Malaysian govt onto its first textile manufacturing hub

The government is facilitating a plan to establish Malaysia’s first textile manufacturing hub as part of an effort to revitalize the industry.

International Trade and Industry Minister Datuk Darell Leiking (picture) said the proposal for the hub is currently being drafted by a team from the ministry, Malaysian Investment Development Authority (Mida) and the recently launched Federation of Malaysian Fashion, Textiles, and Apparels (FMFTA).

“We are re-industrializing Malaysia’s textile sector. I have to put the parties together first. This is something that the government fully supports because we believe the domestic investors are fully capable to develop this,” he said at the launch of FMFTA in Kuala Lumpur yesterday.

FMFTA pro-tem committee chairman Datuk Seri Tan Thian Poh said the federation has suggested that 600ha to 1,000ha should be provisioned for the development of the textile hub.

“We have urged the government to set up a fashion, textile and apparel hub in Malaysia, equipped with shared research and development (R&D) capabilities, common waste treatment and design center, among others.

“What we have in mind is that we are not looking at a small business, but rather a massive land between 600ha and 1,000ha to develop this initiative.

“The foreign direct investment would be invited to participate along with state governments…because if the price of our land is too expensive, the investors will go to other countries,” he said.

Tan added that the federation has also proposed for the hub to be established at the least-developed state which has connected logistics services. The project would, in turn, enhance the economic development of the chosen state.

“We have been developing the richer states, but I feel like there are a lot of resources in the poorer states that have not been tapped.

“Although the employment rate is low, the rural areas have to be looked into. We have to industrialize those rural areas to bring up the standard of living and eradicate poverty,” he said.

While it may be difficult to get local players to move their existing operations, Tan said the firms could be compensated by sufficient incentives.

“This hub could be managed by FMFTA or industry players through a public-private partnership with the government.

“We are aware that not many businesses are ready to uproot their operations to rural places but given the right support such as availability of land and assistance for the respective state government, we believe this is attainable,” he said.

The textile and apparel industry is Malaysia’s eleventh largest manufacturing sector, employing over 155,000 people with an export target of RM24 billion to be achieved by 2020.

On the downstream and upstream segments, a total of 1,195 textile and apparel projects worth RM12.6 billion combined were implemented as of December 2018.

For the first half of 2019, Mida has approved an additional investment of RM94.4 million for five projects, with RM120 million still in the pipeline.

“On investment, we have an additional RM120 million that is still in the pipeline to be disbursed and it is all just for manufacturing projects.

“For the designers, we know that they could leverage on other programs and financial assistance that they can expose themselves to.

“The government understands that moving up the value chain would require financial resources that may not be readily accessible to many local stakeholders,” Mida CEO Datuk Azman Mahmud said.

Courtesy:  The Malaysian Reserve