A

GLOBAL/COUNTRY STUDY REPORT

ON
MALAYSIA
SUBMITTED TO
NR INSTITUTE OF BUSINESS MANAGEMENT
IN PARTIAL FULFILLMENT OF THE RECRUITMENT OF THE AWARD FOR
THE DEGREE OF
MASTERS OF BUSINESS ADMINISTRATION
IN

GUJARAT TECHNOLOGICAL UNIVERSITY

UNDER THE GUIDENCE OF
PROF. MEGHA SHAH
PROF. GURMEET SINGH
PROF. HARSHIT SHAH
SUBMITTED BY
MBA SEM 4 BATCH 2011-13
NRIBM

MBA PROGRAMME
AFFILIATED TO GUJARAT TECHNOLOGICAL UNIVERSITY
AHMEDABAD, APRIL 2013
1

PREFACE
At post-graduation level mere theoretical knowledge would not serve the purpose, we
would also require the practical exposure to it.
Global country report Malaysia is our efforts in understanding to correlate theoretical
aspects with the practical studies.
In this project we have studied the different industries of the country. It includes many
industries like automobiles, textiles, pharmaceuticals, tourism, telecom, food, agricultural, gems
and jewellery and banking industry.
We also studied various companies and products offered by companies and tried to find the
opportunities lying in Malaysia for Indians.
This project has helped us know various insights in order to understand the growth and
development aspect of the country under study. We have also made efforts to highlight the changes
and gave suggestion which can help our country to develop and growth in the better manner. III

ii

ACKNOWLEDGEMENT
We hereby like to acknowledge all those people who contributed towards our successful
accomplishment of our project report. We would like to thank our Dean Dr. Hitesh Ruparel for his
valuable support. We would like to thank Prof. Gurmeet Singh, Prof. Megha Shah, Prof. Harshit
Shah, who guided us throughout the completion of our project.
They actively participated in sharing their views over umpteen numbers in the process of
completion of project and ultimately, kept their faith in the students for the better accomplishment
of the project.
They shared their valuable time and knowledge beyond the textbook to make us know the
happiness at the level in the global scenario.
At last, we take pleasure of completing the project within the deadline given to us, and the
credit of which will be shared with all the friends, who directly or indirectly helped us in final
accomplishments.

iii

TABLE OF CONTENT

Serial No.

Particulars

Page No.

Preface

II

Acknowledgement

III

OVERVIEW OF MALAYSIA

PESTEL ANALYSIS

NATURAL RESOURCES

29

FINANCIAL ANALYSIS

34

TRADE UNION & EXIM POLICY

39

SWOT ANALYSIS

45

INDUSTRY OVERVIEW

48

EDUCATION INDUSTRY

48

CONSUMER DURABLE INDUSTRY

69

TELECOMMUNICATION INDUSTRY

80

AUTOMOBILE INSTRY

91

AVIATION INDUSTRY

102

AGRICULTURE INDUSTRY

115

RUBBER INDUSTRY

136

INFRASTRUCTURE INDUSTRY

153

TOURISM INDUSTRY

167

10

TRANSPORTATION INDUSTRY

184

CONCLUSION

193

BIBLIOGRAPHY

196

iv

OVERVIEW OF MALAYSIA
In the before time 1980s Malaysia initiate the nationalized Automotive Project aim for
local possession and organize, economies of scale and improved local content. The domestic
automotive industry extended in the subsequent decades in terms of invention, service and local
content, but the policy failed to generate satisfactory industrial improvement and international
competitiveness indicate by 55% capital utility in

2008. Local ownership and control have

emaciated in the 21st century with single one considerable national manufacturer, PROTON,
staying in business and looking for tactical associates.
The swing to a national automotive strategy impacted deeply on the employment and
manufacturing relations of the automotive industry. A national collective bargaining

(CB)

arrangement base on an industrial union and an employers relationship emerge in the 1970s but
this arrangement distorted during the 1980s to a pluralistic and decentralized CB scheme based on
individual employers negotiate with enterprise unions in the better automobile manufacturers and
assemblers, while the industrial union gradually more organized constituent and parts companies.
In 2011 the trade union concentration was all the same 45%, representing a comparable
high level of collective concurrence (CC) treatment. From the 1990s until the 2000s trade unions
and workers in the CC-regulated segment faced a sliding stress on employment situation
appropriate to augmented hire of deal (frequently overseas) employees. Moreover, employer have
constantly resist to union organize and influence at the place of work height framed by Malaysias
legislated as well as compulsory limitations on internationally (ILO) recognized operate union
privileges and place of work practices.
The global financial disaster and money-making recession in 2008-09 do not have an effect
on Malaysias automotive Industry as much as the East Asian financial crisis did in 2000s, also the
government has taken counter-cyclical events.

The lower impact of global during the time of slump relates inconsistently to the industrys
pathetic international competitiveness, implying little

export of automotive products from

Malaysia

In the extended term, though, here is no substitute to completely civilizing the automobile
industrys efficiency and competitiveness.
The governments National Automotive Policy (NAP) makes this a fundamental object with
outline a situate of applicable resources (e.g. human resources development in an industry with 50
% uneducated employees).
However, NAP are based on a somewhat tapered association connecting the government
and the national auto maker, and in a extremely unionized industry the policy would possibly not
succeed except all input stakeholders of the industry are mobilize, plus workers and trade unions.
form a widespread and wide-ranging automotive productivity coalition would make available an
institutional driver of the NAP into a fair growth path with high-performance workplaces,
companies and cluster.

PESTLE ANALYSIS OF FACTORS

Political Factor
Malaysia is a Federal parliamentary Monarchy and PM is head of the Country and current
PM of Malaysia is Dato sri Najib Razak. The Constitution was drafted by Reid Commission and come into
force 27th August 1957. Malaysia has nine sultans of nine different Malay states, among them
one is selected for five year term and he called as King Of Malaysia. There are 13 states and
remaining four states have titular governor and they do not participate in selection of King.
Malaysia has parliament of senate and dewan Negara with 70 seats out of them 44
appointed by paramount ruler and 26 appointed by state legislature. The house of legislature or
Dewan Rakhyat with 219 seats and members are elected through voting for term of five years.
Parliament of Malaysia is handled by any of 30 political parties of Malaysia which are DAP,
PKR, PAS. Malaysian law is mostly based on English law and most of the acts are taken directly
from Indian law. There are different courts and Judges of Federal court are appointed by
Paramount Ruler by the advice of PM. Nomination is given to their respective Sultans for state
Government and state governments are controlled by Chief Minister. Malaysia has 13 states and
four federal territories which are Kuala Lumpur, Labuan Island and the Putrajaya federal
administrative territory.
Main source of revenue for Government is Tax, in the year 2011-12 government
generate 76% revenue from tax. In 2012 Income tax rate for Individual is 26%, but domestic
company of country is exempt from tax. In Malaysia income brought from foreign is exempt.
Manufacturing activities, tourism, the agricultural sector, transportation, and communication
these are initiatives taken by Government of Malaysia. In the late 18th century East India came
to Malaysia of the search of trading and military base, the disjointed Malay rulers ceded province
to the British in exchange for recognition and protection against internal - external fear. By
1914 the control of whole Malaysia is taken over by British Management and Tin mining
business is growing rapidly.
3

Temporarily, three phases may have been distinguished in colonial immigration policy. And
these corresponded to the general economic situation in the country, worldwide demand for Malayas
commodities and workers activism.

Throughout the first phase of 1900-27, thousands of migrant employees have migrated to
Malaya to work in the growing tin and rubber industries. For all this three groups (Japanese,
Chinese and India) entry was free and unrestricted. In the second phase, it lasted largely from
1928-46 (included the Japanese profession period), workers limitations were linked to economic
and political motives and had discriminated against Chinese men. Indians were mostly
unaffected by these policy since they were regarded to British subjects. The third phase of
immigration constraint was from about 1947-57. In the time of 1953 the British had enacted an
Immigration Ordinance (IO) which was predetermined, for the first time, the specific categories
of immigrants were permitted entry into Malaya.

UMNO - UNITED MALAYS NATIONAL ORGANISATION became the leading

political force in the Malaysian country, with its support stand mostly in the Malay dominated
rural areas. The Malaysian Indian Congress (MIC) was founded in 1946 with their primary aim
of having the protection of Indian vested interest. Immediately before independence a bargaining
was striked between UMNO and the MCA and which was afterwards reflected in the
foundation for Independent Malaya. Malays smallholders were suffering from low efficiency and diminishing
plot sizes. The World Bank report had recommended tariff security with the purpose of
encouraging diversification into the import substituting industrialization and further more
advised that foreign capital has been utilized to realize their goal.
4

Malaysia last general election was held on 8march08 where BN won the election comfortably
but it became the worst ever electoral showing since its independence wherein seats have been
reduced from 90% to 63% currently which have reached agreement of not to contest against each
other in individual constituencies. More important is that opposition has made more control on five
states out of 13 states. One important out-comes from the election result is that Malaysia is set for
more mature politics which means by voting based on pragmatism. So the current scenario is the
Malaysians are thinking to vote beyond the racial line to make active parliament.
The current PM is Dato' Seri Mohd. Najib bin Tun Haji Abdul Razak. He took office on
the retirement of Dato' Seri Abdullah Ahmad Badawi known as "Pak Lah" on April, 2009.
Apart from that when we talk about monarchy of Malaysia, it is Yang di-pertuan Agong which is
abbreviated as (YDPA) which is commonly said as king of Malaysia. This YDPA is been
selected for five years terms and he has been selected from among nine sultans of Malaysia. This
YDPA has some powers which are as follows:-

Power to exercise based on the advice from the PM.

Power to exercise based on his discretionary power. (i.e. without any other authority).

YDPA is also supreme commander of armed force.

MAIN POLITICAL PARTIES:-

Barinas National ruling coalition:

-United Malays National Organization (UMNO)

-Malaysian Chinese Association (MCA)

-Malaysian Indian Congress (MIC)

-10 other minor partners

 Opposition:

-Party Keadilan Rakyat (PKR)

-Democratic Action Party (DAP)

-Party Islam SeMalaysia (PAS)

So above is the current parties of Malaysia where in BN has three major parties and the
others are minors and there are three major opposition. They are the part of last general election
i.e. in
2008.

ECONOMICAL FACTOR
The Economy of Malaysia is a growing and relatively open state-oriented and newly
industrialised market economy Malaysia, a middle-income country, has transformed itself since the
1957 from a producer of raw materials into an emerging multi-sector economy. Tin, rubber and
palm oil remain important, but have been overtaken by new industries. Malaysia is now one of the
world's largest exporters of electronics and electrical products.
Malaysia's political and economic stability, prudent and pragmatic investor friendly
business policies, cost productive personnel, developed infrastructure comparable to that of any
western country and a host of other amenities make this country an enticing place for investors.
Malaysia has achieved 14 continuous years of trade surplus. Their total trade in 2011 reached RM
1.269 trillion, an boost of 8.7% compared to 2010, the highest total trade ever recorded. Exports
shows a positive growth with an increase of 8.7% to RM 694.55 billion for the year 2011 and
imports rose by 8.6% to RM 574.23 billion.
GDP
GDP : GDP : $453 billion ( PPP, 2011)
Sector wise GDP Contribution : Agriculture : 12.0 % , Industry : 40.0% Services: 48.0% ( 2011
est.)
The Malaysian economy has been surprisingly resilient. In 2Q2012, its GDP growth
accelerated to 5.4 per cent from a revised 4.9 per cent in the previous quarter. The growth was
driven by strong domestic demand, with impressive year-on-year growth in private and public
consumption and investment outlays.
The government projected Malaysia's GDP to grow between 4.5% and 5% in 2012 while
for 2013, it forecast growth at between 4.5% and 5.5%.
GNI per year is 48000RM and creates 3.3 million new jobs because of the economic
transformation programme which covers well paying middle to high income groups.

Consumer Price Index

The Consumer Price Index (CPI) for the period January to October 2012 increased by 1.7
per cent to 104.8 compared with that of 103.0 in the same period last year.
Monetory Policy
Monetary policy 2011---Monetary policy in 2011 remained supportive of growth, while
managing inflationary pressures. Monetary policy in 2012 focused on managing economic growth,
containing the risks to inflation and preventing the build-up of financial imbalances.

In the second half of the year, however, the downside risks to domestic economic growth
increased significantly due to deteriorating global economic and financial situation, whereas the
upside risks to inflation had begun to moderate. Given the balance of risks, the Monetary Policy
Committee (MPC) considered the prevailing Overnight Policy Rate (OPR) level to be correct and
kept the policy rate unchanged for the remainder of the year

The Overnight Policy Rate (OPR) is their policy instrument, and is used to guide the short
term interbank rates which will hopefully influence inflation and economic growth.
Foreign Exchange
Malaysia continues to maintain a liberal foreign exchange administration rules which are
mainly prudential measures to support the overall macroeconomic objective of maintaining
monetary and financial stability.

The fixed change rate was abandoned to floating exchange rate in July 2005. Bank Negara
Malaysia to be responsible for administration,etc. of this Act, and Foreign exchange is being
controlled by Governor of Bank Negara Malaysia and to appoint other officers. The performance
of the RM during the 2011 year was influenced by volatility in international financial markets

The central bank has sufficient international reserves to attenuate volatility in the foreign
exchange market to prevent severe currency movements
9

Interest rates
The benchmark interest rate in Malaysia was last reported at 3.00 %. Historically, from
2004 until 2012, Malaysia Interest Rate averaged 2.9 Percent reaching an all time high of 3.5
Percent in April of 2006 and a record low of 2.0 Percent in February of 2009. In Malaysia, the
interest rate decisions are taken by The Central Bank of Malaysia or Bank Negara Malaysia. The
official interest rate is the Overnight Policy Rate.
Malaysia unemployment Rates
In September 2012, there was an increase of the unemployed total by 66,700 persons,
bringing to a total of 413.900 persons, while the number of employed persons recorded a marginal
declined by 18,100 persons to

12.55 million persons. This situation contributes to the

unemployment rate by 3.2 % in September 2012, an increase of 0.5 percentage point from 2.7 per
cent in the previous month.
Income Distribution
The influence of overall strategies for public expenditure components on public is the
outcomes of income distribution. The impact of public expenditures by various elements seems to
favour urban households as opposed to rural household groups as well as Malay household groups
as opposed to other ethnics. Hence, it could be said that, the public expenditure allocation has
reduced the income inequality between ethnics, but it has wider. This may be due to the bias
policies that are drafted to the benefit of the Bumiputra community while neglecting others and
also the emergence of a new ruling class that are make up of political cronies.
Stock Market

On April 14, 2004, Kuala Lumpur Stock Exchange was renamed Bursa Malaysia Berhad,
following the demutualization exercise, the purpose of which was to improve competitive position
and to respond to global trends in the exchange sector by making themselves more customer-driven
10

and market-oriented. The wholly owned subsidiaries of Bursa Malaysia own and run the many
businesses like security exchange, Bond market etc.
Bursa Malaysia also has a range of progressive products and services which covers equities,
derivatives, offshore listings and services, bonds and Islamic offerings.
Rate of Inflation
The inflation rate in Malaysia was recorded at 1.30 percent in September of 2012. Inflation
rate refers to a general increases in prices measured against a standard level of purchasing power.
The many well known measures of Inflation are the CPI Index which measures consumer prices,
and the GDP deflator, which measures inflation in the whole of the domestic economy.
Malaysia trade
Total exports : 60.21 RM billion ( Sep. 2012)
Total imports : 53.74 RM billion ( Sep. 2012)

Malaysias total trade in September 2012 grew by 5.8% to RM113.94 billion compared
with RM107.74 billion in September 2011. ASEAN was the chief contributor to the
growth, with trade expanding by RM4.34 billion.

Of the total export 67.3% is contributed by Manufactured goods, 107.43% is contributed by

mining goods and 11.4% Agriculture goods and 0.9% Other Sectors

There is an Increase of export by 1.7% in 2012 compare to 2011.

Many contribution involves by Electrical and Electronics products.

Growth of exports to ASEAN, the United States of America (USA), India and Taiwan
supported the boost in Malaysias exports of 2.6% to RM60.21 billion in September 2012.
Imports rose by 9.6% to RM53.74 billion.

11

External Trade :

Malaysia is a founding Member of the WTO by virtue of its membership in the GATT
since 1957.

As a trading nation, membership in the WTO has contributed to Malaysias economic

growth.

Through active participations in WTO negotiations, Malaysia continues to make sure that
trade regulations and trade measures that are negotiated are fair and provide the flexibility
for Malaysia to continue its development policy.

Malaysia free trade agreement involvement :

International trade is an important contributor to Malaysia 's economic growth and

development.

Malaysia 's trade policy is to pursue efforts on the way to creating a more liberalizing and
fair global trading environment.

Free Trade Agreements (FTAs) are generally aimed at providing the means to achieve
faster and higher levels of liberalisation that would create effective market access between
the participants of the FTA.

Malaysia has established FTAs with the following countries:

Japan, Pakistan, New Zealand, India, China &, Australia.

12

SOCIAL FACTORS
The Malaysian culture is made up of varied cultures of the different groups. The first
people to live here were original tribals that still remain; and they were followed by the Malays,
who moved there from mainland Asia in early times. The Indians and the Chinese cultural
influences spread when trade began with those countries, and increased with immigration to
Malaysia. Other cultures that deeply affected that of Malaysia include Persian, Arabic and british.
The many diverse ethnicities that now exist in Malaysia have their own exclusive and typical
cultural identities, with some crossover. The civilization of Malaysia has been described as "Asia
in miniature".
The unique culture of the area stemmed from its original tribes, along with the Malays from
the ancient times. The Malays, which form over half of the population, play a dominant role
politically and are a part of group called Bhumiputra. The Orang Asal, the initial residents of
Malaya, formed only 0.5 percent of the total population in Malaysia in 2000. The Chinese have
been settling in Malaysia for many centuries, and form the second-largest ethnic group. The
Indian population in Malaysia is the smallest of the three main ethnic groups, accounting for about
10 percent of the country's population. Tamil, Malayalees and Telugu cover over 85 percent of the
people of Indian origin in the country
The national symbols of Malaysia intend to unite people by forming visual, verbal, or
iconic representations of the national people, there values, goals, and history.
Malaysia contains speakers of 137 living languages, 41 of which are spoken at Peninsula
Malaysia. The national language in Malaysia is Bahasa Malaysia. English, Tamil, Chinese (in
various parlance- Mandarin, Cantonese, Hokkien, Hakka, Hainan and Foochow), Telugu,
Malayalam and Punjabi are the other languages spoken by different groups. In addition, in East
Malaysia several native languages are spoken, the main ones being Iban and Kadazan
The dominant religion in Malaysia is Islam, whose followers make up 61 per cent of the
population. The code of Islam enforced is Sunni. Other religions, such as the Baha'i
Faith and Sikhism also have devotees in Malaysia. Christianity has established itself in some
communities, especially in East Malaysia. Hinduism is practiced by the majority of Malaysian
Indians Also a small group of Jewish community
13

Baju is the term for clothing in the Malay language.Traditional Malay attire is the "baju
melayu", a loose tunic which is worn over trousers and usually accompanied with a "sampin",
which is a sarong which is wrapped around a man's hips. It is also often accompanied with
a songkok or cap, on their head. Traditional clothing for men in Malaysia consists of a silk or
cotton skirt and shirt with a scarf like piece of cloth tied around his waist.Malay women wear
the baju kurung, a knee-length blouse worn over a long skirt
Marriages in Malaysia are usually a family function right from searching the partner to
selecting them. It is important in Malaysia that the marriages are done between people of the same
class, status, origin and religion for similarities of thoughts and customs. The marriageable age for
men there is between 25 and 30 years, and between 23 and 27 years old for females. The traditional
wedding ceremony is in two parts. The first part is the akad nikah (marriage contract), which is the
legal and religious part of the wedding. The second part is the bersanding (enthronement), which is
a family merriment.
To the Malays, children are the most important possessions to the family. The more
children a family has, the more they are treasured for, as children are gifts from God. A family
with many children is a prosperous family, though poor economically. Thus, family planning
practices and the use of contraceptives which is common in the world is less practiced by the
Malays.
Malaysia has a strong oral tradition that has existed since before the arrival of writing, and
continues today Oral literature encompasses a variety of genres of Malay folklore, such as myths,
legends, folk tales, romance, epics, poetry, proverbs, origin stories and oral histories. The earliest
known Malay writing is on the Terengganu stone made in 1303. The first printed books in Malay
were produced by European missionaries in the 17th century. One of the more famous Malay
works is the Sulalatus al- salatin, also known as the Sejarah Melayu (meaning "The Malay
Annals"). Much early Malaysian literature was based on Indian epics, which remained unchanged
even as Malays converted to Islam; this has expanded in recent decades. English literature
remained restricted to the higher class until the arrival of the printing press. Locally created
Chinese and Indian literature appeared in the 19th century Arts and music have a long custom in
Malaysia, with Malay art dating back to the Malay sultanates. Traditional art was centered around
14

fields such as carving, silver smiting, and weaving. Islamic taboos constrained artwork depicting
humans until the mid-20th century.
Performing arts and shadow puppet shows are popular, and often show Indian influences.
Various influences can be seen in architecture, from individual cultures in Malaysia and from other
countries. Large modern structures have been built, including the tallest twin buildings in the
world, the Petronas Twin Towers.
Of all the festivals in Malaysia, the arguable three biggest celebrations are the Hari Raya
Puasa (also known as Hari Raya Aidilfitri), Chinese New Year and Deepavali, symbolic of the
three largest ethnic groups in Malaysia Other notable celebrations would include Thaipusam (a
unique Tamil festival that entails rituals such as going into a trance-like state and piercing the body
with hooks), Qing Ming Festival or Tomb Sweeping Day for the Chinese, the Buddist Wesak Day,
Awal Muharram (the Islamic New Year) and the Prophet Muhammads Birthday. Not to be remiss,
Christmas is also a notable celebration in Malaysia and recognized as a national holiday.
Malaysian music has a variety of origins, and is largely based around percussion
instruments.Traditional Malay music and performing arts have originated in the KelantanPattani region with some influences from India, China, Thailand, and Indonesia. The music is
based around striking instruments, the most important of which is the gendang (drum). There are at
least 14 types of customary drums. Other instruments are the rebab (a bowed string instrument),
the serunai (a double-reed oboe-like instrument), the seruling (flute), and the trumpets
Cuisine is often at odds along cultural lines, but some dishes exist which have mixed foods
from different ethnicities. Different cultures from Malaysia and the neighboring areas have
influenced Malaysian cuisine, with strong influence from Malay, Chinese, Indian, Thai, Javanese,
and Sumatran cuisines. This is mainly because Malaysia was a part of ancient Spice route. The
different states of Malaysia have diverse dishes, and often the food in Malaysia is different from
the original dishes. Nesi Lemak is the national dish of malaysia Each major religious group has its
chief holy days declared as official holidays.
Traditional sports are popular in Malaysia, while it has become a powerhouse in
international sports such as badminton. Malaysia has competed at the Commonwealth Games since
1950 as Malaya, and 1966 as Malaysia. It has been leading in badminton, and hosted the games in
15

Kuala Lumpur in 1998. The 1998 Commonwealth Games were the first time the torch relay went
through more nations than just England and the host country.

16

TECHNOLOGICAL FACTORS
Contemporary information technologies are a swiftly advance field that can make possible
new efficient resources for retailers to attain consumers. Methods profiled under include the use of
the Internet as a source of standing information and launch pad of traceability schemes, in the
making interactive screen and in sequence kiosks, special shopping assistant, television monitors,
mobile technologies and customer club cards. Smart ads, interactive window-shopping and
holographic imaging as emerging technologies are also profiled.
A second request of machinery includes traceability schemes, which go beyond only if static
in rank to allow clients to trace supply chains of character products. Todays emerging submission
offer retailer an chance to boost consumer trust in both the retailer and the products on. Also, when
tracing products through the supply chain, consumers can feel more that they are part of the chain,
which help in growing the chances of ecological and social externalities being measured in
purchase decision. With

increased knowledge of supply chain issues gained by compile

traceability of in sequence that offers real benefits to retailers such as quality track.

Technologies also offer another chance to provide sustainability in turn to clients. Quick
comeback (QR) have been used in malaysia to relocate product in sequence in-store to the
consumer. Through QR policy reader are mainly available through a technology called i-mode a
Japanese mobile connections company. QR codes which are reasonable by a mobile phone camera
are affix onto a product or pack up and direct clients to online product in order via wireless internet
eg. mobile phones.

The Malaysian technology report presents the expertise requirements resulting from the
behavior of the progression plan team, that describe the of target scientific environment that is
essential to support the activities. and also provides opinion

of the costs linked with the

exploitation of the environment. Also provides the portrayal of the assumption made by the team
for the period of the project, and an diagram of the data model used for the period of the estimate
process. The technology project outcome in a quantity of important change to the obtainable
request surroundings:

17

New applications are visionalfor Service sectors. These system are supported by the use of
imaging technology.

The overhaul system will be augmented to provide Private Agents with a user-friendly interface,
and will also employ imaging technology.

The Service system will beprovided with the consistent user interface. There is not a requirement
for imaging services within this application

In Malaysia science policy is keeping pace by ministry of science, technology and

innovation, ministry of agriculture and the ministry of health. In 1998 high- tech exports made
54% Malaysian export. And in 1987 to 1997 research and development used 0.24% GNP.
Malaysian countrywide liberty agency in 2002 formed which deals with Malaysian space
activities, space education and space experiments.
Razak SAT satellite is a remote sense settlement with the CCD camera. Angkasawan
space flight program helpful for the Malaysia to transport one Malaysian to the space station.
Malaysian privatized part of its military in 1970s to support national development and by
this Malaysian defense industry council formed. And government also making efforts for the
competitiveness and development of the sector. The Malaysian armed force uses weapons and hitech weapons and military imported from foreign countries.
The Malaysian Antratic Research Program and national antratic research center were
established to became partly to the antratic treaty.
By the process of alteration biomass is converted into liquid fuel and the part of it is used
for the diesel in Malaysia. Through fermentation and gasification, biomass is converted into
biogas.

18

This status of technology used in Malaysia with environmentally clean and economically
clean and viable system. Through the application of biomass technology number of issues were
solved of emission.

For the techno-economic analysis many issues like labor cost and availability of raw
objects were solved. The technology from biomass make environment friendly produced high
quality fuel from types of biomass and producing high grade fuel from low quality waste like
feedstock.
For the removal of hazardous air pollutants cost efficient preventive pre-treatment effective
technology were used.
For the demand of liberalized energy and cogeneration market this technology developed.
And this require a good commercialization plan for the success of this technology in Malaysia.
And for this commercial programs are also highlighted.
Technology will also make a significant contribution to the automation of internal business
activities. Workgroup products will be used to manage the handling of customer requests, approval
processes, and product development cycles, and shared databases will be used for the efficient
creation and management of stakeholder, agent, customer, or product information. The use of such
tools facilitates the automatic collection of performance statistics, allowing for the management of
cycle times and further improvement of the automated processes. As a key part of this
environment, integrated office automation products and usage standards will be implemented.

19

ENVIRONMENTAL FACTOR

The environment of Malaysia refers to the geologies and biotas that compose the natural
environment of this Southeast Asian nation. Ecologically, Malaysia is a mega diverse nation with
a bio-diverse range

of flora

and

fauna found

in

various eco-regions throughout

the

country. Malaysia's total land area, Tropical rain forester compass between 59% to 70% and 11.6%
is pristine. Around the world, Malaysia has the fifth largest mangrove area, which totals mangrove
area over a half a million hectares.

In Malaysia, a significant threat is a Human intervention to the natural environment. In the

country Forestry, Agriculture and urbanisation contribute to the devastation of mangroves, forests
and other thriving ecosystems. Landscapes and Ecosystems are dramatically altered by manpower
development, including unlimited to the road construction and river damming. restrained climate
revolutionize occurs as a straight result of air pollution and the green house effect, which in turn is
caused by the release of greenhouse gases.

In Malaysian Geographical phenomena, flooding and landslides in the Klang Valley,

alongside stem from widely extend deforestation and haze. Near the coastline of Sarawak and
Sabah, long line areas are under threat from current sea level rise.

In Malaysia, the Department of national park and wildlife is responsible for fauna and flora
prevention. The environment in Malaysia is the subject to the Ministry of Natural Resources and
Environment at the federal level. Several environmental organisations have been established to
elevate awareness regarding the environmental issues in Malaysia.

In terms of Ecoregions and land use in Malaysia, There are different ecoregions with
varying degrees of prevalence. In the country, grass and shrubs make up 2% , Major forests
account for 45% of all ecoregions, major wetlands constitute 3% interrupted woods represent 33%
while remain coastal aquatic regions and area form 8% of the Malaysias land area, with such
crops and settlement taking up the rest space. There are many national parks in Malaysia, along

20

with that The Taman Negara National Park is 130 years old in central peninsula in Malaysia
making it oldest rainforest around the world.

In Malaysia, Every five years they formulate a Malaysia Plan (MP) that provides a road
map of socioeconomic policies. From 1975 to 1980 covered The Third Malaysia Plan was the first
to environmental policy incorporated that aimed at environmental integrating which concerns to
development planning and Since then, with the next Fifth Malaysia Plan from1986 to1990 and
Sixth Malaysia Plan from 1991 to 1995, the government of Malaysia has made its environmental
policies which is more substantial and concrete.

As cited in the countrys plan, the most important thrust of specific policies that based on
these objectives which include appropriate treatment of solid waste; incorporation of
environmental consideration in land use planning; improvement of air pollution and river water
quality and finally promotion of energy saving and new energy use.

Malaysia has also an active privatization program in different sectors that aimed to solving
the current shortage of technical and human resources in state enterprises, which also improving
efficiency of management. This environmental sector is no exception, with privatization that
already underway in some areas such as scheduled facilities of waste disposal, sewage treatment
and monitoring pollution. Malaysia is also keen to skills utilization in the privatization sector
through such other initiatives too, such as the registration systems introduction for environmental
consultants for environmental impact assessment carrying out.

Second related to Environmental Administrative Framework and Department of

Environment that include, the supervisory agency which is in charge of environmental
administration in country is the Department of Environment of Malaysia which was established in
1975 under the provisions of the Environmental Quality Act 1974. Malaysia's administrative
framework, the Department Of Environment that belongs to the Ministry of Science, Technology
and Environment, but it is an independent organization. With a local offices and staff of nearly 500
throughout the Malaysia, the Department Of Environment has a similarly setup to the Japanese
Environment Agency.
21

The Department Of Environment also has comprehensive jurisdiction over the

environmental administration that related to activities of industries and it is charged with the
formulated environmental rules and regulations and enforcing legislation that carrying out
monitoring in relation to air pollution, water pollution, and hazardous substances that conducting
environmental impact assessment which is proposed development projects and carrying out
evaluation of Site Suitability to proposed factories.

Third related to Framework Environmental Legislation on Industrial Pollution include

countrys system of environmental legislation that based on the law of Environmental Quality Act
1974, was introduced in 1974 and came into force in 1975. From 1957 when Malaysia gained
independence from the Britain until than enactment of the Environmental Quality Act 1974,
country had no fundamental laws relating to control on environmental and used separately pieces
of legislation, such as the Forest Enactment, waters Enactment, and mining Enactment, to directly
deal with issues related to environmental. However, the intent of these environmental laws was not
to protect the environment entirely.

At present, countrys control on environment for pollution related to industries consist of a

raft of orders and regulations, formulated all separately for each activity prescribed under the
provisions of the Environmental Quality Act, addition with a number of guidelines. The specific
contents and requirement of this legislation, such as emission standards and other particulars, are
very well set forth in the various regulations that drawn up separately for air pollution, wastewater
and so on.

Fourth related to Environmental Requirements for Industrial Operations in Malaysia

include that while companies in Japan are expected to properly comply with control on waste water
and all other control on environmental.

In Malaysia, anyone who will proposes to plan to build a new plant or to expand that
existing facilities must go through a different variety of formality related to environment at each
and every stage of project construction and planning.

22

These all formalities that included for conducting environmental impact that assessment
with now presenting written permission or its approval, and also obtaining the licenses.

For a fresh new project, such as plant construction in a country, for example in Malaysia,
environmental impact assessment is must required at the first planning stage if the project is a
prescribed activity. Even if the new project is related to a non-prescribed activity than Evaluation
of site suitability is required.

In addition to Pollution Problems that Beginning from Traditional Industries which include
Environmental pollution problems in country have a long history with effect. River water pollution
by mine wastewater and sludge began with the fast growing or rapid development of tin mining,
and a traditional industry that first started at the new turn of the century around 100 years ago.
Than after last years, with other traditional industries such as palm oil production and natural
rubber began in earnest, and with wastewater from the factories and industries that caused further
pollution of seas and rivers.

An overview of waste problems in Malaysia that refers to Industrial waste is one of the
greatest environmental dilemmas that affecting Japanese companies and all those industrial
activities conducted in Malaysia. Until 1997 country still had get no approved final disposal
facilities which are as prescribed in the legislation of Malaysia, for dealing with the all scheduled
wastes that defined in the set of all regulations and orders which are enacted in 1989. For nearly a
decade in Malaysia, companies of Japan had to go to great lengths with on-site storing scheduled
wastes.

An overview of Malaysian Air Pollution Problems falls into major three categories that
pollution of air due to motor vehicles exhaust gas from mobile emission sources, principally in
urban areas,, secondly haze caused by the Malaysian weather and by forest fires in neighbouring
country Indonesia and third is pollution that caused by industrial activities. By all these three
problems, air pollution from mobile vehicle emission sources is one of the greatest concerns.

In 1997, there were approximately 8.5 million registered cases of present motor vehicles in
Malaysia that climbing at the rate of roughly 10 percent or some more every year. With According
23

to 1997 facts and figures, the estimated quantities of air pollutants in Malaysia released by these
vehicles were around 1.9 million tons of carbon monoxide gas, 101,000 tons of hydrocarbons,
224,000 tons of nitrogen oxides, 36,000 tons of sulphur dioxide and other 16,000 tons of
particulate matter.

That shows Mean values for the years from 1993 to 1997 that the amount of air pollutants
in Malaysia from mobile emission sources that accounts for around 81 percent of all added air
pollution occurring in a country. The problem that becomes more critical clearly in Malaysia as the
more number of motor vehicles keeps on increasing year by year.

At last Other Environmental Problems in Malaysia are in various forms of development

that have resulted in soil erosion, deforestation, species endangering, and a raft of some other
problems that are related to the ecosystem and natural environment and. In relation to all activities
of industry that however, noise pollution can be cited as implied problem particularly. Country
currently has some regulations that governing motor vehicle created noise pollution, but there are
no as such any specific regulations about countries general factory and industry noise other than in
the working environment.

24

LEGAL FACTORS
HISTORY OF LAW
Prior to the independence ( in 1957), most of the laws of U.K. were imported and made
into local legislation or simply applied as case laws. Malaysian constitution is also based on other
jurisdictions like India and Australia. The criminal law in Malaysia, Criminal Procedure Code was
base on the Indian criminal code. likewise, the Contracts Act of Malaysia is also based on the
Indian model. land law is based on the Australian Torrens system.
FEDERAL LAW AND STATE LAW
Federal laws are made by members of Parliament and senators who

sitting in the

Parliament of Malaysia and this laws are applies nationwide. Federal laws are also known as Acts
of Parliament. State laws are made by assembly men,who sitting in the State Legislative Assembly
(namely Dewan Undangan Negeri) and only apply in the particular state of malaysia. State laws are
basically referred to as ordinances or enactments. federal law prevail over any inconsistent state
laws. ( including sharia laws)
Sabah and Sarawak
After the formation of Malaysia (in 1963), the Federal Constitution was amended and
include some special provisions which only applicable to the states of Sarawak and Sabah. various
federal Acts of Parliament apply differently to these states.

Such as Acts related to land ,

immigration and natural resource management.

COMMON LAW
Malaysian law can be divided mainly into two partsunwritten law as well as written law.
Unwritten laws are such laws which are not enclosed in any statutes but it can be found in case
decisions. While written laws are such laws which have been disclosed in the constitution or in
legislations of country. This is known as the common law.
25

Where there is no law governing a particular situation, Malaysian case law may apply. For
example, if there is no Malaysian law applies; English law can applied. There are example where
Indian, Australian, and Singaporean cases are used as influential authorities.

1. Unwritten Law
The Unwritten law doesnt mean that the law is literally not written. but It laws which
are not enacted by the parliament and which are not found in the central and State constitutions.
This law basically comes from cases which are decided by the Courts as well as the local customs,
known as common law. The unwritten law mainly inclusion of the English law, judicial
decisions and custom law.
1.1 English Law
The English Law can be divided into two which are the English Commercial and English
Land Law. According to Civil Law Act 1956 ,sec.5(1), The English Commercial Law is pertinent
in Peninsular Malaysia except Malacca and Penang .While, Sec. 5(2) of the civil law act applies in
Malacca, Penang, Sarawak, and Sabah because the law applicable in these states are the same as
law administered in England.
1.2 Judiciary Decision/ Malaysian Court
The Malaysian Court system is similar and influenced by the English Court system. It is
divided into the Superior and Subordinate Courts. Under the Subordinate Courts, the Penghulu
Court is the lowest level and the state government will appoint a head person to preside the court
for the particular district. Sabah and Sarawak, both are uniformly related to the Native Courts and
relates to the indigenous people's customs. Magistrate's Courts which mainly deals with minor
criminal and civil cases and highest level are the Sessions Courts. However, the Superior Courts
are made up of the High Court, Federal Court (which is the highest court in the land), Court of
Appeal and.

26

1.3 Customary Law

Customs one more significant source of unwritten law. Hindu customary law applies to
Hindus and Chinese customary law applied to the Chinese. Moreover, Sabah and Sarawak natives
have their own customary law which deals with to the land and family matters. In Malaysia, there
are mainly two types of Adat one is the Adat Temenggung and other is Adat Perpateh.
2. Written Law
On the other hand, Written law are the laws contained in the Federal as well as State
Constitution. This laws are much influenced by English laws and Malaysian legal system contains
many characteristics of the English legal system.. The Written law mostly includes the Federal &
State Constitution, as well as Legislation and Subsidiary Legislation.
2.1 The Federal and State Constitution
Malaysia is a federation of thirteen states with a Federal Constitution and thirteen State
Constitution. The Federation Constitution is the highest law of the country. The Federal
Constitution also provides for the Yang di-Pertuan Agong who owes his position to the
Constitution and also act according it. The Constitution can only be changed by a two-thirds
majority out of total number of members of the legislature. The Federal Constitution contains
many Articles relating the religion of the federation and several other related subjects. While state
constitution where each state has their own structure of law regulating the government of that state.
2.2 Legislation
Legislations deals with laws which are set up by the Parliaments at federal level as well as
the State Legislative Assemblies for the state level. The Parliament along with State Legislatures
are not ultimate and thats why they have to pass laws which subject to the various provisions set
out in Federal and State Constitution
2.3 Subsidiary Legislations/ Executive
27

Subsidiary Legislations are prepared by the people or bodies who are allowed by the
legislatures. The Interpretation Act 1967 defines subsidiary legislation as by laws, rules,
regulations, order and notifications made under this legislations. The Legislatures provide basic
law but is insufficient, so subsidiary legislation is very significant to govern day-to-day matters.
Thats the reason, the authority is delegated to their legislative powers. In Federal Constitution
(Article 150) Parliament can pass their authority to legislate of any subsidiary legislation during
emergency, though there are any contradictions with the Federal Constitutions involved.
3. Islamic Law
Malaysian law also includes Islamic law administered by the Syariah Courts,which is
applicable to Muslims only put into practice by Federal Constitution. State authority have also
allowed to prepare Islamic law for the people professing the Islamic religion.
Application of Syariah laws in Malaysia
Islamic laws is not only administered by the Syariah Courts, but also by the Civil Courts.
Special jurisdiction has been provided to the Syariah Courts for the regulation of Islamic laws.
Applicable in Family laws like marriage, divorce, matrimonial properties, alimony, custody and
guardianship, maintenance of children. Applicable in succession Laws like Trust Deed, Probate
and Administration Applicable in criminal laws in respect of indecent dressing and behavior, close
proximity, polygamous marriage.
Administration of Syariah law
Syariah law consists of two main juristic schools one is Sunni school and other is Shia
school. Sunni schools called mazhabs is divided into four main divisions like Maliki, Hanbali,
Hanafi, Shafi. Eighty per cent of total Muslim population of the world is Sunni Muslims,and
majorities is Hanafis and then by Shafis. And if we talk about Malaysia ninty percent population of
Muslims are Shafis. Founder of Shafi school was Imam Shafi. As per Sunni school there are four
sources of Syariah law. They are the Al-Hadith, Holy Quran, Sunnah, Ijma and Qias.anf holy
Quran is the main source of Syariah law.

28

NATURAL RESOURCES
Our global country report is regarding to the study of rubber industry of Malaysia and
analyzing and finding a scope regarding to Indian rubber industry. Here we have tried to brief
about our whole project study and have highlighted few important facts about rubber industry with
basis of natural resource.
Natural resources, particularly those of soil, water, plant and animal diversity, renewable
energy sources, atmosphere, and eco system services are essential for the structure and reason of
agricultural systems and for common and environmental sustainability. A holistic, or systemsoriented approach, is preferable as it can agreement with the complex issues linked with the
complexity of food and other production systems in different ecologies, locations and cultures.
The resources available in Malaysia are different and many in numbers. Irrigation system
and good rainfall creates the production of agriculture product. As area is in the sea that will face
many times flood and the forest can have fire. As the greenhouse effect and the climate change
affect this country at large the environmental protection also needed to increase in the multiple
situations it follows as climate change.
Malaysia has different community in its place as many foreigners came to this country and
live there. Languages are also very different and multi-cultural effect is shown in this country.
Urbanization is very high and its also increased. The education level is also high and its about to
the most of the people in country. Employment of young people is lesser in compare to world.
Government system in the country is both following the old system as well as democracy.
The country is both in hand of people as well as the rulers. As the system work in the UK the
government is working with the kings.
Legal system is following the different rules of the commm0on law as well as the different
religious laws. The system of the selection of candidate is a democratic way. Court of law is
following the hierarchy level.
From the study we have found that, The Malaysian government promotes the liberated
market with limited state interfering and export-oriented industrialization. Its exports to the
worldwide market were used to support efficient use of the country's assets and produce hard
29

currency, which was necessary for further growing into areas of technical and industrial
modernization.
Malaysia is big exporter of rubber as its on the top of the world to produce the natural
rubber and also the product that made from that. Rubber industry is growing in Malaysia and the
government also effort to enhanced and produce the more production.
Rubber industry provide large employment and the revenue that generated but Malaysia.
Consumption of rubber increased as the increase in the automobile sector and other place where
rubber used.
The Malaysian rubber products manufacturing industry is an exemplary case of rubber
industrialization at its best. Unprecedented rapid expansion in size, rubber consumption and
exports within two decades placed the country in the world map as the biggest supplier of quality
medical gloves and a major source of catheters, latex thread and condoms.
Malaysia has become the global leader in natural latex consumption, fifth largest consumer
of natural rubber and eight largest consumer of rubber. Investment-friendly incentives accorded
under various economic development and industrialization policies, research, product
development, technical and market support and financial backing augur well to earn the industry its
growth success.
The growth of Rapid rubber industrialization in other rubber producing countries and
sprouting regional and bilateral trade liberalization, shortage of domestic labour, growing
dependence on most manufacturing inputs, narrow export product base and increasing international
market pressure on product quality and standards affects the industrys growth.
The demand for rubber goods is dependent upon economic development, as the order is
related to income and living standards. Even though Malaysia is the worlds top exporter of latex
products, there is a requirement to get better promotion and branding strategy to hold on to its
position in the export market. In the business and general rubber goods subsector, which is more
domestic market oriented, there is a requirement to maintain its sustainability in the domestic
market by advancement and improving existing goods, as well as introducing new products.

30

Malaysia is worlds largest source of the natural rubber. As the global demand of the rubber
increased this business also have rapid growth. The traditional production is converted by the
modern technology to get the more output and Varity of the product.

The Malaysian rubber industries manufacture tyre and related products, latex products, and
general rubber products. There are more than 500 manufacturers in this trade. The key natural
rubber consuming industries, comprised rubber gloves, rubber thread, and tyres and tubes
industries. The total consumption of these 3 industries comprises 88.6% of the entire household
consumption of natural rubber. The quick growth of the industry has made Malaysia the largest
customer of natural rubber latex in the world.
The latex products sub-sector is the prime sub-sector in the rubber industry and having
more than 160 manufacturer producing surgical, household and industrial gloves, latex threads,
balloons. The country continues to sustain its position as the world's foremost producer and
exporter of latex.
Selling of rubber in the export market get the large revenue for country as the user of it
cannot develop itself and there is no substitute for the rubber product.
Rubber production is requiring very long time of years and the cultivation of plant is
requiring much care. From tree to get rubber is very higher patience and very expertise people who
can work on this business well.
The industrial rubber products sector includes 194 companies manufacturing an wide
variety of rubber products like hoses, mountings, beltings, tubing, seals, and sheeting for the
electrical & electronics, machinery, automotive & equipment and construction industries, mainly
for the domestic market.
In Malaysia, it is necessary for the rubber industry to develop further, stressing on high
value-added and high equipment rubber products, like products for construction, marine,
engineering, and. More R&D tries needs to be embarked upon in product expansion and downstream activities.

31

Rubber production is very big plantation in forest. The part of the rubber tree is very large
in the agriculture.
The policy in the rubber industry is not well for getting the total advantage of it. Restriction
in the investment is big question in the industry. The increasing usage of the synthetic rubber gives
them another opportunity in industry. The local producer also faces the restriction and their level of
profitability is declined. Still the resource is there and the export will must done but the policies
must be changed to boost the industry.
The export of rubber is in whole world that provide the biggest revenue from other country.
The business is supplying natural rubber to the producer of the rubber part and the manufacturer of
the rubber compositions.
Export and the usage of rubber increased as the natural rubber have much advantage over
synthetic rubber and to create the quality rubber product it must contain natural rubber the exports
very high in level of production.
The rubber wood production is also on growth. The usage of the rubber wood in the
furniture and the other industrial use also increased. The very good amount of availability gives
very good growth and the availability of material.
Growth of the industries of rubber and other production is giving boost to the research and
development. As the knowledge of the traditional way and expertise increased to create better and
better product large level of research done to create the different product and usage or the rubber.
Environmental problem are affecting the industry .As the rubber tree require much time of
years to develop. The flood and other disaster are gaining the problems and the country has to
develop more and more solution to keep the country s natural resources steady.
The usage of rubber with different genetically techno the development create the tree with
pharmacy use. This also has rapid growth.
The production of the rubber product is raised in the country as the resource variability
there. Rubber product manufacturer are too many in the country and the industry has rapid growth.
The export of product is raised as the development of demand in global scenario. The investment
32

from global giant that use rubber is also raised. The return are attract many players in this industry.
Govt also support the industry very well as its the main business in country.

33

FINANCIAL ANALYSIS
Malaysia, a Country with thirteen States along with three Federal territories in Southeast
Asia. Kuala Lumpur being the capital of Malaysia while Putrajaya is the seat of the federal
government, Malaysia is having A Total Landmass of 329,847 Square Kilometers which is
Separated By The South China Sea Into Two Equally Sized Regions, Peninsular Malaysia and
Malaysian Borneo.
The country is multi-ethnic and multi-cultural, which plays a large role in politics. The
theme followed by the Malaysia is that similar to the British Empire. The government system of
Malaysia is like the parliamentary system of Westminster, while its legal system is using English
Common Law as its basis. With a population of 28,334,135, Malaysia is the worlds 43rd most
populous country and the country is one of Asias most developed countries by infrastructure.
Financial System Structure in Malaysia
The financial system of Malaysia is structured into two major categories, namely Financial
Institutions and Financial Market. The Financial Institutions comprise Banking System and Nonbank Financial Intermediaries. The Financial Market in Malaysia comprises four major markets
namely: Money & Foreign Exchange Market, Capital Market, Derivatives Market, and Offshore
Market
Banking System
The banking system consists of Bank Negara Malaysia (Central Bank of Malaysia),
banking institutions (commercial banks, finance companies, merchant banks and Islamic banks)
and a miscellaneous group (discount houses and representative offices of foreign banks). The
banking system accounting for about 67% of the total assets of the financial system is the largest
component of the financial system.

The summary background information and functions of the institutions mentioned above are set
out as follows:34

Bank Negara Malaysia (BNM)

Commercial Banks

Finance Companies

Merchant Banks (also known as Investment Banks)

Islamic Banking

Discount Houses

Representative Offices of Foreign Banks in Malaysia

Banking and Financial Institutions Act, 1989 (BAFIA)

BAFIA 1989 is divided into 16 parts and covers a wide spectrum of subject matters related to
the banking industry in Malaysia. The Act provides a framework that enables BNM to supervise
and regulate three broad groups of financial institutions:

Licensed institutions

Scheduled institutions

Non-scheduled institutions

Control of establishment or acquisition of subsidiaries or opening of offices in Malaysia by

a local or foreign licensed institutions

Maintenance of reserve fund, capital, net working funds, liquid assets by the financial
institutions

Appointment of auditors, submission of financial statement, exhibition of financial

statements, submission of statistics to BNM.

Exchange Control
The main objectives follow by the exchange control policy in Malaysia are for ensuring that
the export proceeds are received promptly in Malaysia. Moreover it was form for assisting Bank
Negara Malaysia in monitoring the settlement of payments and receipts in international
transactions and also for encouraging the use of the nations financial resources for creative
purposes. For monitoring and compilation of balance of payments statistics, residents are required
35

to complete statistical forms, Form P and Form R, for each payment or receipt of more than
RM10,000 vis-a-vis non-residents.BNM has issued 16 Exchange Control Notices to-date.

Financial Market
The Financial Market mainly comprises:i) The Money and Foreign Exchange markets, and
ii) The Capital and Derivatives Markets

Apart from BNM, following are the statutory bodies established by Malaysian Government
in regulating and supporting the above mentioned markets:-

Securities Commission
The Securities Commission (SC) is a statutory body entrusted with the responsibility of
regulating and thoroughly developing Malaysias capital markets.

To act as a single regulatory body to promote the development of capital markets;

To take responsibility for reform the regulations of the securities market, and for speeding
up the processing and approval of corporate transactions.

Bursa Malaysia
Malaysia is having Bursa Malaysia as an approved exchange holding company established
under Section 15 of the Capital Markets and Services Act 2007. Bursa Malaysia operates a fullyintegrated exchange, offering equities, derivatives, offshore, bonds as well as Islamic products, and
also provides a diversify range of investment choices including global securities.

36

Market participants:1) Stock brokers

2) Trading Participants
3) Investor Protection
4) Risk Management protectors

An overview on Central bank of Malaysia

On 26 January 1959, under the Central Bank of Malaysia Act 1958 (CBA 1958) the central
bank was established,.
Roles and Functions
1. Economics & Monetary Policy
2. Investment and Operations
3. Regulation
4. Payment Systems
5. Supervision
6. Organisational Development
7. Communications
8. Greater engagement with the public
9. Educate the Public

Developed Infrastructure
Malaysia's one of the strongest point is its infrastructure. A constant drive is made for
developing and upgrading its infrastructure which has resulted in one of the most well-developed
and strong infrastructure among the newly industrializing countries of the continent.

Some of the major contributions and part of Infrastructure in Malaysia includes:37

1) Network highways
2) Industrial parks
3) Efficient seaports
4) International Airports
5) Specialized parks
6) Hi-Tech Communications

38

TRADE UNION & EX-IM POLICY OF MALAYSIA

Malaysia has continued to liberalize its trade and trade-related policies, mainly unilaterally,
notwithstanding the global economic crisis that erupted in 2008. The tariff is the main border
measure affecting imports. The simple average applied MFN tariff was 7.4% in 2009; about 60%
of tariff lines were duty free.Apart from import prohibitions, implemented, inter alia, for national
security, religious, and environmental reasons, various non-tariff border measures are also used as
instruments of Malaysia's trade and industrial policy. A considerable portion of Malaysia's tariff
lines are subject to import licensing, most of which is non-automatic. While automatic licensing is
intended for data collection, the authorities maintain that non-automatic licences are mainly for
sanitary and phytosanitary reasons (for agriculture); non automatic licensing is also intended to
regulate the flow of imports and to promote selected strategic industries identified for certain
socio-economic objectives. During the period under review, Malaysia initiated a variety of antidumping actions against 10 Members; in the same period, 13 Members took anti-dumping actions
against Malaysian products. Malaysia has introduced a Safeguards Act 2006 and Safeguards
Regulations 2007.Import duty exemptions or drawbacks are provided for intermediate goods used
in the production of exports so that the import duties do not feed through to become implicit taxes
on exports. The exemptions or drawbacks greatly reduce, or eliminate, the implicit export taxes,
but they tend to increase the complexity of the border taxation. Rebates of internal sales taxes are
also used to ensure that exported goods are not taxed twice (in both Malaysia and importing
country).

Explicit export taxes and export promotion measures also continue to play an
important role in Malaysia's industrial policy. Export taxes and/or export licence requirements,
which are applied to certain goods (such as timber), have the effect of discouraging the export
of those products and reducing their domestic prices, thereby assisting downstream processing
of the products concerned.

Export promotion measures include export processing zones,

concessionary credits, insurance, and guarantees, as well as government-sponsored promotion

and marketing assistance.

39

TRADE POLICY
Malaysia has achieved impressive growth and continued its economic transformation since
the previous review of its trade policies, under GATT in 1993. These trends are largely
attributable to the pursuit of open trade policies and continuing high rates of investment.
During the review period, exports and imports of goods and non-factor services averaged 90
and 91 per cent of GDP. Malaysia has cut its import tariffs by almost one half since 1993,
reducing protection for most agricultural and manufactured goods. Nevertheless, high levels of
tariff protection remain in some agricultural sub-sectors as well as in the automobile industry
RECENT ECONOMIC PERFORMANCE
With real GDP growing at average annual rates of approximately 8.6 per cent,
unemployment below 3 per

cent, inflation declining to 3 per cent in 1996 and low external

debt, Malaysia's macroeconomic performance since the previous TPR has been impressive.
Malaysia has also been at pains to ensure that the benefits of growth are shared equitably
among different social and ethnic groups.
Notwithstanding this outstanding performance, the Malaysian economy faces two major
challenges to future growth. First, labour, particularly skilled labour, has become increasingly
scarce. In so far as the scarcity results in nominal wage increases above gains in labour
productivity, it would erode the competitiveness of Malaysian industry and contribute to
inflationary pressures. The lack of skilled labour may also hinder the absorption of new
techniques embodied in new capital and thus inhibit growth in total factor productivity (TFP).
Whereas in the past the authorities have dealt with the labour shortage by promoting capitalintensive industries through investment incentives and relying on unskilled immigrant labour in
agriculture and construction, greater emphasis is now placed on investment in human capital.
Secondly, Malaysia's recent growth has largely been based on increases in the volume,
rather than the efficient allocation, of capital; hence, total factor productivity growth has
undergone a marked slowdown. Despite the external (spill-over) benefits usually associated
with FDI, including the acquisition of new technologies, managerial expertise and learning-by40

doing, TFP growth averaged 0.9 per cent annually for the period 1991-1996 compared to an
annual average of 2.9 per cent in 1987-1990. If the rate of improvement in TFP in the earlier
period had been maintained, the same rate of GDP growth could have been accomplished with
considerably less investment.
A further macroeconomic challenge facing the Malaysian Government is the investmentsavings gap and the associated current account deficit. Gross national savings, although
averaging 33 per cent of GDP during 1992-1996, fell considerably short of domestic
investment; with the budget roughly in balance, the 7 percentage point gap has been largely
made up by a net inflow of foreign direct investment (FDI). The counterpart of the gap is a
current account deficit also averaging around 7 per cent of GDP, and reaching over 10 per cent
in 1995, a level that gave serious concern to the authorities. With tight monetary policy, the
deficit was cut to 5.2 per cent in 1996 and is expected to decline further in 1997.
TRADE POLICY FORMULATION
The Government's declared long-term vision for Malaysia is to become a fully developed
nation by 2020. The medium- and short-term objectives of trade and investment policies are
published in periodic industrial plans and the annual budget. The authorities do not publish any
evaluations of the effectiveness of specific policy instruments, such as tax incentives, in
achieving policy objectives or of the relationship between the revenue loss from each measure
and the investment that would not have been undertaken in the absence of the incentive, the
possible misallocation of resources resulting from the incentive, or the net welfare gains or
losses to consumers. Although business has a substantial consultative role in policy-making,
consumer groups do not appear to make any formal input. In the absence of any convincing
evidence to the contrary, therefore, the cost-effectiveness of Malaysia's active industrial policy
might well be questioned.
Both as a member of ASEAN and individually, Malaysia regards the WTO as at the core of
its external trade policy making. Under the Marrakesh Agreement, Malaysia has reduced its
import tariffs by roughly one-half during the period under review; it has made substantial
commitments under the GATS Agreement and is introducing new legislation required by the
TRIPS Agreement ahead of deadlines. Malaysia has also, by and large, made notifications on
41

time, used the Dispute Settlement Mechanism actively and co-operated fully in preparing this
Trade Policy Review. These elements are illustrative of its strong commitment to the WTO
mechanisms.
At the same time, ASEAN provides both a preferential trading area and a major outwardlooking regional forum where Malaysia can coordinate policy with its immediate neighbours.
The APEC process, through "open regionalism" and the pursuit of Individual Action Plans,
involves further development of policies with regional trading partners. ASEAN and APEC
also play important roles in preparing member States for discussion of new topics that may be
raised in the WTO.
TRADE AND RELATED STRUCTURAL POLICIES
Trade and trade-related policy instruments are major features of the Malaysian
Government's active industrial policy, implemented in close collaboration with the business
sector. Policy involves border measures such as tariffs, non-automatic licensing procedures,
quantitative restrictions and anti-dumping actions, together with internal measures such as
incentives, regulations and preferential government procurement

Tax incentives have long been an important instrument of Malaysia's industrial policy.
Direct and indirect tax incentives apply, inter alia, to investments in the manufacturing,
agriculture, tourism and approved services sectors, R&D, training, and environmental
protection activities. No estimates of total tax revenue forgone as a result of these incentives
have been made available. Experience in other countries suggests that tax incentives are rarely
cost-effective.

The publication of estimates of tax revenues forgone as well as studies

evaluating the cost effectiveness of incentives would improve fiscal transparency in Malaysia
and contribute to a more effective tax policy. Standards and standardization activities are
among Malaysia's priorities for achieving developed-nation status by 2020. Malaysia aims to
align Malaysian standards with international standards; in 2008, some 58% of Malaysian
standards were aligned, up from 51% in 2005.

Preferential government procurement

procedures continue to be used as an instrument of industrial policy to favour locally owned

businesses; international tenders are invited only if goods and services are not available
locally. Malaysia is not a party to the WTO Agreement on Government Procurement.
42

Government-linked companies (GLCs) continue to play an important role in the

Malaysian economy through their involvement in the provision of essential services, such as
transport, energy, telecommunications, and financial services.
improve productivity of GLCs.

The Government aims to

As in the case of government procurement, GLCs are

encouraged to purchase from locally owned businesses. Recent initiatives taken by the
Government in regard to corporate governance include a revision to the Malaysian Code on
Corporate Governance, which entered into force on 1 October 2007. Malaysia does not have a
comprehensive competition law; however, it is in the process of drafting such a law. Since
2006, the Government has further strengthened its intellectual property regime. It has also
made further efforts to improve enforcement, such as the establishment of IP courts, although
problems of piracy and counterfeiting seem to remain.
Measures Directly Affecting Imports
43

 Customs procedures and trade facilitation

Customs valuation
Appeals
Tariff bindings
Tariff exemptions & concessions
Tariff preferences

44

SWOT ANALYSIS
Our GCR project focuses on Malaysias transportation sector and SWOT analysis of Malaysia
country. Our project content divided into two parts i.e. analytical and sartorial.

In first part of the report, we found out the strength, weakness, opportunity and threats of
Malaysia.

In second part of the report, we mainly focused on transportation industry.

The transportation sector of Malaysia includes:

Land Transportation
Water Transportation
Air Transportation

SWOT ANALYSIS
A examine of the inner and outer environment is a main part of the strategic planning.
Environmental factors internal to the organization generally can be classified as Strength (S) or
Weakness (W) and those exterior to the firm can be classified as Threats (T) or Opportunities (O).
Such an analysis of the tactical environment is referred to as SWOT analysis.
STRENGTHS

Malaysia is Multi-Racial
The three main cultures are Malay, Chinese and Indian that makes an interesting
Malaysian society still leave its open to other cultures for unite and flourish.
In Malaysia, you will experience the festivals, food, literature, clothing, religion and
culture of Malay, Chinese and Indian.

45

Affordable Healthcare
Healthcare in Malaysia is top-notch and more reasonable compare to the United
States. Malaysian doctors and hospitals have the same standard or superior than
Americans one and concern is world-renowned.

Education
Malaysia's education system is mainly based on the British system and its more
than better as other nation in the area such as Thailand, Vietnam and Cambodia.

Ease of Language
English is the language spoken by most people in Malaysia.

Good Infrastructure
Malaysia has a world-class infrastructure and the Roads are excellent.
The water supply, drain systems and power grids are stable and telecommunication
including phones and internet are phenomenal.

OPPORTUNITIES

Malaysias strong rising economy is a favored destination for foreign firms and a
productive ground for local businesses to increase. In this flourishing, business
environment job opportunities are created to be a focus for both local as well as
foreign talents. There are large opportunities in Malaysia and it is often only a
matter of getting the right work permit.

Managerial positions in development, energy,

business and engineering

corporations are typical option for the relocated worker in Malaysia.

Hospitality, Tourism and management is also enjoying a new start in Malaysia by

offering five-star stays while providing boutique and heritage experiences like
nowhere else on Earth.
46

 WEAKNESSES

Lack of Medical Tourism: Inconvenient social visit pass process

Lack of coordination

Weak policy

Limited Profits to retailers

Discriminatory Policies in Economy:

Threats

Malaysia, being a trading nation that highly relying on global trade, the economic
performance is very unpredictable to the performance of the major worldwide trading
partners. For decades, the economic development has been excessively on global trade,
external segment developments and foreign direct investment.

River pollution: Pollution is one the largest threats to the rivers. The decline in river water
quality is a clear display of the decline in the ecological physical condition of a river sink.

Palm Oil Production Destroys Forest: Environmental group protests are making it
complex to enlarge production of palm oil plantations, so firms have to slow their growth
and find out a new, more sustainable, technique to boost Palm Oil.

Swine Flu Virus:

Swine flu (the H1N1 virus) is added to the list of possible threats. Malaysia has
downgraded their estimate for tourist arrivals consequently.

47

PART - 2
INDUSTRY ANALYSIS
EDUCATION SECTOR
In the years of 1420-1786 the system of Islamic education was in force. Students need to
go to Teachers home or Madrasah-Sarau-Mosque like religious places for getting education. Pondek
school systems were also there into system were there. But all of their aspect was to make a
person morally strong, to popular religious beliefs and to learn basic principles of life.

Till the end of the colonial rule in 1956 english had established it as an international
language and the same was the reason for the rise of private sector education and its increased
adoption amongst the public. Facilities and leisure were added subsequently more and more in
the studies and as a part of studies around the world. There was a time when only technical and
vocational courses were in demand because of its application in business enterprises. But in this
era both of them were in boom. The reason was requirements of people with multi-tasking
ability.

Modern Malaysia required people with vision to develop and attain a stage to out compete
the developed nations in various area of economy. The need was very much clearly to design a
new system which can help every Malaysian to be a part of a developed world. This has increased
the out flow and in flow of student community to other developed countries and Malaysia. With
students the time came where international educational institutions started coming in order to
have their standard courses and its implementations by the creation of harmonized international
trading under controlled circumstances.
Structure and characteristics
To make higher education more accessible - affordable the government had taken some
steps to build a resilient and innovative nation. Through education government was aiming to
maintain sustainable economic development to have a global competitiveness.
48

To ensure this Malaysia targeted to become the hub of education excellence. For this the
Malaysian government had allotted the 20% of the national budget for the education & training
sector. Due to this the 40% of the group of 17-24 are able to get tertiary education.

The main aim of Education Development of Malaysia was to give opportunities of quality
education to all Malaysians from pre-school to tertiary level in three aspects of access, equity,
and quality.

They have also made primary education to all the children of the Malaysia. They had
mission in their mind that 150,000 international students studying at higher educational
institutions by 2015.
Sensitivity to business cycles
With the upcoming sector requirements and government vision - objectives of Malaysia
2020, thecountry is trying to make the country knowledge hub in the south Asian region. For
that various steps have been taken by government to promote education and promote Malaysian
way of the education.

49

Porters five forces

Intensity of existing rivalry
Nowadays education industry is having tremendous growth compared to any industry
and there is competition within the industry. Because everyone wants to generate something out
of this as the chances of profit are highest in developing economies like Malaysia. By
having brand identity in the industry private sector can attract the large number of the students
And this can be achieved by having strong brand presence through advertising for attracting
local and foreign students looking for higher and technical education.
Threat of substitutes
Government is also trying to promote education for the foreign students by promoting the
sector to the global front. It creates a threat for the public institutions providing higher education
as private sector will be getting a big part of it.
Threat of new competitor
Local communities are trying to promote their moral and religious education. Thus the threat of
competitors is high. Malaysia is a destination having higher rate of migration from its neighbors.
Bargaining power of suppliers-Customers
Government and private institutions are trying to provide educational facilities as per the
international standards and modifying them as to match with local and religious requirements.
Thus, institutions have substantial power considering international institutions competition, better
facilities and development. Thus sectors has taken an upward shift and a part of this power has
shifted to buyers.

50

At the same time Malaysia being a country with higher migration rate from the world
ethnic diversity is increasing. Thus the requirement of regional majority-the Muslims have been
offensive many a time for the protection of their religious interest. Tamil and Chinese minorities
have similar problems for the languages with malayu locals. Thus they also have their priorities
for the selection of public-private and international educational institutions.

51

PESTLE ANALYSIS OF EDUCATION SECTOR

Political Factors affecting education sector in Malaysia.
In this modern world, it is very vital to get a quality education. For this economic and
social factors are usually solely blamed for educational inequalities. There are many other factors
that affect education legislation like taxes, political affirm for special interest strata and efforts to
encourage competition around the world through technology and academics, millions of students
are affected by educational policies which were not always created with their possibly best
interests in mind.

In Malaysia there have been adopted many policies meant to add accountability, such
as No Child Left Behind but often have adverse effects. Because in order to achieve this kind of
policy to be successful many times it happens that government will achieve that target but there
will be lack of quality education because they are just targeting number of students rather than
providing quality education.

52

As there are many new policies are being adopted by country but sometimes budgeted
money on some special purpose is not utilized at all and spent on something else.

As a globalization policy there are too many benefits but as we all know every coin has its
two sides. So on other hand there is laying many disadvantage also Due to instant exchange of
thoughts and information, students are not just challenging with other local and national student.
They are competing with students around the world for jobs and positions.

Investing in education sector cost the society tax, but in failing to do that will be
devastating. Malaysia is in a situation of ambiguity as to attract jobs and capital, nations and
states face 2 choices. First is to create a low-tax but low-wage warehouse economy which
competes on price. Second is to compete on quality, by higher taxes and regulation of
investment in human capital for a high productive human capital. Country is more focusing on
improving their current existing processes, but they are not out there in inventing new things
where the big money is. As every parent is investing in their childrens future it is nations duty or
responsibility to invest in the population for the future of the nation. As Malaysia has identified
one of the best Positive Net Return-on-Investment policies which we will understand by
some stats followed. Suppose a fresh graduate joining the workforce with a pay of RM 2,500, for
span of 30 years with a good increment of 5% a year. At the age of 55 years, he would have paid
back at least RM 290,000 to the government in income taxes. Even though we discount this cash
flow, payback in taxes is significantly beyond the investment cost of education. In any country
education will always reduce the income inequalities. They are expecting free access to education
to allow mobility and narrow this inequality gap.

53

Economic factors affecting Education Sector

The financial system in Malaysia has played a catalytic role in helping the economic
transformation and growth of the economy through the various phases of economic development.
Rapid changing global economic and financial environment is contributing towards transforming
the operating landscape of the Malaysian financial system. At the same time, a more integrated
and globalised atmosphere, greater emphasize to local region, and the more classy and diverse
investment and monetary needs of the domestic economy requires a financial system that is more
progressive and dynamic to advance the nations vision towards the attainment of a high value-added, highincome economy. To achieve this and to have an advantage of leverage on the
opportunities going forward, consideration is made on the global trends and regional economic
forces of change that will affect the operating environment. The development of the Malaysian
financial sector has not only provided support to the changing requirements of the Malaysian
economy and significantly

strengthened Malaysias

foundations for financial stability, but has better

positioned the financial sector to resist the effects during destabilizing episodes of added
volatility and stress in global financial markets. The government planned to have knowledge led
economic growth to get the balance in the activities and results.

This transformation relying largely on the private sector, for driving greater productivity
and innovation; and moving up for increasing value-added activities that underpin and maintain
stronger economic growth. The blue print of the plan suggests mainly 3 things to work: They are
as follows:

1. Knowledge- and innovation-intensive economic activity

2. Competition-driven private sector-led economy

3. Greater balance between domestic and external demand

54

There are a lot of factors affecting the results of such wide area, its activities and their
results. The economic factors affecting any sector and its performance are very much long
term in nature, generally. They are as follows:
1. Inflation
The rate at which the universal level of prices for goods and services is increasing, and,
consequently, purchasing power is declining is called inflation. Central banks attempt to stop
rigorous inflation, beside with severe deflation, in an endeavor to keep the extreme growth of
prices to a minimum. It is a very essential factor as it affects universal level of spending an
education being a especially significant factor for individuals expansion it is critical. The average level of
inflation in Malaysia is around 2 per cent. It has been recorded high of above 8 per cent near
Jan 2008 and low of negative 2 % in 2009. More or less it has been stable around 2 % which
makes the economy to be greatly attractive for investment-growth prospects.

55

2. GDP Growth rate

The growth rate of the total value of goods and services produced in a country during a
period of one year is called GDP growth rate. It is very important economic indicator as it
defined the actual growth rate of the rise of the production inside the country. It justifies the
scope of higher investment chances and its scope from within and around the world. The main
business in Malaysia through natural resources is of rubber. Education sector has the chances in
the country to succeed due to main three reasons. First and foremost important is the political
will and steps that have been taken to have a knowledge led economic activity having higher
growth rate. The amount of changes that have taken place in the importance of higher education
is the second important reason. Finance sector and government scholarships are providing the
back-ups for the student having poor financial background. The GDP growth rate which is
average around 2 per cent, is a good amount for a more than 10 year period. Malaysia has
reached the growth rate of 6 per cent at the most in 2010 200, but they had a very
disappointing scenario around 2009 which recorded a negative of 8 per cent GDP growth rate.
3. Interest rate
Interest rates are very important as it provided the fixed amount of return on basic
investment which is risk free in nature. The interest rates in Malaysia have been around 3 per cent
in long period of time if we consider it on an average. It had been highest around 3.5 per cent and
lowest of 2 per cent. It is near to 3 per cent now for last 3 years. Education sector has an impact
in terms of loans only for thus amount of risk assumed is moderate.
4. Exchange rate
The exchange rate is the rate at which a particular currency can be bought. The rate of
exchange for Malaysian Ringgit as compared to Indian rupee is correcting very rapidly after
year 2008. The changes in the economic scenario and its attractiveness for the country as an
investment affect the rate of exchange very closely. Thus it is an important factor. The current
exchange rate is around 17.55 INR.

56

SOCIAL FACTORS
The education is dependent enormously on the population mix. It can be further
classified religion wise; National wise in the case of international population came during
migration.
Religion wise
Most of the population in Malaysia is following Muslim as a regulation. The
knowledge is given from the religious books in this case it is Quran-e-sharif. The main
teaching of Quran-e-sharif was impartiality and brother hood. It helped the growth of individuals
with its society as a whole.
This system was very much strict with respect to the traditional rituals still it
was a very important

and

developing

because

it

was

promoting basic good

qualities of life. With the introduction of the modern education

system by the colonial rule, huge scale opposition were made by such communities but There
have been a number of groups that now have changed to a middle way for the improved future
prospect. Yet community still feels that the modern schools are making students who are not
clear for what their religion is & the problem may be the knowledge of other religions. It is
increasing the confusion in the minds of the people about what to follow and what not to follow
in case of religion.
Residents and international migration
In Malaysia the area and population are conquered by three main ethnic groups, namely
Malay, Chinese, and Indian. Within the social and political schema of tri-ethnic- Malaysia, Malay,
Chinese, and Indian, ethnic challenges and bargaining have molded the formulation and creation
of education policies in Malaysia ever since independence. It is the explanation to understanding
the whole picture of Malaysian economic, political and social patterns. Social, political and
economic in Malaysia is under enemy control by the considerations of ethnic arithmetic. The special ethnic
57

identities in Malaysian society have also affected the configuration of the state and its policy
agenda, mainly in the education system.

58

The Ethnic Diversity in Malaysia

Until the beginning of the 19th century, Malaysia was quite homogenous as far as the
demographic distribution was concerned. It was a singular society of Malays, the indigenous
people. During the British colonial rule, from 1874 to 1957, there was significant transformation
of the Malaysian population. The British, through their policy of encouraging migration,
especially from China and India, changed the nature of this relatively ethnically homogenous
society to a more pluralistic society. According to Ratnam (1965), there is no cultural
homogeneity in Malaysian society with each ethnic group having their own religion, language,
culture and customs.

In education, various changes in the Malay-dominated state policies and attitudes have
led to anxieties among the non-Malay about the future of their education. This brings diverse
preferences regarding type of education between ethnic communities, in which the higher the
degree of feeling threatened by such policy in education, the higher the ethnic inclination to their
preferred education system and schools. Initially the schooling system in the free Malaysia
included mainly local language and international language with the local religions language i.e.
Urdu followed by Muslims. The struggle included the question that if all the languages that have
been demanded will be trusted than the students will be over burden. Thus as way out was zeroed
down that the option will be provided to students about the language they want to choose. In this
era schools also appeared for teaching for a specific requirement of all these sections.
Sex ratio and women education - education for elders
Sex quotient and women education have always been dishonorable questions for
Muslim population. Traditionally their rituals of taking a obligation in provisos of pardah
have been challenged by human rights commissions.

59

An educated woman is the asset for the society in all the ways. Thus, special care had been
given to the women education. Free education for all up to a assured age had been corbelled for
the advantage of society has been implemented successfully. All services for the language and
assortment for subjects have been provided to them, making provisions as per the obligation of
various classes. Education for the aged had also been the central dynamic. Thus the concept of
permanent education had been colonized and people could penetrate into the higher studies at
any age. The education system integrated the great combine of the unique requirements of
languages for assorted communities. It also took into account the value of particles and work,
occurrence, which can help the student to develop rapidly in the work environment having
through knowledge of the theory part of every part distressed with it.

Higher education in such position becomes very much significant for having a knowledge
led economy. The amount of local universities having international principles were residential
which complied the necessity of local people different branches of education is prepared
available like arts , management and business social, politics, science and its streams like doctor
psychology chemistry etc. Higher education is presented up to PHD which is highest degree
accessible would over for several of the subject.

60

Technological aspect:The technology used in Malaysia and when we compare with Indias technology in education industry we can
say that it is far better than that of Malaysia because:-

Our country is having professional teachers who are well attach with the new technology.

And on the other side when we look at the Malaysian teachers they need to go for special
training because there local language is used rather than English. So these is the positive
point when we look at the technical aspect and on the other side we have a good opportunity
of having job there as it is just developing.
-

Apart from that the as English language has just been introduced in last decade. So they
dont have that much material of it. So its the other area were our Indian authors have the opportunity to
provide material in the form of audio and by providing materials.

The next is that when we look at technology used in Delhi university which is not up to the
mark, which means it need to be improved a lot and on the other side when we look at
technology used victoria university there they are focusing on it and slowly they are
improving on it.

The good point is now a days college in India as well as Malaysia as started focusing more
on the technology point. So the student are well aware of the technology which is used

61

outside their education world and which will help them in improving their skills when they
come out from their studies too business world.
Environmental Factors
A new highway layout near the school may create new dangers for pupils etc

It increase pollution near school and it is very harmful for children.

Noise pollution is also big factor in way of education in this situation.

Accidents chances are also increase in big manor because children are in there
own moods in daily activities.
Waste disposal

Education surrounding must be nit and clean, waste displaosal place must be
far away from the education premises.

62

Legal Factors
The Minister may, by order published in the education Gazette, stipulate primary
education to be necessary education. Every parent who is a Malaysian resident residing in
Malaysia will make sure that if his child has attained the age of six years on the very first day of
January of the current school year that child is enrolled as a student in a primary school in that
year and remains a pupil in a primary school for the period of the cumpalsary(obligatory)
education. The Minister may make policy for the carrying into effect of the provisions of this
Section.

The past issues in Malaysian education in progress from the British government.
The Barnes declaration in 1951 to bond each and every races with the colonial speech. The
later Razak Report was completed to substitute the failed Barnes Report, and the system remains
until now.
Language
The subject of language and schools is a key for many political groups in Malaysia.
UMNO champions the cause of using Malay as the midway of education in all schools. The
being of national-type schools was in use by non-Malays mechanism of the verdict Barisal
National to point out that their culture and characteristics were have not been infringed ahead by
the Malay public.
Gender
Practically all developed countries females and males go into university in around equal
ratios. Thus, this equal ratio in Malaysia was cited as fairly strange at what time to be found in a
global environment. Malaysian polytechnics and society colleges are not degree-producing
institutions and no one have post-graduate programmes. The majority of the courses are
technical or vocational institutions. This inequity is corrected once the individual genders leave
the education system.
63

Racial quota in public universities

The government implements a positive action agenda, set a quota of 55% of university
seats for Malay and the left over 45% for other students like Chinese and Indian students in
1973. The university quota system created substantial grief in the Chinese and Indians. It was
initiate that Malay students constituted 69% of state university places. This was interpreted by
the then PM (Prime Minister) Mahathir Mohamad to signify that smaller number Chinese and
Indians were applying for these places. In next year as in 2003 the university quota system was
legitimately abolished. However, in 2004, non-Malay students (128) who obtained perfect 5As in
STPM were deprived of their first choice obviously which was drug or medicine. Each and every
one student managed to effectively nurture offers to private institutions but a few did not follow
a medical education due to be short of of finances and financial support.
Summarizing
International

Comparison

between

Delhi

University

and

Victoria

school

Fees Structure Delhi

University
In Delhi University generally fees are lower compare to other universities of India or
foreign universities. Tuition fees and other fees like room expenses and board expenses may
vary.

Apart from this there are some kind of rules and regulation for foreign students as Every
foreign student has to pay one time Foreign Students Registration Fee of Rs. 18000/- for
undergraduate including Certificate/Diploma courses, Rs. 24,000/- for Postgraduate courses
and Rs. 30,000/- for courses leading to research work.

In addition, every foreign student is required to pay Rs. 6000/- per year in addition to the
regular fee to the College/Department/Faculty in which he/she is admitted. Students (from other
than SAARC countries) are required to pay an amount of Rs. 2, 10,000 per year in addition to the
fees paid by the Indian students for courses like MIB, MHROD, and BSc (Hons) Computer
Science.
64

65

Victoria International School

There are too many courses are being offered by Victoria International School based on
the duration. They are mainly providing diploma and certificate courses. The course fees have
been displayed in the report for local and foreign students in Malaysian ringgit (Malaysian
currency).

Students can work and study in Malaysia so that there have been existence of concept of
earn while you learn. Fees for foreign students have also been displayed in report. They can
choose to their professional qualifications in Business, Information Technology, Hotel Catering,
pharmacy, physiotherapy or nursing.

66

Infrastructure:-

So when we look at both the institute we can see that firstly that Victoria focuses on the safety
more when they plan for any infrastructure. Whereas, on the other side Delhi university colleges
more focus on the world class facilities infrastructure to the student as they lacking in it. Secondly,
Delhi University is Academic institutions that focus on policy, regulatory, & market studies are
important facilitators in transformation of infrastructure sectors. On the other hand, Victoria are
all dedicated to the provision of support services necessary to promote excellence in the teaching,
research and community service activities at the University of Victoria.
The next is Delhi University focuses on the quality of the infrastructure much and match with
the world standard whereas Victoria University doesnt focus much on it because they are still on the developing stage.
Delhi University doesnt provide world class library facilities with the entire major journal, magazines,
books, etc. which we can say the Hub of Books. On the other hand, Victoria is rich with its
library & rich than that of Delhi University.

67

Entry Barriers

As in any of the top institution would have both Delhi University and Victoria
international school has entry barriers. The high cut off markings, problem to adjustment with
international language; high fees etc. are common barriers. The barrier of payment seats
makes problems for an eligible merit student, while it helps to a regional minority.
International students especially face problems with discrimination in terms of fees payment
and behavior from local students. Some barriers are just a trade-off and cannot be avoided.
Course Availability
As we are comparing a private educational institution and a university; the differences
are obvious. The amount of courses available with Delhi university are much higher than that
of Victoria International School. Main focus of PHEI is on professional courses while the
university covers vast range of courses that can be available to students; While PHEI is trying
hard to march up with expansion.

68

CONSUMER DURABLE INDUSTRY

Analysis of Electrical and Electronics Industry in Malaysia

The Electric & Electronic Industry in Malaysia

Introduction to the Electric & Electronic Industry
The strong E&E industry in Malaysia is a result of the Government's initiatives to
promote labor-intensive and export-oriented industries.Since the establishment of the first
semiconductor plant in Penang in 1972, Malaysia has become a major global manufacturing hub
for the electrical and electronics industry, as attested by the large number of multinational
companies from USA, Japan, Europe, Taiwan and Korea which have chosen Malaysia as their
base.
Unsurprisingly, the E&E sector has grown into Malaysia's largest contributor to output,
employment, investments and exports.Malaysia's success can be attributed to a winning
combination of pull factors: a stable government, good economic policies, topnotch
infrastructure and a skilled knowledge workforce.

As a result, Malaysia has developed significant expertise for the manufacture of a wide range of
semiconductor devices, high-end consumer electronic and information and communication
technology products.Performance of the Electric & Electronic Industry In 2010, the E&E
industry is the leading sector in Malaysia's manufacturing sector, contributing significantly to the
country's manufacturing output, exports and employment.

Over the years, Malaysia's electronics industry has developed significant capabilities and
skills for the manufacture of a wide range of semiconductor devices, high-end consumer
electronic and information and communication technology products.Malaysia is currently the

69

world's leading location for semiconductor assembly and test operations, with more than 70
mostly multinational companies specializing in these devices
Consumer Electronics Malaysia's consumer electronics devices market, defined as the
addressable market for computing devices, mobile handsets and AV devices, was projected at
about US$10.Multinational companies such as Apple Computer Systems Malaysia, Samsung
Malaysia Electronics and Canon Marketing continued to have a stronghold on consumer
electronics in Malaysia.Malaysia's domestic AV device market is projected at US$905mn in
2011.

Malaysian market handset sales are expected to grow to 9.0mln units in 2015, as mobile
subscriber penetration passes 124%. Growth will be slower than in the preceding five years due
to slowing subscriber growth, but opportunities in Malaysia's youthful market will be driven by
demand for smart phones, which in 2011 could account for two thirds of Malaysian handset
sales.Increased investment in R&D centers has paid off handsomely: Malaysia is now one of the
world's largest exporters of home airconditioners.

Towards greener Technology Malaysia recognizes the enormous growth potential of the solar
energy sector and is putting in place attractive incentives and support facilities to realize its
development.Malaysia is ready to create a globally competitive solar industry cluster.To date,
Malaysia has attracted five foreign direct investments, worth up to RM13.8bil, to set up solar PV
manufacturing facilities in Malaysia.Development of E&E industry in Malaysia The Electrical &
Electronics industry is the leading industry within the manufacturing sector and is the largest
contributor to manufacturing output, employment, investment, exports and imports.Malaysia's
exports of E&E products in 2011 was valued at RM236.
53 billion, accounted for 50.3 per cent share of manufactured exports and 34.1 per cent
share of Malaysia's total exports.Electronic Sector The electronic sector forefronts the E&E
industry in Malaysia; with more than 38 per cent of electronic exports is contributed by
semiconductor devices, integrated circuits, transistors and valves.Standards Compliance=
; Waste Electrical and Electronics Equipment
70

; Restriction of Hazardous Substances

; Registration, Evaluation, Authorization and Restriction of Chemicals
; Ecolabelling
; Malaysia is stepping up research and development efforts to boost the electrical and
electronics industry with the launch in Penang on Saturday of the Collaborative Research in
Engineering, Science & Technology Centre.

As a result, Malaysia has developed significant expertise for the manufacture of a wide range of
semiconductor devices, highend consumer electronic and information and communication
technology products
; Malaysian Industry Development Authority's records, from a total of just four companies with
577 employees and a total output value of RM25 million in 1970, today the E&E industry has
expanded to more than 1,695 companies with total investment of RM108 billion and a workforce
of more than 600,000 people.

; Siemens, Bosch and Infineon are just some of the well-known companies, who have moved
their production to Malaysia.

; Multinational companies such as Apple Computer Systems Malaysia, Samsung Malaysia

Electronics and Canon Marketing continued to have a stronghold on consumer electronics in
Malaysia.
; Increased investment in R&D centers has paid off handsomely: Malaysia is now one of the
world's largest exporters of home air-conditioners.

; Malaysia recognizes the enormous growth potential of the solar energy sector and is putting in
place attractive incentives and support facilities to realize its development.

71

PERFORMANCE OF Electrical SEGMENT: MALAYSIA

Introduction
The electrical industry in Malaysia had its beginnings in the 1960s with the establishment
of manufacturing projects for the import substitution of household appliances, electrical fittings,
wires and cables and automotive batteries.
Malaysia's Tariff Elimination and Reductions for the Year 2010 Under the ASEAN Free
Trade Area Under the Common Effective Preferential Tariffs Scheme for ASEAN Free Trade
Area, Malaysia will eliminate duties on 2,298 tariff lines in the Inclusion List effective 1 January
2010 where current duties are at 5%. These include a broad category of products covering: Fish
and fish products Dairy products Prepared foodstuff of cocoa Rubber products Wood products
Chemicals and chemical products Vehicles Ceramic tiles Sanitary wares Iron and steel
Mechanical appliances and electrical equipment.
Malaysia Productivity Corporation Championing the Cause In a structured effort to seek
and realise further improvements in the country ranking of Malaysia, Malaysia Productivity
Corporation is initiating collaborative activities bringing together the public and private sectors
to review and, where necessary, advocate the changing of existing regulations in order to assist
the Government in energising the business regulatory environment so that entrepreneurs see the
country as their preferred investment destination.Of particular concern is that, over the past 10
years, E&E's share of exports out of Malaysia has gradually declined.
Malaysia's economy stayed resilient amid slower global economic growth, recording Gross
Domestic Product growth of 5.6 per cent in 2012, surpassing the Asia Pacific growth consensus
of 3.8 per cent.
Economic Transformation Programme in a nutshell As a component of the NTP, the ETP
is a two-pronged initiative geared at building economic sustainability for Malaysia.

72

Electrical & Electronics ;

Where we are today The Electrical and Electronics sector is an important contributor to
the national economy, accounting for RM37 billion in GNI, 522,000 jobs and 41 percent of
Malaysia's total exports in 2009.Our focus will also be on attracting more leading multinational
companies to operate in Malaysia and creating more Malaysian champions.

O Solar With a strong start in solar and solid experience in the similarly structured
semiconductor industry, Malaysia has a promising future in a promising technology.
O Light-emitting diodes Malaysia has a strong lead in solid-state lighting, one of the fastest
growing segments
O Electrical home appliances Malaysia has been successful domestically with the development
of strong local home appliance companies.

Continued robust GDP growth: Although the global economy is going through a slowdown,
Malaysia continues to achieve robust growth.

Highest revenue in history recorded in 2012: Malaysia's economy continued to surpass its GDP
and GNI targets in 2012.Robust capital market development: The Malaysian stock market
performed very well in 2012, with the FTSE Bursa Malaysia KLCI scaling to a historic high of
1,681.33 points on 31 December 2012, and Bursa Malaysia's market capitalisation rising 14.1 per
cent to RM1.47 trillion from the end of 2011.Consistent reduction in fiscal deficit: While many
countries promise to reduce their fiscal deficit yet fail to deliver, Malaysia by contrast has been
successful in moving towards near-budget neutral by 2020.

On AT Kearney's FDI confidence index, Malaysia has risen from 21 in 2010 to 10 in 2012,
ahead of France, South Korea, Thailand, Vietnam, Canada and Turkey.Malaysia's focus in E&E
has traditionally been on assembly, the lower value-added part of the industry, while countries

73

like Taiwan, South Korea and Singapore have captured the higher value-added activities in
research and development, design and manufacturing.
We will revitalise Malaysia's E&E sector to increase GNI to RM90 billion by 2020, provide an
additional

157,000

jobs

and

strengthen

focus

on

four

strong

regional

clusters.

Sector 2: Solar With a strong start in solar and solid experience in the similarly structured
semiconductor industry, Malaysia has a promising future for a promising technology.
Sector 3: Light emitting diodes Malaysia has a strong lead in solid state lighting, one of the
fastest growing segments of the light emitting diode industry.
Economic Transformation Programme -- A Roadmap For Malaysia Sector 4:
Industrial electronics and home appliances Industrial electronics comprises several sub-sectors
involving the manufacturing of precision equipment used in industrial and commercial settings.
Malaysia has been successful domestically with local home appliance companies, most
prominently

Pensonic.Malaysia's

E&E

sector

is

facing

increasing

competition.

A World Bank study shows the increase in export competition between Malaysia and China, 59
percent of Malaysia's exports to EU were under threat from China compared to only about 31
percent in 1990.While Malaysia has built up significant clusters in E&E, much of the activity is
in relatively low value-added assembly rather than higher value-added activities such as
component manufacturing or R&D. Even within Penang's sophisticated semiconductor cluster,
most of the activities are in assembly and testing rather than higher value wafer fabrication.

To provide a complete picture of the full benefits of building the semiconductor industry in
Malaysia, we include these spinoff business opportunities in our GNI impact estimates.
Business Opportunity 3: Light Emitting Diodes Business opportunities in industrial electronics
will concentrate on strengthening the supply chain and the Original Design Manufacturers in
Malaysia, especially for the RFID sector.

Business Opportunity 4: Industrial Electronics Business opportunities in industrial electronics

74

will concentrate on strengthening the supply chain and the Original Design Manufacturers in
Malaysia, especially for the RFID sector.

The cumulative funding required from 2010 to 2020 is RM6.9 million in private investment; no
public funding is required Technology Development in Malaysia Malaysia is an emerging Asian
economy aspiring to move towards a technologydriven and high-tech production-based pattern
of development and thus replicate the experience of the newly industrializing economies of
Asia.Malaysia has been categorized in the group of countries that have the potential to create
new technologies on their own.

In view of that, Malaysia has a strong basis to consider formulating its own technological
development strategy based on those in the NIEs with appropriate adaptations to accommodate
the economy's uniqueness.Malaysia currently has 10% of the LED market largely for the
illumination sector.Malaysia has a strong LED presence - three out of five of the largest lighting
companies are located in the country.

Malaysia

should

be

promoted

as

site

for

leading

automation

equipment

manufacturers.Malaysia's Labour Force Malaysia offers the investor a diligent, disciplined,

educated and trainable labour force.

Malaysia enjoys a free and competitive labour market where employeremployee relationship is
cordial and harmonious.Labour costs in Malaysia are relatively low while productivity levels
remain high in comparison with industrialised countries.

Labour Costs There is no national minimum wage law applicable to the manufacturing sector in
Malaysia.Jobs lie at the core of a strategy to achieve Malaysia's objective of becoming a
highincome economy that benefits all Malaysians.

75

Malaysia still derives much of its competitiveness from low-cost labor, as noted in the November
2011 Malaysia Economic Monitor, Malaysia does very well in the A.T. Kearney Global Services
Location Index because its business environment compares favorably against lower-income
countries and labor costs remain much closer to lower-income countries than advanced
economies.
Electronic Manufacturing Services Industry Energy sector is important in supplying enough
energy to help the various industries and applications in propelling Malaysia to achieve the high
income, developed country status.
FIZs are export processing zones which have been developed to cater to the needs of exportoriented industries.Specialised Parks Specialised parks have been developed in Malaysia to cater
to the needs of specific industries.Examples of these parks are the Technology Park Malaysia in
Bukit Jalil, Kuala Lumpur and the Kulim Hi-Tech Park in the northern state of Kedah which
cater to technology-intensive industries and R&D activities.
TPM is among the worlds most advanced and comprehensive centres for R&D by knowledge
based industries.
PENSONIC INDUSTRIES
HISTORY :
The foundation of Pensonic was planted in 1965 as KEAT RADIO CO. SDN BHD, was setup by
DATO' CHEW to sell electrical appliances.The Competitive industry motivates them to strive
for continuous R&D, and thus continuously increase no.Commercials are played on TV. Indian
Electrical & Electronics Industry The Indian electrical equipment manufacturing industry is
witnessing a sustained growth momentum, with the industry registering a growth of 14% in the
financial year 2010-11.Due to increased focus on power quality and energy efficiency by
utilities, Discoms and user industries, demand for capacitors surged by 35% in 2010-11.Demand
for rotating machine industry has grown by 12%; mainly for low voltage motors and
alternators.With the electricity sector being a sunrise sector across the entire developing world,
there also exists a significant export potential for the domestic industry.The Electronics Industry
76

The market for electronic products in India has witnessed significant growth in recent years due
to several factors, such as manufacturing growth, ICT penetration, growing disposable income,
retail boom and attractive finance schemes.The market size of the electronic industry is projected
to exceed US $ 150 billion by 2015.Cheaper import affecting growth of electrical and electronics
industry The Indian Electrical and Electronics Manufacturers Association, the apex Indian
industry association of manufacturers of electrical, industrial electronics and allied equipment
recently released the Q1 FY13 performance of USD$22 billion Indian electrical equipment
industry.
The result shows that for the first time in 10 years the Indian electrical equipment industry has
witnessed a negative growth of 2.4% in Q1-FY 13 compared to the corresponding period of Q1
FY12 and sequential quarter Q4 FY12.The transformer industry has seen a negative growth of
7.6 % in Q1 FY13 against the growth of 6.6 % for the corresponding period of Q1 FY 12.The
rotating machines industry has witnessed a negative growth of 2.6% in Q1 FY13 against the
growth of 9.6% for corresponding quarter last year.
The numerous stakeholders, including the manufacturers, have not evolved a strategic action
plan for the industry's growth and development," he further added.The double whammy is that
while the Indian electrical equipment industry has recorded a negative growth, imports have
increased by 100 % for insulators and motors & generators.Absence of a level playing field for
the domestic industry to compete with imported electrical equipment, especially from China, is a
clear and present threat.Imports of electrical equipment have grown in the past five years at a
CAGR of 28.28%. The Indian transformer industry has over the last several years more than
doubled its capacity in alignment with the announced government planned power addition
programs for 11 th & 12th plan, however today the situation is that the expected demand has not
materialized leading to overcapacity, adversely impacting the transformer industry.
Vision 2022 for Indian Electrical Equipment Industry To make India the country of choice for
the production of electrical equipment and reach an output of US$ 100 billion by balancing
exports and imports Global electricity consumption is expected to reach ~29000 TWh by 2030,
growing at an average rate of 2.4% per annum.Based on investment estimates and capacityaddition targets, it is estimated that the size of the domestic market in generation equipment is
expected to reach US$ 25-30 bn by 2022, while that of the T&D equipment industry is estimated
77

to grow to US$ 70-75 bn.India's share in global export of electrical equipment is less than 1%.
Vision 2022 set for Indian EE industry is To make India the country of choice for the production
of electrical equipment and reach an output of US$ 100 bn by balancing exports and imports.
To achieve the vision, concerted efforts by all stakeholders including government, industry and
industry association, needs to be deployed.The following themes have been identified to enhance
and sustain growth and improve competitiveness of the Indian electrical equipment industry:
; Enhance EE industry competitiveness Enhancing competitiveness of the domestic industry is
vital to achieving the Mission Plan.
The Indian EE industry should be so equipped that it is naturally able to thwart any competition
in the domestic as well as export markets.Global electrical equipment industry Global electricity
market The demand for electricity worldwide is projected to grow at an annual rate of 2.7% for
the period 2007-2015, slowing down to 2.4% per year during the period 2015- 2030 as
economies mature, and the generation and supply of electricity becomes more efficient.
Global electrical equipment industry
The global electrical equipment industry consists of the following two segments: a. Global
heavy electrical equipment market - power generating equipment, including wind turbines, and
other heavy electrical equipments such as power turbines, heavy electrical machinery intended
for fixed-use and large electrical systems.Indian electrical equipment industry India's electrical
equipment industry is highly diverse and manufactures a wide range of high and low technology
products.
The industry can be broadly classified into two sectors - generation equipment and T&D
equipment.Domestic demand for the electrical equipment Vision 2022 for Indian electrical
equipment industry
Vision statement: To make India the country of choice for production of electrical equipment
and reach an output of US$ 100 bn by balancing exports and imports; The generation
equipment segment is targeted to reach a size of US$ 25 bn and the T&D equipment segment is
targeted to reach a size of US$ 75 bn by 2022.

78

The electrical equipment industry, comprising these two segments, is targted to reach a size of
US$ 100 bn by 2022.Lack of adequate capacity in the BTG equipment industry segment is one
of the major reasons for the higher share of imports.The vision for the country's electrical
equipment industry takes into account the import export scenario and what the industry can
achieve, based on its current position and future plans.The industry is expected to require more
than 5 million of direct manpower and another 10 million of indirect manpower by 2022.
With Indian electrical equipment manufacturers having significant capacity to meet the domestic
demand for transmission equipment, rising Chinese imports are causing concern to the domestic
industry.Enhance EE industry competitiveness Enhancing competitiveness of the domestic
industry is vital to achieving the Mission Plan.
To enhance the EE industry's competitiveness, six strategic initiatives have been identified:
Upgrade technology and bring it at par with global benchmark The domestic EE industry,
comprising of a large number of SMEs, spends about 0.5% of sales on R&D. This is very low as
compared to international leaders which spend as much as 5-6% of their sales on R&D. Hence,
there needs to be a sustained focus to develop R&D in the EE industry.
Some of the proposed ideas for evaluation by the working group are as follows:
Promote R&D in the EE industry by promoting pre-competitive research and providing
incentives to industry players for R&D spending
Utilize existing basic R&D for application R&D relevant for the EE industry
Set up a technology fund to help EE manufacturers in developing product technologies and
modernizing manufacturing infrastructure

79

The Telecommunication Industry

The telecommunication industry is becoming a strategic weapon in the twenty-first
century revolutionizing the manner in which the business is conducted creating a competitive
advantage in business as globalization and changing business environment result in new
framework for employing and managing the employees for sustaining competitive advantage.
This helps the business to be consistent and supporting the core values changes and growth with
the other things. This helps in possessing strong corporate culture to motivate the employees this
helps in focusing on products and people leading to quality and customer service .
Telecommunication industry is the most compititve and important sector and it is the
fastest growing industry all over the world over the past three decades. Due to the privatization
and deregulation their economies are developing .
The changes in technology and the innovation taking place in the telecommunication
industry links between the technology and the technological system and the changes taking place
with the change in time and this affects the industrial network and the firm behavior . The
organization successfully align service role with advance information technology achieving
proportional advantage in the marketplace. Due to the internet explosion transforming the
telecommunication industry and the implementation of e-commerce helps in forming a dynamic
model for the information society and this helps in increasing opportunity of competition and
improving the level of quality helps in creating opportunity for employment.
Due to the use of service delivery it helps in reducing the cost and this helps in increasing
the efficiency of different operation which includes design and development of technology used
to store and speed up data transfer with the help of service delivery it helps in improving
customer satisfaction, retention ,sales , market share and corporate image this could be achieved
by increasing the capital expenditure for use of service deliver technology.
Due to the privatization in the Malaysian telecommunication sector the technological
innovation in the sector will increase. There are mainly two forces that drive the
telecommunication sector that are the developed markets of the sector and the other is
technological diffusion which are developing. For strengthening the financial position there is a

80

need to adapt to the development taking place in the global economy and enhance the
competitiveness in the service .
The Malaysian Telecommunication Industry
Telecommunication is one of the fastest growing industry in Malaysia. There are several
leading players in the industry that are Redtone Broadband , Bizsurf , MIB , Asiaspace Dotcom ,
Celcom, Maxis Communications, DiGi Telecommunications and Telekom Malaysia. Among
this there are four leading players they are Maxis communication, Telekom Malaysia, Celcom
and DiGi Telecommunication. All this companies focuses on providing best communication
service to the customer. There are various forms of telecommunication they are audio signal
transmission, broadband, audio broadcasting and different other technologies are used. The
technology related to telecommunication is developing day by day around the world and the
development will never stop. The current telecommunication technology which is Wimax
(Worldwide Interoperability for Microwave Access). Wimax is the newest technology which
provides high speed broadband access to mobile devices.
Liberalization in the Malaysian telecommunication took place in the 1990. Telekom
Malaysia was the telephone operator during that time which began the liberalization process by
going from government owned to commercial status. New entrants in the market such as Maxis
and DiGi challenged its dominance and fierce competition started between the companies. Due
to the issuance of new licenses this lead to the entrance of new players in the sector for providing
internet and content based operator. The development made restructuring of telecommunication
companies necessary so that the change can come across the spectrum of the industry and adapt
to the development in the global economies and local environment this helped in creating
balance between the existing companies and the new entrants in the market.
Due to the rapid increase in the use of mobile phones and the internet contributed to
increase the importance of telecommunication this led to the need of speed and innovation in the
technology industry and the industry faced a fierce competition . The number of fixed line users
decreased due to the increase in the use of mobile phones this trend can be observed in the
telecommunication industry over the years. The use of fixed lines increased in the business

81

sector in comparison with the other sector. The preference of mobile phones increased in
household than the fixed line phones.
The ratio between the pre-paid and the post-paid was getting wider as there was a rapid
increase in the pre-paid customers over a period of time in the telephone segment. There were
three factors that were driving the domestic buieness strategy they are the nationwide coverage
with

the

focus

on

appropriate

technology

in

different

areas,

improving

service quality in terms of call quality and facilities available to the subscribers and providing
cellular services profitably at the lowest and the best price.
There were five mobile company providers Maxis, Telekom Malaysia, DiGi, Celcom and
Time dotcom. Due to the consolidation of the mobile companies this resulted in three companies
namely Maxis, Celcom and DiGi. The market share of Maxis was 40.5% , Celcom had 38%
share and DiGi 21.5% at the end of year 2004. The consolidation of the companies took place so
due to the increase in the capital expenditure. Most of the equipment was imported from abroad
this had taken toll on the economy as there were five operaters and large investment was required
for 3 g mobile services. The demand of 3g was more among the vendor than the customers. The
telecommunication faced challenges as the technology became more expensive the customers
expected cheaper technology high speed and high value added service and reliable product that
congregate voice and data. The main profit of Malaysia came from the telecommunication
industry. Due to the global restructuring and the liberalization process there were changes taking
place in the Malaysian information technology sector. Information communication technology
was considered the new engine growth because it helps the industry in sustaining the long term
economic growth, knowledge increased among the people with the help of increasing
communication with speed, transfer and sharing of knowledge between people business and
nation. The growth of telecommunication sector was seen in Malaysia and other Asian countries.
With the help of telecommunication and other technologies being used in Malaysia increased the
productivity and enhanced competitive advantage for the telecommunication companies to
deliver excellent service to its customers

82

PESTLE ANALYSIS
Political Factors
Political factors show the intervene of the government in the economy. The factors that
are included are tax policy, labour and environmental law, trade restrictions and political
stability. The other factors that are included are goods and services which the government want
to provide. The government has a great influence on health, education and infrastructure of the
country. Till the year 1984 fixed analogue services were available in Malaysia. Mobile phone
technology which was demanded by Multinational Corporation, foreign banks and hedge fund
managers was not available in Malaysia. In 1980 when the Malaysian economy was going
through recession as the price of the commodity collapsed and the fiscal deficit of the
government adopted the structural adjustment program which was promoted by the World Bank.
Malaysian Communications and Multimedia Commission was set up under the act of 1998. The
Malaysian Communications and Multimedia Commission regulate not only the telephone sector
(which includes mobile phones) and the broadband sector.

Environmental Factors
Telecommunication providers need to improve the service to ensure that the customers
are satisfied by the service provided. Law suit is also filed against the telecommunication
industry for constructing towers on private land due to lack of government authority in managing
the ownership of the land. The multimedia and communication act passed in 1988 stated that the
network provider using the land is responsible for all the activity related to the land being used.
Telecommunication companies should protect their assets and investment done for constructing
the towers. Environmental factors are effective in publication of technical innovations which the
researchers believe. In order to investigate the impact of turbulence on technology two concepts
are use they are Market uncertainty and Environmental hostility.

83

Market Uncertainty
The needs of the customers are fulfilled with the level of effectiveness that
reflects the market uncertainty. Market uncertainty also points out the need of
CRM adoption in the organization. CRM plays an important role in the
organizations which are involved in high uncertainty markets.

Environmental Hostility:
The assessment of customer needs is difficult when the business is associated the
Environmental Hostility as it increases the competitiveness among the companies.
The CRM helps the company to get information about the customers and the
market.

Social Factors
Majority of the people in Malaysia are Malays followed by the Chinese and the Indians .
the other groups like Lebanese, Bajau and Kadazan which mostly reside in the Sabah and
Sarawak are in minority in comparison with the other nationality. The major languages spoken in
Malaysia are English, Mandarin, Bahasa Melayu and Tamil. 80% of the Malaysian are young
and IT-oriented and there are people from other countries coming to Malaysia in the year 2004
the number of foreign workers increased by 10% the belonged to different countries such as
Indonesia, Nepal, Bangladesh, India, Myanmar, Philippines, Thailand. The telecommunication
players tried to captured revenue by reaching out foreign workers and by exploring the
opportunity to partner with the other provider of the region.
Technological Factors
Telecommunication players also struggle to develop innovative services because the current
technology in telecommunication are mostly GSM based and 3G technology is comparatively
immature in Malaysia but it was to be the way to go since mobile data services are expected to
boom. 3G technologies require a lot of upfront investment and telecommunication players would
84

run into chicken-and-egg contemplation. Telecommunication players will have strong debate
internally to convince stakeholders to invest huge amount of money into 3G before seeing the
actual revenue. It is also questionable whether how significant will 3G capture revenue
differently from current 2G technologies. Internationally there is also trend of combining fixed
lines and mobile services that allow customers to own one number and use that same number for
fixed lines, mobile calls and internet access but it will not work in Malaysia due to TMs
(Malaysian government linked telecommunication provider) monopoly in fixed line and wired
broadband services. The technology includes:1. Cellular Technology
1.1) GSM
1.2) Digital Cellular network technology
1.3) GPRS
1.4) GPRS network technology
1.5) 3G Mobile Communications
2. Broadband Technology
2.1) Fibre optic transmission technology
2.2) Digital Subscriber Line Technology

Legal Factors
With the birth and outburst of a new convergent communications and multimedia industry in
Malaysia in the mid 1990s, a new model requiring new approaches in media policies and
regulation became a necessity. In line with this, Malaysia adopted a convergence regulation
model with regards to the communications and multimedia industry in November 1998.
Two legislations were enacted to give effect to the new regulatory model: the Communications
and Multimedia Act 1998 which set out a new regulatory licensing framework for the industry

85

and the Malaysian Communications and Multimedia Commission Act (1998) which created a
new regulatory body, the Malaysian Communications and Multimedia Commission
The Communications and Multimedia Act (1998) came into enacted on 1 April 1999, while with
it; the Telecommunications Act (1950) and the Broadcasting Act (1988) were repealed.
The primary regulator of telecommunications in the Malaysia is the Malaysian Communication
and Multimedia Commission (MCMC). It issues licenses under the Communications and
Multimedia Act 1998, the Postal Services Act 1991 and the Digital Signature Act 1997
Economical Factors
While the mobile market grew within expectations during 2011, 3G adoption slowed markedly in
Q411 according to regulatory data. Meanwhile, the rate of fixed-line decline accelerated in the
second half of the year and mobile broadband became increasingly important to consumers.
Therefore, adjustments to our forecasts this quarter are relatively few and mostly reflect the
somewhat subdued Q411 results. We still expect to see the mobile market reach 38.7mn
subscribers by the end of 2012, despite the lackluster Q411 performance reported by market
leader Maxis. By 2016, we expect the mobile market to be supporting 41.73mn subscribers,
yielding a penetration rate of around 134%. Although the regulator now believes that the 3G
segment of the mobile market grew faster in 2010 than previously thought, 2011 data show that
3G uptake rates slowed. We have therefore factored this development into our forecast suite and
now expect there to be 12.9mn 3G subscribers by 2016, up from 11.2mn in 2012. The three
principal operators are hoping to launch so-called 4G services, using LTE technology, by 2013.
As many as six other LTE networks could also be launched, as nine LTE licenses were issued in
2011; however, they do not expect all licensees to launch.
As for broadband - which includes 3G and WiMAX-supported mobile broadband services - the
marked slowdown in broadband uptake in Q411 suggests that much work remains to be done in
extending services into underserved areas and that cost may still be an issue for many Malaysian
families and businesses. Telekom Malaysia's introduction of IPTV services in 2010 should have
provided an excellent catalyst for growth, but seems mostly to have cannibalised its own existing
customer base. Meanwhile, the company continues to deploy fibre and wireless as part of its
ambitious high-speed broadband (HSBB) commitments and collaborative network sharing.
86

Wholesale service provisioning agreements with its rivals should reinvigorate the broadband
market in 2012.

CASE ANALYSIS
BSNL
The Indian telecom is the fastest growing sector in the country and is passing through a very stiff
competition due to multiple-operator scenario. The telecom operators are vying for market share
by spending huge amount for marketing and related activities. Hence, the marketing really
becomes a very important function in order to remain in the competition.
BSNL is providing a wide range of telecom services. It has to enrich its brand image and
aggressively promote its services to remain a leading player. Being a PSU, it has to follow
transparent procedures. Therefore it is necessary to have a proper marketing policy / guidelines,
which broadly define the activities to be undertaken and the approach thereto in a transparent
manner.

TELEKOM MALAYSIA
The telecommunications component of Malaysias IT sector has been changing rapidly in recent
years. This is part of the restructuring and liberalizing processes that are underway in nearly all
regions and all countries of the world.
TM, the countrys telephone system operator has begun the liberalization process by going from
government-owned status to commercial status. Corporatization started the process in 1987 and
privatization occurred in 1990; this has added new accountabilities. Telekom Malaysias
company goal is to complete the network digitalization process by the end of the decade and take
it to the final step of providing services not unequal to those in developed countries by the year
2005. These ambitious goals inspired by Vision 2020 are necessary to maintain the company's
role and position as an industry leader. They are also key to ensuring corporate growth beyond
this decade.
87

Feasibility Report
The TM begrad, one of the leading telecom company in Malaysia would not be feasible idea for
gujarat. This conclusion may be based on many of the reasons found in the above summarized
report while the major three reasons would be:
1) Product Line Offered is UNSUITABLE FOR THAT OF GUJARAT
The products of BSNL are very different from that of TM Behrad. The difference in the product
line with a particular focus on the variety and the type of products is one of the major reason why
the company wouldnt be feasible in india nad particularly in Gujarat. The reasons in detail can
be justified as follows

Looking at the product line the broadband speed offered by TM Behrad is very low as
compared to that of Bsnl. With the advance of technology, people have started using 3g
while the top Malaysian company still offered a broadband connection with a speed of
maximum 5 mbps. While again BSNL offers a 3G connection.

Being a telecom company, TM begrad have only two schemes coming to the fixed or the
Landline connection while BSNL has 6 varied schemes that is offered to the common
public suiting to their income levels, usage and purpose. Thus the TM Behrad wont be
feasible here reason being the public here is varied and thus a large variety of schemes
would be needed to serve and satisfy all of them and thus have a large market share and
the dommine in the telecom market.

The Indian market has a telephonic guide like Yellow pages and gujarat in particular have
Kem cho? As a helpline service for hotels, restaurants and other lifestyle store. This
service is well-equipped with updated Directory, numbers and information. Thus a
company like TM behrad wont be able to compete well with the already established
players. It would take time to settle up while its competitors would have covered a larger
area already.

BSNL has also entered the mobile service provider market and has a fairly good Share in
the same. While TM behrad doesnt provide the same. The bsnl net to net calls on mobile

88

or landline are cheaper and free in some cases. Thus TM Begrad would fail to provide
the same service.

Also the company provides Some of the enterprises packages to the Indian corporate for
Broadband and Landline while the TM Behrad doesnt provide any such scheme for the
corporate.

Thus the TM Behrad wont be able to establish itself in Gujarat as strongly as compared to
BSNL.

2) The Marketing Strategy are not feasible

Bsnal and TM Behrad differ even in terms of marketing strategies. The difference in operations
of marketing Strategy and branding by the company may lead to unfeasibility of TM behrad in
India and precisely in Gujarat. They are difference in following ways :

Bsnl Concentrates on getting more customers and thus increasing the market usage and
share. It aims not only to brand its landline offers but also its internet, mobile services.
While TM Begrad aims on marketing of the old customers and retaining them in the
business. They are more concentrated on maintain the old customer base.

Bsnl rope in different brand ambassadors for the different schemes that are introduced.
These brand ambassadors keep on changing as per the schemes, popularity and co
promotions. But they compulsorily use a face for the projects. While TM behrad faisl to
do so. They believe in marketing of the goods without a particular face. They thus avoid
the concept of branding.

Bsnl uses extensive marketing concepts. They have marketed their products through
radio, tv and newspaper uses different jingles, tag lines and videos. While TM Behrad is
not in Print or Radio media. It concentrates only on the electronic media specifically
Television.

BSNL is into sponsorship. There are many events and shows here in india and sponsoring
them leads to a huge viral marketing. It help not only to create awareness but also to
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attract and maintain the oldest of the customers by giving them something new
everytime.

Tm behrad is already juggling with its market share thus cant afford to do that. Thus
competing in Gujarat in terms of marketing strategy would not only be costly but also
would take a longer time with no effect in the end.

3) Financial Operations are not suitable

If we observe closely the two companies, TM Behrad would have been a better financially
performing company while as for the Bsnl, it has registerd a loss of Rs. Rs. 8,85,070 (in Lakhs).
Yet BSNL would be more feasible in the country as compared to the TM behrad. The main
reason for the same is discussed as below :

BSNL is a Government recognized company. It is majorly holder by the

government and has no private undertakings. While TM Behrad is a private
undertaking.

In BSNL 99.99% share holding is of Central Govt. while 0.01% is of President of

India while in TM 59.89% holding is of Malaysian govt. and citizens while
40.11% is of by Foreigners and Non-Bumiputera.

BSNL had registered a loss of Rs. 8,85,070 which is because of some political
issues arrised like spectrum scam and additional license fees, etc.

While TM registered profits of 1237.1 RM in million due to constant increase in

its revenue.

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AUTOMOBILE INDUSTRY
The five forces are risk of alternate goods or services, bargain authority of buyers,
bargaining authority of supplier, hazard of innovative entrants and opposition amongst
obtainable firms. Even although this conjecture have be criticize an unreasonable one for the
reason that it tends to exaggerate universal investigation and fail to description for managing
actions this assumption at rest provide a helpful and efficient technique to assist us to do
methodical thinking in research.
innovative entrant frequently transport original capacity, they effort to put on marketplace share
as well as the charge of the goods can be proposal behind or the cost of incumbent could be
greater than before.
Firm in one trade are frequently equally needy, when the move and countermoves between
firms go up, the firms in the industry could know-how beginning declining possible earnings
situation.
While the depart barrier are soaring, the firm with small proceeds struggle with extra firm at
any expenses and encourage more severe resistance in the industry.

Alternate products can bound the possible come back of firms in one industry for the
reason that they force struggle by situation of subordinate price or stronger functions.

The buyer have the bargain authority to strength the value downstairs or order improved
excellence of goods and services. These all reduce the probable profits of the industry. That is,
the superior the bargaining power of industry.

Suppliers can minor the likely earnings of the firm raise the price or declining the excellence
of resources. These proceedings both enlarge the expenses of the manufacture for the firm.

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Pestle analysis
When we about political factors the things that come in mind is ASEAN free trade which was
established in January 1992 .the main function of AFTA was to eliminate the tariff barriers that
was there in the market
The plan of AFTA was to reduce tariff to 0 to 5 %. When we talk about Malayisia in order to
protect their own industries they have set their own tariff barriers which create problems for
foreign to enter in the market. In Malaysia , due to high selling prices of the cars ,there is lot of
possibilities that there ca be more competitors from other countries who can penetrate into their
market .
When we see the economic factor the sales of the vehicles have increased due to various aspects
of the economy. But due to the financial crisis which is existing in Malaysia the economic
growth has also been a low down because of which the sales of the vehicles can fall down at the
same time will effect the growth of the company. As we have seen AFTA has tried to reduce the
tariff barrier which will effect the tariff barrier which will effect the company proton. As the
Malaysian Government has tried hard to save Proton from the competition from other countries
because of several barrier.
Even if we see in 2003 although the economic

growth was slow there

was very less

unemployment .Malaysia can increase trade by directly selling their autoparts to the retailer. If
they will reduce the intermediate their will increase the efficiency and will also reduce the cost of
distribution.
The population of the country will also have their impact on the automobiles industry .As the
population is rising. It will also rise the market or will increase the opportunity for the car
makers in the market .When we see the ratio ,it is 1:5 which shows that people are giving more
importance to can also in their lives. People are becoming more aware about different products
available in the market , so the rule for the national market increases. As prople can export that
cars from other countries. Even the loyality factor also matters.

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Technology also plays an important rol in the automotive industry .as the competition is
increasing in the industry the companies are trying to adapt to newer technologies, so that they
can produce better car.Due to the use of the better technology the proton company has produced
many cars.

This will enhance the performance of the company as well as the positon of the company
in the automobile industry. At is also important to be upgrade with the new innovation process of
the company. Also the other factor that is important in intellectual property which shows that the
product is made automatically and not copied.
Malaysia is growing very fast and is a developing country .The country is dependent on
various commodities such as tin and it is also dependent on agriculture.
Malaysia is considered to be a middle income country . There are various legel factor that
should be kept in mind which trading in Malayasia. If we see the gap growth of Malayasia it was
5.8% in 2006 and 5.7% in 2007.They mainly depends on exports for their work.Malaysia is
heavily depenent on agriculture. Automobile industry which is contributing it to 115% to the
GPP. Malaysia is also good at exporting various vehicle parts and other components to various
countries.
In Malaysia , the auto part industry is at the peak which is increasing the reputation of the
country. The demand of the autoparts manufactures in Malaysia is increasing as it is very good in
quality .
And the demand from companies like Ford, Mercedes, Mazda etc are increasing for their
for their autoparts .Malaysia has its own set of trade barriers to protect their own industries but to
fulfill the demands or the rules of ATFA it has to liberlised the duties or the trade barriers that is
there in the market in Malaysia

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Since 2001,the government has also revised the equity policy for the automobile sector
where in the foreign equity can be upto 51% depending upon the case. In recent trends when we
talk about the domestic manufacturers can outsource the countries if require. The government
has also introduced NAP we shows sure liberalization in car market with the help of strategic tie
ups and alliances so that it can reduce the competition in the market. In order to protect the local
automobile industry they were certain important restrictions made by the government on foreign
vehicles. They have imposed tariffs as well as non-tariff barriers so the Malaysian automotive
companies are at a benefit as compared to foreign companies in the national market
Environmental factors plays an important role when any of the company wants to work in
that country from the total population. 44% of the people are well-trained or skilled workers.
Employees of Malaysia work about 48 hours per week and when we talk about the labour cost of
Malaysian it is standard as compared to other countries it is neither high nor low.
The infrastructure of Malaysia is very sustainable this gives a lot of benefit to the
automobile companies the mode of transport in Malaysia is very good.
The rail network of Malaysia is also more than 2000 km which is mainly located in
kualalumpur which helps in the transportation also there are 3 ports in Malaysia.

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EXIM POLICY
1980s
The idea of Proton was first conceived in 1979 by Tun Dr. Mahathir bin Mohamad, the
ex- Prime Minister of Malaysia with the aim of enhancing Malaysian industry. The company was
at first completely owned by the government of Malaysia and was headed by its creator, Dr.
Mahathir. Proton approached Mitsubishi between 1983 and 1984 and brokered a joint venture
between the two companies for the manufacture of the first Malaysian car. The band enter
the United Kingdom in March 1989 with the Saga saloon and hatchback duo.
1990s
On 15 August 1992, the Proton Saga Iswara was launch, mark one more milestone in the
company's history. It shared the older platform used in the unique Proton Saga, but it's external
and

internal

style

are

exclusive

to

Proton.

This

car

was

extensively

used

as taxis in Malaysia during the 1990s and 2000s and a lot of continue in service to the present
day. 1993 witness the introduction of the Proton Wira, a car which was improved set and bigger
than both the Proton Saga and Proton Saga Iswara.
The company too launch a Citron AX-based B-Segment hatchback call the Proton
Tiara in 1996. It was the outcome of the joint venture between Proton and PSA Peugeot Citron,
which was later on discarded after the tragic death of Proton's then CEO, Tan SriYahaya
Ahmad in 1997.On 30 October 1996, Proton acquire an 80% stake in Lotus Group International
Limited, valued at 51 million.
2000s
The Proton Waja, the company's initial indigenously designed model was launched in August
2000. It put in stone Proton's latest path in business and marked the ending of Proton's extensive
dependence on other automobile manufacturer for vehicle platforms and parts. The innovative
Saga maintain its heritage, and turned out to be a large sales success for Proton with over 23,000
bookings in under two weeks since open. It is time after time rank as Proton's bestselling product
in terms of annual sales volume, placing 3rd in 2008, and 2nd between 2009 and 2012 in
the Malaysian market, trodden only by its arch competitor, the Perodua MyVi.
2010s
95

In December 2008, Proton resume product teamwork with Mitsubishi Motors

Corporation.] Under the conformity, Proton gain the privileges to rebadge the 2007 Mitsubishi
Lancer to be sold completely in the Malaysian market.
National Automotive Policy
The National Automotive Policy (NAP) was introduce on 22 March 2006 to make easy the
necessary change and best combination of the local automotive industry into regional and global
industry network within the more and more liberalised and competitive worldwide location.
Three and a half years after its opening, the National Automotive Policy (NAP) has been
review, consequential in latest policies that will promote a additional ready for action market for
local and international companies. In line with the Government of Malaysia's obligation to
liberalisation and the People First thought, the NAP evaluate provide additional benefits for
consumers in terms of security and environmental security.
As part of the evaluate, a wide variety of stakeholders was consult to draw together
insight and most excellent practice from the private sector, civil society and governmental
agencies. Their common objective is to advance the long-term feasibility and competitiveness of
the automotive market, leveraging the newest development in the regional and global automotive
industry and contribution safer, greener and industrially more superior vehicles.
The objectives of the NAP evaluation were to:

make sure organized improvement as well as long term competitiveness and ability of the
domestic automotive industry as a outcome of market liberalisation;

make a encouraging environment to catch the attention of new investment and increase
existing opportunities;

improve the competitiveness of the national car producer through planned partnership;

promote the expansion of the most modern, more stylish technology in the domestic
automotive industry;

expand high value-added manufacturing actions in niche areas;

improve Bumiputera membership in the domestic automotive industry;

96

advance safety values for consumers and encourage environment-friendly opportunities;

and improve the realization of current NAP's policy instrument.

Malaysia is dedicated in its commitment under ASEAN and WTO. Therefore, the NAP
examination has also taken into reflection Malaysia's commitment under both ASEAN and
WTO. Malaysia will maintain to execute its commitment under FTAs on the taking away and
decrease of import duties for automotive goods.
As announce in the Budget 2010, each Open AP issue will be charged at RM10,000. A
finance will be establish from the income together and will be used to help Bumiputera
entrepreneurs in commission, among others, the follow areas.

secure distributorship/franchise privileges and dealership of other makes of vehicle;

development programmes for authorized dealer;

venture into other automotive sub-sector or added businesses;

improvement show rooms and service centres; and

participation in international seminars/motor shows/conferences or trade mission.

The present congeal on issuance of new Manufacturing Licence (ML) will be lifted for

quite a lot of industry segment which are measured planned and have a far above the ground
impact on Malaysia's economy. This liberalisation will be instrumental to producing advanced
limits, business-related vehicles, and additional environment-friendly vehicles.
New Measures:

purposely, the new-fangled policy will lift the freeze of new ML on:
o

comfort passenger vehicles with engine capacity of 1,800c.c and on top of and on
road prices not less than RM150,000;

spontaneous trucks and commercial vehicles;

hybrid and electric vehicles; in addition to

motorcycles with engine capacity of 200c.c and over.

97

There will be no equity conditions forced on ML.

The present policy on agreement assembly is being maintained to support utilisation of

existing surplus capacity.

The present policy on the freeze of ML for reconditioning and reassembling (rebuilt)
actions is maintain.
Gap analysis
Proton

Proton is the first automobile company which was established in 1983 by the Malaysian
government. The Malaysian government have got a lot of recognition due to the
introduction of proton in the automobile industry nationally as well as internationally

It is an outstanding achievement for the automobile industry in Malaysia. Proton has

taken a major step to develop the automobile industry and to enhance it engineering
capabilities it has acquired a u.k based company called Lotus international in October
1996.Here there stake has increased to 100%

It acquired lotus International to upgrade its technical aspects so that they can compete in
the market. After acquiring this company they together came up with a new model
called Proton saga. It is the first automobile company which was first listed in the
Kualulumpur stock Exchange.

The exports of proton are done worldwide. Proton Edar has do ne a lot of marketing and
built a good image of the company in the market. It is consistently improving its services
so that it can compete in the market.

The first car that was formed was known as Proton Saga. After that the next model that
was formed by the company was Proton Saga Ishwara which was quite different from the
previous model.

In 2000 they launched proton Waja which gave new direction to the company, with this
model they thought that they will bounce back but it didnt meet the expectations of the
customers and this model failed heavily in the domestic market.

Because of this failure it gave chance to Perdua which is the 2nd Malaysian automobile
company to rise in the Malaysian automobile industry.

98

After that it came up with many models such as Proton Exora, Proton Inspira and again in
2008 it got back its collabration with Mitsubishi company. It also got its power to sell
Mitsubishis Lancer model in Malaysia.

Tata Motors

Tata mtors Limited is an Indian Automobile company which has its head quarters in
Mumbai,India which was previously headed by Ratan Tata.

Tata motors not only produced cars but they are also in the business of manufacturing
trucks, vans,coaches,buses.Tata motors have their R&D centres at various places in India
such as Pune,

Jamshedpur, Lucknow.

The company first came into existence in 1945 as it was manufacturing locomotives.The
company formed its first vehicle with the collaboration of Daimler Benz AG.But this
collaboration ended in 1969.

Tata Motors first formed passenger car in 1991which was named Tata Seirra after that
they came up with another model of car.this car was named as Tata Indica which was
formed in 1998.Tata Indica is the one of the best sold cars which was prefferd by people
at that time.

Tata motors have also acquired a South Korean truck producing company Daewoo
commercial vehicles company in 2004.it has also acquired the luxurious carmaker jaguar
land rover in 2008.

They have also acquired 100% stake in Spanish bus maker company called hispana
Corraceo.tata Motors have come up with a new model known as Tata nano so that a
middle class family can easily afford this car and can travel with their family.

Previously it was thought that it would be a great success but due to some technical
problems their model failed heavilyin the market.

Again in 2012 Tata motors have came up with the revised model of Tata nano for which
they are advertising heavily in the market so that it can gain attention in the moind of the

99

consumers.But the problem with this is that it is lagging behind in the luxury terms as
well as in the design because of which people are preferring other brand cars.
Comparison
International market

Proton: Proton has its presence in New Zealand,U.k, Singapore and other 25
countries.Proton has its 11 subsidiaries and it exports to 50 countries .

Tata motors :Tata motors has its present in Argentina, South Africa, Thailand ,U.K. It is
ranked worlds 18th largest manufacturer of motor vehicles. Its subsidiaries include
Jaguar land Rover.
Research and development:
Proton:They have used the resources, technology, innovations, manpower and design
capabilities, and has made a significant impact in the automotive industry.

The investment into developing research and design capabilities which includes the
expertise of PROTON's wholly-owned subsidiary Lotus Engineering UK, one of the
world's leading automotive engineering consultancy companies, has provided PROTON
with an invaluable resource which has helped place the national car company at the
forefront of the automotive industry.
Tata motors:With its big R&D push, Tata Motors has started working hard in
transforming itself into a global auto company. It has its Engineering and Research
Centre (ERC) inside the Tata Motors factory in Pimpri .
Trade regulations:
Proton:Trade regulations are much more complex in Malaysia because just to protect
their automobile industry they have kept lot of trade barriers for foreign countries so that
their own company do not suffer much with this.
Tata motors.: Trade barriers are not complex here so the company can operate easily in
India.
Success:
Proton :Proton achieves its share of success with the production of proton saga but it
achieved real success with Proton Wira and Proton Exora.
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Tata motors: Tata motors tata Indica is one of the best selling cars of that time. It also
gained success in producing other vehicles also.
Failure:
Proton : In 2000 when proton introduced Proton Waja it was not supported by the people
and it failed heavily in the market.
Tata motors : Tata introduced tata nano which was a failure due to some technical
problems but it came up with its revised model in 2012 and relaunched it.

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AVIATION INDUSTRY
Service Tax has not been charge on any learning that is in time by a professional body
and awards known degrees/diplomas etc. All medical and other such profession thus does not fall
under the purview of service tax.Flying Clubs are profit making Organization which runs on
grants-in-aid received from the Government. The main reason for this is that chargeing full
charge would make it possible only for the rich pupils to go for this career to the exclusion of
many promising and talented young pupilss having parents from the middle income and salaried
group.
The minimum rate is charge by Maharashtra which is at 10%.

Majority of states

including Uttar Pradesh have a sales tax regime around 20%. Some southern states and Madhya
Pradesh charge much higher rates at 28% to 29%. While Bihar, Orissa and Jharkhand charge
only 12.5%, Gujarat levies 13% and Rajasthan 14%.Rising fuel price is a major source of
concern threatening to adversely affect the viability of flying training institutes in the country.
The aircraft and spare parts are excused from custom duty for all training institutes. A
move to introduce practice duty on simulators and other training tools will definitely hamper the
functioning the flying training institutes.
The typical air transport services create nearly INR 1.3 million annually, which is around
10 times more creative than the average in India
The boost in trade movement within the country is leading to the progress of various mini
metros. This results in put on more numbers demand. It is expected that the emerging middle
class along with upper middle population will grow at 40 % of the total population in 2007,
creating huge demand for air-travel services.
After the New Economic Policy, 1991 after which things fell in the right places and
successful attempts were made to enter the segment by private players like Jet, Sahara and
others. Yet another, turning point has come in the history of the Indian Aviation Sector when Air
India was granted authorization from the Government of India to combine with Indian Airlines,
the two flag carriers of India.This Mega Merger noticeable the first marriage in the Indian skies
which was followed by two more marriages.
102

Jet Airways will be the most favorite domestic Airline in India. It will be the automatic
first choice carrier for the traveling public and set standards, which other competing airlines will
seek to match. It is the only airline that situates the crunch of late 1990s. Jet started its
International Operations in 2004 and carries more than 7 million travelers per annum.
The Kingfisher Airline started its operation in May, 2005. Its the by far the most
flamboyant airline in India, giving tough rivalry to Jet Airways in in-flight services. It is a major
Indian luxury airline operating an extensive network to 34 places, with plans for regional and
long-haul international services.
The New Economic Policy (NEP) was implemented with 2 objectives of eradicating
poverty and restructuring society. The objective was also to ensure that Bumiputeras and other
indigenous people became full partners in all aspects of economic life of the nation. Later, the
government implemented new policies called the National Development Policy (NDP) and the
National Vision Policy (NVP).
Legal control in respect of Bumiputera participation is enforced from first to last
administrative discretion conferred under statutes or subsidiary legislations. Equity ownership is
controlled from first to last the issuance of licenses, permits and employment passes or in the
purchase of real property and acquisitions of any interest in real property.
The Malaysian government has, in the past few years, taken various steps to liberalize the
restrictions on foreign participation in the manufacturing diligence in Malaysia. The general
policy is that 100% foreign equity participation will be allowed for all new investments,
including investments for expansion and diversification by existing licensed manufacturers, save
for certain sensitive industries/activities where evaluation and approval are still required for the
issuance of the manufacturing license.
The Malaysian system of taxation is protective in nature. takings is taxed in Malaysia if
the income is sourced (I.e. accrued in or derived from) in Malaysia or received in Malaysia from
outside Malaysia (subject to certain exemptions). Foreign sourced income received in Malaysia
by a resident corporation has been and continues to be exempted.

103

On 1 January 2008, the Finance Act 2007 set up a single tier business income tax
organization starting from YA 2008 and the accusation system will be phased out by the YA
2013. Under this single tier system, tax forced on the corporations profits will be the final tax
and dividend dispersed to their shareholders will not be subject to further tax.
Tax losses can be bring forward for an indefinite period but can only be set off against
future business income. However, mount up tax losses of a corporation shall not be allowed to
be carried forward unless the shareholders in the corporation are considerably the ideal during
the relevant periods.

This stipulation is aimed at disappointing corporations from taking

advantage of loss-making corporations. However, the bureau of Finance has used its lawmaking
powers to grant a (at present prevailing) exception from this restriction upon all corporations
except dormant corporations.
Income tax in Malaysia is at present assessed by the Malaysian Inland Revenue Board
(IRB) on a Self-Assessment System (SAS). The taxpayers are expected to absolute their tax
returns fully and precisely and to assess their own tax liability. The IRB will from time to time
audit the corporations to ensure compliance.
Air transport to, in Malaysia create three discrete types of monetary benefit. Typically,
studies such as this focus on the economic footprint of the diligence, measured by its
contribution to GDP, job created by the sector and its supply chain. But the economic value
created by the diligence is more than that. The major benefits are created for the customer, the
passenger or hauler, using the air transport service.
The aviation sector pays over MYR 564 million in tax counting income tax receipts from
employees, social security help and corporation tax levied on income. It is estimated that an
additional MYR 603 million of administration revenue is raised via the aviation sectors supply
chain and another MYR 367 million from first to last taxation of the activities supported by the
spending of employees of both the aviation sector and its supply chain.
Domestic transfer is estimated to double by 2030, which mainly driven by domestic
tourism and the put on more numbers market presence of low cost airlines. The air traffic
mobility of Malaysia is estimated to increase from a propensity to fly of 1.4 in 2003 to 2.0 in

104

2030, in line with developed countries in Europe at present. Current GDP for the state of Johor is
USD4, 000.
Malaysian Airline System (MAS) brings the world to Malaysia from first to last its main
subsidiary, Malaysia Airlines, the nation's primary international carrier. From its hub in Kuala
Lumpur, Malaysia Airlines serves about 80 places on six continents, some via code-sharing.
MAS have a fleet of some 90 aircraft.
PESTLE
P: In 2008 the government provided 50% refunded on landing charges for airlines under its
stimulus plan. in addition, the Malaysia government from first to last its Ministry of Tourism has
been focusing on the growth of hospitality and tourism diligence in Malaysia and has also been
actively promoting Malaysia as a tourists' destination.
E: 2012 was the toughest year that MAS and the whole airline industries had encountered.
Firstly, MAS was hit by the high petroleum price in the first 8 to 9 months of the year which had
increases up to USD$182 per barrel and exaggerated the overall operating cost.
S: The major benefits are shaped for the patron, the traveler or shipper, using the air transport
service.

In addition, the relations created between cities and markets stand for an vital

infrastructure asset that create payback from first to last enabling foreign direct investment,
business cluster, specialization and other spill-over impacts on an financials productive capacity
T: As a rising country, Malaysia has augment the number of expert who earn more and travel
much more frequently overseas. Thus, they want the services that can offer them time efficiency
and good services. MAS have react to them by offering business class ticket that offer the 5-stars
service.
E: community thing have a deep impact on industries & companies, as well as the overall
marketplace. Airline corporation alone have had to spend a great deal of time and money
revising their policies, actions and charges to put up the ever-changing influences of their
clientele over the years as society changes, so must the diligence if it intends to thrive in the
market.

105

L: One argument setting the issue of airline corporations tightening their seat restrictions for
obese passengers. Some corporation have left as far as to charge an overweight individual the
cost of two seats as of their size. This has created a stir, as it brings up the query of favoritism.
Insight is a major issue in how we view the world. It is also one of the oldest studies in
psychology. How we recognize ethnicity, as it relates to air travel, has much to do with
September 11, 2001.
The rising of in sequence knowledge and in sequence System can benefit MAS to operate
their business whereby MAS could make use of this technology in generate more efficient
network running which will lead to lessening in operational cost. skill is helping MAS to reduce
cost, but more importantly, it also adds value to the clientel.
The aviation diligence is in the throes of some technical advance that could radically alter
the landscape for certain sort of air travel. Aircraft technology advancements are enabling
smaller craft to run both more competently and quietly, and are making possible the next
generation of air traffic management expertise. inferior focus of the cram is to explore how the
behavior of institution most affected by the technical change will alter the characteristics of
economic development patterns.
Aviation attorney are well-known with an aircraft's past and mechanism, and can
challenge manufacturers and operative on input issues. Likewise, aviation attorneys will
typically know the fruition of key corporations within the aviation diligence.
Aircraft sound already has the possible to affect the superiority of life of at least half a
million people living close to Malaysian airports with 80% of these alive close up to the major
airports in the southeast of England. The full report draw round a number of latent policy
mechanisms which could offer incremental improvements in the din climate around airports.
A joint proposal of the Ocean Steamship Corporation of Liverpool, the Straits Steamship
of Singapore and Imperial Airways led to a offer to the Colonial Straits Settlement government
to run an air service betMalyasiaAirlinesen.
With the Singapore running determined to develop Singapore Airlines' international
roots, it took the whole fleet of seven Boeing 707s and five Boeing 737s, which would let it to
106

persist servicing its local and long-haul international root. Since most of MSA's international
roots Malaysia Airlinere flown out of Singapore, the majority of international roots Malaysia
Airlinere in the hands of Singapore Airlines. Malaysian Airline System obtain all domestic roots
in Malaysia and international roots out of that country, as Malaysia Airlinell as the residual fleet
of Fokker F27's. It began flights on 1 October 1972 and soon prolonged, including set up flights
from Kuala Lumpur to London.
An economic roar in Malaysia throughout the 1980s spurred increase at Malaysia
Airlines. By the end of the decade MAS was airborne to 47 overseas places, counting eight
European places, seven Oceania places, and United States.
Previous to the Asian monetary Crisis in 1997, the airline bear losses of as much as RM
260 million behind earning a record-breaking RM319 million earnings in the monetary year
1996/1997. The airline then set up actions to bring its P&L back into the black. For the monetary
year 1999/2000, the airline hack its losses from RM700 million in the year 1998/1999 to RM259
million.
Global traveler revenue put on more statistics by RM457.6 million or 8.4%, to RM5.9
billion, while cargo income cut by RM64.1 million or 4.2%, to RM1.5 billion. expenses put on
more numbers by 28.8% or RM2.3 billion, amounting to a total of RM 10.3 billion, primarily
due to increasing fuel charges.
The largest factor in the injured was fuel costs. For the period, the total logs cost was
RM3.5 billion, in lieu of a 40.4% augment compared to the ideal period in 2004. Total fuel cost
increase comprises RM977.8 million due to senior fuel charges and another RM157.6million due
to added utilization.
Under the an assortment of idea, launched as one with the selling Turnaround Plan,
Malaysia Airlines switched from fatalities to productivity put money on Malaysia Airline
FY2006 and FY2007. When the Business Turnaround chart came to an end, the airline posted a
record revenue of 851 million Ringgit (265 million dollars) in 2007, end a series of losses since
2005.

107

Malaysia Airlines has been caught up in discussions for new aircraft acquire, using its
hard cash surplus of 5.3 billion Ringgit to eventually buy 55 narrow-body aircraft and 55 widebody aircraft.
In the US and Europe, the top three airlines account for 40 60 percent of the market. In
Asia, they account for only 20 percent. Consolidation will inevitably come to Asia as Malaysia
Airline. Success in such challenging environments depends on the creation of a differentiated
approach.
In 2011 alone, at this time Malaysia Airline are two such shocks with shocking
earthquake/tsunami in Japan and the floods in Thailand. Airlines have to put up business mockup able to with situate such outer shocks. In 2012, Malaysia Airline have got to be set for the
option of a global depression, brought on by Europes monarch debt catastrophe, and a continued
far above the ground cost of jet fuel.
Merely from first to last the forethought of earlier organization would we be in so
opportune a site to stock up more than partially of our fleet of aircraft in a three-year period. This
development will help lessen our fuel and mend bills, as fine as induce our once loyal clientele to
come back to our fold. Signed in August 2011, our corporation accord with Air Asia and Air
Asia X is a grave success.
Our occupied entrance into one world in the third section of 2012 will significantly
augment our system while as long as base load command from our member one world members.
In the months in front, we will make known a succession of added corporation that will drive put
on more numbers saleable scale. These corporations will be critical for us in the years in front.
Finally, our home remnants Malaysia and that is our most impregnable asset of all. Going
forward, we have got to carry on realizing all normal cost compensation (Figure 10) available to
us to make sure we can advantageously tender the best price in the sky.
Our net is the heart of the Corporation and, as we want to serve up our clientele as well as
we can, we know that we cannot generate income on all the roots we are at present flying.
Hence, we will, bottom on Malaysia Airlines own self-governing internal productivity and yield
analysis, hang up services from select loss-making roots and will additional focus on the core
ASEAN area where we are strongest.
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In 2012, we will take liberation of 23 new aircraft and stage out the A330-200 and B747400 fleets. We will continue that try over the after that few years and, by2015, we will have the
youngest navy in the district. Our new aircraft will be ready with best-in-class hardware and we
will make important savings next year to improve our meal services on all sectors.
Our overall commerce organization has become too multifaceted with a figure of
ancillary behavior becoming very huge. We require to de-clutter the trade to make sure greater
focus on the core airline. We so intend to spin-off a quantity of subsidiary industries &
companies to give these units more freedom to cultivate and to get their full likely.
The division of industries & companies by aircraft sort and remoteness travelled is more
and more common globally. Airlines counting United, Qantas, Lufthansa and Singapore Airlines
segment their business by aircraft type to some degree. The segmentation allows the airline with
the smaller aircraft to heart on commuting and feed services to the close relative, while the
airline with the superior aircraft can focus exclusively on serving long-haul passengers.
The sign of the Collaboration accord with Air Asia and Air Asia X in August 2011 was a
revolving point for aviation in Malaysia. Working jointly will profit all of our clientele, perk up
our individual cost structure and cultivate Malaysia as a hub for sightseeing and aviation.
For clientele, association offers opportunity to join to more places faultlessly. In the
coming months, the airlines will set up a linking service, allowing passenger on one airyline to
join on select, non-overlapping root serve by the other carter. At the ideal instance, this shift
provide Malaysia Airlines with far broader contact, as passengers in more than two dozen cities
about the region can be linked to Kuala Lumpur for their forward long-haul travel.
Ultimately, the association have got to be about promote the centrality of Malaysia as a
hub for tourism and aviation in the district. With chief hub in Bangkok, Singapore and Hong
Kong, we all have a function in ensure the charm of Malaysia to other airlines and possible
travelers.
Steady with this agreement, we will shift to a new arrangement, where a holding
corporation will turn out to be our prime listed vehicle. The core airline industry and the scale
ancillary industries & companies will be under arrest this holding corporation organization. This
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will force better focus for each of the divide industries & companies and bring truly leading cost
location to the airlines, as the spin-offs vie more and more with their contestant for third party
business. takings from carry on board strategic associates can be used to fund our revival and
broader strategic objectives.
Malaysia Airlines in the month of May 2008 start on its zero-fare crusade for limited as
well as for Southeast Asia places. Air Asia claimed that Malaysia Airlines is cross-subsidizing
the zero-fare crusade with profits from international roots. In addition, Malaysia Airlines is
accusing of working greedy pricing. There is a easy test for irritated subsidy and predatory price.
The easy test for cross financial support is the cost loom. If the revenue from a separation of
output is less than its incremental cost, the separation is the recipient of cross subsidy.
IC can be distinct as the augment in cost as a outcome of produce a further production in
addition to the existing yield. Mathematically, IC of creation y2 is defined as C(y1, y2) -C(y1, 0)
where C(.) is the total cost role. The disagreement is that the price of product 1 which exceed its
IC is not unfair to the consumer of creation 2 since those buyers gain from the sale of product
1 at that price. Baumol (1986) measured that the customers of product 1 are better off by the
supply of that product. This is because consumers of the firms other goods must also gain as a
cluster, and no customers lose out in the process.
According to Clark (1923), changeable charge means a number of accounting items
that vary in quantity to variation in business. In more all-purpose terms, it is a charge that varies
with the level of output. The disparity of cost is complete with position to the variation of
production in a small period of time. In the extended run, all costs are changeable. There are a
variety of terms for uneven cost. Marshall (1916, p. 359) call it special, direct or major cost.
His special cost built-in the cost of raw cloth used, the pay of the part of labour used up which
is remunerated by the hour or by portion, and the dress in and tear of the fix used in produce the
service.
Annoyed financial assistance has been old by main firms in unfair pricing decision. A
industry responsibility uses cross financial support as an asset to minimize the blow of
opposition in a market. According to Heald (1997), Stagecoach ran free of charge buses on small

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competitor roots, and connected Newspapers for the moment revived an old title to force out a
entrant from the rewarding London sunset newspaper market.
A rate contrast test is a test which compare the outlay of similar military with the
expenses of the service in query, and the rates for the alike services are themselves financial
support free. A price test is a examination to establish whether the income from a exacting
product is at least equal to the distinct cost of produce the product. If the income received age
group or exceeds the properly definite cost of produce the amount of high-quality in query, then
the produce is subsidy free. If, though, the proceeds conventional does not cover its price, then it
is not financial support free. What is grave here is the meaning of cost, in particular in the being
there of economy of weighing machine and economies of range.
A learn by Burns (1986) lends substantial support to the view that greedy price can get
improved the terms of a take-over. burn deliberate the behavior of American Tobacco from 1891
to 1906. During that period, it had acquired 43 rival corporations. Burns establish that the alleged
predation shaped a important cost decrease to American Tobacco. The reimbursement gained
from greedy pricing can be more than the decrease of profits during the price wars.
The debate on the greedy pricing test have exposed that judgment a cost dimension
technique that can be second-hand in the test is difficult, particularly when a important part of
the costs is fixed and perhaps sunk. Until now, there is no agreement on the suitable test for
greedy pricing, although many courts in the United States have modified the basic yvalues of the
Areeda-Turner test (Hovenkamp 1994).
Tune Air SdnBhd acquires the fairness in AirAsia from DRB-Hicom in late 2001, and
become Malaysias second nationwide airline. AirAsia become the first low fare, ticket fewer
airline in Asia. It offer a easy no frills service at charges that are on standard considerably
lower than those obtainable by usual full-service airlines. The model was based on the winning
airlines of the US-based Southwest Airlines and the Dublin-based Ryanair.
In order to endorse low cost air travel, The Malaysian administration has construct a
devoted terminal for low cost air carrier operation. The low cost terminal is intended to cater for
10 million passengers per annum who afterward can be long-drawn-out to 15 million traveler if
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required, with 30 parking bays for aircrafts. This terminal provide AirAsia with many cost saving
occasion as well as a more well-organized operation.
Malaysia Airlines had its modest start in the golden age of journey in the colonial
existence. A side from the Ocean Steamship Corporation of Liverpool, the Straits Steamship of
Singapore and Imperial Airways planned to the management of the Colonial Straits Settlement to
scuttle an air service connecting Penang and Singapore. As a outcome, Malayan Airways
Limited (MAL) was included in 1937. In early 1947, MAL took to the skies with its first viable
flight. When Malaysia was bent in 1963, the airline tainted its name to Malaysian Airlines
Limited and soon behind, Borneo Airways was included into MAL.
Rocketing fuel charges have compulsory the airline diligence group of actors to take
drastic actions to make certain that they pull from first to last the hard times. Malaysia Airlines
execute a new business policy that blended the full-service carrier character with that of low-cost
carriers (New Straits Times, 5 June 2008). According to IdrisJala of Malaysia Airlines, the
Everyday Low Charges movement has bent a new market for the airline. In adding up cost
cutting actions such as the introduction of food boxes for the financial group commuter are
realize to remain spirited and sustainable.
Another matter is the state of predatory worths. Faced with increasing fuel charge, the
airline has to tool strategy that its spaces can be selling so that the growing price tag of fuel can
be abundant or partially well again. What Malaysia Airlines does is to substantially cut the fare
for the unsold seats. even though the incremental profits is not significant, the airline can pull
through some of the overall charge from first to last its oil addendum. Such a approach can
lessen the 30 per cent unsold seating, and thus reduces its cost.
The accomplishment of any rapacious scheme depends on maintain domination power for
long enough both to earn the predators victims and to harvest some supplementary gain. Absent
some guarantee that the hoped-for monopoly will occur, and that it can be continuous for a
significant stage of time, the predator ought to make a extensive investment with no guarantee
that it will pay off.
Jet Airways (India) Private Limited was a reputed private airline in India with an average
fleet age of 4.45 years. Jet flew to 63 places spanning the length and breadth of India and
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beyond, including New York (both JFK and Newark), Toronto, Brussels, London (Heathrow),
Hong Kong, Singapore, Kuala Lumpur, Katmandu, Dhaka,

Colombo, Bangkok, Kuwait,

Bahrain, Muscat, Doha, Riyadh, Jeddah, Abu Dhabi and Dubai. The Airline carried 1.28 million
passengers out of 4.08 million passengers approved by the whole airlines industry. It enjoyed a
status for punctuality and exceptional service and consequently involved a large proportion of
industry travelers.
In May 1974, he created his own firm, Jetair (Private) Limited, to market other overseas
airlines in India. NareshGoyal was occupied in developing study of traffic pattern, path
structures, equipped economics and flight scheduling. Jetair finally grew to a network of 60
branch offices. After three and a half decades of domination by Air India and Indian Airlines, the
Indian management reopened the domestic aviation marketplace to private carrier in April 1989.
This provide an opportunity to Goyal who reputable Jet Airways (India) Private Limited in 1991.
It commences saleable operations on May 5, 1993. At that time, Jet Airways claim to be the only
money-making privately own airline in India. Certainly, by 1997, five of the seven airlines that
had been launched since 1992 were grounded.
The reduction of expenditure and then the restoration saga had bred anxiety among the
employees. The airline pilots did not have every union and being bond employees could be
exposed the door anytime. It was logica that the current monetary crisis may badly influence the
lives of the younger pilots who may be laid off any time as the accumulation sacking had
indicated. This led to the structure of the National Aviators Guild the NAG. On July 24 2009, the
NGA -National Aviators Guild- was registered by the Regional Labour Commissioner. Captain
Sam Thomas and one of his generation played a significant role in the configuration of the
Union.
On July 31, 2009, the two senior pilots of Jet Airways, who were both office-bearers of
the newly formed NAG, were dismissing. They were sent a single-line e-mail shape that their
services were ended with immediate outcome and no reason were assigned for the ideal.
management alleged that the two captains went about coercing pilots into signing the
amalgamation membership form. The pilots on their part maintain that their demand for
discussion and representation were ignored by the organization.

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The right to form a Union is the spirit of any socialist state (including India) and to one
side from the foundation; it has too been codified in the Trade Union Act, 1926. The vital point
is that it uses the word employee rather than workmen. The running obtained an ex parte
order from the Bombay Court by virtue of Sections 22 of the manufacturing Disputes Act
restraining the NAG from prominent. Further, given that the matter was waiting before the
Labour Commissioner, it was ask that the argument be resolved via that average as soon as
possible.
Talks between the pilots and the running failed to resolve the crisis and the deadlock
continual. The striking pilots incessantly demanded the re-instatement of their sack colleagues. in
the meantime news reports drinkable in that pilots of Jet Airways had skipped a listed meeting
with the running of the airline as the imbroglio entered its third day. According to a information
report, pilots were quoted as proverb that they were not knowledgeable about the meeting in
advance.
To deal with the circumstances, the airline set up a crisis running centre to continuously
monitor the circumstances. At the crisis centre, a team of 15 staff from planning, revenue
supervision and public dealings work round-the-clock to rearrange various flights and watch the
situation, the airline said. Jet Airways Chief Commercial official Sudheer Raghavan said the
airline has re-accommodated 80 per cent of its trapped passengers on flights of additional
airlines, while they have willingly refunded the airfare of the residual ones. "We have set up a
disaster centre and are updating our website on a real time base.
The discussions ended with the shape of a grievance committee consisting of both pilots
and direction members to hear such bags. Under the agreement, the pilots resolute to join duty
with direct effect. It was decided that a board to look into the organization among the pilots and
the administration would be shaped.
Manish Sabharwal, chairman of Bangalore-based staffing solution firm Team Lease,
offers a standpoint. "There is no question in my mind that Jet Airways execute what was a right
decision the wrong way," he says. "There is also no query in my mind that the majority of the
sacked workers of Jet who have been taken flipside will not be about a year from now because
the business handled them with no dignity, respect or listening to them."
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AGRICULTURE INDUSTRY IN MALAYSIA

Amounting to 12% of contribution from agriculture to nations GDP employing 16% of
total population of Malaysia, various crops such as rubber, palm oil, cocoa, bananas, coconuts,
durian, pineapples, rice, rambutan are grown. Being agricultural dominant country Agriculture
Trade liberalization is expected to affect the economical, social and political sectors.
Palm oil being the largest industry contributing higher portion in global liberalization of
trade in oil & fats markets as an export oriented industry giving continuous efforts to increase
productivity and efficiency still efforts are required to compete with other edible oils. To
overcome this, automation, research and development, quality control & diversification are being
recommended to enhance the industry.
DEPARTMENT OF AGRICULTURE
Established in the year 1905 DOA handles agriculture sector related legal aspects. DOA
has established state DOA & has given responsibility of their respective state and work for
their development. In 1926 Rubber Research Institute Malaysia was established realizing the
tremendous development potential and immense demand within the rubber industry.
Agriculture: Malaysias economic and social transformation
In 10th Malaysian plan (2011-15) they missed out agriculture aspect for its future,
resulting into economic and social transformation workers, with about half of these being
temporary migrants. In spite of this agriculture, along with fisheries and forestry contributes 78% in GDP.
Palm oil and Rubber
Despite the reliance on migrant labour palm oil and rubber continue to do well as demand
of palm oil in food and non-food sectors is high, and demand of rubber as a industrial product is
high. With a good backup of R&D in both the products their production is high because of that
they are exporting in neighboring countries helping them to gain higher profits.
Rice

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Malaysia is continuously facing problems for promoting improvement and change as it is

a hilly region. There are many future plans as to innovation and up-gradation of the agricultural
equipments.
Food industry
Malaysias food industry is a multi-cuisine food industry so its expecting to grow more in
future and right now its 3rd largest producer of poultry meat. Malaysia has started organic
farming in fruits and vegetables and has come up with logo Organic Malaysia. One of the
largest processor in cocoa and 6th largest producer and exporter in spices.

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OVERVIEW OF AGRICULTURAL INDUSTRY

Second Malaysian Plan & First Malaysian Plan seems to continue big governmental
expenditure for agriculture industry. Agriculture sector employ 42 % Malay people in 1980 was
most important employment provider in the economy. National Agricultural Policy the 1st
National Agricultural Policy was made in response to the incapability of earlier policies to
eliminate poverty and slow presentation of the agriculture sector as the countrys engine of
economic growth.
The rapid escalating manufacturing sector place a large damage on the agricultural sector
where demand for labour, land, capital and other inputs were in direct rivalry with the
manufacturing sector. In total, the agriculture sector contributed RM42b amounting to 9.5% of
Malaysia s GDP in 2004.During the era 2000-2004 the enlargement of the manufacturing sector
nonstop to outpace growth in the agriculture sector.
At the finish of 2004, manufacturing sector contribute 31.4% to the GDP. Despite the
actuality that the manufacturing sector is now without uncertainty the country s engine of
growth, the agricultural sector remains to be a major and significant component of the Malaysian
economy. The 2 mainstays of the agriculture sector, oil palm and rubber continued to like the
profit of better output and strong export require which contributed to higher export pay in 2004.
In 1960, contribution of agriculture sector was 44% to the Malaysias GDP, chiefly from
the rubber and palm oil industry. The involvement of agriculture sector in GDP was withdrawal
over time since 1960 until present. In 2007, Malaysian agricultural sector contributed 8% to the
country's GDP and it became the third engine of growth next to the manufacturing sector and
service sector. Since 1984, 3rd National Agriculture Policy plans were completed to construct up
the sector. Over the duration, the agriculture industry has changed from rural agriculture to
commodities based agriculture practices. The countrys economy is moving from agrarian based
economy, with its main drive agriculture sector in early 1960s, to an industrialized economy in
the 2000s, with the manufacturing sector and service sectors taking primacy in its economy.

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PRODUCTS OF INDUSTRY
In MALASIYA there are many kind of industry and its different product available in
country. From there many products export by the country to other country, basically there are
mainly agricultural products exported by MALASIYA. Some of the products exported like,
rubber, palm oil, refined petroleum, chemical, metal, Liquefied natural gas (LNG), crude
petroleum and other non- agriculture products, but indirectly related to agriculture like, electrical
machinery appliances, other scientific products.
There are major contribution of all these products to growth and GDP of MALASIYA.
This was because of exportation of products. In 2011, total export of RM 697.86 billion. From
that major part of export was agricultural products. That was increase to RM 702.19 billion in
2012.
There were also importation form other country, in 2011, there were over all import of
RM 573.63 billion. That was increase to RM 607.36 billion. In import major share of electronics
good which use as raw material for different kind of products.
When we talk about evaluation, in MALASIYA there are import and export consider as
an year on year and month on month basis, based on that they decide whether there were fall in
export or import subsequent to previous year. By that analysis they prefer different policy for
that and take action for better performance for future.
When we consider export-import between INDIA and MALASIYA, then there were
major trade between these two countries. From last five year up to 2012 there were significantly
increase in trade between these two countries. It was related to exportation or importation of
goods or products. And there were also measurable share of agriculture trade between these two
countries.

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WTO-GENERAL TRADE IMPLICATION FOR AGRICULTURE

Introduction
WTO alternated General Agreement on Tariffs and Trade subsequent wrapping up of
the Uruguay Round of trade negotiations in 1994.WTO accelerate global trade through market
opportunity instrument and improving trade rules, which among others: offer transparency,
predictability and stability, stop adoption of unilateral way on trade matters, supply resolution of
disputes through the dispute settlement mechanism, including corrective action on unfair trade
practice through anti-dumping and countervailing process.
There is opportunity for constant discussions to generate a more translucent, expected,
fair and liberal global trading environment.Negotiations are meant at gradually removing
obstacles to do business in order to create superior market entrance opportunities for its
Members.
WTO rules are embryonic through journal review of alive scheme and negotiations on
novel rules.WTO values Most-Favoured-Nation Treatment offer for non-discrimination amongst
trading partners,need all Members to be treated equally.Exceptions to the MFN code are allowed,
for example, privileged duties under regional trading arrangements & Generalised System of
Preferences.
It gives clearness to guarantee predictability to the business community, members have
to certify trade barriers are not raised randomly. statement requirements as provided for in
specific WTO agreements are meant to grasp this objective.
Trade Policy Review Mechanism gives chance for assessment and explanation of the
trade policies and practices of Members.The WTO agreements gives elasticity as part of the
S&D action to developing countries.

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WTO Agreements
These agreements gives

legal ground-rules for international business. They are

fundamental contracts, obligatory governments to trade policies within established limits.

Ministerial Conferences
The WTO Ministerial Conferences is uppermost decision-making body and which meets
minimum each 2 years to do decisions on all matters describing to all multilateral trade
agreements
MALAYSIA AND THE WTO
Overview
Malaysia is an origin Member of WTO by asset of its membership in GATT from 1957
& indulgence at Uruguay Round through lively participations at WTO negotiations, Malaysia
continues to make sure that trade regulations and trade measures that should be negotiated are
fair and provide the litheness for Malaysia to continue its expansion policy.
As a trading nation, membership in the WTO has great involvement to Malaysia's
economic growth. Lowering of the trade obstacles in export markets and augmented market
opportunities has authorized Malaysia's exports to raise. 1 of the fundamental benefits enjoyed
by Malaysia is the non-discriminatory conduct of Malaysian products in the markets of WTO
Members. National Consultations In business with all matters in WTO counting the Doha
Development Agenda, Government has been upholding regular consultations in the midst of the
Ministries, Government Agencies, academicians, the private sector and other stakeholders.
Ministry of International Trade and Industry is the crucial point in cementing and
reorganizing Malaysia's place on international business and investment in the various such as the
WTO, UNCTAD, ASEAN, OIC, APEC and FTAs.Consultations with Ministeries, Government
Agencies, private sectors, academic and anorher organization dealing with international trade
issues will continue to be undertaken by the various working groups.
MICECA is a inclusive agreement that covers business in goods, trade in services,
investments and movement of natural resources.It value-adds to the benefits joint from ASEAN120

India Trade in Goods Agreement and will additional facilitate and augment two-way trade ,
services, investment and economic relations in general.
TRADE IN GOODS
Accordance with MICECA, both Malaysia and India will gradually abolish tariffs on
their relevant industrial and agricultural products.In order for a product exported by Malaysia to
enjoy privileged dealing in India, exporters need to obtain a certificate of foundation issued by
the Ministry of International Trade and Industry, in Malaysia CO is a certificate that can be used
to gratify your buyers that the products exported derive from Malaysia.If you import a product
from India, in order for the product imported from India to enjoy privileged treatment in
Malaysia, importers need to request the exporter/supplier in India to get a certificate of origin
issued by the Export Inspection Agency of India.
SERVICES
MICECA facilitates cross-border trade in services and provides services providers
admittance into each other's market.

TECHNOLOGICAL ADVANCEMENT
Malaysia with 25 million population is capable to become one of the worlds food
production centre due to excellent infrastructure facilities such as Latest Modern Airport,
Modern Highways, Sophisticated Port, Railroad and ICT facilities.
Due to long research activities by Malaysian Rubber Board (LGM) and Malaysian Palm
Oil Board (MPOB), Oil palm and rubber technology are advanced from plantation activities to a
finished product.
With new technology adoption problem soil are the prospective area for future food
production. Introduction of Bris Soil, tin tailing soil, Acidic soils, Peat Soil, and Steep soil
natural fertilizers and good irrigation system will ensure the setback soil can be grown for food
crop.

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In Malaysia Marketing system through supply chain management (SCM) are enhanced
vastly. The traditional outlets available for domestic marketing system are the existing local wet
market, Pasar Tani, Pasar Borong, Pasar Malam. Through out the nation, there is huge marketing
channel through international giant marketers such as MAKRO, TESCO, GIANT,
CARREFFOUR. Guaranteed quality safe product labeled with SALM or Malaysias Best are
also available.
Malaysian Agricultural Biotechnology Focus Areas
Malaysia focuses on 4 key areas in which it is able to power on its natural strengths and
capabilities to develop an globally competitive position in the market. The 4 focus areas are the
livestock, crops, natural products, and marine & aquaculture.
1. Crops
It includes plant tissue culture, Bio pesticides & bio controls, Bio fertilizer, Transgenic crops,
Molecular marker for crop selection.
Due to Malaysias vast biodiversity & government support in developing & improving the
yield specific farming corridor for commodity and food crops, development of the crops sector in
Malaysia is particularly strong.
A crop is the annual or season's yield of any plant that is grown in noteworthy quantity to be
harvest as food, as fuel, as livestock fodder or for any other economic purpose. In Malaysia,
crops can be divided into food crops and commodity crops. Commodity crops of vast economic
significance for Malaysia are timber products, cocoa, palm oil, natural rubber and pepper. Food
crops include vegetables, fruits and paddy. The biggest success stories for Malaysia is the palm
oil. Most plantations for palm oil can be found on the Malay Peninsula and Sabah, together it
produces more than seventeen million tonnes of oil per year, nearly of the world's supply.
Productivity of the Malaysian industry has been improved consistently at all stages, including
the cultural practices, processing methods, planting material, marketing strategies and genomic
discovery. In Malaysia there are 270,000 tiny holders involved in the industry, other than the
mid-sized and large companies such as Sime Darby and IOI Plantation. Malaysia is also the
world's leading supplier of natural rubber, 80% of which is produced by smallholders in both
western and eastern parts of the country.
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There are about 50 types of vegetables grown in Malaysia, including the low land and
highland types. The vegetables are categorized into 4 divisions namely leafy, fruity, roots and
spices.
2. Natural products
It includes Extraction of metabolites, Nutraceutical & phytomedicine, Drug discovery,
Functional foods. A natural product is a chemical compound or else substance produced by a
living organism which found in nature that usually has a nutraceutical or biological activity for
use in drug design and drug discovery. With the Earth's oldest rainforest and 13,050 indigenous
species including 1,200 species of medicinal plants, Malaysia is classified as one of the world's
twelve "mega-diversity" countries and is the fourth most bio-diverse nation in Asia after India,
China, and Indonesia.
Malaysia presently has 142 herbal manufacturers with GMP qualifications operating. Its
GMP and TCM guidelines are in accordance with those of the UNIDO, WHO and the
Pharmaceutical Cooperation Scheme (PIC/S).Malaysian herbs are mainly used in health foods &
beverages, health enhancing products, herbal & traditional medicines, dietary supplements,
cosmetics, flavors and fragrances, and toiletries.
3. Livestock
It includes feed & feed additives, drug production, vaccines & Diagnostics, molecular
marker for livestock selection and use of biotechnology tools (e.g. AI & ET). Livestock is the
term used to refer to a domesticated animal intentionally raised in an agricultural setting to
produce things such as food / fiber, or for its labor. In Malaysia, the term livestock is referred
to ruminant, poultry (broiler and egg) and swine industry. The trend of individual farmers
who rear these animals as part of their overall rural agricultural activities is likely to change
by the recent development of livestock nuclear farm establishments utilizing synthetic
inseminations and embryo transfers. The main potential for cattle rearing appears to be in oil
palm plantations where there is plenty edible herbage available for grazing.

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4. Marine & Aquaculture

It includes genetic material, feed & nutrition, breeding & cultivation, disease tool kit and
selection using molecular markers. Fisheries are harvested for their commercial, recreational or
subsistence value. They can be saltwater or freshwater, wild or farmed. Marine fishery involves
the capture of wild fish whereas; aquaculture is the raising fish through fish farming. In
Malaysia, the fisheries sub sector is a very important component of the overall marine
biotechnology area. The downstream meat processing sector has also witnessed strong growth
driven by domestic demand and exports, especially for chicken, beef and swine meat.
Natural Resources
Malaysia has good natural resources in areas like agriculture, forest and minerals. When
we consider agriculture sector, country like Malaysia is world's main exporter of natural palm oil
and rubber, which combine with saw wood and sawn cocoa, timber, pepper, timber, tobacco and
pineapple lead the growth of the sector. Palm oil is also a main earning sector of foreign
exchange.
The government of Malaysia provide plans for the natural forest conditions improvement
of land with rattan under and in rubber plantations as an intercrop. To further develop forest
resources, fast-growing timber species like merawan meranti, tembaga, and sesenduk are also
being planted. At that time, high-value trees cultivation like teak and other trees for paper and
pulp are also encouraged. Rubber, once the mainstay of the Malaysian economy, has been
largely replaced by oil palm as Malaysia's leading agricultural export.
There are basically two kinds of resources which help to agriculture industry directly or
indirectly, these resources are renewable and non renewable resources.
Renewable resources like rubber, palm oil, timber. Rubber, once the mainstay of the
Malaysian economy, has been largely replaced by oil palm as Malaysia's leading agricultural
export. Petroleum and tin are the two main mineral resources which play significant role in
economy of Malaysia.

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PESTEL ANALYSIS
POLITICAL
Governments take cares the crops farmers through rules and regulations, various
subsidies for farmers to make accessible their work and quotas. Governments also provide
training, advice, and finance to farmers. In new farming areas, Government provide
infrastructure facilities like roads and drainage. In Malaysia, the government is trying to help
roaming farmers to settle at one place. They also plan and fund land reclamation and
improvement schemes of agriculture.
ECONOMICAL
The Malay Peninsula and Southeast Asia has been a centre of trade for centuries. Various
items like porcelain as well as spices are traded actively there. Later 17th century, the British had
started to take over the whole control of Malaya, and at that time rubber and palm oil trees were
started for trade or commercial purposes. Gradually, Malaya became the world's largest and
biggest producer of rubber, tin, and palm oil.

And because of these three commodities, Malaysia's economic grow well into the mid20th century. In 1970s, Malaysia began to try to be like the original four Asian Tigers and
committed itself to a shift from being dependent on agriculture and mining to an economy that
depends more on manufacturing.

Due to Japanese investment in heavy industries, Malaysian exports became the country's
crucial growth engine. And we had seen that Malaysia consistently achieved more than 7% GDP
growth with low inflation during 1980s and in the 1990s. At that time, the government tried to
eliminate poverty with a program named New Economic Policy (NEP) with mixed success.

Later, Malaysia enjoyed faster economic growth compared to its neighbours. The pace of
development today is not as fast; but it is seen to be more sustainable. In September 2005,
Director of the London School of Economics, Mr.Howard J. Davies, at a meeting of Kuala
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Lumpur, He had cautioned Malaysian officials regarding desire of flexible capital market in
Malaysia, they have to lift the ban on short-selling. And on March 23 2006, Malaysia had
removed the ban on short selling.
SOCIAL
These are human factors and include labour, capital, technology, and markets. The
importance of each factor varies from farm to farm. Note how each influences farms near to you.
1) Labour
In LEDCs (least economically developed countries), such as India, Java, and Malaysian
farmers use abundant cheap labour instead of machines. In Japan and the UK, where labour is
expensive, they use machines. People working on farms may be unskilled labourers or skilled
and able to use machinery, e.g. tractors, harvesters and milking machines in Malaysia.
2) Capital (finance)
Capital, the money which the farmer has to invest in the farm, can be used to increase the
amount of inputs into the farm, e.g. machinery, fences, seeds, fertilizer and renewing buildings.
If a farmer can have enough money to invest capital, yields will rise and can create
greater profits which can be utilised for more investment.
3) Markets
Farmers grow crops which are in demand and change to meet new demands, e.g. rubber
plantation farmers in Malaysia have switched to oil palm as the demand for rubber has fallen.
Markets vary throughout the year and farmers change their production to suit them.

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TECHNOLOGICAL
Machines and irrigation are two types of technology that can increase yields.
Greenhouses, with computer-controlled technology, give good conditions for high and best
quality crops in Malaysia. We know that the computer controls the moisture level, temperature
and amount of feed which need for the plants. Genetic engineering has allowed new plants to be
bred that resist drought and disease and give higher yields.

ENVIRONMENTAL
These are physical factors and include climate, relief and soil.
1) Climate
Malaysia is located on a neck of land in south East Asia. The climate of Malaysia is such
that it produces the proper conditions for production of various crops. This area is hardly ever
affected by drought or any hurricanes. Malaysia maintains a humidity level approximately 90
percent because location is close to the equator. Malaysia is populated with hills and we know
that large scale agriculture needs a highly flat land. As well as Malaysia doesnt have a strong
temperate climate in country. Due to all these disadvantages, Malaysia cant produce enough rice
as well as other food products to supply in whole country and they need to import.
2) Relief
Lowlands are good for crops like flood plains. We know that Tea and coffee crops
requires the well-drained soil on hill slopes. And temperature of Malaysia decreases by 6.5C for
every 1000 meters gained in height.
3) Soil
For farming Fertility is most important. Poor soil shows lower outputs or larger uses of
fertilizers. Good drainage facilities reduce the dangers of water logging in agriculture.
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Competition from the global market for Wheat farming is influenced by local conditions of
Malaysia. Unfavourable weather conditions mean the harvest will be delayed as well as the crops
may be ruined. Wheat can be produce cheaply in Britain and other parts of the world and so
farmers of Malaysia must remain competitive. Wheat prices fluctuate according to global market,
and prices are set according to supply and demand of the wheat in global market.
LEGAL
1) FARMERS ORGANIZATION ACT 1973
This Act provide the registration of Farmers Organizations in Malaysia. It also
connected with the control, supervision and matters of such Farmers Organizations. It is enacted
by the seri aduka baginda yang di-pertuan Agong with the consent and advice of the Dewan
Negara and Dewan Rakyat in the Parliament assembled.
Farmers' Organization Authority
It is a Malaysian government statutory body which comes under the Ministry of
Agriculture and Agro-based Industries, in Malaysia. Farmers' Organization Authority was
founded in 14th February, 1973. FOA was founded to take the responsibility of helping the
economy and social agricultural communities. Under this act, farmers' societies are cancelled and
were re-registered as farmers' organization (FO), and all agro-based cooperatives will be units of
FO.
The functions of the FOA :
To control and supervise FO and making rules and regulation for related matters.
To encourage social and economic progress of farmers organisations in Malaysia
To coordinate the implementation of all FOs activities

2) INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT ACT 1992

This Act allows Malaysia to become a member of the International Fund for Agricultural
Development (IFAD).

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Contribution to Fund
The Consolidated Fund such part of the contribution of Malaysia to the Fund pursuant to
the Agreement, will be payable in Malaysian currency or in freely convertible currency.
Approval of Dewan Rakyat for additional contribution to Fund
Any increase in the contribution of Malaysia to the Fund is authorized; and no amount
shall be contributed without prior approval of the Dewan Rakyat.
Receipts
All moneys which received by Government or on behalf of the Government of Malaysia
from the International Fund shall be repaid into the Consolidated Fund only.

3) IRRIGATION AREAS ACT 1953

The Act regulates the establishment of irrigation areas and applies only to the States of
West Malaysia. The irrigation areas shall be declared by the appropriate authority by notification
in the Official Gazette; no land within an irrigation area destined to the cultivation of padi shall
be used for other purposes, unless expressly authorized by the competent officer (sect. 5).
The appropriate authority may also approve a classification of the irrigation areas, and
consequently impose water rates. The Drainage and Irrigation Engineer may provide for the
construction or maintenance of waterworks, provided a reasonable compensation be paid to the
owner or occupier for any loss, damage or inconvenience arising there from.
Specific provisions are made to avoid the waste and obstruction of water and penalties
are established (a) for the construction of unauthorized waterways, (b) for the unauthorized use
of vehicles and boats, and (c) for the pollution of water.

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DIFFERENCE BETWEEN INDIA AND MALAYSIA AGRICULTURAL

Oil Meals
Indias status as a leading exporter of oil meals in Asia remained unabated throughout the
period under study and it could be attributed to the high comparative advantage enjoyed by India
in relation to other Asian players. India has revealed its comparative advantage in this sector with
notably higher values. not like in other commodities, India did not suffer setback in this
commodity. The Indian oil meals exports was 0.70 during 1991 and was more or less stable in
the succeeding years and stood at 0.74 during 2004. Malaysia were the immediate competitors
for India in the field, but did not maintain a consistent level of comparative advantage.
India has strengthened its position in the international markets in exports of oil meals.
But as far as the exports of fresh fruits & fresh vegetables are concerned, India cant boast to
have a comparative advantage. Indias status in exports of meat and its preparations and marine
products has not been very comfortable. Although marine products dominate Indias agricultural
exports, it cannot be attributed to comparative advantage of india in the global markets. It is
assumed to be more due to a growing demand for these products among the international
consumers. In nut shell, comparative advantage of India in most of the important agricultural
exports has been found to be eroding & losing out to other Asian competitors in certain
commodities in the period after reforms of economic.

In 2012, Malaysia, the world's second major producer of palm oil, produced 18.79 million
tonnes of crude palm oil on approximately 5,000,000 hectares of land. Malaysia is the world's
largest exporter of palm oil having exported 18 million tonnes of palm oil products in
2011. Pakistan, China, the European Union, India & the United States are the main importers of
Malaysian palm oil products.

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1. Oil Palm India Limited

Establishment year of OPIL is 1977 and from 1983 started working as a joint venture with
government of kerala and India with paid up share capital 11.78 crores
Objective :- to spread palm oil cultivation particularly in kerala as well as in country.
Area:- 3646 hect (yaroor,chithara, Kulathupuzha in kerala.
About palm oil of palmolein:Palmolein is very rich source of oil as it contains vitamin A and E in it so its much viable in
compare to other crops in Malaysia like rubber, coconut and specially red palm oil considered as
a natures gift to human beings
Modern Processing Mill
Modern processing mill of OPIL With investment outlay of Rs.19 crores and production
of 7000 metric tones(crude palm oil) it becomes largest mill in the india
Kernel Oil Extraction Mill
Kernel Oil Factory with investment of about Rs.2.5 crores for the extraction of Palm
Kernel Oil gives Annual production of 800 Metric Tonnes.
Modern Rice Mill, Vechoor
With the cost of Rs. 8 Crores and capacity to process 40MT paddy company has set up a
modern rice mill for diversification. which marketed with brand name-'Kuttandau Rice'.

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2. Rasi Seeds (P) Ltd

This company located in salem district of tamilnadu established Mr.Ramasami in 1973 with
objective to be customer centric company by providing best quality seed and expertise in farming
service with help of high level of operational efficiency. Rasi now started to provide multi crop
research service to multi location, in which they are acknowledged as the leader in cotton hybrids
which gives good yield.
Fact File

Experience in Seed Business-37 Years

Leading brand in Hybrid Cotton Research and multi crop seeds group

Occupied place in the list of TOP 10 Biotech seed companies in India for(2010)

Have done alliance with Monsanto company with aim to develop transgenic Bt hybrids
which controls pests of cotton

Field Crop Division

With the help of technologies, progressive methods and hybrids seeds they provides good
quality rice to those consumer who believes in better quality.

In process of creating new breeding lines rasi seeds did collaboration with the
international crops research institute for the semi arid tropics(ICRISAT)

Taj Agro Products

The rural population in India which comprise of more than 1/3 of the Indian population,
are far too poor to even afford an adequate diet. Main means of edibles is agriculture and
fishing, especially in the coastal areas. India's budget deficit, balance of payment
problems and structural imbalances necessitate re-evaluation of past economic policies
and financial institutions. In spite of Indian reforms tariff are the highest in the world.
Even after the liberalized system of import license, seafood has stringent license rules
also applies to India fish. India was the bigest exporter of fish in 1998, which amounted
to 384474 tons which was worth U. S. $1100 million. India's main import is fishmeal.

In the global market there is a fix liking towards India fish which is now considered as
the brain food. This is a major boon for developing countries as India, which along with
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other Southeast Asian countries are earning greater than $33 billion annually from the
export of fish.

According to 2000, by arrange of their value, the most important fishery product which
come below the heading of India fish which were being exported were: shrimp, crabs,
salmon and trout, and lobsters, flatfish, mollusks, , fish meal, small pelagic, cephalopods,
and large pelagic.

Exciting part about seafood trade is that a more extensive liberalization world markets
could be disastrous for it. Open access will lead to over harvest and running down of fish
stock. Therefore regulatory restrictions are extremely necessary. Under these
circumstances it would become tough to sustain the international market.

India holds a third position in the world production. India's total annual fish production is
5.65 million tons (Inland-2.8 million tons and Marine-2.83 million tons). But India has an
estimated potential of about 8.4 million tons (Inland 4.50 and marine3.90 million tons).
This vast untapped potential can be utilized successfully to uplift India's fish trade in the
international market and secure a position for India fish in the world.

About the Fish

Fish are classified according to material which makes their skeleton. Skates, sharks, rays
belong to cartilaginous fish as skeletons are made of cartilage.

Useful fish

Fish is most regularly used as food. Fish may be eaten raw & fresh, it may be salted,
dried & salted, dried, boiled, smoked, fried, left in a specially dug hole till it gets rotten a
little, convert into soup, and so on.

Useless fish

The reason for fish becoming useless are as it is impossible to catch and make any use of
them, because they are very small or fish eaten by another fish instantly.

Salted fish

In the common process of dry-salting, whole fish are eviscerated, washed, cleaned, drysalted, stacked in containers with more NaCl between the pieces, stored for a salting or
curing period, and then dried.

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Global Network
Taj Group of Companies works globally
Evolution:
"Taj Agro International" started by Taj Pharmaceuticals Ltd to give satisfaction to their
exiting loyal customers, Distributors, Importers as well as to new customers and business
associates by which they try to make available our country's unique and quality Products every
corner of world and make them matches with international standards and taste.
1) Malaysian Palm Oil Industry (One of The World's Largest Palm Oil Exporter)
Malaysia

Production

exports

Palm oil

39%

44%

Oil and fats

12%

27%

So from above table we can say Malaysia plays important role in fulfilling the growing global
need for fats and oils sustainably.

The Processing Of Palm Oil

With palm oil we also get palm kemel oil. Processing is start with extraction of crude palm from
fruit at the mill and end with refining process for final RBD palm oil.

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2) Sansui trading tropical fish importer and exporter

In year 1977 Mr. Chen woon san established One of the biggest wholesale and Tropical
Fish Export sole-proprietor companies San Sui Trading Tropical Fish Importer & Exporter
in malaysia and expert in consolidating, breeding, fish farming and exporting most excellent
quality live tropical fish and coldwater fish.
In Breeding and Farming this company is pioneer since 1960 and the first in
development of tropical fish in mud pool and ex-mining pool. Also having expertise in coldwater
fish,goldfish and koi(Koi Information:- since 1970 company has been biggest breeder, producer
& exporter of koi(nishiki-goi). Koi is Japanese word which means the a domesticated colored
form of the wild common carp.)
Export and Marketing
Export done by lorry and plane for that the deal with every customer individually to
satisfy their need as they belong to different country so they have different market condition.
Import Wholesale
This is second activity done in huge volume in which distribution of various type of
ornamental fish for aquarium shop and fish farmer has been done. Company does business of
almost 25% for aquarium shops in malaysia
3) Sime Darby
Malaysia's Sime Darby is the largest listed palm oil company globally, based on
plantation area and fresh fruit bunch production. The company was formed through a Malaysian
government initiated merger in December 2006. The world's great oil palm plantation company,
Felda Global Ventures Holdings, is as well based in Malaysia.

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RUBBER INDUSTRY
Malaysia situated in the south East Asia. Near the South China Sea which divide the
country in parts. Malaysia has very different kind of topography with the multiple geography
structures. Very good length of coast line that help in the area of business of the sea transport and
fishing and other marine business.
Malaysia have border are with country like Indonesia and Thailand, the location wise the
culture and development are much nearly similar between those country. The Monsoon is
seasonal and the level of the heat and cold remain constantly neutral. Heavy rain falls create the
lash greener area and the forest are nurtured by tithe Level of the solar energy is also high
compare to the white countrys but lower that east Asia countries like India.
We have found that, Malaysia has positioned itself to be the worlds leading producer and
exporter of rubber products. One of the challenges for the Malaysian rubber industry is to remain
the competitive against cheaper products from low-cost producers, particularly the China and
India, through higher productivity and quality. The rubber products of Malaysia industry also has
to remain resilient in competing with other natural rubber producing countries such as Thailand
and Vietnam, as these countries also have easy access to readily available raw materials.
Why Malaysia Attracts Foreign Investment Malaysia is supported by a market-oriented
financial system and pro-business government policies. It offers investor lively trade
surroundings with ideal conditions for enlargement and earnings. Malaysia's strengths include
strong infrastructure and industrious labour force. It is a politically steady country with a good
lawful system and provides pretty incentive for investors.

Development in technology is an important part of Malaysia's development as an

industrialized nation. Malaysia is resolute in contribution up to date day fundamentals of
financier companies based in the nation. The country's steady drive to utilize modern technology
has proved to be a benefit to manufacturers.

One of Malaysia's absolute positives is its human resources. The country has youthful
skilled and dynamic personnel, representative to be one of the top in the area. The government's
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pressure on human resource growth makes sure the incessant supply of manpower to meet the
desires of the rising manufacturing and services sectors.

As an effect of dedicated approaching, planning and rich resources, Malaysia provides

investors a broad variety of investment opportunity. The Malaysian economy is established
through the country's contribution in well developed research and development (R&D),
electronics manufacturing, innovation and a highly automatic manufacturing sector. The
Government's desire is also to make Malaysia a hub for other value chain activities, like, design
and development (D&D), procurement, and marketing.
The Malaysian government welcomed export-oriented industries, shaped a very positive
investment environment in the country. The government established a few barriers on the
importation of goods and services, although it often opted for discriminatory involvement and for
protecting some sectors of the national economy.
As the exporter or the petroleum product country got its much money from that kind of
resources. But the sources are going to end sooner, country try to focus to get more and more
concern on the different business opportunity, to stop relaying on the natural resources.
Country is rising in the service sector and the agriculture is very low. The industrial
sector is also very larger than agriculture. The rising of the non-traditional work in hence the
power of the industry and services.
In economics, an export is any good or service, transported from one country to another
in a lawful manner, usually for use in do business. Export goods or services are provided to
overseas customers by domestic producers. Export is an important part of global trade. Export of
marketable quantities of goods in general requires participation of the customs powers that be in
both the country of export and of import.

During the early period of economic growth, Malaysias economic constitution was
greatly reliant on merchandise exports, but it has diversified since then over a period of time. In
1958, Malaysias chief export items were rubber, contributing approximately 60 % to the total
export, and tin, contributing about 12 %. After freedom, the Malaysian supervision made a
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strong attempt to diversify not only the agricultural sector but it split out and made great in roads
into manufacturing.

Rubbers command at present has been reduced to about 1 % of Malaysias total export
worth. The key agricultural export thing is palm oil, which contribute about 5 % to its export
cost. In addition, Malaysia has solid its dependence on agricultural exports to develop foreign
incomes. Manufacturing goods look as if has overtaken agricultural products as the main foreign
exchange earner.

The shift primarily was determined by a policy of import replacement, wherein imports
of consumer things were reduced and natural resource handling was greater than earlier. Later, in
the early 1970s, policy moved to a growth-with-equity export way, which was special to
Malaysias own socioeconomic and political condition. Trade strategies were endorsed with
fiscal incentives, export-processing and free-trade zones were shaped to be a emphasis for
foreign outlay in particular.

The rubber industry can be classified into the latex, tires and tire- related and
manufacturing as well as general rubber goods. Latex products contain rubber cloves, condoms
and foam products. Malaysia is the worlds major exporter of rubber gloves with an avg. annual
GDP of RM6 billion.

The rubber industry is mostly covered by gloves industry; up to 70% of all rubber exports
are gloves. The other rubber goods include rubber threads, engine mountings, and seismic
bearings. It is currently the number one exporter of disposable gloves in the world with supply of
60% of world intake. Malaysia imports 90% of all latex used in gloves production from its
fellow citizen. There are more than 338 manufacturers in the rubber product industry In
Malaysia.

The popular of the latex based businesses are either medium or large sized companies.
About 35% of the industry gives 75% of the exports and this is mostly in the course of glove
exports. The dry rubber goods Exports are low in contrast. The Government rules, regarding aids
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and pays to native workers, are stricter, and the taxes are advanced in Malaysia. The rubber
planters also face the tricky of excess manufacture which effect in depressed prices and
revenues. The synthetic rubber made from petroleum, coal, alcohol or other materials is gained at
low cost of production.

The natural rubber export has a share of 44.4% of all rubber types exported worth an
amount of $3,085.022Mio.it is also importing the natural rubbers from other countries.
Approximate 62,000 tones of natural rubber are imported. Philippines, Vietnam, Thailand are the
major country for import.58 % of total import is from Philippines and followed by 14 % from
Vietnam and 9 % from Vietnam.

India is the 4th largest manufacturer of natural rubber and the 3rd largest customer of the
polymer. India comprises the pride of being the main producer of retrieve rubber in the global
market. The Rubber Trade in India is governed by the Indian Rubber Board and this is a
jurisdictive body established by the Government of India. There are two categories of rubbers
being natural rubber and synthetic rubber. In present years India has gone into the international
market exporting both raw natural rubber as well as rubber products.
The rubber product mix in India is founded typically on dry forms of rubber. The natural
rubber / synthetic rubber usage ratio in the country is presently 75:25, while worldwide the ratio
positions at 44:56. Worldwide tyre manufacturers are forming construction facilities in India.
India has the superiority of being the major producer of reclaim rubber. Indian Rubber Making
Areas divided into two regions - traditional and non-traditional. Traditional zone comprise
Kanyakumari in Tamil Nadu & Districts of Kerala area while non-traditional zone comprise
Coastal regions of Karnataka, Goa, Andhra Pradesh, Odessa, Some areas of Maharashtra,
Andaman and Nicobar Islands area. 90% of India's total production of natural rubber is
contributed by Kerala.
The per capita spending of rubber in India is only 1 kilo compared to 12 to 14 kilos in
Japan, USA and Europe which shows that India is attractive a advantageous target for rubber
goods The total employ generation by the rubber product business industry is 465,000 although
the financial failure in most parts of the world; the Indian rubber manufacturing has performed
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nearly well, although the growth rate has decreased to some extent in 2008-09. During the last 7
years while the worth exports has grown-up at an average yearly growth rate of 17 %, that of
imports has grown at an average rate of 29%.
In 1945 All India Rubber Industries Association has been conventional which is reflected
as 1 of the best businesses Association in India. It includes around 1200 members associated to it
who are ranging all over the country. The India Rubber Expo controlled every 2 years, which
is the best stage for Producers, Exporters and dealers of rubber products, Rubber raw material,
Machinery and testing Equipments.
The Rubber Board is a governmental body established by the Government of India, under
the Rubber Act 1947. Marketable farming of natural rubber was presented in India by the British.
The position of rubber production had been appreciated by the Government during the 2 nd World
War historical in india. After the war, there was increasing demands from the growers for growth
a everlasting group to look after the benefits of the industry. On the suggestion of the ad-hoc 18
committee, the government approved the Rubber Act 1947, on 18th April 1947, and the Indian
Rubber Board was constituted directly.
The Rubber Training Institute Update the technical and managerial competitiveness of
the Rubber growers and Rubber cultivated area workers, communicate suitable training to rubber
processors and rubber products manufacturers so to accomplish better quality and
competitiveness, renew the technical and managerial, competitiveness of Rubber Producers
Societies (RPS) and Rubber Marketing Co-operative Societies, expand the required aptitude and
managerial skills of the Boards employees, carry out international training programmes.
The Licensing & Excise Duty Department control various licences issued by the Board as
per requirements under the Rubber Act 1947 and the Rubber Rules 1955. The department has
three major divisions namely Licensing, Excise Duty and Revenue Intelligence and 9 suboffices located in major rubber consuming centres outside Kerala and three check posts and five
squads. As per section 12 of Rubber Act, Natural Rubber produced in India is liable to a duty of
excise referred to as cess. Cess leviable is Rs. 2/- per Kg with effect from 1-9-2011.

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The excise duty division has the major function of collecting and Assessing of cess on
rubber and its remittance to the consolidated fund. Interstate movement of Rubber is controlled
through N (an) form which is to be used by dealers, manufacturers, and estates wherever they
transport Rubber from one state to another. These forms are supplied by the Board at a price of
Rs. 20/- per book containing five sets. It will also be issued as single set at price of Rs. 4/- per
set. The Licensing Division issues the following Licenses. License to deal in rubber: (Dealers`
License) General License Special License to transaction in Rubber. Processors License
Manufacturers License fee. The rates of license fee for a year are as per Rule 45.
Two-thirds of the medical gloves used in India are in the healthcare sector.Many kinds of
gloves are formed in India. Among them patient examination and surgical gloves meant for the
health care sector leads the demand scenario. Household gloves used in homesteads, shopping
malls and retail chains are also accepted. Many medical institutions in the private sector are
occupied in organizing medical tourism, further raising the glove demand Food industry and
industrial sector are also using the glows.
The glove industry in India primarily uses NR latex for glow production. Neoprene and
chloroprene latex also find relevance in gloves production. With increase in the population of
urban and rural both area the hospitals like Apollo, Care Hospitals, Fortis Healthcare and
Wockhardt are also increasing and because of it the use of the rubber in healthcare sector is also
increasing.
After the hospital sector, glove use is strong in the food industry which sector is
supported by hotels, motels, clubs, food chains, restaurants, resorts and conference centres.
According to the Federation of Hotels & Restaurant Associations of India, more than 17 million
work in the hospitality sector in India. And the same number is in unorganised sector. These
show that demand for gloves in the food industry is large and likely to grow supported by the
tourism industry.
There are 31.15 million micro, small and medium enterprises. They contributed 45 % to
the countrys industrial output and 40% to the gross domestic product. Which employed 73.2
million persons and Engineers, technologists, technicians and shop floor workers in the factories
who can increase the demand for the use of industrial glows? There are gloves designed
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especially for workers in the building and construction sites. These reusable gloves are also used
in the construction industry, for marine products handling, cleaning and in chemical handling.
There are also gloves particularly designed for plumbers, electricians, carpenters, AC technicians
and landscape workers. Work safety gloves are also offered, particularly designed to save from
harm hands against impact, cuts and abrasions. Household gloves discover applications in
millions of households across the country. Shopping malls and retail chains are also using it.
Latex price in India rules higher than the price in a foreign country. From the last week of
May 2012, the Indian price happening climbing over the world price. The variation between the
Indian price and the world price has been to the tune of Rs.15 a kg.
We have tried to get information about rubber statistics of Malaysia. We include statistics of
different category like

World rubber production

World rubber consumption

Malaysian natural rubber production

Malaysian natural rubber import total

Malaysian natural rubber import country wise

Malaysian natural rubber export

Malaysian natural rubber consumption

Here for the world rubber production since 2000 to 2012 increase at very high growth rate.
Natural rubber increase from 6762000 tons to 11383000 tons, while synthetic rubber production
increases from 10870000 to 15094000 tones.
While production of rubber in Malaysia is not consistently increasing but it remains in range
of 900,000 to 1100,000 tones
As production of rubber increases consumption also increases worldwide. Total rubber
consumption increase since 2000 to 2012 is from 18170 to 25869 (000 tones). Malaysias
consumption of rubber is 441,116 tones.

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Malaysia imports natural rubbers from different country as per their requirement. Malaysia
imported 57.2% of natural rubber from Thailand only in 2012. While Malaysia imported 0.9%
natural rubber from India.
Malaysia exports different type of rubber products but in those latex products gains the
majority of the share in exports other than tyre products, industrial rubber goods, general rubber
goods, footwear etc.
To support the rubber industry there is one major resource which is itself rubber or natural
rubber. There are some other resources require like oil, labour, electricity, but major resource is
rubber. Malaysia has developed clones of rubber so they can improve the productivity.
PESTLE analysis is all about an analysis of political, economic, social, technological, legal
and environmental factors. Here, in this part we have focused on pestle analysis of rubber
industry and that enhance our knowledge regarding particular industry.
It is rightly said that, Malaysia's market-oriented economy, Malaysian govt have been trying
to develop an economy that gives an edge to the country and it is still hoping for a great future
ahead in the rubber industry.
There are the reports that show that In the recent, FDI Confidence Index study shows that
Malaysia was listed as the world's 10th most attractive destination. Here the data was collected
from huge source. So it indicates very supportive political scenario and shows the potential
business opportunities.
Even this political factor includes a transformation plan and under this plan, Thailand,
Indonesia and Malaysia these three countries will meet and try to establish a policy which would
help in stabilizing the prices.
In the recent study free by the World Economic Forum, Malaysia is graded sixth in Asia,
And it is also the worlds 29th most networked economy which is a good pointer for all those
who ar looking for an chance of doing a trade with Malaysia since it gives an edge to the
business makers about the financial safety. The Malaysian stock market has imitated that
economic prosperity.

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Under the transformation plan, the countries with having great percent contribution in the
rubber manufacturing as well as in the trading of the same would try to help and improve this
trade.
So with the implementation of this plan, Malaysia will more focus on the development of
pricing structure regards to global pricing and that will enhance the trade in the financial terms.
With ranked as a 6th economical networked and this will be more improved.
While Malaysia is not anyhow behind in a technological factor, following are latest
innovations which were found as a boost to the rubber industry.
1) Smartphone application i-Klon, which is a clone-checker application designed as an
substitute as well as to enhance the shortage of expert clone inspectors.
2) Rubber Information Traceability System, a watching tool to certify the quality of the
planting materials achieved by tracing their source.
3) Automatic Rubber Nursery Machine, an mechanical polybag filling device that lifts the
polybag using a vacuum system, and at a parallel position is opened by gravity and an air
blower.
4) Automatic Planting Machine for Rubber Seedlings, which benefits in planting and
replanting schemes to rise yield.
In the addition to above factors, The country's legal and accounting applies imitative from the
British organisation are familiar to most international companies, legal factors are also in support
to the growth of Malaysian rubber industry, Government policies that maintain a business
situation with chances for growth and profits have made Malaysia an attractive manufacturing
and export base in the section.
Earlier Malaysian govt has established a policy where, foreign investors could hold complete
the shares in all funds in new projects, as well as investments in increase projects by existing
companies nonetheless of the level of exports and without rejecting any product or activity.
Remote companies in the industrial sector are allowed to employ emigrants where certain skills
not available in Malaysia.

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Malaysia has earned a position among the 14 most viable countries in the world, according
to the 2012 World Competitiveness Yearbook, issued by the Swiss-based Institute for
Management Development.
The utmost improvement to producers in Malaysia has been the nation's determined drive to
develop and upgrade its infrastructure In bike with the expansion of the economy and trade, ports
in the country registered impressive growth in recent years. They have developed parks which
are given for an industry purpose and it will have advantage of govt policies.
Under the Equal Access Regime, telephone subscribers in Malaysia can choose from five
network service providers for a full range of local, domestic and international services
encompassing voice and data facilities.
Industries in Malaysia are mainly located in over 200 industrial estates or parks and18 Free
Industrial Zones (FIZs) developed throughout the country. New sites, fully equipped with
infrastructure facilities such as roads, electricity and water supplies, and telecommunications. In
areas where FIZs are not available, companies can set up Licensed Manufacturing Warehouses
(LMWs) which are accorded facilities similar to those enjoyed by establishments in FIZs.
Even societal factors shows that potential lies there for young and enthusiastic generation in a
business expansion field, One of Malaysia's major pull factors is its large pool of young,
educated and trainable workforce. Many of Malaysia's university graduates are trained overseas
in fields such as engineering, and accountancy, allowing them to adapt easily to an international
corporate environment.
Another underappreciated but key business advantage: Almost all Malaysians, thanks to the
British rule from 1786 to 1957, speak English. This is a huge plus for attracting western
businesses to set up shop in Malaysia.
Above, we have seen the brief facts about all factors of PESTLE analysis regarding rubber
industry of Malaysia. But still there are few interesting facts about Malaysian rubber industry
and that is, The latex products sub-sector is the largest sub-sector within the rubber products

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industry and comprises 165 manufacturers producing gloves, condom, catheters, latex thread and
others.
This sub-sector accounted for 81 per cent of the rubber total value of exports, largely
contributed by gloves, catheters and latex threads. While there is glorious fact that, Malaysia
continues to maintain its position as the world's leading producer and exporter of catheters, latex
threads and natural rubber medical gloves.
There is no restraint in issuing Manufacturing License to undertake the manufacturing
activities in rubber industry. Foreign equity holding is allowed without any restriction.
Political factors are advantageous for the tyre industry. Government of India decreased tax on
raw materials to promote and encourage rubber tyre industry. Taxes and duties on trading of
tyres at international basis are less because cheap tyres easily imported and high quality tires can
be exported. Major export destinations for tyres which made in India are emerging nations such
as Latin America, South-East Asia, Middle East and the Africa.
There are various trade policies like All kind of tyres can be exported liberally, All classes of
tyres can be imported without restriction, No certain WTO rates on tyres and tubes.
Too many laws in India related to employment there are 45 laws at the central level and close
to four times that at the level of state governments that observe the functioning of labour market
places. Each law leads tycoons and labourers to react with determination, often in complex ways,
were paid no attention. Flexibility in recruiting and firing is not the only problem. India's
complex web of regulation leads to a system of dispute determination that is very slow.
There are many Trade restriction and Tariffs which are described. Custom Duty on tyres
10%, Custom Duty on Natural Rubber 20%, Additional Duty of Customs 4%. There are trade
agreements are India- ASEAN Free trade Agreement on Natural Rubber /Latex/TSNR.
Economy factor is also important factor. The rubber industry is one of the major sectors of
the Indian economy in terms of natural rubber producing India ranks fourth in world and biggest
consumer of the polymer.

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The Indian rubber manufacturing has a turnover of Rs 12000 crores. Most of the rubber is
consumed by the tyre business which is almost 52% of the total production of India. Currently
India is importing around 50000 tons of rubber yearly. Raw material Availability in states like
kerala,Punjab and maharastra is high compare to other states.
Social factor is also an important factor. The Population growth in India is high. A firmly
organized society wherein every individual's roles, duties, privileges and obligations are exactly
and rigidly defined is less given to changes than a more loosely structured society wherein roles,
lines of right, privileges and obligations are more open to individual reorganization
In India the government has established the rubber research institute of India.

It mainly

helps the farmers to increase the productivity of natural rubber from the land and it also helps the
rubber manufacturing companies for tyre and non tyre productions. To advance the rubber wood
and rubber product the rubber wood testing laboratory was established.
Environment for the production of natural rubber is also important. Majority production
of Indian natural rubber is being produced from kottayam area of Kerala. The rubber industry in
kottayam provides pay to a large number of people of this region. One point, which is also
seriously taken into account by the rubber manufacturing, is the environmentally friendly
disposal of used rubber products. certainly, depending on the product, several additional lives
may be expected, although it may be no longer useful in its first application.
We took Malaysian rubber glove maker Top gloves to find the business opportunity and
analyze the rubber market of Malaysia.
A top glove is firm which improve itself not only by the way of innovation but it
improves itself by using the financial direction given from its auditor Ernst & Young. Firm
implement financial guidelines given by the auditors very effectively.
Top Gloves Corporation is the holding company of top glove bhd. Company is producing
and treading rubber gloves. Top glove is the world level manufacturer of rubber gloves and top
ranked in area of rubber. It produces mostly all kind of rubber gloves in world and creates the
most quality product.

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Top gloves initially work for its customers brand before it starts selling gloves of its own
brand name. Growth of rubber glove market and technically advance equipment help top gloves
to create large product line and quantity. Large investment was done in facilities to create mass
production.
Currently near thousands of customers are there in world that buys gloves from top
gloves and they are in more than 180 countries worldwide. Biggest consumers are Europe and
America. Top gloves have nearly 25% market share in world market of rubber gloves and its the
largest player in this.
Top gloves create more than 30 billion pairs of rubber gloves from 371 assembly line
which there in 3 factories. Top glove is financially strong & have no debt. Cash savings are since
last three years.
Company is member of mostly all the reputed groups of rubber association. Number of
awards is increased with year. Excellent performance in industry help top glove to earn several
title and awards.
Tan Sri Dato' Sri Lim started top gloves with rented factory and supply gloves to only
few customers. As the growth of rubber glove is higher there were hundreds of company started
in Malaysia to sell product in America but top gloves rise above all players and became the
largest player. Having factories in Malaysia, Thailand and china the number of product and
quantity is increased with time is highest than any competitor in the world.
Top gloves success is driven by many external factors that include H1N1 virus and
several other diseases that need awareness in medical practitioner and people to improve
hygiene. Innovation is another factor that allows top gloves to manufacture lower weight gloves
that consume less rubber and cost is low. Top gloves even produce flavored gloves that help
different customers that give them good feel.
Internal and external training given to all staff help them to learn more and that can help
to be more innovative and technology friendly.HR policy are world class in Top glove. R&D,
marketing are driven by all the sources available that include students, employee and experts.

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Effective cost management is key ability that by this company control its price better than other
players in market.
To maintain its level of growth company has much challenge that it conquer in world
market of rubber. As the main source that is natural rubber is decrease in Malaysia top gloves
need to expand its source as strategy top gloves set plantation in Thailand for supply of natural
rubber. Even for the more sources company looking worldwide source of rubber.
Price of natural rubber is fluctuating in world market. Most of the product is exported in
world and currency it earns is USD. When national currency gets stronger top gloves face Forex
losses.no subsidies natural gas also increase price of operation in Malaysia.to sustain in this
situation top gloves increase its factory in different country to get competitive advantages.
There are nearly fifty players there in Malaysian market that produces rubber gloves and
many small scale manufacturers. Nearly fifteen big players are take 80% share of market. Top
Glove Company acquire majority of production share amongst the other competitors. Many
players are there in industry but the coverage is not as much as top gloves.
Top gloves produce multiple products that contain different powder and non-powder
coated gloves. The share of powdered latex is highest followed by powder free latex. The
demand of other type of gloves is less and the concentration is on powdered and non-powdered
latex as the usage is higher and growth of this is increased with increase in medical usage. Their
sales show that market its covering is mostly western countries. In Asia they sold just 10% of its
total sales in .It shows the need to capture this market as the growth of medical is very high in
Asia and its right time to capture this market.
We took Indian rubber manufacturing company Truskin gloves for comparing Indian
rubber gloves market with Malaysian rubber gloves market.
Truskin is the global company that exports its product worldwide to its customers.
Truskin glove is the company under the holding firm Sutures India Private Ltd. One of the
largest players in the surgical products. Truskin is located in Kerala which is the largest producer
of natural rubber in India. The capacity is about twenty five million gloves and the growth is
about three fold.
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Truskin has three brands that include Truskin, Trupoly and Truxam which is available
locally and globally. Truskin have the different quality certificate that includes ISO standard and
BIS.
Truskin provide gloves that are containing lesser protein and lesser quantity of powder.
The product has specially treatment for removing the impurities in glove that help for life of
gloves and damage. Truskin provide the logistic facility also and product can be delivered in
worldwide within just thirty days.
Truskin is also providing facilities like free sample and special prices as a marketing
activities. It also create product for private brands. Main three kinds of gloves are produced by
Truskin as this three are used widely in Indian market.
Disposable surgical gloves are mostly used as protection in several medical and nonmedical purposes. This is widely used as the hygiene and safety are increased among people.
Product has international standards of quality and made very technically innovatively so that
gloves work best on hand of user.
Re usable powdered gloves are stronger than disposable gloves as it made for multiple
uses. The tension standard is made higher on this product as its durability can be increased.
As the powder coated gloves are creating several issues in medical use of gloves the
answer is polymer coated surgical gloves. This kind of gloves is used in surgery and they are
high quality and convenience for surgeon.
Truskin have very technologically advanced manufacturing facility. That makes the best
quality product for customers.it provides global standards in product. Several procedures are
done on gloves to enhance the quality of it. Numbers of test are done to check the optimum
required standards to meet. This helps Truskin to create the global brand and sustainable growth
than the small players who doesnt have the quality standards.
Malaysia is worlds largest producer of rubber gloves in the world followed by Thailand
and china respectively. The biggest player is Top gloves bhd. As the mass production and
innovation are higher in Malaysian rubber gloves market it get the competitive advantages of

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economics of scale and learning. Money is invested in plantation of rubber ant technological
innovation helps the Malaysian rubber glove market to rise.
Indian rubber industry is containing many manufacturers of rubber gloves. But there is no
single of few large player are there in the market. As a result the market is of many small players
that are producing less quantity than the Malaysian firms.
As the consumption is increased in Indian market due to rise in awareness and population
there is large opportunity for rubber gloves producers. But lack of quality product let foreign
producers advantage over Indian manufacturers. India import gl0oves in large quantity from
different rubber market in world. Even medical practitioners support exported gloves as Indian
gloves have no advantage and quality standards over foreign made rubber gloves.
Malaysian rubber industry contained two major sectors and as the Malaysia has natural
resources of latex its main business of rubber is latex product. The market is covered by SME
and it takes around 85% of rubber product manufacturer. Mostly the main product of export is
rubber gloves as around seventy five percent of export is rubber gloves from total rubber export.
Globally Malaysian rubber gloves capture more than fifty percent market of global export
which is around four billion USD. As the maturity stage of rubber gloves industry of Malaysia
will come soon but now it has growth more than the other countries.
Import of rubber gloves in India also helps Indian firms to match the quality of that
standard and improve it as the market of gloves is rising. Application of rubber gloves is rising
and many different uses are taking place which were not there.
Protecting from different viruses and hygiene increased consumption of protective
gloves. Developed countries were not that much of awareness about health but now the
increasing in facilities and availability of medical services create more usage of protection.
Barriers are there in rubber gloves market as it requires large investment ant technology
.presence of well-established players gain economics of scale and learning advantage. The
relationship with customer also increases the competitive advantage as the hospital and
organizations have long life operations.

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Asian countries are the only region that having natural sources for latex rubber. Thailand,
Indonesia and Malaysia are taking around 65% production of natural rubber. Consumption of
natural rubber is highest in china and Europe as well as other countries.
Synthetic rubber needs crude oil and its produced in china, USA with higher amount.
Products made from synthetic rubber are higher in durability but for production it also requires
natural rubber. Consumption of synthetic rubber is growing faster as the industrial growth and
automobile sector at rise.
Growth in the medical expense is rising constantly in India and increasing as rural
community also receiving better knowledge about health awareness and hygiene. Insurance
industry growth are rapid in India and that crate more and more people to take use of advance
medical treatment.
Malaysian rubber gloves industry faces the challenges as the global recession period and
economy crisis are there. Labor demands more wages. Cost of input is rising as the natural
source of rubber is decreasing. Aggressive strategy to capture market and factory expansion also
faces criticism and long term disadvantages.
Indian rubber gloves manufacturers have biggest problem of quality of product and lack
of innovation. Government support is not enough for growth. As the resources are limited the
demand cannot be satisfied without importing of rubber.
In this study we find that the biggest opportunity for Indian firm is to export gloves from
already established and economically advance manufacturer. To create better importing can help
to reduce cost and have better quality product at lower price. New factories can mad by using
international level of technology of top gloves company and the process that can help to get
quality product for Indian consumers.

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INFRASTRUCTURE INDUSTRY

During 2005 and 2008, Malaysia's economy continued to rise increasingly. Nonetheless,
the velocity of expansion slowed in 2008, and in first quarter of 2009 the economy deteriorates
markedly, dazzling the global financial crisis and connected sharp fall in exports. The
Government responded at the appointed time, with both macroeconomic and structural policies.
In 2009, the Government started to relax restrictions on foreign investment in services, including
health and social services, tourism, transport, business services, and computer and related
services. This relaxation reflect an escalation of the Government's hard work to endorse services
by, inter alia, eliminate barriers to trade and investment in services, in accumulation to high-tech
manufacturing; net FDI inflows in 2008 were about 8% lower than those in 2005, and FDI in
services accounted for only about a quarter of the total FDI. Malaysia also intends to diminish
reliance on exports of manufactured goods that are reliant on semi-skilled and low-cost labour.
The objective is to increase services' share of GDP from approximately half to 60% by 2020.

Real GDP growth in Malaysia was 4.6% in 2008, down from 6.2% in 2007. With exports
dilapidated significantly in the second half of the year, there was a decline in the involvement of
external claim to economic development. At the same time, the consumer price index improved
by 5.4%, mainly shimmering the intelligent increase in commodity prices in the first half of the
year. advanced commodity prices partly, if not fully, elucidate the rise in the shares of agriculture
and mining and quarrying in GDP and the beg off in the shares of manufacturing and services.
Malaysia's expansion of export leaning production remains highly thriving and trade show
business an important role in the economy. The share in GDP of deal (exports plus imports) of
goods and services was roughly 184% in 2008 (compare with 212% in 2005). Between 2005 and
2008.

Malaysia's gross national saving rate remain amongst the highest in the world, averaging
about 37% of GDP; its gross domestic investment averaged some 20% of GDP. The large and
rising gap between gross national saving and gross domestic investment is reflected in a
corresponding current account surplus, which rose to 17.5% of GDP in 2008; the increasing gap

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was due to an on the whole rise in gross national saving and a considerable decrease in gross
domestic investment, both in relative to GDP.

Malaysia has been investing profoundly in the enlargement of infrastructure over the past
decade, including major improvements to interstate highways, public transit, and port amenities a
new international airport; and enhanced electrical power generation.

The financial crisis has lead to the termination of one of the highway projects, still in its
in the early hours planning stages, and the termination of work on the Bakun Hydroelectric Dam
in Sarawak, but a large amount other infrastructure projects have proceeded.

The existing horizon for the improvement of infrastructure in Malaysia is the Ninth
Malaysia Plan period of 2011-2015. There are no expansion plans for infrastructure beyond
2015. During the Ninth Malaysia Plan public sector investment in infrastructure is anticipated to
be RM41.6 billion, an enlarge of about 15 per cent over the RM36.2 billion invested throughout
the Eighth Malaysia Plan. Private sector resources will appendage public sector investment in
infrastructure. How much the private sector will invest in infrastructure during the Ninth Plan
phase up to 2015 cannot be ascertained but obtainable by past experience the amount of private
sector investment in infrastructure will nearly definitely exceed the RM41.6 billion to be spent
by the Government.

Even nevertheless the total investment in infrastructure up to 2015, wide-ranging of

investment by the private sector, is not known, indications are that capability extension and
sector reconstruction will continue unabated. There will also be some important changes in
priorities.

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Malaysia's continual drive to enlarge and improvement its infrastructure has resulted in
one of the well-developed infrastructure among the lately industrializing countries of Asia.
Latest, the development of Kuala Lumpur Central, a bizarre self-contained city, on
condition that the wonderful live, work and play environment. A fashionable transportation hub
integrating all major rail transport networks, including the Express Rail Link to the KLIA and
Putrajaya, the government's new managerial centre. The transport amenities offered are on par
with the best the world over.
The implication of the Infrastructure industry in Malaysia in stirring the nations
economy frontward cannot be underestimated as it is predictable to grow to over RM90 billion
this year. While the global economy faces suspicions and the property sector may be less
vigorous experts in the field are cautiously optimistic that the industry outlook for 2012 will be
relatively stable on the back of continued implementation of projects under the 10th Malaysian
Plan and opportunities abroad.
The General Agreement on Trade in Services (GATS) is in the middle of the World
Trade Organizations most significant agreements. The accord, which came into oblige in
January 1995, is the first and only set of bilateral rules covering international job in services. It
has been negotiated by the governments themselves, and it sets the framework within which
firms and individuals can manage.
The tariff is the main borders appraise affecting imports of goods. The simple average
useful MFN tariff was 7.4% in 2009; about 60% of toll lines were duty free. Around one fifth of
tariff lines were boundless and the uncomplicated regular bound MFN rate was approximately
double the useful rate, leaving significant scope for the system to raise tariffs within the hurdle
levels. However, the authorities have raised tariffs in only a few cases; these occupy tariff-rate
quotas, which Malaysia began applying to several tariff lines since 1 April 2008.
Standards and standardization actions are among Malaysia's priorities for achieving
developed-nation status by 2020. Malaysia aims to support Malaysian standards with
international standards; in 2008, some 58% were associated up from 51% in 2005. This reflects
the authorities' deportment that, when developing or revising standards acceptance of
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international standards is the primary option. The new alignment covers different sectors, e.g.
Food & Agriculture, Chemicals, Mechanical engineering, Information technology, Plastics,
Packaging, Rubber, Textiles, Environment administration partisan government procurement
actions continue to be used as a main instrument of industrial policy to favors nearby owned
businesses; international tenders are invited.
GENERAL POLICIES Malaysia has a generally liberal trade organization for agricultural products, with an
average applied MFN tariff of 2.8% (WTO definition) in 2009, although some non ad valorem
tariffs have a propensity to obscure relatively high rates. Some of 6.1% of all agriculture tariff
lines are subject to non-ad valorem tariffs. The average duty for agricultural products including
AVEs is 18.1%. In addition, import licensing applies to some agricultural products, and rice may
only be imported by BERNAS. As a monophony buyer of rice, BERNAS has the market power
to bargain lower prices with its suppliers. Malaysia began to relate tariff-rate quotas on
agricultural products in 2008.

Malaysia's manufacturing sector is moderately open to trade and foreign investment; the
regular tariff for manufacturing products was 8.7% in 2009, and 100% foreign equity
contribution is generally allowed. However, a notable exemption is the automotive sector, which
has long been privileged from foreign competition by both tariff and non-tariff procedures.
Strategies for Enhancing Exports
Standards Malaysia gear programmed that offer hand exporters by indirect resources as part
of the events to carry out these five strategies. These contain pursuing an enthusiastic plan for
balancing values with international standards, promoting and supporting Malaysian involvement
in international standards and conducting awareness sessions for industry on new developments
in international homogeny. The specification of direct services to industry is undertaken by other
selected organizations, as it is focuses on policy matters. SIRIM Berhad provides in sequence
services on standards and technical convention for export, the capable certification bodies

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present a full range of product documentation and administration system documentation services
that assist exporters.

The underneath steadiness in Malaysia is important to drag towards you more foreign
investors to the country. There are three main races that can be bring into being in
Malaysia which are Malay, Chinese and Indian community.

In May 1969, there was a main racial divergence that has guide Malaysians to live
somewhat melodiously with each other in order to avert another cultural riot from
occurrence again. Since then, races of different kinds can be seen operational portion
jousting together. The political power in Malaysia is mostly constrained by Malays which
are known as the Bumiputera.

This perspective is primarily because we are expectant headwinds from a deteriorating

global economy to grow in sternness and dampen demand for suburban and nonresidential buildings.

Political influence possibly will also influence the HR policies of Airways (Airasia) employment and collection of staff does not routinely be based on merits but also on the
racial masterpiece.

The economic pressure group is to supply a picture of the economic growth in Malaysia.
The Gross Domestic Product also known as the GDP is to work out the countrys total
output. The trade and industry in Malaysia has been in a slowdown.

As for the inflation rate in Malaysia, it has been escalating in view of the fact that the
month of March 2010. The latest inflation rate, which is in the month of July 2010,
geared up to 1.90% compared to the month in March 2010 which is 1.30% (Malaysian
Inflation Rate 2010). According to Bloomberg, the influence costs are the food and
transport areas (Adam 2010).

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Facts regarding Malaysia :

Malaysia is one of the five members of the Commonwealth of Nations which have their
own crowned heads even though all members recognize Queen Elizabeth II as the head of the
Commonwealth.

Uniform of hostess: UMNO members wanted it to be more "Islamic" Some decisions are
made by the government (landing rights, services to convinced routes, equity possession take the
case of Subang for example, Airasia applied to use Subang as their hub, was turned down by the
government Now the government has allowable Firefly (a subsidiary of MAS) to function from
Subang.
The economic tendency is to provide a picture of the economic growth in Malaysia. The
Gross Domestic Product also known as the GDP is to measure the countrys total output. The
economic in Malaysia has been in a slowdown.

As for the inflation rate in Malaysia, it has been accelerating since the month of March
2010. The newest inflation rate, which is in the month of July 2010 reached up to 1.90%
compared to the month in March 2010 which is 1.30% (Malaysian Inflation Rate 2010).
According to Bloomberg, the pretentious costs are the food and transport areas (Adam 2010).
Malaysia is in its most essential conversion as it battles to achieve the Vision 2020. The
conversion is visible on the political front, the public sector and among Malaysian business
entities.
The various races and individuality of this country has concerned many foreign investors
to Malaysia. Such as investors that comes from China, India and Middle East. Foreign investors
from these countries find it easier to set up a conglomerate in Malaysia as they are able to
communicate easily with the locals.

For instance China has set up a company known as Wenzhou an enterprise that was set up in
Malaysia has become a well-known company in Malaysia. Even Indians from India can be found
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investing in Malaysia. According to MIDA, Indias firm is set to invest in companies that
involves in pharmaceuticals and biotechnology in Malaysia. Not forgetting Investors from
Middle East has also invested in Malaysia such as surroundings up Islamic Banks (Business
Times 2010).

Inflation is still under 4% having doubled from the normal 2% due to the global increase
in retail prices of petroleum product

Unemployment continues to be low, at under 4%

Political situation in the country remains stable

Financial institutions consider mortgages for foreign investors purchasing real estate in
Malaysia as a favorable option and therefore there are multiple mortgage options,
including those as provided by Islamic banks

"Malaysia My Second Home" programmed promoted by the Malaysian government has

removed many of the obstacles preventing foreign investors from purchasing property in
Malaysia and offers several substantial incentives for foreign nationals purchasing
property in Malaysia

Up to 10% and in some cases even higher rental returns can be found on newly
constructed developments in Malaysia.

Malaysian Infrastructure Company: IJM

IJM is one of Malaysias leading conglomerates and is listed on the Main Market of
Bursa Malaysia Securities Berhad (Bursa Securities). Its nucleus business activities include
construction, property development, manufacturing and quarrying, infrastructure concessions
and plantations. Headquartered in Selangor, Malaysia, IJMs provincial aspirations have seen it
establish a rising presence in neighboring developing markets with operations currently spanning
10 countries, with prime focus in Malaysia, India, United Arab Emirates, China and Indonesia.
IJMs exceptional expansion over the past three decades has been the effect of its untiring focus
on its core competencies, diversification into deliberately related businesses and discerning
expansion into new markets.

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Projects Offering:
Efficient and expedient toll highways are necessary to balance any governments pains to
get better its countrys infrastructure development. The toll infrastructure services we offer cover
a wide spectrum of project supplies counting the design, construction, maneuver and
preservation of the tolls, from initiate to finish.
In recent years, we have extended our highway operations through an assortment of
mergers and acquisitions. Today, IJM fully owns and operates a number of urban toll
concessions in Malaysia, namely the Sungai Besi Highway, New Pantai Expressway and Lekas.
With one of the leading populations in the world, India has a steady need to connect
people and businesses across enormous areas. With our ground-breaking infrastructure solutions,
comprehensive support services and disciplined operations, we have located the standards for
roads in India.
During the financial year, the Port Division sustained to invest in port facilities that
would yield good returns to its bottom line. The division plans to construct three new berths
costing RM150 million in order to knob additional cargo and mitigate the current berth
overcrowding due to significant increase in iron ore and steel pipes cargoes.

ADANI INFRASTRUCTURE
Adani Infra (India) Ltd (AIIL) is an infrastructure development company that specializes
in on condition that comprehensive engineering, project and construction organization services
for the supremacy generation and transmission sector.
The company has a nucleus capability in the establishment of power projects,- a sector
that holds much promise for enlargement as the demand for inexpensive dependable and
unswerving supply of electricity is crucial for the increasing population and the rapidly
increasing economy of India. The Government of Indias determined mission of POWER FOR
ALL BY 2012 has given much enhance to power generation, rural electrification, merchant
power plants and augmented private sector participation in power generation, transmission and
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allocation In recent years, many multinationals and Indias industrial houses have started work
on establishing mega power plants in the country. For a company entering the fossil fuel or
renewable energy based power generation/ transmission liberty in the fast growing economies of
the Asia Pacific Region, AIIL has the core competencies obligatory to provide Project
Management Consulting (PMC) services for the project or undertake implementation of power
projects on Engineering, Procurement and Construction (EPC) contract basis. The company has
leading edge competencies for EPC contracts covering civil, electrical, and mechanical and
instrumentation engineering, project and construction management, systems, preparation and
operational services.
Analysis:
1. Confederation of Indian Industries

Malaysia and India share a common history in that both were British colonies. Having
achieved independence and sovereignty, the two countries today are enjoying impressive
economic growth.

In the case of Malaysia, the past 50 years have seen it transform from a commodity-based
economy to a manufacturing and services-oriented economy.

Today, Malaysia is one of the most open economies in the world:

Average trade growth of 12 per cent for last five years;
In 2006 the World Trade Organisation Report ranked :

Malaysia as the world's 19 th largest trading nation;

19 th largest merchandise exporter; and

23 rd largest merchandise importer.

The success of both Malaysia and India has been in large part due to the facilitative role
of the Government and the resilience of the private sector.

In terms of bilateral relations, India was among the first few countries to establish
diplomatic relations with the Federation of Malaya, as Malaysia was known at that time,
when it gained independence in 1957.

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I am happy to note that Malaysia and India have continued to deepen this relationship
and the scope of cooperation has expanded to cover many areas of trade, investment,
education and tourism.

There has also been a cross flow of human resources. From January to October 2007,
Indian nationals accounted for 7.6 per cent of the total foreign labour force in Malaysia.
Indian human resource assumes a key role in Malaysia 's economic development. Today
they constitute 19.6 per cent of the total expatriate in Malaysia and are mainly involved
in highly skilled areas such as information technology and biotechnology.

Major areas of investments by companies from India include :

paper, printing and publishing;

fabricated metal products;

chemicals and chemical products;

basic metal products; and

wood and wood products.

Projects approved with Indian participation include:

Sabah Forest Industries (paper, printing and publishing);

Unitata Sdn. Bhd. (chemicals and chemical products); and

Sriya Renewables Sdn. Bhd. (wood and wood products)

Indians wishing to stay in Malaysia for longer periods can do so under the Malaysia - My Second
Home Programme.

The latest Annual Global Retirement Index issued by the International Lifestyle Magazine,
ranked Malaysia among the top 10 countries to retire in.

The Malaysia - My Second Home Programme provides incentives for foreigners from anywhere
in the world, particularly retirees, to retire in Malaysia.

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Companies from India can start looking into investing in the manufacturing and manufacturing
related sectors in Malaysia such as :

i.

Malaysia 's Medical Device Industry :

Malaysia is currently the world's largest producer and exporter of medical gloves and
catheters accounting for :

80 per cent of the world market for catheters; and

60 per cent for rubber gloves, including medical gloves.

Malaysian companies are now expanding into the manufacture of higher value-added
products; and moving from basic processes and conventional assembly, to product and
process research and development, design and prototyping, distribution and logistics.

Malaysia also welcomes collaboration, through investment and trade, to develop the services
sector, particularly the:

i.

Construction Services

Malaysian construction com pa nies have:

Established presence overseas and gained recognition for their brands and expertise; and

Completed 288 projects abroad worth US$5.81 billion ( 239.0 billion Indian Rupees ) since
1995.

Malaysian investments in India in the construction sector is significant :

1995 to 2007 , Malaysian com pa nies have undertaken a total of 70 projects in India worth
US$3.6 billion ( 148.1 billion Indian Rupees ), of which;

51 projects valued at US$2.2 billion ( 90.5 billion Indian Rupees ) have been completed; and

19 projects worth US$1.4 billion ( 57.6 billion Indian Rupees ) are currently on-going .

On-going projects in New Delhi include:

construction of a Convention Center and a Civic Centre for the Munici pa l Council of New
Delhi totalling US$279.3 million (11,490.4 million Indian Rupees); and design and
construction of viaducts and elevated stations in Phase II of the Delhi 's Mass Rapid
Transport System project estimated at US$89.5 million (3,682.0 million Indian Rupees).

Malaysia is pursuing market opportunities at the Multilateral, regional and bilateral levels.
163

At the multilateral level, Malaysia and India must continue to engage effectively in the ongoing Doha Round for a successful and ambitious outcome to the negotiations.

While Malaysia firmly believes that deeper commitments from developed countries are a
must to advance the Doha negotiations, Malaysia is also of the also view that developing
countries should contribute to the process by moving away from long-held protectionist
positions.

Greater economic cooperation among developing countries is imperative to enhance their

bargaining power in multilateral negotiations.

More pro-active South-South cooperation is crucial in making the world trading system more
responsive to the needs of developing countries.

Feasibility Test for Adani Infrastructure

The construction industry is one of the most dynamic industries because it provides
human beings with better living conditions and contributes significantly to the economy of any
nation. However, most developing countries face a lack of sufficient physical and social
infrastructures to sustain the economic growth of the nation.More specifically, it is imperative
that social infrastructure is made available to serve new communities so as to enhance the
quality, image and desirability of the new place, as well as its commercial value. Teriman echoed
the idea that social infrastructure should meet the basic needs of communities and improve the
quality of life, equity, stability and social wellbeing. The challenges of the new era thus call for
greater focus on Social Infrastructure Projects (SIPs) for sustainable development.
Understanding SIPs success factors helps reduce the complex nature of management issues,
which in turn makes it easier and more efficient to manage those factors with limited resources.

The main objective of this paper is to propose a framework of SIPs success factors. A
critical review of the current literature on project success factors generates an initial list of
perceived success factors. A total of 10 interviews with experienced practitioners are conducted
to identify the underlying dimensions that were not found in the existing literature. SIPs
represent a context driven topic, whereas project success is a complex and multifaceted concept
[5]. Therefore, an exploratory approach is employed to investigate the new research area linking
164

SIPs with project success factors. To the knowledge of the authors, this paper represents the first
attempt to explore SIP success factors. Limitations are also presented in order to enhance the
originality of this paper.
Social Infrastructure Projects (SIPs)
The notion of SIPs emerged over the last decade mainly due to the fact society at large has a
great interest in public infrastructure Argy et al. differentiate social infrastructures into hard
social infrastructure (e.g., hospitals, schools and community halls) and soft infrastructure (e.g.,
social security and education). Therefore, social infrastructure may refer to building and
community facilities or to services like training, education and security. This paper, however,
only focuses on hard social infrastructure (buildings or facilities meeting social needs).
SIPs involve a wide range of partners, including in most cases various government
agencies, private companies and nonprofit organizations, together with a selection of user
groups, freelance scientists, independent consultants as well as academic research institutes.
Although SIPs are generally smaller scale compared to economic infrastructure, they are as
complex and dynamic as generic construction projects because the post construction and
maintenance stage involves an ongoing involvement with the community.
Project success factors
The concept of project success factors, more popularly known as Critical Success Factors
(CSFs), was defined as a course of action which is pursued to reach objectives. Because an
understanding of project success factors in general is, on its own, insufficient for the success of
a project, it is necessary to clarify the success factors of a project, especially when the project is
highly complex and uncertain Therefore, the CSFs approach is considered an appropriate
method for exploring complex and dynamic SIPs [9]. The subsequent discussion is justified in
the sense that project success factors do not change frequently but may require revision and
updating from time to time [19].
The literature review on project success factors was broadly structured according to two
metaphors suggested in [20]. The first metaphor perceives the project success framework as a
universal tool, while the second perceives it as a contextspecific tool.
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The construction industry has long been perceived as one of the most dynamic industries, and
underpins the economic growth of all nations. Dainty proposed that methodological pluralism
should be embraced in the context of construction management. Drawing extensively from
interviews and studies in the literature, 41 success factors have been reduced to six dimensions,
forming the basis for improving the provision of SIPs in the Malaysian construction industry.
The contribution of this paper is twofold. First, it represents the idea of contextdriven research
that identifies the success factors in the provision of SIPs to address the dynamic nature of the
industry. Second, in the methodological aspect, it presents a grounded empirical approach. This
assembles a simple framework that should help decisionmakers to focus on key areas to avoid
failure. This can be achieved through the appropriate allocation of various project resources.
It is important to note that identification of project success factors is an important step in
capturing lessons learned. Lessons learned are usually documented to increase the likelihood of
success in future projects. Because the scope of this paper focuses on SIPs in Malaysia, the
findings may not be applicable to other geographical locations. In addition, the notion of project
success should not be limited to success factors. There are other variables, such as the criteria
for success and the relationship between success factors and success criteria. Furthermore, this
paper is to be seen largely as exploratory research and requires confirmatory research on the
scope in terms of the methodological aspect. These limitations present recommended avenues
for future research.

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TOURISM INDUSTRY
Malaysias hospitality industry is experiencing healthy growth in hotel openings
and hospitality-related services through the steady flow of business travelers, tourists and
popularity as a MICE (Meeting, Incentives, Conventions, Exhibitions) venue. Malaysias
advantage in this sector lies in good value in terms of costs compared to the rest of the region, its
diversity of natural attractions such as beaches and mountains as well as solid infrastructure and
amenities. A total of 23.6million tourists entered Malaysia in 2011, marking an increase of 7.3%
y-o-y compared to 2010. The tourism industry has rebounded quickly despite the effects of the
global economic crisis.
Currently, there are approximately 180 hotels of 4-star grade and above,
contributing to a total room supply of 54,175. The average hotel occupancy rate in 2011 was
fairly stable at 60.9%. According to the Malaysian Association of Hotels, average hotel room
rates in Kuala Lumpur's prime Golden Triangle location stands at approximately RM 221.10
(USD$ 70.00). Hotel occupancy levels in Malaysia rose to 70% in 2010 from 62% in 2009, with
Kuala Lumpur registering growth in Revenue Per Available Room (RevPAR), while other cities
witnessed a decline in performance, as reported by Horwath HTL in the recently published 2011
Malaysia Hotel Operations Survey. About 89 hotels across the country participated in the
Horwath HTL 2011 Malaysia Hotel Operations Survey, making it the most prominent study of
its kind in the Malaysia hotel industry. The survey conducted annually is supported by the
Malaysian Association of Hotels, and is used extensively by developers, investors, hotel
operators and government agencies.
Hotels across the country reported a growth in occupancy and a general
improvement in Income Before Fixed Charges and Management Fees (IBFCMF), but Average
Daily Rate (ADR) dropped from RM281 in 2009 to RM223 in 2010. This is due to a general
decrease in ADR, as well as an increase in participation from hotels in lower rate categories.
However, tight cost controls exercised in 2010, particularly in undistributed operation expenses,
resulted in a growth in IBFCMF margins from 35% in 2009 to 39% in 2010. Kuala Lumpur and
Petaling Jaya/ Subang Jaya/ Sepang recorded slight increases in RevPAR, largely driven by
growth in occupancy. Other main tourism destinations, such as Penang, Langkawi and Kota
Kinabalu, however, reported year-on-year drops in RevPAR by 11% to 15%. The largest
167

IBFCMF margins were seen in Kuala Lumpur and Langkawi, while Kuching offers the leanest
margins.
Leisure demand emerged as the most prominent source of business in 2010,
contributing 32% to 67% of room nights across the cities. Corporate demand is also strong in the
Greater KL area and Penang. Participating hotels reported Southeast Asian markets as the largest
regional source, making up about 60% of all room nights in 2010, including the domestic market
which accounted for about 43%. Other significant markets include Singapore, Australia and New
Zealand, Middle East and China. "Overall, participating hotels are conservative in their
projections for both occupancy and rate increases in 2011, projecting only a 4% and 6% increase
respectively," said Sen Soon-Mun, Director of Horwath HTL Kuala Lumpur. In 2010, tourist
arrivals grew by 4% to a record 24.6 million arrivals, compared to 23.6 million arrivals in 2009.
This resulted in total tourism receipts of RM 56.5 billion a strong 5.8% growth from 2009. The
top 10 source countries include regional markets such as India, Korea and China.
The Malaysian government is totally committed to the development of this sector.
Over the last 12 years, extensive promotional campaigns have been engineered both locally and
overseas to attract tourists from around the world. Despite the economic slowdown, the tourism
industry remains strong. Today, Malaysia is one of the most popular tourist destinations in Asia.
In 2005 alone, the industry accounted for a total of RM31 billion in foreign exchange earnings
from over 16.4 million tourist arrivals.
Malaysia's continuous efforts to improve the quality of tourism services and
infrastructure play an important role in attracting foreign investors to this sector. The
government's many initiatives, which are undertaken by its official tourism promotional board
Tourism Malaysia, have also resulted in tremendous growth in the industry's supply and demand
chain - thus, creating potential investment opportunities in many areas, from retail and services
to hospitality and travel.

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Major players and overall products / services offered by the hospitality industry :
1)

Rubber-based Industry
The Malaysian rubber products industry is made up of more than 500 manufacturers

producing latex products; tyres and tyre-related products; and industrial and general rubber
products. The industry contributed 18.1 billion to the country's export earnings in 2011.
Rubber products accounted for 3.9 per cent of Malaysia's total exports for manufacturing
products.
Malaysia's natural rubber production in 2011 amounted to 996,210 tonnes compared with
939,241 tonnes in 2010. The domestic consumption of natural rubber for 2011 was 401,923
tonnes. The natural rubber consuming industries for 2011 were latex products (80.3%), tyres
(9.2%), general rubber products (7.2%), industrial rubber products (3.2%) and others (0.2%).
The rapid growth of the industry has enabled Malaysia to become the world's largest consumer
of natural rubber latex.
The latex products sub-sector is the largest sub-sector within the rubber products industry
and comprises 125 manufacturers producing gloves, condom, catheters, latex thread and others.
This sub-sector accounted for 81 per cent of the rubber total value of exports, largely contributed
by gloves, catheters and latex threads. Malaysia continued to maintain its position as the world's
leading producer and exporter of catheters, latex threads and natural rubber medical gloves.
There are currently 120 companies in the tyres and tyre-related products sub-sector
comprising nine tyre producers while the remaining companies produce retreads, tyre treads for
retreading, valves and other accessories. There are three major tyre producers producing
passenger car tyres, commercial vehicle tyres and earthmover tyres, and another nine
manufacturing other types of tyres. Exports value of rubber tyres, flaps and inner tubes in 2011
amounted to RM779.3 million.
The industrial and general rubber products sub-sector comprises 185 companies
producing a wide range of rubber products such as mountings, beltings, hoses, tubings, seals, and
sheetings for the automotive, electrical & electronics, machinery & equipment and construction
industries, largely for the domestic market.
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The rubber products industry will need to diversify further, emphasising on high valueadded and high technology rubber products, such as products for engineering, construction and
marine applications. Under the Palm Oil and Rubber NKEA, four EPPs are being implemented
including accelerating downstream activities and commercialising new rubber products. The
rubber industry is targeted to contribute RM52.9 billion to the GNI by 2020.
The government continues to promote the development of Malaysia's resource-based
industries to diversify the country's sources of growth. In addition to fiscal incentives which are
currently available for promoted products and activities, the government has further fine-tuned
the incentives to promote specific activities among which is the rubber products industry. To
further encourage investments in resource-based industries, local companies in the rubber
industry that reinvest to expand their projects are eligible for Pioneer Status or Investment Tax
Allowance.

2)

Petrochemical and Polymer Industry

The petroleum and petrochemical industry covers natural gas, petroleum products and

petrochemicals. The industry is an important sector in Malaysia with investments totaling RM

60.7 billion as at 2011.
The rapid growth of the industry is mainly attributed to the availability of oil and gas as
feedstock, a well-developed infrastructure, a strong base of supporting services, the country's
cost competitiveness, as well as Malaysia's strategic location within ASEAN and its close
proximity to major markets in the Asia Pacific Region.
Malaysia has the world's 14th largest natural gas reserves and 23rd largest crude oil
reserves. Currently, Malaysia produced 2,000 million standard cubic feet per day of natural gas
and 730,000 barrels of oil equivalent per day of crude oil. Malaysia also has the world's largest
production facility at a single location of liquefied natural gas with production capacity of 24.2
million metric tonne per year.
The long term reliability and security of gas supply ensures the sustainable development
of the country's petrochemical industry. The existence of a trans-peninsular gas transmission
170

pipeline system and six gas processing plants, has resulted in a ready supply of gas to the
industry.
To complement the existing gas reserves and to ensure further security of gas supply,
Malaysia has forged partnerships with other ASEAN members for the supply of gas such as
Vietnam, Indonesia and the Malaysia-Thailand Joint Development Area (JDA). In addition, gas
supply will be further enhanced with the implementation of the ASEAN gas grid, a venture to
make gas available to all the 10 ASEAN countries.
With the full implementation of AFTA, petrochemical manufacturers in Malaysia will
benefit from a single market. Manufacturers based in Malaysia will also benefit from the access
to a much larger Asia Pacific market. With China being a net importer of petrochemicals,
Malaysia's Free Trade Agreement with China will open up new business opportunities for
petrochemicals manufacturers in Malaysia.
The presence of world renowned petrochemical companies, such as BP, Shell, BASF,
Eastman Chemicals, Toray, Mitsubishi, Idemitsu, Polyplastics, Kaneka, Dairen and Honam
speaks clearly of Malaysia's potential as an investment location for petrochemical industries.
Most of these companies are working in collaboration with Malaysia's national petroleum
company, PETRONAS.
Three major petrochemical zones have been established in Kertih, Terengganu; Gebeng,
Pahang; and Pasir Gudang/Tanjung Langsat, Johor. Each zone is an integrated complex with
crackers, syngas and aromatics facilities to produce feedstocks for downstream products.
There are also other petrochemical plants in Malaysia such as the ammonia and urea
plants in Bintulu, Sarawak and Gurun, Kedah; acrylonitrile butadiene styrene plant in Pulau
Pinang; methanol plant in Labuan and the nitrile-butadiene rubber plant in Kluang, Johor.
From being an importer of petrochemicals, Malaysia is today an exporter of major
petrochemical products. A wide range of petrochemicals are produced in Malaysia such as
olefins, polyolefins, aromatics, ethylene oxides, glycols, oxo-alcohols, exthoxylates, acrylic
acids, phthalic anhydride, acetic acid, styrene monomer, high impact polystyrene, ethyl benzene,
vinyl chloride monomer and polyvinyl chloride and polybutylene terephthalate. These world
171

scale plants have also contributed significantly to the development of local downstream plastic
processing activities by providing a steady supply of feedstock material for the plastic industry.
These factors have led the plastic products industry to become one of the most dynamic
industries in Malaysia's manufacturing sector. The plastic industry can be divided into four subsectors, namely packaging sub-sector, electrical & electronics and automotive components subsector, consumer and industrial products sub-sector and others. The packaging sub-sector, both
flexible and rigid (including bags, films, bottles and containers), remains the largest market for
the plastic industry. The main production processes involved in the plastic producers industry are
injection moulding, pipes and profiles extrusion and foam moulding.
There are more than 1,450 companies in operation, producing products ranging from
common household items, packaging materials and conveyance articles to parts and components
for

the

electrical

and

electronics,

automotive,

office

automation,

computer

and

telecommunications industries.
Malaysia is currently a net exporter of plastic products. The total export of plastic
products amounted to RM21.2 billion in 2011, an increased of 12.7 per cent compared with
2010. The main products exported were plastics in primary form, containers of plastics, plates,
films, sheets, foils, strips and other articles of plastics. The main export destinations included the
EU, the People's Republic of China, Hong Kong, Singapore, Japan and Thailand.
The Malaysian plastics industry has been rated as among the most competitive in Asia.
Globalisation poses both challenges and opportunities simultaneously for Malaysian plastic
manufacturers. Therefore, it is imperative for Malaysian manufacturers to sustain their
competitiveness, through improved technologies, enhanced skills and penetrating new markets in
developed and developing economies.

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3)

Pharmaceuticals Industry
Malaysian pharmaceutical industry has shown a progressive growth over the years,

particularly over the last one decade. The industry has invested substantially to upgrade itself in
the last few years to meet the latest Good Manufacturing Practices (GMP) requirements, in
accordance with the domestic as well as international Guidance. Currently the industry has the
capacity to produce medicines in all dosage forms e.g. tablets (coated & non-coated), capsules
(hard and soft gelatine), liquids, creams, ointments, sterile eye drops, small volume injectable
(ampoules and vials), large volume infusions, dry powders for reconstitution and active
pharmaceutical ingredients (API).
Local manufacturers have also developed and launched off-patent generics and herbal
products using their own brands. Currently, the local industry is producing about 30 per cent of
the domestic demand, as well as exporting to the Asia-Pacific Rim countries, the Middle East,
Africa, Latin America and Europe. Leading Malaysian companies are also moving into the
production of biologics drugs, oncology and high value-added generic compounds in-line with
the growing demands in this region.
The principal regulatory authority on the production, import and sale of pharmaceuticals
(including traditional medicines) in Malaysia is the Drug Control Authority (DCA) of the
Ministry of Health. To date, a total of 246 pharmaceutical premises with Good Manufacturing
Practices certification have registered with the DCA.
Of these, a total of 51 premises are licensed to produce modern medicines comprising
mainly analgesics, antacids, anti-hypertensive, diuretics, antibiotics and anti-histamines in the
form of tablets, capsules, drops, powders, creams, ointments, injectable, syrups, ophthalmic and
nasal preparations. The remaining 172 premises are licensed to produce local traditional and
herbal medicines.
Malaysia is one of the few countries in the region that have been accepted into the
Pharmaceutical Inspection Cooperation/Scheme (PIC/S). With the admission of Malaysia as a
member of the Pharmaceutical Inspection Convention and Pharmaceutical Inspection
Cooperation/Scheme (PIC/S) in January 2002, the country's exports of pharmaceutical products

173

received a boost, especially among the member countries, which include the EU, Australia and
Canada.
Equally attractive is the increasing global demand in halal pharmaceuticals which offer
companies the opportunities to capitalise on local expertise in halal production and the global
acceptance of Malaysia's halal certification as well as increasing recognition of its halal products.
Under the Healthcare National Key Economic Area (NKEA) sector, one of the key
recommendations is to promote manufacturing of pharmaceuticals. New investments in the stateof-the-art technologies and compliance with international standards have enabled Malaysian
companies to be strategic outsourcing partners for MNCs.
Increasingly health-conscious Malaysians have contributed to the growth of OTC
food/health supplements as well as herbal and traditional medicines. This is also in line with the
agriculture NKEA to capitalise on Malaysias competitive advantage by leveraging on
Malaysias biodiversity, including developing diverse natural herbs into premium herbal
products.
To further support the development of the pharmaceutical industry in Malaysia,
increasing efforts are being undertaken by the Government to develop the clinical trial services
sector. Under the purview of the National Institute of Health of the Ministry of Health (MOH), a
Clinical Research Centre (CRC) has been established to conduct clinical trials, clinical
epidemiology and economic research, and manage complex medical databases. The CRC
comprising a network of 27 centres around the country acts as the one-stop-centre by providing a
single point of contact to access all Ministry of Health hospitals and clinics to conduct clinical
trials in Malaysia. These clinical trial centres have linkages to more than 50 general and district
hospitals, and more than 100 health clinics as potential sites for clinical trials with access to 550
clinical investigators and 17 million patients from diverse therapeutic areas in the public health
care system in Malaysia.
Malaysia has nine international contract research organisations (CROs) operating in its
shores and four local CROs. The country has 138 secondary and tertiary Ministry of Health
(MOH) hospitals that service over 15 million patients in various therapeutic areas, which has
generated about 175 active investigators. This is merely a fraction of the approximately 2800
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specialists at MOH facilities (in total there are 5000 specialists from both the public and private
sectors). (Source: Contract Research at MOH Hospitals. Berita MMA 2011(January):17-18).
Currently, the manufacture of pharmaceuticals, biopharmaceuticals, nutraceuticals,
microbials and probiotics are eligible for Pioneer Status or Investments Tax Allowance
incentives. The development, testing and production of pharmaceuticals promoted under
biotechnology are eligible for High Technology Pioneer Status or Investments Tax Allowance
incentives.
4)

Textiles and Apparels Industry

The textiles and textile products industry in Malaysia comprises four sub-sectors, namely

primary textiles which cover activities such as polymerisation, spinning, weaving, knitting and
wet processing; made-up garments; made-up textiles; and textile accessories. The growth of
Malaysia's textiles and apparel industry accelerated in the early 1970s when the country
embarked on export-oriented industrialisation. Due to the intensified global competition,
Malaysia textile manufacturers are moving up the value chain by diversifying into the production
of higher value-added textiles, implementing automation and computerised manufacturing,
processes, seeking business collaboration with foreign companies to acquire new technologies
and undertaking research and development activities to develop new processes, new applications
and value-added products. The industry currently employs more than 68,000 workers.
In 2011, the industry was the 10th largest export earner, contributing approximately 2.3
per cent to Malaysias total exports of manufactured goods. Exports of textiles and textile
products for the year 2011 were RM10.8 billion while imports amounted to RM6.6 billion. The
main export items were yarn, woven fabrics and apparels and imports were mostly yarn and
woven fabrics. Malaysias apparel manufacturers continue to maintain an excellent reputation for
quality to meet high standards set by international brands owner such as Nike, Adidas, DKNY,
Ann Taylor, Armani, Talbots and Tommy Hilfiger.

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New growth areas in textiles industry have been targeted for promotion under the Third
Industrial Master Plan (IMP3). The growth areas for the industry include: industrial and home
textiles; functional fabrics; high-end fabrics and garments; ethnic fabrics; and key support
facilities and services such as design houses and fashion centres, specialized dyeing and finishing
facilities, etc.
Six strategic thrusts have been set for further development of the industry during the
IMP3 period. The thrusts include:
(a) Intensifying the promotion of investment in higher value-added textiles and apparel,
including key support services
(b) Sustaining the market share in textiles and apparel and promoting exports of the targeted
growth areas
(c) Intensifying regional integration of the industry
(d) Enhancing domestic capabilities and facilitating the utilisation of ICT and new technologies
(e) Enhancing the skills of the workforce in designing production and marketing
(f) Strengthening the institutional support for the further development of the industry

5)

Food Industry
Malaysias food industry is as diverse as the multi-cultures of Malaysia, with a wide

range of processed food with Asian tastes. The food processing industry is predominantly
Malaysian-owned. It is estimated that the present global retail sales in food products are worth
around US$3.5 trillion, and are expected to grow at an annual rate of 4.8 per cent to US$6.4
trillion by 2020.
Malaysia remains a net importer of food in 2011 (RM34.5 billion). Major food imports
were cereals and cereal preparations (RM7.2 billion), vegetables and fruits (RM4.2 billion),
cocoa (RM3.6 billion), sugar and sugar confectionery (RM3.4 billion) and animal feed (RM2.8
billion). Raw materials such as cereals and dairy products continue to be imported for further
176

processing. In 2011, Malaysia exported food products worth RM20.6 billion to more than 200
countries, of which, processed food contributed about RM13.5 billion. The main exports were
cocoa and cocoa preparations (RM3.8 billion), prepared cereals and flour preparations (RM1.6
billion) and margarine and shortening (RM1.3 billion). Major export destinations were
Singapore, the USA, Indonesia and Republic of China.
The Malaysian food industry is dominated by small and medium scale companies. The
major sub-sectors are the fish and fish products, livestock and livestock products, fruits,
vegetables and cocoa.
The fisheries products sub-sector includes processed seafood products such as frozen
and canned fish, crustaceans and molluscs, surimi and surimi products. This sub-sector is export
oriented and remains the main contributor to the exports of processed food.
Malaysia is the third largest producer of poultry meat in the Asia Pacific region. Malaysia
is self-sufficient in poultry, pork and eggs, but imports about 80% of its beef requirements.
Among the dairy products produced are milk powder, sweetened condensed milk, pasteurized or
sterilized liquid milk, ice cream, yoghurt and other fermented milk.
The common fruits cultivated and produced are mango, starfruit and papaya and local
fruits such as rambutan durian. Most of these fruits are for fresh consumption in the domestic
market. There are currently a number of organic farms producing rice, vegetable and fruits to
meet the growing demand. To lend credibility to Malaysian produce, the Ministry of Agriculture
and Agro-based Industry has put in place a certification process whereby accredited farms can
carry the Organic Malaysia logo.
Malaysia is currently the largest cocoa processor in Asia. Although Malaysia is the
worlds fifth largest cocoa producer, local cocoa bean production could not support the huge
demand from local grinding and processing industry. Most of the cocoa beans are imported.
Malaysia is also a major producer of spice, being the world's sixth largest exporter of
pepper and pepper-related products (specialty peppers, processed pepper and pepper sauces).
Other spices such as coriander, turmeric, lemongrass, cinnamon, clove and fennel are also
produced
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Agriculture is one of the sectors identified in the National Key Economic Areas
(NKEAs). It focuses on selected sub-sectors including aquaculture, seaweed farming, swiftlet
farming, herbal products, fruits and vegetables and premium processed food which have highgrowth potential. There is a growing demand for these high value products which provide
opportunities for farmers to increase their income. In addition, the paddy and livestock subsectors were also selected due to their strategic nature in ensuring national food security.
Increasing consumer awareness in nutrition value and food fortification for healthcare has
created the demand for functional/healthy minimally processed fresh food, organic food and
natural food flavours from plants and seafood. Functional/health food produced in Malaysia is
mainly in the form of food products that are enriched. Food ingredients such as customised
formulations required by food manufacturers, natural food additives and flavours have the
potential for further growth.
The halal industry in Malaysia provides immense opportunities for Malaysian
manufacturers. It was estimated that the potential value of the halal food industry range between
USD600 billion and USD2.1 trillion. The concept of halal is associated with food products which
are of high quality in terms of cleanliness, sanitation and compliance with religious
requirements.
Malaysias food manufacturer can contemplate joint-ventures with established food
manufacturers particularly from Australia and New Zealand to service the ASEAN, Middle
East, European and US markets which have sizeable Muslim populations. Local halal food
products can gain easy access into these halal markets as Malaysias halal certification is
globally recognised.
6)

Wood Based Industry

The wood-based industry in Malaysia comprises four major sub-sectors:Sawn timber, veneer and panel products which include plywood and other reconstituted
panel products such as particleboard/chipboard/fibreboard, mouldings and builders' joinery and
carpentry (BJC) such as doors/windows and its components panels and flooring board/parquet,

178

and furniture. The industry is predominantly owned by Malaysian and it is estimated that 80 - 90
per cent of the companies comprise small and medium-size (SME) establishments.
Most of the larger sawmills, veneer and plywood mills are located in Sabah and Sarawak.
Mills in Sabah and Sarawak utilise tropical wood species for the production of sawn timber,
veneer, plywood and other veneered panel products. More than 45 per cent of the plywood mills
and 60 per cent of the mouldings mills are located in Sabah and Sarawak.
The downstream processing mills for the production of fibreboard, BJC as well as
furniture and furniture components are mainly located in Peninsular Malaysia. These mills
mainly utilise rubberwood which are sourced from sustainable plantations.
Malaysian furniture manufacturers produce a wide range of furniture from office,
kitchen, bedroom, dining room, occasional, living room, upholstered furniture/sofa, outdoor and
garden furniture. Furniture is made from not only wood, but also all types of materials such as
rattan, metal, fabrics, plastic, glass, marble and other composite materials. The furniture
manufacturers are located mainly in Johor, Selangor, Sarawak, Perak and Melaka.

179

A Truly Malaysian Experience

The most distinct and charming aspect of Malaysian tourism is the country's cultural and
natural heritage. While cultural and historical tourist attractions can be found in destinations such
as Malacca and Penang, eco- and agro-tourism activities are more popular in the east coast of
Peninsular Malaysia, and Sabah and Sarawak in East Malaysia.
Besides sightseeing, other activities that are attracting tourists to Malaysia include
shopping, leisure and business-related events. Global sporting events like the Sepang F1 Grand
Prix, Le Tour de Langkawi and the Raja Muda International Regatta are also drawing in a
significant number of foreign tourists into the country.
Domestic tourism is also another important part of Malaysia's tourism industry. In 2005,
Malaysians alone made 16 million tourism trips in the country. In that same year, the number of
domestic hotel guests was recorded at an astounding 29 million. The growing interest in
domestic tourism can be attributed to rising household incomes, the improved quality of life
among Malaysians, as well as the corporate retreats, family-friendly resorts and recreational
camps burgeoning at various tourist destinations around the country. Investment opportunities
abound in these areas for both local and foreign companies.
Flying High
The state-of-the-art Kuala Lumpur International Airport (KLIA) is a major gateway into
South East Asia. The airport currently handles flights for over 40 international carriers. These
include British Airways, KLM, Japan Airlines, Emirates, Lufthansa, Northwest and many others.
Despite rising global fuel prices, air fares remain relatively stable in Malaysia. The local
air routes are serviced mainly by national carrier Malaysia Airlines and Asia's largest budget
airlines Air Asia. With the introduction of this low-cost carrier, there are now more travel
options to various local destinations, especially East Malaysia. The healthy competition between
these airlines has facilitated in the growth of tourist arrivals by providing competitive air fares to
all.

180

World-Class Accommodations
Some of the world's leading hotel brands are already in Malaysia - including Hilton,
Marriott, Shangri-La, Sheraton and Westin. However, with the tourism boom still gaining
momentum in Asia, there is great potential for investors to come in. The occupancy rate of hotels
is consistently high for popular tourist attractions such as Kuala Lumpur and Genting Highlands,
especially with a steady flow of tourists from neighbouring countries such as Singapore and
Thailand.
A Shopping Haven For Tourists
With an endless variety of goods and competitive prices, Malaysia is a glorious haven for
shoppers, local and international alike. From massive shopping malls and hypermarkets to ethnic
stores, exclusive boutiques and duty free shops, Malaysia has all the attributes to make it the
preferred shopping destination in the region.
For the international shopper, the biggest highlight of the year will probably be the
Malaysian Mega Sale Carnival, an event organised by the Ministry of Tourism, Tourism
Malaysia and the Shopping Malaysia Secretariat. Held twice a year, the Mega Sale Carnival is an
exciting one-month showcase of promotions, bargains and discounts of up to 70% on a wide
variety of products, brands and services at shopping complexes and malls across the country.
During this period, tourists can take advantage of concessions on room rates, F&B, entertainment
outlets as well as transportation & travel packages.

181

SWOT Analysis

STRENGTHS
1. Natural and cultural diversity : India has a rich cultural heritage. The "unity in diversity" tag
attracts most tourists. The coastlines, sunny beaches, backwaters of Kerala, snow capped
Himalayas and the quiescent lakes are incredible.
2. Demand-supply gap : Indian hotel industry is facing a mismatch between the demand and
supply of rooms leading to higher room rates and occupancy levels. With the privilege of hosting
Commonwealth Games 2010 there is more demand of rooms in five star hotels. This has led to
the rapid expansion of the sector.
3. Government support: The government has realized the importance of tourism and has
proposed a budget of Rs. 540 crore for the development of the industry. The priority is being
given to the development of the infrastructure and of new tourist destinations and circuits. The
Department of Tourism (DOT) has already started the "Incredible India" campaign for the
promotion of tourism in India.
4. Increase in the market share: India's share in international tourism and hospitality market is
expected to increase over the long-term. New budget and star hotels are being established.
Moreover, foreign hospitality players are heading towards Indian markets.
WEAKNESSES
1.Poor support infrastructure: Though the government is taking necessary steps, many more
things need to be done to improve the infrastructure. In 2003, the total expenditure made in this
regard was US $150 billion in China compared to US$ 21 billion in India.
2.Slow implementation: The lack of adequate recognition for the tourism industry has been
hampering its growth prospects. Whatever steps are being taken by the government are
implemented at a slower pace.
3.Susceptible to political events: The internal security scenario and social unrest also hamper the
foreign tourist arrival rates.
182

OPPORTUNITIES
1.Rising income: Owing to the rise in income levels, Indians have more spare money to spend,
which is expected to enhance leisure tourism.
2.Open sky benefits: With the open sky policy, the travel and tourism industry has seen an
increase in business. Increased airline activity has stimulated demand and has helped improve the
infrastructure. It has benefited both international and domestic travels.

THREATS
1. Fluctuations in international tourist arrivals: The total dependency on foreign tourists can be
risky, as there are wide fluctuations in international tourism. Domestic tourism needs to be given
equal importance and measures should be taken to promote it.
2.Increasing competition: Several international majors like the Four Seasons, Shangri-La and
Aman Resorts are entering the Indian markets. Two other groups - the Carlson Group and the
Marriott chain - are also looking forward to join this race. This will increase the competition for
the existing Indian hotel majors.

183

TRANSPORTATION INDUSTRY

In Malaysia transport was started mounting during British colonial rule, and its
transport system is now developed and different. Malaysia's road system begun
during British immigration and it covers about 63,445 km. The main highway that
reaches the Thai border from Singapore covers a distance of over 800 km. Within the
city, the Light Rail Transit is existing to help congregate Malaysia's need for mobility
that is trustworthy, safe, relaxed and expected.
Peninsular Malaysia has high quality system of roads, while the East Malaysian road
system is not as well developed. In Peninsular Malaysia the main modes of transport
are trains, buses, cars and to a level of airplanes.
Malaysias tiny railway system is less considerable than its roads and is confined
mostly to the peninsula, where it runs from the southern tip northward to the border
with Thailand.
Malaysias first light-rail transport was started in Kuala Lumpur in 1996. After that,
numerous monorail and articulate lines have opened in the Kuala Lumpur
metropolitan area.
In East Malaysia and especially in Sarawak river transport is of grand importance. In
addition, Malaysias available and long coastlines have fostered maritime trade for
more than a millennium. Numerous ports, notably Penang on the Strait of Malacca
and Port Kelang have developed into major container-handling amenities.
Air transport has developed very rapidly as the passenger traffic has improved
particularly on the peninsula. Almost all Malaysian states are associated with an
internal air network. Airports in Kota Kinabalu, Penang and Kuching have restricted
global service.

184

The Malaysian railways are indeed a dynamic, diverse corporatized entity that has the
potential to play an important role in the development of a sustainable transportation system in
the country. The company is wholly owned by the Minister of Finance Incorporated, a
corporate body established in Malaysia. The seamless land and bridge connections with
neighboring states are a key characteristic that may define the rail aspect of the system.
Malaysian railways are facing the dispute to develop their consistency and pace in order to
recommend aggressive services and improve their significance as a road alternative.
Keretapi Tanah Melayu Berhad (KTMB) is a private limited company, incorporated and
domiciled in Malaysia. The company is fully own by the Minister of Finance Incorporated, a
corporate body found in Malaysia. The principal activities of KTMB are to operate the railway
transportation & the provision of related services in Peninsular Malaysia & Singapore. The
company works these activities provide to a license given by the Minister of Transport. KTMB
began its first operation on a 12.8 km stretch between Taiping & Port med in 1885. Today,
KTMBs rail network explore 1,661 km from Padang Besar-North to Singapore-South and to
Tumpat-East. KTMB is principally attached in the business of rail transportation operating,
maintaining and managing the system to provide its main business segments. However, KTMB
also runs as the manager for railway property vested with the Federal Land Commissioner & the
Railway Asset Corporation and as Project Manager cum Adviser to the Government for
Government funded railway similar infrastructure projects. In addition, KTMB through its
subsidiaries and associate companies has business interests in parcel sharing, haulage, property,
car parks, cargo terminals and fiber optic telecommunications.
KTMB has always been the nations recognized player in the logistic industry, moving
passenger, goods and services throughout the railway network in Peninsular Malaysia &
Singapore. Its rail network strategically links and helps to enlarge the industrial growth centres in
the hinterland to the seaports such as Penang Port, Port Klang, Port of Tanjung Pelepas and
Tanjung Pagar. It also connect cross-border actions of freight among Singapore, Malaysia and
Thailand.
The financial results of KTMB have not shown much improvement, but continued to face
sufferers and we might miss our yearly bonus in the future. Deep in his thoughts, it would be
bad if he was fired. However, according to En. Azman Shaharbi, the Finance & Administration
185

General Manager of KTMB, KTMB Group managed to decrease its losses from RM163 million
in 2001 to RM125 million in 2002, but the Group turnover declined from RM382 million in
2001 to RM364 million in 2002. He also extra that the in use income was expected to reduce
largely due to the loss from freight services during the construction period of the Rawang-Ipoh
Double Tracking Project. Losses from railway operation were predictable to increase mainly due
to the restoration of deferred maintenance of rolling stock and railway infrastructure. KTMB was
facing funding shortfall as a result of delayed operating expenditure in addition to loan
repayments and capital expenditure. En. Azman Shaharbi also explained that KTMB remained
severely undercapitalized and over-leveraged. Revenue was recognized when it was probable
that the economic benefits associated with the transaction would flow to the enterprise and the
amount of the profits could be measured reliably. The revenues for the financial years 2003 up
and doing to 2009 for Intercity Passenger Services, Freight Services, Property and Commuter
Train Services.

186

PESTLE ANALYSIS OF RAILWAY INDUSTRY IN MALASIYA

Political Factor
Malaysia was listed as the world's 10th mainly eye-catching FDI objective by international
management expert A.T. Kearney in its current FDI assurance Index study, which gathers data
from more than 200 executive from 27 countries and 17 developed sectors. Malaysia was rank
20th in 2010. The jump is an indication of rising investors' confidence in the government's a
variety of initiatives to alter the economy into that of a high-income nation by 2020.
Supportive Government Policies
Government policies that sustain an industry location with opportunities for development
and earnings have made Malaysia an eye-catching developed and export base in the county. The
confidential segment in Malaysia has developed into partners with the public sector in achieving
the nation expansion objectives.
Taxation
Income of any person together with a trade, accruing in or resulting from Malaysia or
conventional in Malaysia from outer surface Malaysia is matter to income tax. However, revenue
conventional in Malaysia by any person other than a resident company moving on business of
banking, assurance or sea or air transportation for a year of evaluation derived from sources
outside Malaysia is exempted from tax.

187

 Economical
Malaysia is in its most fundamental revolution as it battles to accomplish the Vision 2020.
The rebellion is noticeable on the supporting front, the public sector and among Malaysian
manufacturing entities.
Malaysia is also the worlds 29th most networked economy and the highest-ranked nation
not to be in the right place to the group of high-income countries. In the comprehensive
Information Technology Report 2012, unconfined by the World Economic Forum, Malaysia is
ranked sixth in Asia after Singapore, Taiwan, South Korea, Hong Kong & Japan. The report
praise Malaysia for its government-led attempt in ICT usage, as go back to government-related
indicator such as government usage, not far behind South Korea, Singapore and Taiwan.
Social Factor
Quality of Life
Malaysia is along with the friendliest and generous places in the world to work and live
in, while Malaysians are humid, sociable people who easily believe foreigners into their circle of
friends.
Expatriates and their families will enjoy a secure and relaxed living atmosphere with 21st
century facilities; good healthcare and health check facilities, excellent educational institutions,
and world-class entertaining and sports amenities - at expenditure much lesser than in their own
countries.
Population Growth Rate
Year

Population Size (Million)

1990 -17.6, 2000-22.6, 2010-27.7, 2020-33.6, 2030-39.8,

2040-46.0

188

 Technological
Technology innovation
Rising the frequency of services such as Double Tracking
Increase the pace and reduce transportation time such as diesel replaced by electrical
power
Tracing and tracking systems such as Bar coding systems
Door to door services such as combination with other modes
Improve the accessibility such as enlarge number of workstation
In line with the Governments objective to enhance the improve of public transportation
system in Klang Valley, KTMB Commuter has implemented the Touch n Go scheme
whereby a prepaid electronic purse system for expense of low cost high volume
transactions that will cut queuing time for tourist buying tickets from the counters or the
ticket vending machines.
Legal
Employment law
The Department of Lab is reliable for the government of labour laws in order to maintain
manufacturing synchronization. The labour laws necessitate the minimum necessities that apply
to all types of employment. Flexibility in the action of businesses is facilitated by function for
exception to the Director of Labour, Department of Labour
Health and safety law
The Department of industrial Safety & Health (DOSH), under the Ministry of Human
Resources, is trustworthy for administrating and enforcing legislation connected to industrial
safety and health. DOSH ensures that the safety, health and welfare of people at work as well as
others are sheltered from hazards consequential from industrial actions in the a variety of sectors.

189

 Environmental
Malaysia has earned a place among the 14 most aggressive countries in the world,
according to the 2012 World Competitiveness annual report published by the Swiss-based
foundation for Management Development. The list connections Malaysia allied with 58 country.
With an pointer score of 84.217, Malaysia is the 2nd highest-ranked Southeast Asian countries
after Singapore and ranked 4th in Asia after Hong Kong, Singapore, and Taiwan.
Vibrant Business Environment
Malaysia's market-oriented nation, heartening government policies and a large local
business society that is ready to do business with global corporations have made Malaysia a
highly aggressive urban and export base

190

SWOT Analysis:
Strength:
It is eco friendly and it is help it out to reduce the air pollution and noise pollution which
is essential elements for our society
Safer form of transport for Women.
The voluntary International Standardization Organization (ISO) 14,000 qualifications
Ultra-modern technology and visually arresting design, active and modern, aggressive
and World Class.
It is a cartel and acts as a pro-active government
Weakness
Less ridership than estimated.
High development cost
Displaced many economic backward people.
Opportunities:
Growth of a business is good reputation for that company
To increase frequently because the main crowd of the people are to prefer avaibility of
the train and the metro train executed some strategies which are more beneficial to that
company
Increased revenue for govt. by means of advertising Public private partnership : opening
of retail outlets at metro stations
Revenue from possessions development and advertisements.
Potential to reach higher ridership.
Threats:
A struggle on the division of those being displace, and protest, petitions, hunger strikes,
negotiations and lawful action have all been initiated.
Safety threat.
Risk of cost overruns and ridership shortfalls.
191

 Increase in cost of the parts.

192

CONCLUSION
Education industry
There is a gap between the institutions providing higher education i.e. Delhi
university and Victoria International School. The gap is there in terms of availability of
courses, infrastructure, and faculty qualification. These gaps can be a business opportunity for
an upcoming educational institution.

Consumer durable industry

The Malaysian Electronic Electric industry remains fixated on assembly activities, the
lower value-added part of the chain while Taiwan, India and Singapore have forged ahead in
higher value-adding activities of research and development, design and manufacturing.

Telecommunication industry
It can be observed over the project that TM Behrad cant be settled in Gujarat and India on the
whole. The reason for the same would be that the TM Behrad is a developing company in the
terms of the product line that it offers. Also the services giving by the company is not according
to the need of the people in Gujarat. The marketing strategy used by TM behrad is also aint
suitable for the country. India is a wide nation with a very diversed population in terms of the
culture, usage and income bars. Thus serving all of them would be a very difficult task for the
people. Also financially the company is not strong enough to develop here and give the services
at a rate as low as that offered by the competitors here.

193

Automobile industry
T he Indian companies can get technological support from the Malaysian market as we
have seen in the project Malaysia is famous for the production of auto parts of vehicles and it is
one of the top countries who are exporting there auto parts to various countries this is an
advantage for an Indian company which can be utilized very easily varying they can use the auto
parts made by the Malaysian companies.

Aviation industry
After studying the aviation sector of Malaysia we can conclude that it will have more
opportunity for India to expand in Malaysias aviation industry. Also, Malaysia has more
technological advancement than India. Malaysian airlines refer to expand their business to
change the scenario and incorporate with different airlines by partnership and alliances, so Indian
company such as Air India, Indian airlines; kingfisher has better opportunity to tie up with
Malaysian airlines.

Agriculture industry
Malaysia is the world's largest exporter of palm oil having exported 18 million tonnes of
palm oil products in 2011. Pakistan, China, the European Union, India & the United States are
the main importers of Malaysian palm oil products.

Rubber industry
From our study we conclude that Indian and Malaysian company can join hands together
and that can help both the sides of business to grow and utilize capacity and satisfy demand of
each other.

194

Infrastructure industry

Yes Its Feasible for Adani infrastructure Industry to do business in Malaysia. All the
criterias match .

Tourism industry
Overall with prospect to the import export and tourism- hospitality industry Malaysia
serves best for any countrys entrepreneur to work and grow.

Transportation industry
we can say that its an infeasible business for DMRC to merge or explore with Malaysias
railway company to do business
o DMRC should start service during night also.
o Try to possible similar projects discussed throughout the country.
o DMRC should focus on penetrating other Metro cities.

195

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