Strong Investments Drive Exports

In 2020, exports have been impacted due to lockdown measures imposed globally to curb the spread of COVID-19

In 1980, MITI under its External Trade Department, established the Malaysia Export Trade Centre or MEXPO, which role is to maintain a permanent exhibition centre showcasing Malaysian-made products to visiting foreign businessmen from around the world, including those from the investing companies. This role gradually expanded to MEXPO organising the participation of Malaysian companies in overseas trade exhibitions. 

The need for Malaysian companies to participate in global trade events grew as demand for Made-in-Malaysia manufactured goods increased between the 1980s to 1990s due to inflation in Japan and European countries that pushed the companies from these countries to seek cheaper alternatives. 

MEXPO laid the groundwork for the country to embark on more ambitious plans for the promotion of Malaysian products and services to the world. As a result, MATRADE was instituted on 1 March 1993. The birth of MATRADE complements the role that MIDA plays and the two are very much dependent on one another. Today, efforts by MATRADE have contributed to the rapid growth of Malaysian entrepreneurs who can compete globally. On average, exports grew annually by 12 per cent between 1980 and 2019.

In 2020, exports have been impacted due to lockdown measures imposed globally to curb the spread of COVID-19. However, exports started to improve in the second half of the year as the economy progressively reopened and external demand recovered. For the period of January-November 2020, Malaysia recorded a marginal decline of 2.6 per cent in exports which was a significant improvement from a 7.9 per cent decline in the period of January-June 2020.

Malaysia’s exports in November 2020 increased by 4.3 per cent to RM84.43 billion compared to the same month last year, registering three consecutive months of year-on-year (y-o-y) growth. The expansion was supported mainly by higher exports to the United States, Singapore, China and Hong Kong SAR. The opening of economic sectors played a major role in the rebound of export performance for Malaysia as Malaysian companies get to resume their role in the global supply chain.

Export of scientific equipment and chemicals recorded a significant growth

In November 2020, exports of manufactured goods which contributed to 88.1 per cent of total exports, rose by 8.1per cent y-o-y to RM74.34 billion. The growth was buoyed mainly by higher exports of E&E products as well as rubber products. Exports of rubber products performance showed resiliency with 13 consecutive months of growth. Higher exports were also registered for other manufactures especially solid-state storage devices (SSD), wood products as well as optical, scientific and equipment. 

The exports of goods in sectors driven by investments in Malaysia such as E&E have recorded significant growth over the last decade. The E&E registered an increase of 49.4 per cent, petroleum product (up 122.9 per cent), chemicals & chemical products (up 98.6 per cent), optical & scientific equipment (up 117.8 per cent), machinery, equipment & parts (up 94.1 per cent) and iron & steel products (up 159.7 per cent) as well as transport equipment (up 106.5 per cent). 

In the effort to boost Malaysian companies presence and readiness in the global market, MATRADE facilitates companies to explore export opportunities overseas through various programmes that cover two main aspects – Exporters capacity development programmes; and Export promotion programmes, notably participation in international exhibitions, trade and investment mission (TIM), export acceleration mission (EAM), international sourcing programme (INSP) as well as a business matching programme. 

Last year, MITI through MATRADE has taken the following steps, to boost Malaysia’s export:

• To help companies reduce the financial burden of market promotion, MATRADE provided RM23.96 million in Market Development Grants (MDGs) to a total of 1,374 firms assisted in 2020. In 2020, export initiatives under MDG were further expanded to include:

1. Recognised international Virtual Events, including virtual trade exhibitions and virtual trade missions, where business-to-business (B2B) meetings are an integral part of these virtual events;
2. Reimbursement on logistic costs of sending Malaysia product overseas affected by COVID-19 global shutdowns; and
3. Financial compensation for postponements or cancellations of Trade Promotion Events. 

• Developed and disseminated 899 Market Alert reports and 171 Product Market Study reports, with information on regional economic and market developments, export opportunities, standards and foreign trade policies and regulations. MATRADE’s mobile app – MyExport – also deployed 3,177 trade leads, based on inquiries received from foreign firms keen to buy goods and services from Malaysia. Among the most-sourced products include pharmaceuticals, food and beverage, chemicals, automotive, furniture and electrical/electronics. 
• eTRADE programme was introduced to assist Malaysian SMEs to leverage the power of e-Commerce. The programme helps exporters promote their wares to global markets through listings on 20 selected international e-commerce platforms. The programme has assisted 774 companies. Since its inception, the programme has benefitted over 4,000 Malaysian SMEs who have made inroads into markets such as Cambodia, Thailand, China, USA and Egypt, among other nations around the world.  
• eBizMatch, a programme conducted on a digital platform, where MATRADE implements business matching between foreign importers and Malaysian exporters. In 2020, a total of 1,020 business matching were held between 621 foreign buyers and 885 Malaysian companies, resulting in potential export sales of RM1.08 billion. 
• Empowerment of exporters is also intensified through export training activities using webinar methods. In 2020, a total of 154 webinars with 8,760 viewers were organised in collaboration with various parties including Asian Development Bank (ADB), Islamic Center for Development of Trade (ICDT), The Star, eBay and McKinsey & Co., with topics discussed including market updates, trade promotion strategies, supply chains and the impact of COVID-19 on business sustainability.