Sign in Subscribe
Petroleum industry

Malaysia's Petrochemical Industry Gains Ground Against Singapore

Strategic Insights

— 1 min read

Malaysia has made significant strides in the petrochemical industry over the last 10 years, emerging as one of the most cost-effective producers, according to Malaysian Industrial Development Authority (MIDA) chairman Zainal Abidin Sulong. The country's abundant gas resources have given it a competitive edge over Singapore, which has a more petroleum-based industry. Malaysia's petrochemicals are also being sent to Singapore for value-adding, highlighting the complementary nature of the two economies.

Key Takeaways:

  • Malaysia has developed its petrochemical industry vigorously over the last 10 years, emerging as one of the most cost-effective producers.
  • The country's abundance of gas resources has given it a competitive edge over Singapore, which has a more petroleum-based industry.
  • Malaysia complements Singapore in the industry by sending petrochemicals for value-adding, with Petronas' Gebeng complex sending products to Singapore for potential value-added processes.
  • Between 1995 and 1999, Malaysia approved 59 projects in the petroleum products sector, with a total approved capital investment of RM22,585.9 million (US$5.94 billion).
  • Foreign investments in Malaysia's petrochemical industry accounted for 59% of the total, with the US, Japan, Taiwan, and Germany being major contributors.
  • The notable projects approved included those for the production of acetic acid, amines, polyacetals, copolyesters, and other petrochemicals.
  • Petronas has invested RM3.6 billion to develop and construct infrastructure facilities in the Gebeng and Kerteh petrochemical plants, offering investors 20% capital cost savings.
  • Malaysia needs to attract investors like BASF, Union Carbide, and BP-Amoco, which are proprietary developers, to create accommodative downstream activities that involve more local players.

Statistics:

  • Between 1995 and 1999, 59 projects were approved in the petroleum products sector, with a total approved capital investment of RM22,585.9 million (US$5.94 billion).
  • Foreign investments accounted for 59% of the total, with the US contributing RM5.6 billion, Japan RM2.1 billion, Taiwan RM1.4 billion, and Germany RM1.2 billion.
  • Petronas has invested RM3.6 billion to develop and construct infrastructure facilities in the Gebeng and Kerteh petrochemical plants.

Sources:

  • Zainal Abidin Sulong, Malaysian Industrial Development Authority (MIDA) chairman, "Downstream Opportunities in Petrochemicals" seminar, May 31, Asia Pulse
  • Mohd Hassan Marican, Petronas chief executive and president, "Downstream Opportunities in Petrochemicals" seminar, May 31, Asia Pulse

Read more