Over a third of Japanese companies in Malaysia keen to expand

Jetro said the poll, which covered Japanese firms in 20 countries/regions, found that this represented the smallest rate of decline (-6.7%) among the six participating Asean countries compared to the 2019 survey.

KUALA LUMPUR: Just over a third – or 36.1% – of Japanese companies in Malaysia surveyed by the Japan External Trade Organisation (Jetro) have expressed an intention to expand in the next one to two years, especially in the food, precision medical devices and transportation industries.

Jetro said the poll, which covered Japanese firms in 20 countries/regions, found that this represented the smallest rate of decline (-6.7%) among the six participating Asean countries compared to the 2019 survey.

“In particular, expanding function for ‘Production of high value-added products’ at 44.4% is the highest among the six Asean countries. Food as well as precision/medical devices in the manufacturing sector, and transportation in the non-manufacturing sector have exceeded 60% with high intention for expansion, ” it said in a statement.

The Philippines (-17.7%) and Vietnam (-17.1%) recorded the highest decline in “expansion”, according to the 2020 Jetro Survey on Business Conditions of Japanese Companies Operating Overseas (Asia and Oceania), which was conducted from Aug 24 to Sept 25 last year.

Jetro received valid responses from 5,976 companies out of the 14,399 surveys sent out. In Malaysia, the survey was sent to 946 Japanese companies and received valid responses from 257.

The organisation said electrical and electronics, the primary industry in Malaysia, had an “expansion” rate at 38.3%, higher than the overall average for Malaysia. The same industry in Vietnam and the Philippines showed strong intentions for expansion as well.

With regard to the business normalisation period post-Covid-19, Malaysia had the highest percentage of companies at 11.2% which answered that their businesses “are already back to normal” at the time of the survey.

As for procurement rate, the survey revealed that within the Asean region, it was relatively high in Singapore and Malaysia. In Indonesia, Singapore, Thailand and Malaysia, nearly 50% of local procurement were sourced from local companies.

Among the six Asean countries, Philippines, Vietnam, Singapore and Malaysia are considered “export oriented” while Indonesia and Thailand are “domestic demand-driven”. In particular, more than 20% of Japanese companies in the Philippines and Vietnam were fully exporting their products. — Bernama