentlocal, state and federal departments, thusshortening the approval process substan-tially to four months. In addition, the Cer-tificate of Fitness for Occupation wasreplaced with the Certificate of Completionand Compliance during the year, enablingfaster occupation of completed projects.

EUMCCI Construction and Buil-ding Materials Committee hasgot a new Head of Committee:Aat van der Horst from VictorBuick Steel Sdn Bhd.

The Committee is raising andreviewing issues for MITI Dia-logue and the agenda for therest of the year includes discus-sions and lobbying with relevantauthorities of the sector.EUMCCI members in the con-struction and building materialssectors are invited to join!Contact: wendy@eumcci.com

Construction Sector Showing Positive Growth

Construction Sector (LHS)

Private investment (RHS)

Federal Government Development Expenditure (RHS)

-3

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-1

0

1

2

3

4

5

2002 2003 2004 2005 2006 2007

-30

-20

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0

10

20

30

40

50

Value-add Growth in Construction Sector versus Growth in Federal Government Development Expenditure and Private Investment

Annual change (%) Annual change (%)

Source: Department of Statistics, Malaysia and Accountant General's Department

space in the Klang Valley to increase toabout 40 million square feet (2006: 36.4million square feet). The new retail spacewas mainly towards high-end facilities.Given the rise in supply, rentals broadlyremained unchanged except for choiceproperties. With the growing attraction ofthis sector, several shopping complexeswere bought by foreign-based Real EstateInvestment Trusts (REITs) in 2007.

Activity in the residential sub-sectorremained positive during the year followingseveral policy measures introduced by theGovernment since December 2006. Theseincluded the liberalisation of the ForeignInvestment Committee (FIC) ruling onforeign purchases, the exemption from RealProperty Gains Tax and relaxation on thenumber of residential or commercial pro-perty loans that foreigners could obtain.Findings from a survey by the Real Estateand Housing Developers Associationshowed that these liberalisations and theattractive valuation of high-end propertiesin the Klang Valley contributed to increasedforeign interest in this segment. Residentialproperty transactions by foreigners rose byabout 30% in the first half of 2007 (2006:13.9%). Demand was also supported bythe availability of end-financing as reflectedin higher housing loan applications, appro-vals and disbursements of 47.6%, 45.6%and 11.1% respectively during the year.

Developers were generally cautious inlaunching new projects in the past twoyears to prevent accumulation of unsoldproperties. Incoming supply declined by8% to 580,883 units as at end- September

Source Picture: Victor Buick Steel Sdn Bhd

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Why is Malaysia still a favourableplace to invest in? Do the recent gene-ral election results have an impact?Post general elections, foreigners areadopting a ‘wait and see’ attitude becausethey want to see some certainty in terms ofpolicies and a clearer picture of where thecountry is heading. Although Selangor hasa new state government, the chief ministerwas an ex-corporate person and is inclinedto be pro-business. The new stategovernments have also reiterated that theywant to be investor friendly.

Aside this, we have actually achieved arespectable economic growth rate of 5-6%. Our political environment is stable.The federal government is still under thesame ruling coalition. Our infrastructurefacilities are complete - we have modernports, airports and highways. And we havea sizeable population of educated andEnglish-speaking labour force who are fairlycheap too.

The legal framework for propertyownership is developed and the foreignownership rules are fairly relaxed in thiscountry. We have a system of registrationof titles. Basically, we inherited UK’s legalsystem. Unlike some markets, there aregenerally no restrictions for foreigners tosell their properties in Malaysia.

Will prices of office units continue tomove upwards?Office rent and values are under pressure togo up. Vacancy rate of purpose built officespace in the Klang Valley had dropped from13.9% in 2006 to 13.2% in 2007. 3.45million square feet of new office spacecame in the Klang Valley in 2007 with aconsiderable take-up of 3.25 million squarefeet.

The average prime rent in Kuala Lumpur,excluding Petronas Twin Towers, is RM5.50to RM7.80 psf (per square feet) per month(including service charges), compared to

year 2000, the rate was RM3.50 toRM5.50. Rental at KL Sentral has gone upto RM6.50-RM7.00 due to the MSC status.Petronas Twin Towers is about RM11.00 psfper month in 2007, while in 2000, it wasRM8.00.

Glomac sold their yet-to-be-built GlomacTower for RM1,120 psf to KFH.Subsequently, YNH sold 50% of its MenaraYNH to KFH for RM1,230 psf. Offices inKuala Lumpur were fetching about RM500psf only a few years ago.

From 2008 to 2011, it is estimated thatabout 13 million square feet of space willbe coming into the market. The take uprate depends on macro economicconditions. As an indication, 2 to 2.5million square feet were taken up per yearduring the last five years. Some buildingstake time to refurbish and it would bevacant for some time. As at end 2007,there is a supply of 68 million square feet ofoffice space.

Do you foresee many more officesmoving from Kuala Lumpur toPetaling Jaya? Some companies like Prudential has a backoffice in Jaya 33, and both ReckittBenckiser and KPMG have moved fromDamansara Heights to Mutiara Damansara(Menara UAC) and Bandar Utama (8 FirstAvenue) respectively.

This is not the first time people have movedout of Kuala Lumpur. In the early 1990s,offices moved out because there was

Property Development- trends and outlook of the office sector

It is no secret that foreign investors have been on a buyingspree of office space in Malaysia. In 2007, foreign investorsaccounted for more than 40% of office transactionscompared to only 20% in 2005. In total, transacted valueof the office market had doubled over a period of twoyears, from RM1.2 million in 2005 to RM2.4 million in 2007.

Echoing popular sentiments on why foreigners are makinga serious play for Malaysian properties, Goh Tian Sui,managing director of CH Williams Talhar & Wong, saidthat, “Real estate in Malaysia is the cheapest in the region.We have quality stocks (properties) that are no less thaninternational standards if you are willing to pay the price.”The question is whether this trend will continue in light ofrecent political developments. Goh shares his thoughts.

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shortage of space and rental shot up. Also, peoplemoved to new offices like Phileo Damansara andDamansara Intan when they were completed.

The choice of location depends on the nature of thecompany’s business. Some multinationals still want tohave a Kuala Lumpur address. Basically, if the companydoes not need a prime address, they may look atPetaling Jaya. If the company is involved in technologyor business process outsourcing (BPO) businesses, itcould choose to be in Cyberjaya. An oil and gas wouldwant to be near Petronas Twin Tower.

Petaling Jaya has grown to become city status. It has allthe facilities and it is near Kuala Lumpur. Previously, a lotof companies were in Kuala Lumpur for its quality stock.But the situation is improving in Petaling Jaya - there ismore stock, giving people more choices. Now you havenew offices like Jaya 33 and 3 Two Square in PetalingJaya.

The rental in Jaya 33 and Menara UAC is still lower atRM4 psf plus. In 2000, office rental cost was onlyRM2.50 to RM3.50 psf. Only KL Sentral is closer to KLcity prices because of the MSC status.

In deciding whether to relocate, companies should lookinto how much space they require, how many morestaff they need to accommodate, number of car parksthey can get, access to public transport, and availabilityof cheap eating areas for their staff. I know of a legalfirm who moved from the city to Damansara Heights.For awhile, they provided free shuttle to retain theirstaff.

By Noelle LimSource: WTW Research, March 2008

Key acquisitions by foreign players in the office market

1 Singapore’s CIMB-Mapletree acquired CP Tower in Petaling Jaya

(RM123 million) in 2005 and MRCB’s Lot A at KL Sentral (RM100

million) in 2007.

2 Singapore’s GuoccoLand established Tower REIT (real estate

investment trust) which bought a 78% stake in Menara ING in 2007.

3 Kuwait Finance House (KFH) bought Glomac Tower for RM577million,

and 50% of Menara YNH for RM920 million in 2007.

4 Australia’s Macquarie Global Property Advisors invested RM680 milion

to acquire Empire Tower, City Square and Crown Princess in 2006.

5 Germany’s Union Investment Real Estate acquired Capital Square’s

Office Tower 2 (RM440 million) in January 2008.

Klang Valley: Cumulative Supply, Vacancy rate & Take-up rate ofoffice Buildings

MIFF 2008 recorded a total of19,549 total visitors (inclusive ofinvited guests) with 7,410international buyers from 137countries, with RM 2.17 billion (USD690 million) worth of sales gene-rated during the show. Buyers camefrom Europe (20.9%), the ASEANregion (17.9%), the Middle East(12.4%), Australiasia (9.7%),followed by the Far East (7.6%).

In general, exhibitors concluded thatthe quality of buyers had improved,with almost 80 percent of thevisitors being importers, whole-salers, retailers and buying agentswho gathered at MIFF 2008 to placeorders as well as make newcontacts.

The exhibition had expanded from75,000 sq. metres last year to80,000 sq. metres this year - about7 percent size increase to encom-pass 496 exhibitors spread over 2venues. The Interntional flavour ofMIFF 2008 came in the form of topexhibitors from Malaysia, China,Hong Kong, Indonesia, India, Japan,Korea, Philippines, Singapore,Taiwan, Thailand, Vietnam, France,Turkey, Germany and USA.

MIFF 2008 DeliversSubstantial Progress

YB Dato’ Dr S Vijayaratnam, Then Parliamentary Secretary, Ministry of Plantation, Industries &Commodities, YB Dato’ Sri Dr Lim Keng Yaik, Retiring Minister of Energy, Water and Communications, YBhgDato’ Tan Chin Huat, Managing Director, MIFF Sdn Bhd, YBhg Dato’ Yong Seng Yeow, President, MalaysianFurniture Industry Council

The 14th edition of the MIFF series,MIFF 2008, successfully attracted bu-yers from across the globe, includingvarious trade delegations and buyingmission groups that converged at theexhibition despite global uncer-tainties and discouraging economicclimates.

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Middle East12.4%

Australasia9.7%

Africa8.6%

Far East7.6%

India6.7%

North America6.5%

Japan/Korea4.7%

Other Asian Countries2.6%

South America2.4%

Europe20.9%

ASEAN17.9%

INTERNATIONAL VISITORSHIP BY REGION (%)

Despite so many international furniture exhibitionsstaging almost the same time in the region duringthe month of March, MIFF 2008 recorded an increaseof visitorship compared to last year. This year, a totalof 19,549 visitors visiting the show, of which 7,410are international visitors as compared to 7,266 inMIFF 2007. Compiled reports indicate that exhibitorsshowcasing outstanding design and quality receivedpositive response from new and existing buyers. Inaddition, buyers also exclaimed their satisfaction asthis year’s MIFF showcased variety of world classfurniture besides providing the best services.

Number of Exhibitors : International(from 15 countries) 146Malaysia 350 Total 496

Number of Visitors : International (from 137 countries) 7,410Malaysia 7,606 Invited Guests 4,533Total 19,549

VISITORSHIP BY REGION (exclude invited guests)Malaysia 7,606Europe 1,546Asean 1,328Middle East 917Australasia 717Africa 639 Far East 562India 497North America 483Japan/Korea 350Other Asian Countries 191South America 180Total 15,016

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Malaysian Furniture Exports to European Countries

No Country 2006 Export (RM) 2007 Export (RM)

1 Austria 1,229,855 1,009,8942 Belgium 53,805,037 65,575,8273 Bulgaria 762,478 659,4794 Cyprus 23,809,973 22,640,1235 Czech Republic 11,253,314 10,454,9786 Denmark 39,895,395 33,892,2327 Estonia 3,445,000 4,649,9838 Finland 44,112,213 43,723,0209 France 98,088,821 140,884,93410 Germany 125,715,776 134,987,74911 Greece 27,909,500 45,909,94212 Hungary 8,068,524 8,122,07413 Iceland 1,865,187 3,806,25214 Ireland 100,180,507 99,496,69215 Italy 31,574,617 38,262,19116 Latvia 8,502,667 12,259,69317 Lithuania 4,574,245 10,052,63018 Luxembourg 0 71,71919 Malta 3,196,960 5,442,27520 Netherlands 126,086,123 92,651,44421 Norway 53,335,309 48,130,47222 Poland 15,827,983 36,635,35823 Portugal 9,625,636 16,793,18524 Romania 159,322 129,967,06225 Slovakia 4,300,789 7,686,95926 Slovenia 11,416,119 9,540,05327 Spain 64,994,611 86,986,50728 Sweden 35,718,170 28,033,61929 Switzerland 1,843,996 2,301,22030 United Kingdom 602,566,813 591,704,64131 Vatican City 0 11,030

Total 1,513,864,940 1,732,343,237

According to Lawrence Downs from UnitedKingdom, he “loves to buy from Malaysiabecause Malaysia traders are veryefficient”.

Jon Austin from Australia “really likesdealing with Malaysia and has been cominghere for last 9 years. It’s easy to find every-thing here, we have long-term relationshipswith our suppliers and we generally findeverything we need right here”.

Malaysia’s retiring Minister of Energy, Water& Communications, YB Dato’ Sri Dr LimKeng Yaik officiated the MIFF 2008. Dato’Sri Dr Lim has been the Minister of PrimaryIndustries back in 1980s and instrumentalin the creation of the first MIFF in 1995.“MIFF has developed beyond my wildestdreams since those early days”, he sharedwith the audience at the official openingceremony, “largely as a result of MIFF’sefforts, the Malaysian furniture industrycontinues to grow and grow. The officialstatistics indicate that 30% of the country’s

furniture exports are concluded at MIFFeach year”.

A major highlight of the MIFF event eachyear is a series of Prize Presentation Cere-monies to recognise Furniture Excellence,Exhibition Booth Presentation and FurnitureDesign. An international panel of judgesfrom Australia, Belgium, Canada, China,France, Germany, South Africa and Malay-sia provided the added credence to theFurniture Excellence Award, Best Presenta-tion Award and Mieco Designer’s ChoiceAward competitions. All the competitionswere held to encourage a higher level ofcreativity and innovation among exhibitorsand furniture designers. The keenly con-tested competitions also enhanced thequality and standard of the fair.

MIFF 2009 will be held from 3-7 March2009 once again at the PWTC and MECC.

Source: Malaysian International Furniture Fair2008 (MIFF 2008)

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EU-Malaysia Golf Challenge 2008Staffield Golf Resort, 27 January 2008

More than 120 playerscompeted for individualprizes, team prizes,novelties as well as theTeam Challenge Trophy.

Team:1. Syarikat Bekalan Air Selangor Sdn Bhd

(SYABAS)2. Rohde & Schwarz (M) Sdn Bhd3. Unilever (M) Holdings Sdn Bhd

Nearest to the pin:Chin Wee Hua (ALSTOM Power AsiaPacific Sdn Bhd)

Longest drive:Lim Ling Ling (Multi-trans)

Nearest to the line:Roger Spetz (Montpelier NordicLtd)

The Challenge Trophy waswrestled back by the Malaysianteam from last year’s winner theEU team by the score of 1294 -1174. The trophy was received bythe Malaysian Team captain Dato’

Waiting for tee-off Ulf Skarp from Thysselkrup, Dato’ Seri Rafidah Aziz,David Jones and Dato’ Karunakaran from MIDA.

One of the highlights of the EU-MalaysiaChamber of Commerce & Industry’s eventscalendar is the annual EU-Malaysia GolfChallenge which was held on a sunnySunday morning 27th January at StaffieldGolf Resort. The event, which reached its5th edition, was graced by Y.B. Dato’ SeriRafidah Aziz and several VIPs from theGovernment sector as well as industrycaptains from corporate side.

TESCO Stores team: Richard Brown, Christopher Bush, Martyn Crongeand John Chen

Tan Sri Mohamad Basir bin Ahmad with H.E. Jose’ RamonBaranano, Ambassador of Spain.

Results:Individual:1. Marshidi Adnan (SYABAS)2. Jordan Chua (TBWA-

ISC\Malaysia Sdn Bhd)3. Abdul Halem Hj Mat Som

(SYABAS)4. Zahirman Zarif Yusof (Skali

(Alam Teknokrat) Sdn Bhd)5. Col Rahmat Hassan (Rohde

& Schwarz (M) Sdn Bhd)

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April

Event Co-Sponsors

Prize Sponsors

Goodies Sponsors

Mustafa Mansor, Immediate Past Presidentof FMM.

Main sponsors of the event were: Alstom Power Asia Pacific Sdn Bhd,SYABAS, Elit Purnama Sdn Bhd, Rohde &Schwarz Sdn Bhd, Unigroup Worldwideand F-Secure Corporation.

Main partner : Hallbert

Prizes & Goodies were sponsored by: Ciao caffe’ Ristorante, Novotel, GrandMillennium Hotel, the Old Club House,Shangri-La Hotels, JW Marriott Hotel, ThePuteri Pacific Hotel, PICO, VaisalaCorporation, DZ card (Malaysia) Sdn Bhd,Pensonic, Nestle, Berjaya Hills Golf &Country Club, Staffield Golf Resort, McGill,Bukit Jambul Country Club, Scholl, Sunquick, Nivea, Carlsberg, Heineken, Unilever,Tesco, Maybank, Sanofi Aventis, TBWA-ISCMalaysia, OCE Malaysia Sdn Bhd, DHL,Ayer Keroh Golf Club, Rahman Putra GolfClub and Kajang Hills Golf Club.

EUMCCI is once again proud to organisethe signature European Wine, Beer andCheese Fest. This 7th edition is just rightround the corner to provide the opportunityfor European companies to showcase theirproducts and get in touch with Europeanand local corporate guests. A host ofexhibitors will showcase their wines, beerand cheese that are uniquely Europeanthroughout the evening.

Mark us on your diaries to celebrate the richEuropean Cuisine and Culture at a brand

new location- Imperial Hotel! Full details areas follow:

Date : 27th May 2008Venue : Imperial Hotel Kuala Lumpur

(formerly Sheraton Imperial)Time : 18.00 to 21.30Price : RM95 (members) and

RM120 (non-members)

An event of fun not to be missed! Keep adate with us for an evening networkingwhile enjoying a good glass of wine, beer

and European delicacies in the midst ofsplendid new surroundings. Look out alsofor delicious lucky draw prizes!!

European Wine Beer & Cheese Fest coming soon!

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Melia Kuala Lumpur hosted EUMCCI-FMM networking event “Let’s getdown to Business” on 6th March 2008. EUMCCI chairman David Jones and

Dato’ Mustafa Mansor, Immediate Past President of FMM, welcomed the guests together with GM of Hotel Melia,Arno Thöny. We wish to thank warmly Melia Hotel for its superb and elegant hospitality.

VIP Luncheon talk: Malaysia Moving Forward-Challenges and OpportunitiesHotel Impiana, 15 April 2008

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Farewell to Dr HerretEUMCCI Director and Executive Director ofMGCC, Dr Rainer Herret bade farewell toEUMCCI. The Board of EUMCCI thanks DrHerret for his valuable support to theChamber and wishes him the best ofsuccess in his new posting. The Board alsowarmly welcomes his successor, MrAlexander Stedtfeld and is looking forwardto a fruitful cooperation.

The April VIP Luncheon saw a panelof distinguished speakers giving theirviews on the aftermath of theelections. Dato’ Dr Mohamed Arifffrom Malaysian Institure of EconomicResearch concentrated on theeconomic impact. According to himit is too early to foresee the impact,the main concern for investors is ifthe opposition has the experience torule. Important is to have politicalchange without political instability.

David Jones handing a farewell gift to Dr Herret.

VIP Luncheon talk: Malaysia Moving Forward-Challenges and Opportunities

Dato’ Michael Yeoh from ASLI continued onpolitical agenda, where the issues to be tackledare: Judicial reform, Corruption, enhancingeconomic competitiveness, dealing with inflationand rising costs of fuel and food. Dr. Nungsarifrom Khazanah offered a wrap up of the talk andDato’ Robert Teo acted as a moderator, providingone key for interpretation of the election results:“arrogance of power” upset people and thequestion is will UMNO be able to re-invent itself inthe next 5 years.Dato’ Dr. Ariff delivering his speech

From left: Dato’ Michael Yeoh, Dato’ Robert Teo, Dr. Nungsari

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Outlook for 2008 is also partof the name of the event,Grand Millenium Hotel

European Business in Korea,Taiwan and Vietnam

EU-Malaysia Golf Challenge 2008 Staffield Golf Resort, 27 January 2008

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Skali organised recently a press conference where En Aimi Aizal Nasharuddin,President of SKALI explained, “2008 will continue to be a positive year forSKALI, as we foresee improvement in earnings largely due to various local andinternational projects, which were started in 2007. This is the main reason forthe reorganisation of the company into various subsidiaries which stands tomake the corporation even stronger.

“We are going toconcentrate more oninternational foraysfor this year. We haveset our sights on va-rious human capitalprojects in South EastAsia and possibly be-yond. Currently, weare assisting the Bru-nei government infacilitating a traininglaboratory and an ICTcollaboration with theWest Java Govern-ment.

“We believe that our strategy to create human capital development betweenother countries will foster even better bilateral ties between Malaysia and ourneighbours. SKALI is also looking into possibilities in the Middle East,” headded.

In Malaysia, SKALI Group has lined up different key projects involved inhuman capital development. Through subsidiary SKALI E-Ventures Sdn Bhd,SKALI would be undertaking the SPIKE@PERAK which is a three-yearprogramme to train graduates from both ICT and business & management-related disciplines. The programme also involves preparing them to take uprelated jobs or possibly to venture onwards to become entrepreneurs. For thestate of Perak, this project is set to realise the state’s plan to develop the stateinto becoming a fully-developed Knowledge State by 2020.

SPIKE (SKALI Pioneers and Innovators in Knowledge Economy), is a SKALIinitiative to help unemployed graduates to develop their ICT knowledge andalso to become entrepreneurs.

SKALI Shared its Business Strategy for 2008Membership StatisticsMembers with European Equity (EU)

31-Dec-07 30-Mar-08Austria 2 2Belgium 14 13Cyprus 0 0Czech Republic 0 1Denmark 30 30Finland 19 21France 124 117Germany 211 200Greece 0 0Ireland 3 22Italy 3 3Luxembourg 2 3Malta 0 0Poland 0 1Portugal 0 1Slovak Republic 0 1Slovenia 1 1Spain 2 22Sweden 40 45The Netherlands 85 84United Kingdom 148 144Sub-Total 684 711

Members with European Equity (Non EU)

Norway 2 1Switzerland 16 15Sub-Total 18 16

Members without European Equity

Australia 3 2Bermuda 1 1Canada 2 2Hong Kong 9 10India 1 1Indonesia 1 0Japan 6 6Kuwait 1 1Malaysia 328 315Singapore 9 8United Arab Emirates 3 3United States 13 11Sub-Total 377 361

Total 1079 1088

Aimi Aizal (centre), President of SKALI Group, explaining a point atSKALI’s media briefing held recently. Spokespersons included were,Maznida Mokhtar the Chief Financial Officer and Company Secretaryof SKALI and Saiful Khairi the Executive Director of SKALI.

STYLO KL Fashion Festival08 was one of the 8 mainevents of KLGP Week 08,organised by Kuala LumpurTourism Action Council(KLTAC), to celebrate the 10great years of F1.

Managing Director of Elit Purnama, Anita Hiong,surrounded by her models at STYLO Fashion Show

“Je t’aime” at STYLO FashionShow in Conjunction of F1 event

On 20th March the STYLO Fashion Show celebrated toplocal Malaysian designers. Elit Purnama - a local FashionHouse with manufacturing capabilities - showcased theirlabel “Je t’aime”, contemporary collection and cocktailwear. Year 2008 will be exciting for Elit Purnama, becausethey are going global with their collections in Paris, Madrid,London, Hong Kong and Melbourne fashion exhibitions.

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The Malaysia Tech-nology Expo (MTE2008) is an annualevent being orga-nized by MARS(Malaysian Associa-tion of ResearchScientists) and co-organized by theMinistry of Science,Technology and In-novation. MTE 2008was a three-dayevent starting from21 February that focussed on research fieldsand innovative development on appliedsciences, users’ technology and engi-neering. 34 organizations had participatedin MTE 2008 and it opens to all researchinstitutions and individuals to bring theirresearch and innovative products forward.

UPM success in MTE 2008has put UPM at the top forthe overall results. This is thebest achievement thus far forany UPM’s participation inproduct and research com-petitions at the national level.This success has definitelystrengthen UPM’s position asa research university inMalaysia!

MTE 2008 - UPM The Best LUKA KOPER Day

Mr. Aldo Babi , Vice President of Luka Koper, delivering thewelcoming speech

Mayflower Travel Group has beenconferred the prestigious best brandfor tours and travel by TheBrandLaureate-SMEs Chapter Award2007. This is the most covetedbranding award for the SMEs industryin Malaysia and the Asia Pacific,recognizing the best of brands.

Administered by a Board of Governors,it is also in line with the government’sobjectives of nurturing and facilitatingthe growth of the SMEs to be global

Prof. Dr. Faridah Abdullahfrom the Faculty ofScience, the recipient of“The Very Best Award”.

Six months after opening its Far EastRegional Representative Office Luka Koper,d.d. - Port of Koper (Slovenia) organizedthe first “LUKA KOPER DAY” businessdinner. At the meeting, which took place inKuala Lumpur on 26th March, thecompany Vice President Mr. Aldo Babi andhis team presented the Port of Koper andits Regional Office to the Malaysianmarket.

Port of Koper is an excellent entry point toCentral and Eastern Europe from theSouth. Its strategic location shortens thetransit time from SE Asia to Europe formore than five days. It is believed that theuse of this Adriatic port can contribute tofacilitate the trade between Malaysia andother EU countries. As Luka Koper is notyet well-recognized within the Malaysianlogistics and shippers market segment, thisevent provided the guests with theopportunities to learn more about whatLuka Koper has to offer in order to aid alllogistics providers in terms of transport costreduction and increase of logistics systemefficiency as a whole.

For more information, visit www.luka-kp.si

UPM delegations with their well-earned medals.

Universiti Putra Malaysia made an astound-ing sweep of medals when we clinched 11gold, 7 silver and 12 bronze medals in theMalaysia Technology Expo 2008 (MTE) heldfrom 21-22 February 2008 at the PutraWorld Trade Centre (PWTC), Kuala Lumpur.

UPM, through Prof. Dr. Faridah Abdullahfrom the Department of Biology, Faculty ofScience, also won ‘The Very Best Award’ inMTE 2008, whom also won a gold medalfor her research. Other UPM researcherswhom won gold were Assoc. Prof. Dr. Lai OiMing, Assoc. Prof. Dr. Abdul RashidMohamed Shariff, Assoc. Prof. Dr. LuqmanChuah Abdullah, Dr. Zanariah Abdul Majid,Prof. Dr. Taufiq Yap Yun Hin, Dr. AhmadBustamam Haji Abdul, Assoc. Prof. Dr.Mohd Basyaruddin Abdul Rahman, Assoc.Prof. Dr. Siti Nor Akmar Abdullah, Prof. Ir.Dr. Mohd Amin Mohd Soom and Assoc.Prof. Dr. Ishak Aris.

Mayflower TravelGroup Awarded TheBrandLaureate - SMEsAsia Pacific ChapterAwards 2007

brands. This was further inspired by the callof the Prime Minister, Datuk AbdullahBadawi, that “Branding Malaysia is the nextbig task.”.

Yang di-Pertuan Agong graced thisauspicious event at the Shangri-La Hotel KLon 8 Jan 2008.

The winners were selected based on a 300-point criteria, covering areas on brandidentity, culture, communication, equityand performance.

EUMCCI Review 23

members’ cornerM

embers’ C

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April

Capitalize on opportunities in the European Union and in Malaysia ! Interested ? Call us for more information.

EUMCCI Membership What is it for you?• The best brands in the world are committed to EUMCCI

because co-branding with the Chamber is simply goodbusiness! Any company with an interest in the EuropeanUnion / Malaysia, whether it has significant investment in theregion or is just testing the market, will derive value from itswork with the Chamber.

• Advocate for new business and build market share byleveraging your Chamber alliances.

• Access leaders and decision makers affecting your success inMalaysia with the collective impact of most prominentcorporations.

• Resolve unique issues or problems that impact your bottomline.

• Forge strategic alliances and establish customers with yourfellow members.

• Advance your policy positions and enhance your position asa key player and contributor to the Malaysian economy.

• Promote awareness of your products, investments andcommunity contributions.

• Assess market conditions for market expansion andoperations optimization.

• Be part of the European Business Organisation (EBOs)worldwide network.

EUMCCI Services• Trade and business contacts

EUMCCI provides Networking opportunities with EU

companies, the local business community and authorities.We organize events, business and social gatherings regularly.There are special member rates or free participation formembers in EUMCCI events and seminars.

• Representation of your company’s problems and concerns tothe Government. Ongoing MIDA, MDTCA and MITIdialogues and others on ad hoc basis with EUMCCI positionpapers.

• Participation in Industry Sector Committees, raising issuesof concern to the authorities.

• Free listing

° EUMCCI website for direct members

° Company’s logo and banner in EUMCCI e-Bulletin fornew direct members

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• Information on EU-Malaysia trade and investment• Virtual office services

New Office Opening

Tonasco, a Dutch-Malaysiansourcing company, cele-brated the opening of itsnew office and warehouseat Glenmarie on Friday, 29thFebruary 2008.

The Ambassador ofNetherlands to Malaysia,H.E. Lody Embrechts,together with the companydirectors, officiated theopening. VIP guests Mr.David Jones, Chairman of

EU-Malaysia Chamber of Commerce &Industry (EUMCCI), and Mr. Marco Winter,Executive Director of Malaysian DutchBusiness Council (MDBC) were also present tograce the event.

In their welcome speeches, Business Director,Ms. Lin Sheau Wei and Technical Director, Mr.Toon Moors shared future plans to expandsourcing capacity, as well as plans to enhanceservice quality and delivery performance toour clients.

His Excellency and the directors later joinhands in the drumming ceremony tocommemorate the celebration. Guests wereentertained by colourful Lion Dance andvibrant Chinese Orchestra performances,while sumptuous Malaysian cuisines andrefreshments were served.

The joyous and momentous celebrationconcluded late in the evening amid melodiesof contemporary Dutch music, markinganother milestone for Tonasco.

H.E. Lody Embrechts, Tonasco Directorsjoin hands in Opening Ceremony.

EUMCCI Review24

New

Mem

bers

new members

April

Suite 20.05, Menara CitibankNo.165, Jalan Ampang50450 Kuala LumpurTel: 603-2383 0204 / 0205Fax: 603-2383 0206E-mail: lochoa@acsm.com.my

Chief Executive in MalaysiaMr Luis Manuel Ochoa Sierra, Managing Director

Brief Company ProfileACSM is a private company based in Kuala Lumpurthat supplies a wide range of mooring chains andaccessories for the Oil & Gas Industry . The companyoperations cover South East Asia , China andAustralia.

Anchor Chain SinarMalaysia Sdn Bhd

No. 12, Jalan Nilam 1/8Taman Teknologi Tinggi Subang40000 Shah Alam, SelangorTel: 603-5635 9567Fax: 603-5635 4708E-mail: info@cekapace.comWebsite: www.cekapace.com

Chief Executive In MalaysiaMr Haridass N., Managing Director

Brief Company ProfileSpecialized in out-sourcing management of foreignworkers in various industries such as manufacturing,hotel, cleaning, and hypermarket. We have govern-ment licence from Ministry of Home Affairs.

Cekap Ace Technologies Sdn Bhd

Suite 12.7, Menara Great Eastern303 Jalan Ampang50450 Kuala LumpurTel: 603-4251 3281 / 4256 2834Fax: 603-4251 4281E-mail: info@perceptionmanagement.com.myWebsite: www.malaysia-europeforum.com

Chief Executives in MalaysiaMs Millicent Danker, Chief Executive in Malaysia

Professor Emeritus Tan Sri Dato’ Dr Lim Kok Wing,Chairman

Brief Company ProfileThe MEF is a not-for-profit organisation which worksclosely with corporate, government and non-governmental organisations to build communitiesthrough dialogue. Towards this end, symposia,forums and educational exchange programmes willbe organised. Surpluses will be directed towardscharity.

Malaysia Europe Forum

Suite 5A-1, 5th Floor56 Jalan Tuanku Abdul Rahman50100 Kuala Lumpur, MalaysiaTel: 603-2691 0888Fax: 603-2691 3816E-mail: edralph@hotmail.cm

Chief Executive in MalaysiaMr Edgar Ralph Fernandez, CA (Malaysia), CMA(England), CPA (Australia), ATII, MBA (Finance)

Brief Company ProfileWe are a leading boutique firm that offers qualityservice at affordable rates, We offer friendly andpersonal attention and retain only fully qualified andtrained staff to offer you total quality service at aone-stop centre! We offer:• Company Audits and Taxation Services• Taxation Services for Individuals• Company Incorporations / Shelf Companies• Accounting & HR Services - Business Consultancy

Edgar RalphChartered Accountants &

Tax Consultants

No.20, Jalan Maktab 5Off Jalan Tan Razak50400 Kuala LumpurTel: 603-2697 1085Fax: 603-2697 5271E-mail: info@hallbert-packaging.comWebsite: www.hallbert.net

Chief Executive in MalaysiaMr Bertil Schuil, Managing Director

Brief Company ProfileHallbert Sdn Bhd is an international firm specialisingin Retail Bags and Carton Board Packaging, your glo-bal partner for outsourced packaging, we offer awide range of both paper and plastic bags for the re-tail industry and deliver many types of carton boardpackaging: boxes, trays, cups, displays and liquidpackaging. We have established a strong, reliablenetwork with expertise in printing, quality control,raw material and logistics management to meet thedemands of our worldwide customer base. Furthermore we help our customers outsource printingwork like books, diaries and magazines. Our aim is torealize a minimum of 20% savings compared tothere own production cost.

Hallbert Sdn Bhd

EUMCCI Review 25

new membersN

ew M

embers

April

MCOBA Building42, Jalan Syed Putra50460 Kuala Lumpur, MalaysiaTel: 603-2718 6868Fax: 603-2718 6888E-mail: rubaiha@uemworld.com;

zakieshariff@uemworld.com;Website: www.uem.com.my

Representative in MalaysiaEncik Ahmad Zakie Ahmad Shariff, Senior GeneralManager, Group Business Development

Brief Company ProfileUEM Group Berhad , Malaysia’s leading conglome-rate in infrastructure-building, is a wholly-ownedsubsidiary of Khazanah Nasional Berhad, an invest-ment arm of the Government. Our core businessesare in expressways, engineering & construction,healthcare, environmental services, property, manu-facturing, information, communication & technologyand logistics.

UEM Group Berhad

43400 UPM Serdang, SelangorTel: 603-8946 6003 / 8946 6014Fax: 603-8948 7273E-mail: cco@admin.upm.edu.myWebsite: www.upm.edu.my

Chief Executive in MalaysiaProf. Datuk Dr. Nik Mustapha R. Abdullah, ViceChancellor

EducationUPM is recognized by the Ministry of Higher Educa-tion as one of the reputable ‘Research Universities’ inMalaysia. Established since 1931, UPM is acknow-ledge as a multidisciplinary institution for tertiaryeducation which offers a comprehensive array ofhigh-quality undergraduate and postgraduate prog-rammes of worldwide recognition.

Universiti Putra Malaysia(UPM)

11800 USM, Pulau PinangTel: 604-653 2902Fax: 604-653 2903E-mail: dvc_icn@usm.myWebsite: www.usm.my

Chief Executive in MalaysiaProf. Dato’ Dzulkifli bin Abdul Razak, Vice-Chancellor

EducationEstablished as the second university in Malaysia in1969, Universiti Sains Malaysia now has 24 Acade-mic Schools and14 Centres, a total enrolment of27,800 with 5,600 as postgraduate students.

Universiti Sains Malaysia(USM)

192-4 Jalan Tun SambanthanBrickfields, 50470Kuala Lumpur, MalaysiaTel: 603-2272 3443Fax: 603-2272 4411E-mail: sathiah@origenius.com.myWebsite: www.origenius.com.my

www.origenius.my

Chief Executive in MalaysiaMr Sathiah Sudakaran, Managing Director

Brief Company ProfileOrigenius is a total business solutions providerspecialising in media relations, below the line adver-tising, above the line advertising, corporate gift &premium importer and wholesaler , event manage-ment services and international film hosting. Estab-lished in 2003,the group has grown to become aleading regional player in the industry.

Origenius (M) Sdn.Bhd

The Oxford Centre for Leadership, UK (Asia-Pacific Representative Office)84-A, Jalan SS 21/35Damansara Utama (Uptown)47400 Petaling Jaya, Selangor, MalaysiaTel: 603-7729 1070Fax: 603-7725 5071E-mail: enquiry@oxcelasia.org Website: www.oxcelasia.org /

www.oxcel.org

Chief Executive in MalaysiaDr. Saiful Bahri, CEO / Asia Representative

Brief Company ProfileThe Oxford Centre for Leadership (OXCEL) wasestablished to provide opportunities for members todevelop and enhance their corporate, business andgeneral leadership skills. OXCEL runs monthlyleadership seminars, ‘The CEO Talks @ KL Tower’,various networking events and internationalconferences

OXCEL Sdn Bhd

EUMCCI Review26

Mal

aysi

a N

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malaysia news

April

Taxes on Property inMalaysiaThe property development industry hasalways been regarded as one of the majoreconomic drivers of a country, especially sofor a fast “developing” country such asMalaysia which requires space andinfrastructure to meet its developmentneeds. The multiplier effects of the industrythrough the economy is widespread andcan be felt in the whole supply chain frombuilding material suppliers, developers andcontractors to the service providers such asarchitects and engineers. Undeniably, pro-perty development not only creates wealthbut its products are also a store of wealthfor the buyers.

If property is dear to most people’s hearts,then taxation of property is probably one ofthe biggest dreads on their minds. Propertyhas always been associated with wealthand governments will seek to tax propertyowners in various ways. In Malaysia, pro-perty owners through mere ownership,whether or not there is a derived income,have to pay property tax in the form of quitrent and assessment on an annual andsemi-annual basis to the state and localauthorities respectively. If they receiverental income from the properties, they arefurther liable to income tax. Treated asordinary income, this rental income is to beincluded in the taxable income of thetaxpayer.

The Stamp Duty EncounterTo the average property investor, their firstencounter with property taxes is in theform of stamp duty, which is payable onthe acquisition of properties at the rate of1% - 3% of the property value. The 1%rate applies to property value belowRM100,000 whilst the 2% applies to thevalue between RM100,000 to RM500,000,and the 3% to the balance aboveRM500,000. Buyers will also be required topay additional stamp duty at the rate of0.5% of the loan value if their purchaseswere financed through loans.

On the other hand, the disposer takeshome his capital gains free of taxes withthe “suspension” of real property gains taxwhich came into effect on 1 April 2007. Inaddition, following the change of theMalaysian tax system to the single tier taxsystem from 1 January 2008, a disposerwhich is a company, is able to distribute its

tax their profits. Nonetheless, to appreciatethe contribution of this sector to the eco-nomy, in 2006 the government introducedseveral concessions such as allowing“warranty costs” incurred during thedefects liability period to relate back to theyear of completion of the development.Estimated losses incurred in a year werealso allowed tax deduction againstestimated profits from profitable projects,with the effect that property developerspay less tax upfront and defer their taxes,thereby improving their cashflow.

One thing that remains unchanged is thatproperty development profits are taxedprogressively over the period of develop-ment based on the stage of completion,although the meaning on stage of comple-tion had been interpreted differently overthe years. By and large, stage of completionis now determined based on the develop-ment costs incurred by the developer orbased on a survey of the work done inaccordance with accounting standards. Thetax authorities will also allow the use ofprogressive billings as a measure of stage ofcompletion provided this is used in aconsistent manner.

Reasonable Tax Treatment in MalaysiaA quick overview of the taxes on propertytherefore shows that Malaysia is relativelymild on taxation of property as comparedto many countries which not only imposesimilar taxes but also capital gains tax onproperty. The reasonable tax treatmentshould stimulate the property developmentand construction industry which is asignificant source of jobs, taxes andbusiness opportunities. This is buoyed noless by Malaysians’ affinity for property asinvestments. Many Malaysians wouldsubscribe to the saying by Mark Twain “buyland, they’re not making it anymore”! Withthe continual rise of property values andgrowing demand by buyers, the propertymarket will be a happy hunting ground forinvestors, developers and the governmentalike for many more years to come.

Horwath - Kuala Lumpur OfficeEmail: info@horwathkl.comwww.horwath.com.my

Written by: Poon Yew HoePoon Yew Hoe is the tax partner of Horwath - Kuala LumpurOffice, Chairman of the International Tax Committee ofHorwath International and a council member of the MICPA.

capital gains to shareholders in the form oftax free dividends. Under the single tier taxsystem, a company may distribute divi-dends without the need for franking taxcredits which were previously required.

The Catch in Disposal of PropertiesHowever, one must also be aware that alldisposals of properties which were notsubjected to real property gains tax, maypossibly be subjected to income tax if thedisposal is considered an “adventure in thenature of trade”. This insidious term is tocatch disposals whether by companies orindividuals, who had acquired propertywith the intention to make quick profitsand thereby deriving trading profits asopposed to making long term investmentswhich results in capital gains. Suffice to saythat this concept is a major grey area of taxlaw that has given rise to a significantamount of uncertainty. In the absence ofany objective guidelines or clear directionsby the tax authorities, every case isconsidered based on its facts. Disposals ofproperties for a “quick gain” or after valueenhancement activities by the owner suchas repeated renovation and sale, conver-sion, sub-division or development planning,may fall within this category of disposals.

In addition, a taxpayer is frequently at adisadvantage because the tax authoritieshas the benefit of hindsight where it is ableto delve into the intention of the disposerby referring to the conduct of the disposer,even long after the transaction had beenconsummated. In most instances, the dis-posers will be oblivious of the tax con-sequences until challenged by the taxauthorities many years later. A good case inpoint was the tax waiver given by thegovernment in the year 1999, which laterbecame an opportunity for the taxauthorities to reap bounties from thosewho exploited the “tax waiver year”provisions.

Concessions for Property DevelopersWhilst property owners gained from thesuspension of real property gains tax, theother major beneficiary of the tax changewere property developers who had seen aninflux of foreign buyers following thesuspension of the tax. Property developersbeing entrepreneurs are taxed on incomefrom their property development activities.In fact, they are regarded by the taxauthorities as a unique group of taxpayersand special rules have been formulated to

EUMCCI Review 27

indicatorsIndicators

April

Production of Primary Commodities

2003 2004 2005 2006 2007p 2004 2005 2006

Volume Annual change (%)

Source: Malaysian Palm Oil BoardDepartment of Statistics, MalaysiaForestry Departments (Peninsular Malaysia, Sabah & Sarawak)

Malaysian Cocoa BoardPETRONASMinerals and Geoscience Department, Malaysia

2007p

p Preliminaryn.a. Not available

Crude palm oil ('000 tonnes)Rubber ('000 tonnes)

Saw logs ('000 cu. metres) Cocoa ('000 tonnes)Crude oil (including condensates) ('000 bpd)

Natural gas (mmscfd)

Tin-in-concentrates ('000 tonnes)

13,355

986

21,53236

738

5,013

3.4

13,976

1,169

21,78233

762

5,196

2.7

1,126

2.9

14,961

22,39828

704

5,797

1,284

15,881

21,34432

667

5,774

2.4

1,201

15,823

20,214

695

5,854

35

n.a.

4.7

1.2

3.3

3.7

18.6

-7.8

-18.3

7.0

2.8

-7.7

11.6

-3.7

-16.3

4.1

6.1

-4.714.2-5.2

-0.4

14.0

-16.1

-6.4

-

-0.4

-5.310.2

4.3

1.4

1 Financial intermediation services indirectly measured2 Numbers may not necessarily add up due to roundingp Preliminaryf Forecast

Source: Department of Statistics, Malaysia and Bank Negara Malaysia

5.0 ~ 6.0

20,862

5,959

531,949

2003 2004

RM million

Plus: Import duties

GDP at puchasers' prices2

Annual change (%)

Less: Undistributed FISIM1

Plus: Import duties

GDP at purchasers' prices

2005 2006 2007p 2008f

Gross Domestic Product by Kind of Economic Activity at Constant 2000 Prices

6,453

399,414

6,099

426,508

-2.1

5.8

-5.5

6.8

6,017

447,818

-1.3

5.0

5,287

474,392

-12.1

5.9

3.7 0.3 0.2 3.4 7.5

4.3

6.3

39,817Agriculture 33,369 34,929 35,822 37,672 38,50145,840Mining and quarrying 40,959 42,627 42,076 41,914 43,245

155,150Manufacturing 119,687 131,127 138,014 147,756 152,36716,063Construction 15,031 14,903 14,637 14,559 15,223

289,982Services 201,568 214,528 228,994 245,550 269,276

5,517

504,408

Less: Undistributed FISIM1 17,654 17,705 17,742 18,347 19,720

5.8

8.0

Agriculture 6.0 4.7 2.6 5.2 2.2 3.4Mining and quarrying 6.1 4.1 -1.3 -0.4 3.2 6.0Manufacturing 9.2 9.6 5.3 7.1 3.1 1.8Construction 1.8 -0.9 -1.8 -0.5 4.6 5.5Services 4.2 6.4 6.7 7.2 9.7 7.7

0.7

1.9

141.8

141.6

Growth in Manufacturing Production (2000=100)

2004 2005 2006 2007 200720062005

Index Annual change (%)

Export-oriented industriesElectrical machinery, apparatus,

Total

Source: Department of Statistics, Malaysia

1 Under the new Industrial Production Index (2000=100), LNG has been reclassified as petroleum products (previously classified as chemicals and chemical products). Consequently, petroleum products have been reclassified as export-oriented industries

5.7

5.1

130.8

129.3

123.8

123.0

140.7

139.0

7.5

-0.9137.8appliances and supplies 3.5128.9124.5 139.1 7.91.5162.4Electronics 5.2143.0136.0 160.0 11.8

-8.789.7Electrical products -0.8101.3102.1 98.3 -2.91.8157.2Chemicals and chemical products 11.0149.7134.9 154.5 3.25.4169.0Petroleum products1 10.8141.2127.4 160.4 13.6

-9.381.0Textiles, wearing apparel and footwear 3.484.181.4 89.3 6.11.4115.4Wood and wood products 1.5109.6107.9 113.8 3.85.9151.8Rubber products -0.4133.8134.3 143.4 7.2

-0.5137.7Off-estate processing 8.1131.0121.2 138.5 5.75.5126.0Others -3.7107.4111.4 119.4 11.3

6.8141.1Domestic-oriented industries 2.8123.2119.9 132.1 7.25.0120.0Construction-related products -0.5110.7111.2 114.2 3.20.4117.4Non-metallic mineral products 2.0113.2111.0 117.0 3.3

14.5124.8Basic iron & steel and

non-ferrous metal -5.3105.8111.7 109.0 3.07.6148.8Food products 7.6129.7120.5 138.3 6.7

-6.0139.0Transport equipment 8.5150.2138.5 147.9 -1.519.4186.5Fabricated metal products -4.9123.5129.9 156.3 26.511.0149.5Paper products 7.5119.0110.7 134.6 13.1

8.3122.3Beverages 6.1119.3112.4 112.9 -5.32.885.9Tobacco products -3.087.890.5 83.6 -4.7

7.5

EUMCCI Review28

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and growth. With a wide set of data tables,graphs and written analysis, this publicationdraws a comprehensive picture of the Science,Technology and Innovation activities in theEuropean Union as carried out by its people,enterprises and governments. It reveals inparticular the contributions and expenditureson research and development; defines thecharacteristics of the high skilled peopleparticipating. It further widely describes theinnovation activities of enterprises as well aspatenting which is one of the channels leadingto commercialising newly developedtechnology.

European Economy - Report No 4/2007Labour market and wage deve-lopments in 2006, with specialfocus on relative unit labour costdevelopments in the euro areaavailable only in English (EN) 2007 - 228 pp. - 21 x 29.7 cm

ISBN 978-92-79-04949-1Cat. No: KC-AR-07-004-EN-CPrice (excluding VAT): € 50

Target groups: Market researchers, consumerassociations, entrepreneurs, experts infinancial politics

This report analyses labour market and wagedevelopments in 2006 from a macroeconomicperspective, looking at the main geographicalaggregations (euro area, EU-15, NMS10 andEU-27).

Rural Development in the EuropeanUnion - Statistical and EconomicInformation Report

with CD-ROM includedavailable only in English (EN) 2008 - 358 pp. - 21 x 29.7 cmISBN 978-92-79-08010-4Cat. No: KF-AH-08-001-EN-CPrice (excluding VAT): € 30

Target groups: Policy makers, economists,students, entrepreneurs, environmentalassociations

The aims of the policy have been simplifiedand clarified around three clearly definedeconomic, environmental and territorialobjectives:• improving the competitiveness of

agriculture and forestry;• improving the environment and the

countryside;• improving the quality of life in rural areas

and encouraging diversification ofeconomic activity.