Market News

Malaysia’s economic performance has been sustained with positive outlook providing impetus for expansion among its various industries. With projected gross domestic product (GDP) at 4.6% for 2024, as per RHB Investment Bank’s forecast, there is much optimism due to improvements in the global and regional economic performance. The country has also seen an increase in private consumption due to favorable labor market conditions and investment incentives. These factors are expected to have a positive impact on various industries, including the plastics and rubber industries.

The plastics industry in Malaysia is experiencing rapid growth and is considered one of the fastest-growing industries in Asia. This growth can be attributed to the growing demand for plastic materials from various sectors within the country. According to a report by Mordor Intelligence, the size of the plastics market in Malaysia is projected to reach US$3.89 billion this year. It is expected to increase to US$4.71 billion by 2029, with an annual growth rate of 3.91% during the period of 2024-2029. The strong performance of the industry is driven by the huge and increasing demand for flexible packaging from manufacturers of personal and healthcare products, pharmaceuticals, and packaged foods and beverages. The report also highlighted significant growth potential in the aerospace industry in the coming years, along with the rising use of biodegradable plastics and intensified recycling efforts.

The sustained demand for plastic materials in Malaysia can be attributed to the thriving food and beverage packaging sector. Stringent standards have resulted in manufacturers utilizing state-of-the-art manufacturing equipment to meet both domestic and global market demands. To date, packaging continues to account for the biggest share of plastic applications in Malaysia. This is due to the material’s inherent chemical resistance, ease of processing, high mechanical strength and recyclability.

Malaysia has also embraced the use of bioplastics as an alternative to fossil plastics. Bioplastics are increasingly being used in flexible packaging, rigid packaging, agricultural packaging as well as consumer goods. This increased application of bioplastics aligns with the Malaysia Plastic Sustainable Roadmap 2021-2030. The roadmap outlines strategies and action plans to achieve the country's circularity goals for plastics. It encompasses key policies, measures, regulations, R&D efforts and technologies that cover the entire life cycle of plastics, from production to disposal and recycling, with special focus on the mandatory Extended Producer Responsibility (EPR) scheme. In particular, the objective is to achieve a 100% recycling rate for plastic packaging by 2050, a 15% average recycled content for various products by 2030, as well as the implementation of halal certification standards for recycled plastic (rPET).

To support Malaysia’s effort towards a circular economy, a number of key investments have been made to introduce more advanced production and recycling technologies in the country.

Coca-Cola Malaysia, in partnership with Aeon Malaysia, Hiroyuki Industries, and Trash4Cash, launched the Recycle Me! Campaign to promote plastic recycling and the circular economy model in various states of Malaysia. The campaign aims to encourage the recycling of plastic bottles in the country, which is poised to unlock the economic potential of 1.7 million tonnes of discarded plastics, tapping into a potential economic value of US$1.3 billion, according to the estimate by the Natural Resources, Environment and Climate Change (NRECC) ministry.

The Recycle Me! campaign aligns with The Coca-Cola Company's global vision of achieving a World Without Waste by 2030, which aims to collect and recycle a bottle or can for every one it sells. This campaign encourages the public to recycle PET bottles in exchange for cash rewards, with the collected bottles being recycled to produce new ones. As part of this initiative, Coca-Cola Malaysia has introduced bottles made from 100% recycled plastic bottles for its Coca-Cola Original Taste and Coca-Cola Zero Sugar 500ml products, excluding the caps and labels. The company currently offers at least one brand made from 100% recycled plastic bottles in over 40 countries worldwide, including Indonesia, Myanmar, Vietnam, Thailand, Singapore and now Malaysia.

Another notable investment is the construction of Asia’s largest advanced chemical recycling plant by Petronas Chemicals Group Berhad (PCG), which was announced in October 2023. Touted as Asia’s largest advanced chemical recycling plant, the facility will have a capacity of recycling of 33 kilo-tonnes per annum (ktpa) for post-consumer plastic once it becomes operational. The plant will be located in Pengerang, Johor, and is targeted to commence operations in the first half of 2026. A Technology License Agreement (TLA) was signed between PCG’s subsidiary and the Plastic Energy Limited, while the engineering, procurement and construction were awarded to Mutiara Etnik Sdn. Bhd. The plant is expected to boost waste chemical recycling in Malaysia through the conversion of end-of-life plastics into pyrolysis oil or TACOIL™ for the production of sustainable plastics. Plastic Energy will contribute to the plant through its patented TAC™ process, the chemical recycling technology which involves the heating of mixed post-consumer plastic waste in the absence of oxygen.

In the area of ocean-bound plastic waste, SABIC has partnered with Scientex group to develop the world’s first PP flexible food packaging using post-consumer recycled (PCR) ocean bound plastic. The material is based on advanced recycled Ocean Bound Plastic (OBP) using SABIC® certified circular polypropylene (PP). Itis currently being employed in a premium brand noodle packaging sold in Malaysia.

OBP refers to abandoned plastic waste found in areas located up to 50 km inland from waterways that may eventually find its way into the ocean by rainfall, rivers or tides. The OBP used in the project is recovered and converted to pyrolysis oil through an advanced recycling process. SABIC uses this oil as an alternative feedstock to produce certified circular PP polymer for further processing into BOPP film. Scientex then manufactures and prints the noodle packs from this film.

The demand for automotive plastics is expected to increase in Malaysia as the country has been raising its automotive production. Noteworthy is the country’s fast-growing electric vehicle (EV) sector which has attracted numerous investments. Malaysia is home to 27 vehicle producers and over 640 component manufacturers. It is the third largest automotive industry in Southeast Asia and 23rd largest in the world.

EP Manufacturing Berhad (EPMB) has recently announced a substantial investment of US$20.98 million in an EV automotive manufacturing facility in Melaka. The move is part of the company’s plan to set up a manufacturing center for energy-efficient vehicles (EEVs) and EVs in Malaysia. The facility will be constructed in several phases at the HICOM Pegoh Industrial Park. The first phase of the facility, once completed, will have the capacity to produce up to 30,000 vehicles annually.

EPMB has also announced the plan of vehicle assembly partnership with Great Wall Motor in Malaysia. This partnership will involve the Completely Knocked Down (CKD) model and marks Great Wall Motor's first CKD program in the ASEAN region. On the other hand, EPMB’s CKD plant will also be used by the subsidiary of Beijing Automotive Group (BAIC) to assemble the right-hand drive variant of BJ40P and X55II SUVs, and the future EV and Internal Combustion Engine (ICE) models of the brand.

At CHINAPLAS 2024, Malaysia’s packaging and automotive professionals will have the opportunities to witness real-life demonstrations of innovations for these dynamic applications. New materials and more advanced technologies will offer a range of options and opportunities to Malaysian manufacturers to serve its domestic market and expand globally. For more information, please visit: www.chinaplasonline.com