Malaysia’s economy is experiencing a remarkable growth—mainly due to its increasingly wealthy and well-educated population. The country is expected to expend more than $26 billion from 2012 to 2017 for its aviation and maritime requirements.
Parallel to the economic growth of Malaysia is its demand in its maritime sector. The majority of the trade of the country is by sea. Malaysian ports were managed by the government in the past; however, many of these ports have been increasingly privatized and commercial operations being undertaken by private companies.
Ship leasing is offering an attractive opportunity in Malaysia. Leasing vessels to clients in the oil and gas industry is become a key opportunity in the country. Also, with Malaysia’s continuous anti-piracy missions and patrols, the country needs equipment upgrade programs to cater to its ageing vessels.
Boeing and Airbus recently announced an increase in the global production of commercial aircraft. Malaysia offers opportunities in the aircraft-delivery supply chain, aircraft maintenance and airport infrastructure.
Malaysia’s Economic Transformation Programme (ETP) is based on a policy that aims to take the country to a higher level in the global chain. The program aims to have the aviation MRO (maintenance, repair, and overhaul) contribute RM13.4 billion in Gross National Income and open 20,700 new jobs by 2020.
In 2015, Malaysia Airlines announced that it was ‘technically bankrupt’ owing to the two airline tragedies that occurred in the previous year. A restructuring program was also declared as a means to overcome the Airlines’ immediate issues along with a job cut of 6000 positions within the organisation. The recovery program for Malaysia Airlines involves a stabilisation strategy and a renewed growth path by 2017.
Opportunities in maritime and aviation
As part of Malaysia’s defence industrialization program, a budget of US$2.49 billion is allotted for equipment procurement for Land Military Modernization. The procurement plans include utility helicopters, multiple rocket launchers, self propelled artillery and a future soldier system.
Royal Malaysian Navy (RMN) Future Fleet Programme targets to build a six-vessel squadron of Scorpène class submarines, maritime patrol aircraft, new generation patrol vessels and multi-purpose support ships by the year 2020.
Trends and opportunities
Low technology capabilities and reliance on partnerships with international contractors characterize Malaysia’s industrial base in the defence sector, focused mainly on repair and maintenance. However, its defence industry has seen more progress, with many local companies engaging in joint ventures with foreign companies for shipbuilding and assembly of armored and military vehicles.
Depending on the project size, Malaysian Armed Forces performs the defence procurement. For major purchases by the government, approval of the Ministry of Defence along with the Prime Minister is required.
Malaysia’s priority to strengthen its defence industrial base is part of its Vision 2020 policy, which aims to direct its economy to capital and knowledge-base industries.
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