MTPMA Newsletter 2Q April-June 2011

8/4/2019 MTPMA Newsletter 2Q April-June 2011

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TPA NEWSLETTER 2011 2nd

QUARTERApril - June, 2011 Issue

Electrical & Electronics Industry News

E&E is Major Contributor to Export Growth

The electrical and electronics (E&E) sector is expected to remain a major contributor to

Malaysias export growth in 2011 on the back on rising global demand for semiconductordevices. Malaysia External Trade Development Corporation (Matrade) chief executiveofficer Datuk Noharuddin Nordin said more than half of the demand would come fromthe Asian market, followed by the United States and Japan. "Based on the first quartertrade performance, we can see that we are able to sustain our presence in the globalE&E market. Recently, there is also an announcement about a major investment bymajor global and local players in the solar industry to invest significantly in Malaysia. Theirfactory is expected to be fully operational by the year-end and the products from thiscentre will be reflected in the E&E classification that will further strengthen our E&Eexports," he told a briefing on Malaysias trade performance in the first quarter of 2011here yesterday.

The Semiconductor Association recently projected a 6.8% growth in the globalsemiconductor market to US$318.76bil this year. Noharuddin also said Malaysias majorexport markets recorded growth in the first quarter except the US. He said the US was nolonger a prominent manufacturing hub of E&E products. "Most of the Americancompanies have shifted their assembly operations elsewhere, so their E&E productimports are mainly in the form of finished products," he said.

(Source: The Star, 10 May 2011)

Globetronics Upbeat on Sales

Globetronics Technology Bhd is looking at "good" first and second quarters this year,

despite the recent earthquake and tsunami in Japan. Chief executive officer Heng HuckLee said although 40 per cent of its total RM280 million sales were to Japanesemanufacturing companies, things are looking optimistic for the Bayan Lepas-basedintegrated circuits manufacturer, which is engaged in the energy-saving andenvironmental LED lighting market and crystal-based timing devices.

Heng said Globetronics is on track to achieve its projected growth and progress in theLED lighting and timing device markets for the first two quarters of 2011. "We areoptimistic about enjoying another good year, although we are cautious due to theunrest in the Middle East and Africa, and also the recent disaster in Japan, amongothers. "Until now, we have suffered only minimal impact from the Japan disaster but asa key component manufacturer in the global supply chain, we must also consider directand indirect effects as well, like the possibility of other suppliers in the chain not beingable to deliver the goods on their side for the end products," he said after annual generalmeeting here yesterday.

Therefore, Heng said, there might be uncertainties such as possible product cancellationsby end-customers during the third and fourth quarters of the year, even though most ofthe company's Japanese clients did not operate around the Fukushima area and hadoutside plants, where they could move some of their operations to.

Globetronics closed its 2010 year with revenues of RM279 million and RM30 million netprofit, improvements of 28 per cent and 88 per cent respectively compared to 2009's


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numbers. The group spent a record RM107 million in capital expenditure in the growingLED lighting and timing device industries, compared to the RM95 million invested in 2008and 2009. Heng said Globetronics would be slowing down on its capital expenditureafter having spent over RM200 million in the past three years. Last year, it made threedividend payments totalling RM17.8 million to shareholders, and managed to close theyear with over RM55 million in cash and other investments. He said the group is optimisticthat such a performance would be sustained for this year. Heng noted that as part of itscorporate social responsibility, it had recently donated 2.5 million yen (RM93,548.98) tothe Japanese Red Cross Society to help victims of the twin disasters.

(Source: New Straits Times, 19 May 2011)

Malaysian to Helm Intel Ops in Penang, Kulim

The world's biggest chipmaker Intel Corp is set to see its operations in Penang and Kulimhelmed by a Malaysian soon. Business Times has learnt that Penang-born Robin A.Martin, vice-president of the company's Technology and Manufacturing Group (andcurrently based in China), is set to assume the role of Intel Malaysia managing director,taking over from Atul Bhargava effective July 1. Bhargava has helmed Intel Malaysiasince 2007 and is expected to return to Intel's operations in the US. Sources said Martinwill likely continue to maintain his global role as vice-president for assembly test andmanufacturing while serving as managing director of the Intel operations in Penang andKulim in Kedah.

Malaysia was the chipmaker's first offshore facility in 1972 and the company has investedin excess of US$3.9 billion (RM11.86 billion) in the country to date. Intel Malaysiacomprises three campuses and employs more than 10,000 people. Intel Penang is a keyassembly and testing site, Intel Kulim assembles processor packaging and serves animportant operations centre for mobile modules, while Intel Kuala Lumpur boasts adevelopment centre as well as a sales and marketing office. Intel Malaysia corporateaffairs manager Loo Cheng Cheng when contacted said that "Intel has not made anynew announcement". Loo also clarified a Business Times report yesterday that thevoluntary optional retirement plan for Intel employees would be offered to 500 and not

200 employees as reported.


US Electronic Firms Expect Lower Export Sales This Year

Export sales for the US electronic firms are expected to decline this year as personalcomputer-related companies continue outsource their manufacturing activities tocountries like China. The Malaysian American Electronics Industry, in its annual survey2010/2011, said export sales are expected to ease 1.5 per cent to RM51 billion.

Its chairman, Datuk Wong Siew Hai, said without the PC-related companies, the growthrate of the semiconductor companies is forecast to be 5 per cent for 2011 in line with theexpectations of the Semiconductor Industry Association's 6 per cent growth forecast."Member companies are cautiously optimistic, with uncertainties still hovering in Europeand the US, calamities and disasters and also the ringgit's appreciation versus the USdollar," he said. Drivers of growth would revolve around computing and consumerelectronics, followed by communications, medical devices and automotivesemiconductor market and gadgets.

Total exports fell by 26 per cent in 2010 due to changes in manufacturing strategy of PC-related companies as they chose to outsource the manufacturing activities. "We can


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expect to see the residual effects this year too," Wong said, adding that the move by thePC companies was in line with the global industry trend of contract manufacturing oftheir products elsewhere, focusing on designing instead. Wong said minus the PC-related companies, the growth rate is 26.3 per cent. For the semiconductor productsegment, the export sales recorded 30.2 per cent of growth rate.

(Source: New Straits Times, 9 June 2011)

MAEI Export Sales at RM51.8bil

Export sales by Malaysian American Electronics Industry (MAEI) members dropped toRM51.8bil last year from RM70bil in 2009 due to the shift of production by personalcomputer makers here to other countries. However, this was replaced by newinvestments in high-end activities like product design and development, said chairmanDatuk Wong Siew Hai yesterday. This is positive for Malaysia as companies that shiftedtheir operations here go higher up the value chain. In fact, capital spending byAmerican manufacturers jumped to a high of RM3.87bil last year, he said at a briefingon MAEI Annual Survey 2010/2011.

For this year, Wong said spending by American manufacturers was expected to be

moderate at RM2.87bil. In 2010, MAEI's export sales accounted for 20.7% of Malaysia'stotal electrical and electronic exports. Our biggest challenge is talent. There is ashortage of talent pool to meet the potential demand of the industry, particularly indesign and development, he said. He added that there were 4,500 design anddevelopment engineers in the country last year and the figure was expected to grow to4,700 this year. Wong said MAEI was optimistic of achieving growth this year despiteworries about the economies of Europe and the United States, natural disasters and theringgit appreciation.

He believes that growth would revolve around computing and consumer electronicssectors, followed by communications, medical devices as well as automotivesemiconductors and gadgets. He forecasts the total export sales by MAEI to stabilise toRM51bil this year. MAEI is an industry committee of the American Malaysian Chamber of

Commerce. About 60% of MAEI members are based in Penang, with the rest operatingtheir facilities in the Klang Valley and Melaka.

(Source: The Star, 9 June 2011)

Slower Outlook for Electronics

Penang-based companies producing automated-equipment and precision engineeringcomponents for the electronics and semiconductor sector expect slower second andthird quarters. A projected slower year for worldwide semiconductor spending, highunemployment figures in the US and the ongoing economic crisis in Europe, as well as

higher production cost due the increase in electricity rates are among the keychallenges facing manufacturers.

Penang Foundry & Engineering Industries Association (PENFEIA) president Datuk Ng ChaiEng told Starbiz that orders for precision engineering components used in the electronicsand semiconductor equipment were slower in the second quarter, compared with lastyears corresponding period. The orders for the third quarter are also coming in slowly,due to high unemployment figures in the US, which is a big customer of Malaysian-madeprecision engineering components. A strong ringgit coupled with higher electricity costhave also eroded our margins. Due to the intense competition, it is very hard for us toraise pricing for our overseas customers. It is still too early to tell about the fourth quarter,


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Employers Oppose Penalty on Minimum Wage

The RM10,000 fine to be imposed on employers who fail to comply with the minimumwage requirement would drive away foreign investments while hampering efforts tomake Malaysia a high-income nation. Malaysian Employers Federation executive

director Shamsuddin Bardan said the proposed law would not be solely on the minimumwage but the formation of the National Wages Consultative Council (NWCC). Theclause on the fine seems odd. It's like putting the cart before the horse. Although theminimum wage has not been fixed yet, the penalty for employers has been spelt out, hetold The Star yesterday. He added that the proposed fine would also drive awaypotential investors seeking to set up operations here.

Under the proposed Act, employers would be liable to a fine of not more than RM10,000for each employee if they fail to pay the basic wage once the amount is determined bythe Government. Shamsuddin also said imposing a minimum wage would be counter tothe Government's effort in turning Malaysia into a high-income nation. Rather thansetting a minimum wage, he said the Government should look at ways to enhanceemployees' income while remaining competitive. Shamsuddin added that some em-ployers may take advantage of the law by keeping workers' wages at a minimum.There may be some employers who will be happy to pay their workers the minimumwage as long as they comply with the law, he said.

The NWCC bill was tabled before Parliament on Tuesday by Deputy Human ResourcesMinister Datuk Maznah Mazlan. Among the provisions in the Bill are the roles andfunctions of the 23-member NWCC which is to convene four times a year. The councilwould be responsible for collecting, analysing and researching data and makerecommendations to the Government on the minimum wage. The Bill also states that thecouncil must consult the public on the minimum wage rate before making anyrecommendations.


MTUC Not Pleased With New Wage Act

MTUC has ex-pressed its disappointment over the National Minimum Wage Act which itclaims does not differ very much from the Wages Council Act, which has been in forcesince 1947. In a statement yesterday, MTUC secretary-general Abdul Halim Mansor saidthe proposed National Wages Consultatives Council Bill, which was awaiting approval ofthe Parliament, did not meet trade unions' expectations. He said the wages council, tobe set up under the new Act, would be powerless and ineffective while the HumanResources Minister would wield absolute power to accept or reject any recommendation

made by the council.

The minister can continue to frustrate millions of lowly-paid workers by refusing to acceptthe council's advice and delay the implementation of a decent minimum wage, hesaid, adding that the ministry can also arbitrarily reduce the rates. He said based on theHuman Resources Minister's proposal, workers' representation in the wages council wouldbe less than 20%. In appointing the members of the council, the minister is not obligedto consult MTUC or organisation of employers and he is empowered to remove anymember of the council, he said. Abdul Halim said despite studying the various wagescouncil models in other countries, the proposed bill was not aimed at implementing a


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national minimum wage but instead, wages would be determined by sector, categoryand region.


Members News

New Collectibles in Pewter

This years Royal Selangor Spring Collection reflects a cheerful tone with something foreverybody, from fairy-tale inspirations to themes related to the five elements of feng shui.The merchandise ranges from ingeniously crafted Jack And The Beanstalk bubbleblower, Pied Piper Of Hamelin music carousel, Hanzel And Gretel coin box, Cinderellabookends and Chinese five-element incense burner and scent holder, to mensaccessories such as a humidor, bottle stopper, bottle opener and hip flask. This collectionis also exciting as it features the latest works of designers such as Hong Kong FreemanLau and his Danish counterpart, Erik Magnussen.

Pewter is malleable and shiny, both features accentuated with a touch of class in the

collection, like in its amazing smooth curves that carry a fine tone of sleekness, whetherthey are the ancient symbols of the five elements or a smooth hip flask carrying aminimalist theme.

Magnussen focused on a range of accessories mostly for use at the wine bar. The mostappealing are the hip flask, foil cutter and bottle opener, all fine embodiments of thedelicate contours and lines that pewter creates. These will definitely find a friend amongcollectors of pewter. The hip flask and foil cutter in particular, are so well smoothened outthat you can feel every inch the elegance of pewter, compact and a privilege to hold.Prices start at RM130.

Laus range of table top and home accessories, Five Elements, is a treasure for those who

believe in energy regeneration through the elements of wood, metal, water, fire andearth. Some are accented with nyatoh wood, giving them the allure of the geometricblend of wood and pewter. The intricate characters Sheng Sheng Bu Xi, which meanperpetual regeneration, are carved on the scent holder, incense box, incense burner,seal and desk caddy. These characters run in a maze of symbols representing the fiveelements.

As Laus creations are in sync with current trends, they should find favour with those whohave a weakness for spa treatments such as aromatherapy. Prices are from RM220. Alsonot to be missed are tea caddies inspired by the Japanese inro, a portable container forseals and medicine. Royal Selangor general manager (manufacturing) Yong Yoon Licounts these as his favourites because of their nature imprints such as the pine andcrane, lotus, dragonfly and bamboo as well as orchid and magpie. These designs are

reflective of how the ancient literati enjoyed tea and nature at the same time. (In China,Taiwan and Hong Kong, tea enthusiasts are known to have their own caddies carryingtheir favourite tea.) They are so beautiful that they can be used as decorative items.Prices are from RM380. Details at royalselangor.com.

(Source: New Straits Times, 16 April 2011)

Royal Selangor Centre in Penang


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The elegant Straits Quay, Penangs first retail marina enclave, is the latest home of theRoyal Selangor Visitor Centre. Officially opened last March, it is the second centre in thecountry (the first is in Setapak) and the third worldwide after Singapore. It covers a built-up area of 354.5 sq metres over two floors a showroom on the lower floor and a galleryabove. The store boasts a new identity that blends traditional and modern elements,drawing inspiration from the source of pewter tin mines. The ambience is peaceful,thanks to the use of different materials and neutral colour tones that also create a visualimpact on visitors.

Like its counterpart in Setapak, the centre has all the key features to make it a top touristdestination. Visitors will enjoy free guided tours to the gallery and a look at how pewteritems are made at the demo areas. But the most exciting attraction is the crowdfavourite The School Of Hard Knocks where visitors can make their own pewterbowls using traditional tools similar to those used more than a 100 years ago. RoyalSelangor is Malaysias iconic pewtersmith and has a history that dates back 125 years.

Lesson in Hard Knocks

Royal Selangor School of Hard Knocks means exactly what it says. No hidden meaning,no metaphor. The school, available at the Royal Selangor Visitor Centres in KualaLumpur, Penang and Singapore, simply teaches how hard knocks can turn a pewterplate into a polished bowl. For RM50, the students not only get to do that for 30minutes but they also get to keep their masterpieces and are given a certificate.

The School Of Hard Knocks is a hit with foreign tourists and schoolchildren. It is openbetween 9am and 5pm daily. Advance booking for large groups is recommended.

(Source: New Straits Times, 2 June 2011)

MTPMA Newsletter 2Q April-June 2011

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