GEORGE TOWN: The Malaysian Investment Development Authority (Mida) is adopting a cautious stand on investments by photovoltaic (PV) solar manufacturers from China and Taiwan.
Mida deputy chief executive officer Datuk Phang Ah Tong told StarBiz that this was because Mida did not want Malaysia to be used as a transhipment point for China and Taiwan-made PV cells and panels to enter the United States, as the latter had imposed anti-dumping duties on PV products originating from China and Taiwan.
The US International Trade Commission had recently imposed a minimum 70% tariff rate on China PV modules, and an 11.45% to 27.55% rate for Taiwan PV manufacturers.
The fear is that China and Taiwan PV products will be exported from Malaysia using generalised system of preferences (GSP) issued for companies in Malaysia and made-in-Malaysia certificate of origin (COO) documents.
Phang said that so far there were no significant PV investments from China and Taiwan in Malaysia.
“However, we are still pursuing investments in alternative renewable energy such as bio-mass, bio-gas and small hydro plant projects.
“We want renewable energy to comprise at least 11% of the energy consumed in Malaysia by 2020,” he added.
Phang said Mida was currently negotiating for foreign direct investments in advanced electronic and aerospace manufacturing.
“Penang should focus on advanced electronic and medical device manufacturing activities, taking advantage of the weakened ringgit, which makes Malaysia-made products attractive to the United States, whose currency is strong,” he said.
Phang added that there would be a slowdown in oil and gas investments this year, especially in upstream activities, in view of the declining oil price.
“Companies involved in downstream production like plastic resin are expected to do well this year,” he said.
According to Exim Bank Global Advisory and Research’s latest report on the solar panel industry in Malaysia, the country will gain from the recent imposition of anti-dumping duties by the United States on imported China and Taiwan solar products through greater market share in America.
“Malaysia will also stand to benefit from more investments from China and Taiwan as the US-China trade dispute will motivate Chinese and Taiwanese producers to move production outside China to avoid the anti-dumping measures,” the report said.
It said as a result of the foreign investments, Malaysia was the third largest solar module producer in the world after China and Japan, and the fourth largest producer of solar cells in 2013.
The major corporations in Malaysia involved in PV manufacturing are First Solar and Panasonic Corp in Kulim Hi-Tech Park, Hanwa Q Cells in Cyberjaya, AUO Sunpower in Malacca and IRM Group Bhd in Ipoh.
Malaysia has been known as a transhipment point for China-made products using the GSP and COO documents issued for companies in Malaysia to enter Europe.
In December 2010, carbon steel fastener manufacturers in Malaysia exporting to European Union had to declare and were investigated by the European Commission to clear themselves from any involvement in the transhipment of China-made carbon steel fasteners to the EU to avoid anti-dumping duty using the GSP and made-in-Malaysia COO documents.