(May-June) 2013 issue.pdf - Federation of Malaysian Manufacturers

fmm.org.my

(May-June) 2013 issue.pdf - Federation of Malaysian Manufacturers

Business

in Action

KDN

May/Jun 2013

VOL 3/2013

@FMM

NO: PP 16730/08/2012 (030376)

2 nd Hazards Asia Pacific Symposium

Switch Asia Project on Environmental Declaration Scheme

Visit to Singapore Manufacturing Federation

www.fmm.org.my

World Food Uzbekistan 2013


Contents

FEDERATION OF

MALAYSIAN

MANUFACTURERS

© Copyright Reserved

PUBLISHED BY

Federation of Malaysian Manufacturers

Wisma FMM

No 3, Persiaran Dagang PJU 9

Bandar Sri Damansara

52200 Kuala Lumpur

Tel: 03-62867200

Fax: 03-62741266/7288

Email: webmaster@fmm.org.my

Website: www.fmm.org.my

FMM has eight branches and

two representative offices located in

Kedah, Penang, Perak, Selangor,

Negeri Sembilan, Malacca, Johor,

Eastern, Sabah and Sarawak.

Any material extracted from

Business in Action @ FMM to be

quoted or reprinted should contain

an acknowledgement to FMM or its

acknowledged sources.

Editorial

ADVISOR

Dr Yeoh Oon Tean

Chief Executive Officer

EDITORIAL TEAM

Madeline Loh

General Manager (Trade)

Ng Lee Lee

Senior Manager

International Business Division

Florance S Gabriel

Assistant Manager

Communications and Publications Unit

ADVERTISEMENTS

Kenny Lee

Marketing Unit (+6012-383 3857)

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Percetakan Okid Sdn Bhd

No. 2, Jalan SS13/3C

Subang Jaya Industrial Estate

47500 Subang Jaya, Selangor

Special Feature

03 2 nd Hazards Asia

Pacific Symposium

News Highlights

04 Switch Asia Project on

Environmental Declaration

Scheme for Construction

and Building Materials

in Malaysia

05 FMM Manufacturer of

the Year Award (SMIs)

Kina Roof Industries (Sabah)

Sdn Bhd

06 World Food Uzbekistan 2013

07 Over 26 Wood Products to be

Licensed by September 2013

08 Visit to Singapore

Manufacturing Federation

10 Conference on

Marketing & Branding

11 Updates on Industrial Designs

(Amendment) Act 2013

Updates

12 Is Your Business Competition

Law Compliant?

16 Events in Pictures

Trade & Policy

18 Free Customs Advisory

Services for FMM Members

Market Alerts

20 Updates on Production Costs

of Mainland China

Happenings at Branches

22 Kedah/Perlis

Malacca

Sarawak

24 Perak

Penang

26 Selangor

Negeri Sembilan

28 Johor

02 BIA@FMM | May – Jun 2013


Cover Story

2 nd Hazards Asia Pacific Symposium

An international audience of 240 process safety experts and regulators gathered in Kuala Lumpur for the 2 nd Hazards

Asia Pacific (Hazards AP) Symposium held from April 16 – 18, 2013. The Symposium was jointly organised by the

Chemical Industries Council of Malaysia (CICM) and the Institution of Chemical Engineers. It was officiated by Tan Sri

Mohd Sidek Hj Hassan, Chairman of the Petroliam Nasional Berhad (PETRONAS).

With the theme: “Achieving Operational Excellence in

a Competitive Environment”, the Symposium provided

a platform for process safety experts and regulators to

discuss the latest developments and challenges faced

by companies in the Asia Pacific region on chemical

process safety.

Tan Sri Mohd Sidek Hj Hassan in his keynote address

reminded companies that to remain competitive in the

long run, chemical companies in the Asia Pacific region

will need to contend with compliance to new regulations

and standards, rising energy and production costs and

increasing expectations to innovate and create sustainable

products and businesses. He also stated that maintaining

a good track record of health, safety and environment

performance is a must and that it is considered as a

license for companies to continue operating.

In his welcome speech, CICM Chairman Dr Abd Hapiz

Abdullah highlighted that “in the midst of enormous growth

in the chemical industry, particularly in the Asia Pacific

region, process safety continues to be more relevant than

ever. What’s more, with near instant communications, if

the chemical industry wants to keep

its license to operate, it must improve its health, safety

and environment performance by adopting a set of high

standards which are receptive to the views of the public

and other stakeholders”.

Keynote speakers featured in the three-day symposium

included Judith Hackitt, Chair of the British Health &

Safety Executive, Hans Volkmar Schwarz, Group-wide

Vice President of Process Safety at BASF, Datuk Wan

Zulkiflee, Chief Operating Officer and Executive Vice

President for Downstream Operations at PETRONAS.

Group photograph of the Heads of Safety and Health in

Malaysia, UK and China.

Other speakers included Wang Haoshui, the Director-

General in the Department of Hazardous Chemicals

and Work Safety Supervision, Lee Yang Soo, Senior

Vice- President for Health, Safety and Environment at

SK Innovation, John Bresland, President of Process

Safety Risk Assessment, Ian Hamilton, who was

appointed to run the global human factors team at

leading EHS consultancy practice, ERM, and Juan

Gabriel, Worldwide Managing Director of Sustainable

Operations for DuPont Sustainable Solutions.

Among the topics addressed by the keynote speakers

included Complacency to Anxiety – the Road to

Process Safety Leadership, Achieving Business

Sustainability Through Effective Management of

Process and Operational Risks, Supervision and

Administration of Safety in the Chemical Industry in

China, and Design of Buildings in Petrochemical

Facilities Using a Risk-Based Approach.

The Symposium also comprised a twin track technical

programme containing more than 40 peers reviewing

papers pertaining to process safety design and analysis,

asset integrity, operational safety, challenges of regulatory

compliance, process safety management, learning from

major hazards incidents and management of abnormal

operations; which highlighted the importance of

exchanging knowledge, learning from past mistakes

and sharing of best practices.

Some of the delegates who attended the

Hazards Asia Pacific Symposium

The next Hazards Asia Pacific Symposium is scheduled to

take place in May 2014 in Kuala Lumpur.

May – Jun 2013 | BIA@FMM 03


News Highlights

Switch Asia Project on Environmental

Declaration Scheme for Construction

and Building Materials in Malaysia

FMM had on March 14, 2013, organised a free briefing and dialogue session on Identification of Environmental

Declaration Scheme for Construction and Building Materials in Malaysia chaired by John Lee Boon Haw, FMM Council

Member. A total of 32 participants from 25 companies manufacturing construction and building materials attended the

briefing. The purpose of the briefing was to pre-screen ten product categories in the construction and building materials

industry that would be selected for the project.

The Switch Asia project, funded by the European Union,

aims to transfer existing best practice in sustainable

construction materials, which is currently absent in

Malaysia. It seeks to produce tools, guidelines and the

supporting mechanisms for product footprinting and

labelling that meet the needs of the local and international

market and create the recognition for sustainable products

from SMEs in the Malaysian construction and building

materials sector. The three-year project will involve an

international collaboration with Carbon Trust, which is the

pioneer of product carbon footprinting and carbon

management in United Kingdom.

Following the briefing in FMM, SIRIM Berhad as the

project leader conducted a brainstorming session on

March 21, 2013 with FMM and other project partners

i.e Malaysian Green Building Confederation and Building

Materials Distributors Association of Malaysia to finalise

the product selection. The final product categories agreed

to by all partners are as follows:

• Coatings such as paint, sealant, primers;

• Sanitary wares made of ceramic, metal & plastics;

• Plumbing pipes made of PVC, PE, copper and steel;

• Floor finishing e.g tiles, plasters, fiber cement,

metal, timber;

• Wall panels such as Gypsum plasters, fiber cement,

timber, metal, tiles, glass;

• Masonry units like concrete, clay, recycled materials;

• Structural steel (truss & frame) – steel;

• Ceilings such as Gypsum plasters, fiber cement,

timber, metal;

• Architectural metal – railing & lourves made of brass,

steel and aluminum; and

• Architectural roofing made of clay, metal sheets,

concrete & recycled materials.

FMM members especially the SMEs involved in the

manufacturing of selected product categories are

encouraged to participate in this Project as they

could be among the first ten SME market leaders in

Malaysia to obtain carbon footprinting for construction

and building materials.

For further details on the project, please contact

Nur Hafizah of the FMM Secretariat at email:

hafizah@fmm.org.my

John Lee Boon Haw, FMM Council member (left) and Letchumi Thannimalay from SIRIM Berhad during the Q&A session at the briefing

04 BIA@FMM | May – Jun 2013


News Highlights

FMM Manufacturer of the Year Award (SMIs)

Kina Roof Industries (Sabah) Sdn Bhd

Established in 2008 by a group of businessmen with more than ten years experience in cold roll form industry, Kina

Roof is currently equipped with the most up-to-date cold roll form machines available in the market that comply

with the Australian Standards; AS1599 and AS 1365.

Kina Roof is the leader in metal roofing industry in

Sabah. This family-owned business achieved

outstanding double digit sales growth and an

exceptional nine-fold increase in profit after tax in

2011. Kina Roof’s motto is “those in the market, we

improve it; those we don’t have, we do it”. Their

products are patented under the brand “ROFO”

On winning the award, Lau Lee Chung, Kina Roof’s

CEO said that this recognition is a good start for the

Company to move in the right direction. Lau said that

Kina Roof was established with very limited financial

resources and manpower. “Focus and continuous

improvement were the most important factors that

contributed to our success in winning the award”

Lau further added.

The award was presented to Kina Roof Industries

(Sabah) Sdn Bhd during FMM’s Annual Dinner held

on November 29, 2012.

Lau Lee Chung, Kina Roof’s CEO (right) after receiving the award from

Datuk Dr Rebecca Fatima Sta Maria, Secretary General,

Ministry of International Trade and Industry (centre) while

FMM President Tan Sri Datuk Yong Poh Kon looks on

Visit to PKT Logistics Group Sdn Bhd

On March 7, 2013, 55 members led by FMM Council Member and Chairman of FMM-SMI Working Committee Tan Sri

Dato’ Soong Siew Hoong visited PKT Logistics Group Sdn Bhd (PKT) at One Logistics Hub, Shah Alam. The group was

welcomed by PKT’s Chief Executive Officer/Managing Director, Dato’ Michael Tio and his management team.

PKT which was founded in 1974, specialises

in custom clearance for cars. Located at

Shah Alam, Selangor, it consists of The Ship

(headquarters), The Wave (environment friendly

warehouse) and The Lighthouse (warehouse

expected to be ready end of this year).

FMM delegates were briefed on PKT’s strategy

and expansion plan by the Group Chief Operating

Officer, P’ng Tean Hau. Dato’ Michael Tio shared

on how he turned the company into a logistics

giant and his unique management style,

capitalising on the workforce of Generation Y

and the social networking media, including using

Facebook as a tool to achieve his business goals.

The visit ended with a tour to a pineapple farm

located next to the headquarters, managed by

the staff of PKT Logistics.

Group photograph of members who visited PKT Logistics Group Sdn Bhd on March 7, 2013

May – Jun 2013 | BIA@FMM 05


News Highlights

World Food Uzbekistan 2013

Over 180 exhibitors from 25 countries participated in the World Food Uzbekistan 2013 which was held in Tashkent,

Uzbekistan from April 3 – 5, 2013. Four Malaysian companies namely Erapoly Global Sdn Bhd, Inno-Wangsa Oils

and Fats Sdn Bhd, See Hau Gobal Sdn Bhd and WMA Trading Sdn Bhd participated for the first time in the Fair which

attracted over 6,000 trade visitors.

According to Abdulaziz A Yunusov, Regional Representative

and Marketing Officer of MATRADE in Tashkent, there are

vast business opportunities for Malaysian companies

in Uzbekistan. Malaysian exporters can explore and work

with the local importers or purchasers who are interested

in their products.

Business matching discussion in progress at the Exhibition

Chow Kien Yu (left) of See Hau Global being interviewed by the

local Uzbekistan TV station

06 BIA@FMM | May – Jun 2013


News Highlights

Over 26 Wood Products to be Licensed by

September 2013

The Customs Prohibition of Export and Import Order 2012 was gazetted on December 31, 2012. The new regulation

requires exporters of 26 types of wood products and importers of three types of wood products to be registered and to

obtain export and import licenses from Malaysian Timber Industry Council (MTIB). Implementation of the new ruling would

come into effect on September 2013.

FMM, in a letter dated April 18, 2013 to the Director-General of MTIB, highlighted the following concerns raised by

FMM members on the imposition of the above new regulation:

• Additional cost incurred in applying for the license which adds to the cost of doing business. These include application

fees and membership fees to join the associations as listed by MTIB;

• Requirement to be a member of the listed associations even through some of the members are already members of

FMM or other associations;

• Imposition of export taxes on finished wood products is unnecessary and acts as a non-tariff barrier to trade.

It is also inconsistent with the Article XI of the World Trade Organisation’s General Agreement on Tariffs and Trade

(GATT) which generally prohibits export restraints such as export licensing; and

• The Malaysian Government is currently negotiating comprehensive Free Trade Agreements (FTAs) such as the Trans

Pacific Partnership Agreement and the Malaysia-European Union Free FTA that require the removal of NTBs such as

export licensing. This new export requirement on most wood products would only hamper the successful completion of

the negotiations.

FMM also proposed the following:

• As the main objective of imposing the regulation is to collect data on raw timber and semi-finished timber, finished

products should be exempted from this requirement; and

• The requirement for applicants to be a member of any one of the listed associations in the MTIB Act should be removed

as it effectively increases the cost of doing business.

For further information on The Customs Prohibition of Export and Import Order 2012, please contact Leong Soke Ching

of the FMM Secretariat at soke_ching@fmm.org.my.

FMM will be organising a Briefing on Updates on Requirement for Licenses for Export and Import on Tuesday, July 2,

2013, from 9.00am to 4.30pm at Wisma FMM to update companies on the licenses requirement for wood products and

other products listed in the Customs Prohibition of Export and Import Order 2012 i.e skin, leather, wool, milk based

products, rice flour, fish etc.

For further information on the Briefing, kindly contact Nur Hafizah of the FMM Secretariat at hafizah@fmm.org.my.

May – Jun 2013 | BIA@FMM 07


News Highlights

Visit to Singapore Manufacturing Federation

The SMI Working Committee and Human Resource Management Committee jointly organised a visit to the Singapore

Manufacturing Federation (SMF) on April 15, 2013. The 22-member delegation which included members from

Johor was led by Tan Sri Dato’ Soong Siew Hoong, Chairman of the FMM SMI Committee and Davies Danavaindran,

FMM Vice President and Chairman of the FMM HRM Committee.

The main objective of the visit was to better understand issues affecting the manufacturing sector in Singapore, including

Government policies and incentives for SMEs. The delegation was received by SMF President, George Huang.

Key highlights of the visit include the following:

• Minimum Wage – Singapore does not have a minimum wage policy as the Government believes that supply and

demand would determine the right wages;

• Foreign Workers (FW) – There is a tightening of foreign worker employment in Singapore. The tightening was triggered in

early 2000 when the Singaporean economy overheated. The high growth was unsustainable as it was heavily dependent

on foreign workers. Singapore decided to grow the economy by improving productivity. A huge fund was set aside

each year by the Government to assist industries increase productivity, including implementing ERP and automation.

The growth in productivity and revenue is shared with companies and workers. To reduce FW dependence, the

Government increases the levy each year. However, the levy is given back to industries to upgrade/automate. A quota

is imposed on FW employment based on industry as some industries in Singapore still require FW as locals are not

prepared to work over time;

• Employment Practices – The Singapore National Employers’ Federation formed a Tripartite Committee with representatives

from the public and private sectors and unions to resolve all issues related to human resource. Retirement age in

Singapore is 62 years old. The Government has a Retirement and Re-employment policy. Unemployment is 1.9%; and

• Assistance for SMEs – Singapore has over 160 finance and grant schemes for SMEs. Incentives given are always

tied to productivity. Grants are given to activities such as investment in ICT and establishing operations in the Iskandar

region and Riau. Singapore has SME Centres to provide consultation.

SMF believes that political boundaries should not deter investments from both sides and looks forward to greater exchange

of visits and discussions, including setting up joint working groups to discuss issues affecting the manufacturing sector of

both countries. The one-day visit ended with a tour to Makino Asia Pte Ltd, a precision engineering company producing

milling machines and electrical discharge machines.

Group photograph of the visit to Singapore Manufacturing Federation on April 15, 2013

08 BIA@FMM | May – Jun 2013


NOW ON SALE!

Contents

• Comprehensive and reliable one-stop

business sourcing handbook that

provides in-depth profiles of over

2,400 manufacturers, exporters and

service providers;

• Product index of over 11,500 items

to provide importers, exporters and

buyers with quick and easy reference

for business opportunities;

• The latest information on the Malaysian

Economy, trade statistics;

• A list and contact details of Ministers

and Ministries in Malaysia;

• Easy-to-refer index according to

states, industry groupings, products and

services and certified ISO companies,

in alphabetical order; and

• Classification by industry groups based

on International Standard Industrial

Classification (ISIC) code.

Products & Services Catalogue for:

• Chemical and Petroleum;

• Food, Beverage and Tobacco;

• Electrical and Electronics;

• Fabricated Metal;

• Machinery;

• Plastic;

• Transport;

• Basic Metal;

• Paper, Printing and Publishing;

• Non-Metallic Mineral;

• Rubber;

• Medical, Precision and Optical Instruments;

• Textile, Wearing Apparel and Leather;

• Manufacture of Furniture Wood and

Wood Products; and

• Recycling.

Federation of Malaysian Manufacturers (7907–X)

Wisma FMM, No 3, Persiaran Dagang, PJU 9, Bandar Sri Damansara, 52200 Kuala Lumpur

Tel: 03-62867200 Fax: 03-62741266/7288 E-mail: webmaster@fmm.org.my Website: www.fmm.org.my

Communications & Publications Unit (Attn: Ida Tan)

NOW ON SALE at FMM Head Office, Branches and Representative Offices

May – Jun 2013 | BIA@FMM 09


News Highlights

Conference on Marketing & Branding

Atotal of 192 participants comprising Chief Executive Officers, Managing Directors, General Managers, Marketing

Managers, Brand/Product Managers, Marketing Communication Managers, Customer Relationship Managers,

Business Development Managers or Executives attended the FMM Conference on Marketing & Branding which was

held on April 18, 2013 with the theme Retail Marketing – Insights & Opportunities in Engaging Consumers.

The event was officiated by

Dato' Saripuddin Kassim, Secretary

General, Ministry of Domestic Trade,

Cooperatives and Consumerism.

One of the issues raised during the

dialogue session with Dato’ Saripuddin

Kassim was the inability of SMEs

to supply to hypermarkets due to

high listing and advertisement rates.

The Secretary General requested

FMM to coordinate a meeting among its

members and to submit its proposals to

reduce listing fees in hypermarkets.

Speakers at the Conference included

senior representatives from Retail

Group Malaysia, Nielsen Malaysia and

Singapore, Nelson’s Franchise,

dunnhumby Malaysia, CBSA Online

Sdn Bhd and MYDIN.

FMM Marketing & Branding Conference 2013 attracted over 200 participants

MTDCC Secretary General, Dato’ Saripuddin Kassim (centre) receiving a token

of appreciation from FMM President, Tan Sri Datuk Yong Poh Kon (left) while

YM Raja Dato’ Abd Aziz Bin Raja Muda Musa, Vice President of FMM looks on

Caroline Chong of dunnhumby Malaysia briefing

participants on TESCO’s Loyalty Programme

10 BIA@FMM | May – Jun 2013


News Highlights

Updates on Industrial Designs (Amendment)

Act 2013

At a recent meeting of the FMM Branding and Intellectual

Property Rights Committee held on April 5, 2013, members

were informed by Charmayne Ong of SKRINE that the

Industrial Designs (Amendment) Act 2013 (“Amendment Act”)

was gazetted on January 22, 2013 and would come into

force on July 1, 2013. The following are some of the

amendments made to the Industrial Designs Act 1996

under the Amendment Act which will have a significant

effect on the protection and exploitation of industrial

designs in Malaysia:

• The new amendments will require prospective

applicants to ensure that the design they intend to

register with the Malaysian Intellectual Property

Office be new on a global basis. Currently an

industrial design has to be only new in Malaysia to

qualify for registration. This requirement of novelty on

a global basis will not apply retrospectively to cases

where the design has already been registered.

This would include cases where legal proceedings

in respect of such registered designs are pending.

However, it is crucial to note that any application for the

registration of an industrial design pending on the date of

coming into force of the amendments will be dealt with

under the IDA as amended by the Amendment Act. This

being the case, although the amendments will only come

into force on July 1, 2013 it would be necessary to ensure

henceforth that designs for which registration is sought, are novel

on a global basis;

• The proposed amendments will enable the proprietor of an industrial

design to protect an industrial design up till a maximum of 25 years

(as compared to the current 15 years) provided renewal fees are paid before the

expiry of each term; and

• The new provisions are being included to clarify that a security interest can be created over a registered industrial

design or an application for the registration of an industrial design.

For further enquiries, please contact Leong Soke Ching of the FMM Secretariat at soke_ching@fmm.org.my.

Requirement of Certificate of Approval for Electrical Equipments

In order to enhance the safety of electrical equipments, the Energy Commission (EC) will now be regulating

35 new electrical equipments. The manufacturers and importers of the electrical equipment are required to obtain

the Certificate of Approval from EC before they can be sold in the market. The effective date of the implementation

has been postponed from January 1, 2013 to January 1, 2014.

The affected electrical products include massagers, air conditioners, adaptors, chargers, door bell & chimes, portable

cable reels, Edison screw holders & caps, LED lamps, bottle warmer sterilizers, water dispenser/filters, dish washer

and other utensils, decorative fans, ionic facial sauna or similar to it, audio/video recorder up to four channels and

etc. The complete list of regulated electrical equipment can be located at http://www.fmm.org.my-Resource

Center/Announcements.

For enquiries, please contact Maygelah Siva of the FMM Secretariat at tel: 03-62867320 or Fax: 03-62741266/7288

or e-mail: maygelah@fmm.org.my.

May – Jun 2013 | BIA@FMM 11


Updates

Update on Competition Law (Part 1)

Is Your Business Competition Law Compliant?

The Malaysian Competition Commission (MyCC) has made it clear that the beginning of 2013 will see the end of

its ‘soft touch’ approach to enforcement of Malaysia’s Competition Act 2010 (CA 2010), which came into force on

1 January 2012. Now is the time to ensure your business is competition compliant. The best way to ensure compliance

is to put in place a “competition law compliance programme”. This article sets out the steps involved in establishing a

compliance programme and includes some practical tips.

Where to Begin?

As a preliminary step, you should ensure that the CA 2010

applies to your business. The CA 2010 applies to “any

commercial activity”. This is a broad concept so it is

likely that the activities of most businesses in Malaysia –

big and small – will be caught by the Act.

What is the Purpose of a Competition

Law Compliance Programme?

A competition law compliance programme is designed to

perform a number of key functions:

• Identify any existing competition law breaches and

risk areas;

• Give the business an opportunity to rectify those

breaches and manage the risk areas; and

• Ensure that ongoing competition compliance becomes

part of the culture and ethos of the business.

The following steps set out how to achieve these functions

in practice.

STEP 1: Identifying Competiton Law

Breaches or Risk Areas

This initial step will be the most critical for a business

undertaking a competition law compliance programme

for the first time. The aim of this step is to identify:

• existing agreements or practices that are, or may be,

against the law; and

• the areas of the business which are most at risk of

breaking the law in the future.

In practice, this step requires a comprehensive review

of all of the legal arrangements your business has in

place. This will include written and verbal (gentleman’s)

agreements, decisions of trade associations, as well as

informal ‘understandings’ reached (through a nod and

a wink) that are not documented.

Written Agreements

If your business has a ‘contract register’ (a formal record

of the agreements entered into by the business), then you

should be able to easily identify the written agreements

for review. If the business does not have a record of its

agreements, this may present a good opportunity to

create one.

Unwritten Agreements

It will be much harder to identify verbal agreements or

understandings that are reached as part of the day to

day activities of your business. A good way to identify

arrangements or practices that exist is to conduct

face-to-face interviews of relevant staff members.

The interview should seek to build a picture of:

• who the staff member deals with outside the business;

• what meetings the staff member attends;

• where meetings are with competitors, what is the

purpose of those meetings;

• how prices are determined for goods;

• how decisions are made about production or investments

in new technology or production facilities; and

• who makes decisions about which markets the

business operates in.

This is not an exhaustive list and more questions will no

doubt arise as the answers are provided to the above.

It will not be necessary to interview all of your staff, just

those in risk areas. For example, those responsible for

buying and selling, those who attend trade association

meetings on behalf of your business, those involved in

regular dealings with your competitors, as well as all

senior management. You may wish to have someone

independent of the business conduct these interviews.

It should be made clear to staff members that they

will not face any consequences for disclosing any

arrangements or practices that are against the law.

At this stage, the objective is not punishing staff

members; it is to identify areas of concern for the

business so that you can decide how to deal with them.

Once you have established an ongoing compliance

programme, you may wish to include some consequences

for staff members that break the law after appropriate

training has been given.

"Published with permission of The Malaysian Current Law Journal

Sdn Bhd and CLJ Legal Network Sdn Bhd."

Part two of the article will be published in the

next issue of the BIA.

12 BIA@FMM | May – Jun 2013


Assistance to Members

Perak

Flooding at Teleflex Medical Sdn Bhd

Through the efforts of the Branch, Majlis Perbandaran Taiping (MPT) convened a special meeting on February 25,

2013 under the Taiping IPMC to discuss the acute flooding problem faced by Teleflex Medical Sdn Bhd (Teleflex).

The meeting was chaired by Borhan bin Abdul Halim, Secretary for MPT and noted that the main reason for the

flooding was the backflow of the water from two neighbouring factories which had weak drainage systems.

The representatives from the two companies who were present at this meeting were directed to improve

their drainage system within three months failing which they would be compounded. At the Taiping Regional

Sub-Committee meeting on April 2, 2013, Abdul Mutalib reported that one of the companies had complied and

since then there have been no reoccurrence of flooding.

Improving the Delivery of the State Immigration Department of Perak

The Branch wrote to the Director of State Immigration of Perak on February 27, 2013 to highlight the following

problems faced by members in their applications for foreign workers:

• Queue numbers are taken up fast even though some companies arrive and queue from as early as 6.00am;

• Limited number of counters are opened during peak periods;

• The computer system frequently break downs; and

• Calling visas take up to two weeks or more to be approved although it is indicated as three days in the

acknowledgment slip.

FMM made the following recommendations:

• Have separate counters to process applications for foreign workers by companies and agents;

• Look into the feasibility of establishing foreign workers division at regional immigration offices to ease the

load at the Ipoh Immigration Office; and

• All counters should operate during the peak hours.

The new Director of State Immigration of Perak, Ahmed Syam bin Che Kub @ Ab Rasid in a letter dated April 1,

2013, informed that queue numbers would be abolished and additional officers would be stationed at the

counters during the peak period from 8.00am to 10.00am. Efforts are also being taken to improve the reliability

of the computer system.

FMM EXPORT PROGRAMMES

EXPORT SEMINAR

• Cambodia & Vietnam – FMM Focus ASEAN Series: Cambodia & Vietnam – June 18, 2013

INTERNATIONAL TRADE FAIRS

• Taiwan – Food Taipei 2013, Taipei – June 26−29, 2013

• South Africa – Africa Big 7 and SAITEX, Johannesburg – June 30 – July 2, 2013

• Indonesia – Interfood, Jakarta – August 28 – 31, 2013

• Myanmar – Build-Con Myanmar, Yangon – September 25 – 27, 2013

For further details, please contact Ida or Sandy of the FMM Secretariat at 03-62867200

14 BIA@FMM | May – Jun 2013


Events in Pictures

Factory visit to Makino, Singapore, April 15, 2013

Seminar on FMM-JETRO Energy Saving Audit, March 13, 2013

Selangor Branch’s visit to Selangor State Investment Centre,

March 14, 2013

Kedah/Perlis Branch’s Seminar on Implementing

Strategic OSH-MP 15 & Overview of Proposed

Review of OSH Legislation, December 6, 2012

16 BIA@FMM | May – Jun 2013


Events in Pictures

Trade & Investment Mission to Balikpapan, Indonesia, April 24 – 26, 2013

FMM Marketing & Branding Conference,

2013, April 18, 2013

World Food Uzbekistan, April 3 – 5, 2013

Briefing on Environmental Declaration Scheme,

March 14, 2013

Hannover Fair in Germany, April 8 – 12, 2013

May – Jun 2013 | BIA@FMM 17


Trade & Policy

Free Customs Advisory Services for

FMM Members

A Senior Customs Officer from the Royal Malaysian Customs Department, Choo Kim Foong is based at FMM to

assist FMM members as a Customs Advisor. The services of the Customs Advisor are available at FMM from 9.00 am

to 1.00 pm every Tuesday. The Customs Advisor will assist members with the following:

• Provide advisory services and guidance on Customs related policies, procedures and requirements;

• Resolve operational related issues encountered at the company level; and

• Assist with applications for licenses and Customs facilities.

Members are encouraged to have individual meetings on a ‘one-on-one’ basis with the Customs Advisor at FMM

to resolve specific issues pertaining to their company. Common issues and enquiries will be published in the

Business in Action@FMM for members’ information. For further enquiries, please contact Arasy Velayutham at

FMM Secretariat at tel: 03-62867356 or e-mail: customsadvisor@fmm.org.my.

Q Where can I locate the latest amendments to the Customs Acts or Regulations?

A The official portal e-Federal gazette will have the latest amendments to the Customs Act or Regulations.

Q What is the difference between the sales tax facilities for sales tax exemptions: CJ5 and CJP2?

A Sales tax exemption CJ5 is a facility given to a licensed manufacturer to import or buy raw materials, components and

packaging material from other licensed manufacturer to be used directly in the manufacturing process without paying

sales tax as provided under section 9, Sales Tax Act 1972.

The Customs Department also allow sales tax

exemption to institutions and individuals who are not

licensed under the Sales Tax Act 1972, to buy taxable

goods without paying sales tax as provided under

the Sales Tax (Exemption) Order 1980 by using the

form CJ(P)2.

Some examples where CJ(P)2 can be used are:

• Sales Tax (Exemption) Order 1980, Schedule B,

item 28: Trading company can apply for sales tax

exemption when it buys from a sales tax licensed

manufacturer to sell to a licensed manufacturer under

section 65/65A of the Customs Act 1967 (LMW);

• Sales Tax (Exemption) Order 1980, Schedule B, item

71: Trading company can apply for sales tax

exemption when it buys from a sales tax licensed

manufacturer and exports the said products;

• Sales Tax (Exemption) Order 1980, Schedule B, item 85: These companies can apply for exemption to buy or import

packing and packaging materials from a licensed manufacturer to be used solely for the packing or packaging of

fresh eggs, fresh fruits, aquatic plants, aquarium marine life or cut flowers and then exported;

• Sales Tax (Exemption) Order 1980, Schedule B, item 89: All goods exported to a Free Industrial Zone or moved

to a manufacturing warehouse licensed under sec 65/65A of the Customs Act 1967 for subcontract work and

subsequently re-imported or returned can apply to be exempted from sales tax; and

• Sales Tax (Exemption) Order 1980, Schedule C, item 1 – 13: Manufacturers who manufacture goods that are not

subject to sales tax can apply for sales tax exemption to buy/import raw materials/components and packaging material.

This facility is only given to certain industries as stated in item 1 – 13.

18 BIA@FMM | May – Jun 2013


Market Alert

Updates on Production Costs of

China Mainland

Tight Labour Supply Amid Rising Labour Costs

Immediately after the Chinese New Year, which fell in February this year, manufacturers generally felt the pressure of

labour shortages, in particular those operating in Guangdong. According to the Human Resources and Social-security

Department of Guangdong, there will be around 1.2 million shortage of workers this year after the Chinese New Year.

The city of Dongguan, a major production base in Guangdong, was reportedly having a labour shortage of 150,000

after the Chinese New Year.

According to a survey conducted by Hong Kong Trade Development Council (HKTDC) among Hong Kong manufacturers

in the first quarter of 2013, 50% of respondents indicated that they experienced the problem of labour shortage after the

Chinese New Year. Among those having labour shortage problem 21% considered the situation to be much more serious

than a year ago, while 38% considered the situation to be a bit worse than a year ago.

This development has persistently pushed up the general wage level. In 2012, 25 provinces or regions in China raised

the minimum wage levels by an average of 20.2%. In Guangdong, the minimum wage level will be raised again effective

from May 1, 2013 by an average of 19.1%. The city of Shenzhen continues to have the highest level of minimum wage

in China.

Companies need to employ different levels of staff for different jobs. According to official figures, in the first three quarters

of 2012, the average wages of staff and workers in China on average increased by 12%, while in Guangdong province they

increased by 11.5%. Some inland provinces recorded faster growth in the average wages of staff and workers, such as

Hunan at 14.4%, Sichuan at 13% and Jiangxi at 14.8%.

According to HKTDC surveys in the first quarter of 2013, 78% of the responding Hong Kong companies experienced a

rise in labour costs on the mainland compared to the previous quarter. For those respondents who experienced higher

labour costs on the Mainland, 33.3% said the increase was more than 10% and 51.3% said the increase was between

5% to 10%. Compared to the first quarter of 2012, the rates of increase appear to be moderating but the general wage

level is still moving upwards.

(continue on page 21

20 BIA@FMM | May – Jun 2013


Market Alert

China’s Food Prices Surged in February 2013

China’s inflation reached a recent low in October 2012 with the Consumer Price Index (CPI) increasing by 1.7% and

food prices increasing by 1.8%, but has begun to accelerate again since then. The CPI recorded a 3.2% increase in

February 2013 while food prices grew at 6%.

Gasoline and Diesel Prices Adjusted Upward In February 2013

Following the rise in oil prices, China followed suit and also raised the retail price of gasoline and diesel in February 2013.

The retail price of gasoline in Guangdong is now 10.6% higher than the level in July 2012. The increases in gasoline and

diesel prices will push up transportation costs.

Metal Prices Moderated on Entering February 2013

Over the last 12 months, the general price level of metals has been volatile. Metal prices had been edging up since

November 2012, but moderated on entering February 2013. According to the Economist Metal Price Index, in early

March 2013 the general price level of metals declined by about 7% within a month. However, the level in early March was

still 7.5% higher than the recent trough in mid-August 2012. Over the last six months, the prices of aluminium alloy have

been fluctuating within the range of US$1,800 to US$2,000 per tonne while the prices of copper have been moving in the

range of US$7,600 to US$8,400 per tonne.

Oil prices started to edge down after reaching a recent peak around mid-February 2013. However, prices in mid-March

2013 were still about 21% higher compared to the ebb in June 2012. Prices of downstream products, such as plastics,

have also declined since mid-February 2013. The price of polypropylene (PP) in mid-March 2013, for example, had

dropped by about 5% from a month earlier. However, the price level of PP in mid-March 2013 was still about 11% higher

than the level in mid-June 2012.

The price of cotton has started to edge up again since November 2012. The average price of cotton in February 2013

was about 11% higher than the level recorded in November 2012. The average price of pulp has also started to rise since

September 2012. The average price of pulp in February 2013 was up by 7.5% compared to the level in September 2012.

The Rmb Continued to Appreciate

Rmb appreciation has been a major challenge for Hong Kong manufacturers operating in China. Since June 2010,

China has continued with its reform of the exchange rate mechanism of the Rmb by allowing more flexible movement in

its exchange rate. Since the end of July 2012, the exchange rate of the Rmb against the US dollar has generally engaged

in an upward trend. By mid-March 2013, the Rmb had appreciated by about 2.4% compared to the end of July 2012.

China’s Export Prices Stopped Declining

The growth of China’s export price index continued to slow down in 2012 and recorded declines from September to

November 2012, but the price index has moved back to positive growth since December 2012. On the other hand,

import price index of the US with China as origin remained in decline in the first two months of 2013.

Source: Billy Wong, Senior Economist (Greater China) of the HKTDC – Research.

May – Jun 2013 | BIA@FMM 21


Happenings at Branches

Kedah/Perlis

The Branch organised the following activities:

• Seminar on Implementing Strategic OSH-MP 15 & Overview of Proposed Review of OSH Legislation on

December 6, 2012. The Seminar was conducted in collaboration with Department of Occupational Safety and Health;

• Seminar on GST: Getting Started on February 27 – 28, 2013.The speakers were Teh Kheng Ean, Senior Assistant

Director of Customs I and Nur Hanisah Dukes bt Abdullah Senior Assistant Director of Customs II of Customs

Department Putrajaya;

• SME Corp Seminar on Halal Certification and Workshop on Branding and Packaging on March 15 – 16, 2013 in

conjunction with Kedah Halal Products Exhibition 2013; and

• FMM Branch Institute assisted Schaefer Kalk (M) Sdn Bhd to Develop and Implement Good Manufacturing Practices

(GMP) for Pharmaceutical Excipients.

Teh Kheng Ean, Senior Assistant Director of Customs speaking to the participants of the Seminar on GST held on February 27 – 28, 2013

Malacca

The Branch organised a training session on Malaysian

Customs Classification: The Right Way to Get the

Correct Tariff Code and Avoid Disputes” on March 18,

2013. The event was facilitated by retired Customs

Officer, Goh Kin Siang.

Sarawak Representative Office

The participants who attended the GS1 Briefing held at

Kedah/Perlis Branch

The Branch organised a Workshop titled “Bengkel

Pembungkusan & Penjenamaan” from February 28 –

March 1, 2013. The Workshop attracted a total of

300 participants who were briefed on how to fill in the

GS1 application form, GS1 numbering system and

documents required for application.

22 BIA@FMM | May – Jun 2013


Happenings at Branches

Perak

The Branch organised the following programmes:

• A two day seminar on GST for Industries: Getting Started

was held from March 5 – 6, 2013 and facilitated by

Mohammad Sabri Saad, Senior Assistant Director

of Customs Department and Arvina binti Alwi,

Assistant Director of Customs from the GST Task

Force Unit, Putrajaya; and

• Briefing on the Implementation of Guidelines on Minimum

Retirement Age Act 2012 and The New Employment Act

Section 81: Sexual Harassment on March 12, 2013.

The following Industrial Park Management Committee

meetings were held:

• IPMC Batu Gajah on March 13, 2013 which was co-chaired

by Haji Dato’ Hj Jamry bin Hj Sury, Yang Dipertua

(YDP) of Batu Gajah District Council (MDBG) and

Teng Kim Ming, Committee Member of FMM Perak.

Among the issues discussed were thefts at the

industrial estates and FMM’s objection to a cattle owner’s

proposal to use the vacant plot next to Nihon Canpack

for grazing cattles;

• IPMC Ipoh on March 13, 2013 which was co-chaired

by Dato’ Haji Roshidi bin Hashim, The Lord Mayor and

Tony Cheam, Committee Member FMM Perak. Issues

discussed at the meeting include FMM’s proposal of

utilising the road shoulders at industrial estates as a

parking lot for heavy vehicles. Other issues discussed

included flooding at the Ceramic Industrial Park; and

• IPMC Manjung on March 15, 2013 which was chaired by

Azizan bin Haji Abd Muin, Secretary of Manjung Municipal

Council (MPM) with FMM representing the private sector.

Issues affecting the industries like rubbish disposal,

dust and air pollution were discussed at the meeting.

The Committee was informed that lorries parked along

the road near PGEO Group were from out of state and

FMM’s proposal to provide a holding bay was noted.

Participants who attended the two-day Seminar on GST for

Industries: Getting Started at Perak Branch

Arvina binti Alwi (left) and Mohammad Sabri Saad briefing the

participants on GST for Industries: Getting Started

Penang

The Branch’s activities include

the following:

• Forum on Human Resource

Management Updates facilitated

by Lingasparan Karuppaiah

Chairman of the FMM Human

Resource Management (HRM)

Sub-Committee on January 10,

2013; and

• ICT, Biotech & Green Tech

Funding Workshop held on

January 30, 2013. The Workshop

was organised in collaboration with

Malaysia Debt Ventures Berhad.

Participants who attended the Forum on Human Resource Management Updates

at Penang Branch

24 BIA@FMM | May – Jun 2013


Happenings at Branches

Selangor

MITI speakers (from left) Noraini Abrahim, Jaysiwanta Kaur and

Aizul Kamil Ibrahim at the Briefing

Members who attended the Business Opportunities Networking Session

on March 21, 2013

The Branch organised the following activities:

• Briefing on Certificate of Origin on February 26, 2013, in cooperation with the Ministry of International Trade and

Industry to discuss on Preferential & Non-Preferential Certificate of Origin;

• Briefing on Competition Act 2012 on February 28, 2013 conducted by Dhaniah binti Ahmad, Head of Legal Unit from

the Malaysian Competition Commission;

• Courtesy call to Selangor State Investment Centre on March 14, 2013 led by the Branch Chairman Dato’ Soh Thian Lai;

• Seminar on GST for Industries: Getting Started from March 19 – 20, 2013 conducted by Wan Leng Whatt, Deputy

Director of Customs and Annie Thomas, Assistant Director of Customs Department; and

• Business Opportunities Networking Session on March 21, 2013 facilitated by Dr Neoh Vee Heng, Chairman of

FMM Selangor SMI Working Sub-Committee.

Negeri Sembilan

The Branch organised the following activities:

• A visit to Danone Dumex (M) Sdn Bhd led by the Branch’s Vice Chairman Radzi Abdul Rashid held on March 19,

2013; and

• The FMM Human Resource/ Industrial Relations (HI/IR) Forum & Consultancy Session held on Tuesday, March 12, 2013

which was attended by 19 participants.

Group photograph of members who visited Danone Dumex (M) Sdn Bhd

26 BIA@FMM | May – Jun 2013


Happenings at Branches

Johor

The Branch organised the following activities:

• Courtesy Call on State Economic Planning Unit

Director on March 14, 2013. Branch Chairman Capt (R)

Hj Abdullah Shariff met Tuan Hj Elias bin Hasran,

State Director and Dr. Badrul Hisham Kassim, Deputy

Director of Economic Planning Unit (UPEN) Johor;

• Meeting of Industrial Park Management Committee

on February 1, 2013 which was chaired by Tuan Hj Elias

bin Hasran, State Director of UPEN Johor. Among the

issues tabled by the Branch included the site of the

demolished building near General Electric Sdn Bhd,

long term solution for the illegal stalls operating in

industrial estates, vacant land located between Kami

Electronics and Malayan Sugar and scheduled cleaning

at Sungai Kangkar and Sungai Tebrau; and

• Meeting with PEMUDAH Johor on January 18, 2013

the Branch was represented by its Vice Chairman

Eiap Eng Khoon. Issues discussed at the meeting

included Tenaga Nasional Berhad’s tariff conversion

from commercial to industry, on-line Preferential

Certificates of Origin, port security issues and delays

in issuance of Health Certificate.

Capt (R) Hj Abdullah Shariff (left), Branch Chairman presenting the

token of appreciation to Tuan Hj Elias Hasran, UPEN State Director

New Members (March – April 2013)

The FMM welcomes the following 36 new members into the organisation, 29 Ordinary Members and

7 Affiliate Members. The majority or 39% are from Selangor, 19% from Johor and Penang and 11% from Federal Territory,

while the rest is from other states

Ordinary Members

• Arab Supplier Fabrication and

Retail Sdn Bhd

• Bee Hua Industrial Gases Sdn Bhd

• Bestgen Food Sdn Bhd

• BI Technologies Corporation Sdn Bhd

• De Luxe Circle (M) Sdn Bhd

• Diptech Industries Sdn Bhd

• Flexitech Sdn Bhd

• Guava Soft

• Hong Yang Hoo Pharma Sdn Bhd

• Hung Thong Food Technology Sdn Bhd

• Kein Hing Industry Sdn Bhd

• KYM Industries (M) Sdn Bhd

• Linkk Busway Systems (M) Sdn Bhd

• Mackenzie Industries Sdn Bhd

• Memscom Technology Sdn Bhd

• NBC Ventures Sdn Bhd

• Platinum Green Chemicals Sdn Bhd

• PMI Pneumatic (M) Sdn Bhd

• PTT Corporation Sdn Bhd

• Rohde & Schwarz Technologies

Malaysia Sdn Bhd

• Saga Software Sdn Bhd

• Solid Print Sdn Bhd

• SPM Syarikat Permainan

(Malaysia) Sdn Bhd

• Steriflow (Malaysia) Sdn Bhd

• Summer Pacific Sdn Bhd

• Sunhei Sdn Bhd

• Trapia Malaysia Sdn Bhd

• Trinitas Global Sdn Bhd

• Trocellen S.E.A. Sdn Bhd

• Vermi Industries Sdn Bhd

Affiliate Members

• Dagang Net Technologies Sdn Bhd

• European Credit Investment Bank Ltd

• Harvard Hotel (Jerai) Sdn Bhd

• HCK Capital Sdn Bhd

• Malaysia Debt Ventures Berhad

• Senawang Indah Medical Centre Sdn Bhd

28 BIA@FMM | May – Jun 2013

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