Adapting to the world’s market place
Exports Building on a substantial history for further successes

Malaysia is working to differentiate products and services from others in the global marketplace and to gain recognition for their quality

Situated in the heart of Southeast Asia at one of the world's major crossroads, Malaysia has always been pivotal to trade routes from Europe, the Orient, India, and China. There is evidence that the Malays, thanks to their skills in farming and the use of metals, established trade ties with China and India as long ago as the first century BC. But it was during the 15th century, while the Portuguese commanded the Asian seas, that the city of Malacca became one of the world’s most vibrant trading centers with an influence that spread over a vast territory including the whole Malaya Peninsula.

Under the British, Malaysia was a highly successful commodity economy, and it made a great success from exploiting its abundant supply of rich natural resources to become a major exporter in palm oil, rubber, wooden furniture, oil, and gas. However, over recent decades Malaysia’s exports have rapidly scaled the value chain so that today the country’s principal exports are of manufactured products.

Over the past decade exports have provided a vital source of revenue for Malaysian business and now account for 173% of GDP, amounting to a massive $105 billion in 2003. This makes Malaysia the 18th largest exporter in the world, contributing 1.4% to global exports.

However, competition in the global market place is becoming stiffer. Merlyn Kasimir, CEO of MATRADE (Malaysia External Trade Development Corporation), is aware of the challenges ahead and the changing role that Malaysia is assuming in regional and global trade. He says, “We are not competing on the basis of price anymore since we are no longer a low cost producer of products.”

Interestingly, one strategy that the Malaysian economy is adopting is to pay more attention to the agro-based sector. Palm oil exports, for example, registered a huge 35.7% growth in 2003 on the previous year. And one area that shows promise is the food-based sector. According to Kasimir: “Malaysia is seeing encouraging growth in the agro-based industries, and this is one sector where we expect further increases to occur, especially in markets like the Middle East, China, and certain countries in Europe where there is growing kdemand for ethnic food.”

MERLYN KASIMIR CEO of MATRADE

The main response to the challenge of the global market, however, is to get more Malaysian companies to brand their products and move away from being contract manufacturers. Mr. Kasimir explains, “Our strategy is to promote and differentiate Malaysian products and services in the market place from other products, and to gain recognition based on quality.”

Malaysia has enjoyed particular success in the North American market. As a country, the U.S. is Malaysia’s principal trading partner, taking 19.6% of exports in 2003 and providing 15.3% of Malaysia’s imports. Furthermore, total trade with the U.S. has more than doubled in the last decade; bilateral trade was worth $15.4 billion in 1994 and $33.4 billion in 2003.

As a group, ASEAN is Malaysia’s largest trading partner, forming around 25% of the country’s total trade, and from this group Singapore, due in part to its proximity, is the biggest export market for Malaysian products. In recent years, China and India have also become important markets for Malaysian products and services.

Malaysian exporters registry by industry sectors for 2002

Malaysia’s recent economic success and the strong domestic demand, coupled with a robustness and an agility that has allowed it to transform rapidly to suit its circumstances, are reasons to be confident that Malaysia will continue to be an important player in the global marketplace.

Your link to Malaysian producers

MATRADE raises the profile of Malaysian exports through trade promotion activities

Established in 1993 under the Ministry of International Trade and Industry, the Malaysia External Trade Development Corporation (MATRADE) provides a vital link between Malaysian companies and the international market, with a range of services and facilities to help Malaysian businesses capitalize on export opportunities. According to CEO Merlyn Kasimir, the agency’s activities fall into three broad categories.

Firstly, through the agency’s network of offices in 24 major cities across the globe, MATRADE provides information on markets that could lead to business opportunities abroad. Information is also provided to foreign buyers looking for suppliers and suitable products that they can import from Malaysia. “This involves matchmaking between buyers and Malaysian exporters,” says Kasimir.

Secondly, MATRADE works hard to raise the profile of Malaysian exports by organizing trade promotion activities such as international trade fairs and trade missions.

In fact, trade and investment missions were organized in 2002 to the U.S.: one to San Diego, San Jose, and Houston by government and state officials, and the other to Toronto, New York, and St. Louis by 11 prominent Malaysian companies. Meanwhile, Malaysian companies have taken part in three international trade fairs in the U.S. from which over $500,000 was generated in actual sales and three times that in potential sales.

Thirdly, MATRADE develops training programs for exporters, including workshops and seminars on market information, branding, packaging, and export trade financing.

More recently, MATRADE has also become tasked with assisting in the export of services, which include construction, professional services, healthcare, IT, education, and printing.