EUMCCI Review April 2008

Volume IV No. 2 April 2008

EUMCCI Review The Business Digest of the European Union-Malaysia Chamber of Commerce and Industry

KDN PP 14083/4/2008

Construction Sector Showing Positive Growth

MIFF 2008 Delivers Substantial Progress

April 2008

Volume IV No.2

E UMCCI R EVIEW www.eumcci.com

Published by EU-Malaysia Chamber of Commerce & Industry (EUMCCI) Office Address Suite 15.02, Level 15 Menara CMY (Kemayan) 160 Jalan Ampang, 50450 Kuala Lumpur, Malaysia Tel: +603-2162 6298 Fax: +603-2162 6198 E-mail: eumcci@eumcci.com Website: www.eumcci.com Editorial Committee Minna Saneri - Editor Marco Winter Paul Vincent Galea

Contents 4

EDITORIAL

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CHAMBER@WORK EUMCCI Lobbying Trade Issues ‘Bridging the Gap Between Academia and Industry’

Submissions Articles and other materials of interest to the general membership are actively solicited and may be sent to the Chamber. All materials submitted for publication are subject to editorial review and revisions.

Reproduction No part of the EUMCCI Review may be reproduced or transmitted in any form or by any means, electronic or mechanical without prior written permission.

Circulation 3,000 copies of the EUMCCI Review are distributed, on quarterly basis to EUMCCI members, all Embassies, industry associations and government officials with whom the Chamber has dealings as well as European Chambers Worldwide Subscription Service Subscriptions from non-members are also accepted at RM80.00 (€28.00 abroad) for 4 issues. Individual copies may be purchased at RM25.00 (€8.00 abroad).

EUMCCI Board Chairman David Jones Deputy Chairman Jean-Francois Jadin Honourary Treasurer Dato’ Robert Teo Directors /Alternates Austria Franz Schröder Belgium Rene Heymans Cyprus Wan Azuar Dato Wan Daud Czech Republic Milan Vagner Denmark Kim Hansen France Michel Lozach Finland Jari Silventoinen Germany Alexander Stedtfeld / Knut Herzer Greece Andreas Vogiatzakis Hungary Robert Papp Ireland Michael Garvey Italy Alberto Ciaramicoli Luxembourg Wolfgang Heidkamp Malaysia Caesar Loong Malta Paul Vincent Galea The Netherlands Marco Winter Poland Czeslaw Klimczak Portugal Datuk Eugenio Campos / Maria Liew Slovak Republic Patricia Dudova Spain Antonio Garcia Sweden Nils Nordh United Kingdom Datuk Peter Wentworth Ramesh Menon

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CSR in Malaysia Gains Momentum

Geert Anckaert Patricia Chin

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EUROPE NEWS

11 FEATURE Construction Sector Showing Positive Growth Property Development - Trend and Outlook of the Office Sector

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MIFF 2008 Delivers Substantial Progress

16 EVENTS EU-Malaysia Golf Challenge 2008 EUMCCI-FMM Networking Event

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21 MEMBERS’ CORNER 24 NEW MEMBERS 26 MALAYSIA NEWS Taxes on Property in Malaysia

27 INDICATORS

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28 ADVERTISE WITH US

Designed by UR Graphic Sdn Bhd Printed by Anekaprint & Packaging Sdn Bdn No. 6 & 8, Jalan Asa 8, Taman Asa Jaya 43000 Kajang, Selangor

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editorial The Changing Landscape…

Dear Members As the freshly instated Editor, I am very happy to bring you a wide array of news from EUMCCI.

Editorial

The recently concluded 12th General Elections heralds a new phase of governance in Malaysia, and EUMCCI is looking forward to working closely with the new administration and EU investors who have high expectations from the government. The aftermath of the elections is seeing exciting times and responding to this sense of newness, the Chamber continued its series of VIP Luncheon Talks on the topic “Malaysia Moving Forward” with a distinguished panel of speakers giving their views on the evolving political landscape and its impact on the economic climate. We also have a new Events Manager, Geetha, who will continue bringing up good speakers and organising interesting events.

Under “Chamber@Work”, you can read about an exciting project which allows EUMCCI to concentrate on helping you, our Members, to raise Trade issues and Recommendations to the Government and to other relevant stakeholders. We have re-organised our Committees: fresh start for Construction and Building Materials Committee and the IPR Committee both under new leadership! Congratulations to the new Heads of Committee. We will also be starting Committees for Financial Services and Information Technology in order to provide a platform to raise issues and lobby as we see these as two very important sectors in Malaysia. Welcome to Wendy: our Project Manager who is handling the issues faced by our members. So do send her issues affecting your business - we are here to provide value, dear Member.

Our Corporate Social Responsibility Committee has started work on a publication highlighting best practices in CSR - read more about it and the upcoming International Conference we are co-organising on pg.8 as well as from the brochure enclosed.

In addition to collecting all Trade issues and recommendations which we will publish in a book later this year, EUMCCI together with the other members of the European Business Organisations - EBO - network in the region, will be uploading the issues under one eplatform, www.eboasia.eu; which will become a valuable database of trade issues for new and existing investors, as well as providing input for the EU-ASEAN Free Trade Agreement talks which began last year.

Anywhere in Kuala Lumpur, and much of Klang Valley, one can see construction sites, cranes, armies of construction workers climbing, drilling, hammering. Here we talk about what’s in store for the construction sector, and whether all this development is sustainable, and not forgetting trends for the office sector. Our second feature reveals how Malaysia’s furniture sector is coping with the challenges of the stormy global markets.

I hope you enjoy this issue.

Minna Saneri General Manager

4 April

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c@w E UROPE A ID CO-OPERATION OFFICE

EUMCCI Lobbying Trade Issues Raffaele Quarto from European Commission Delegation to Seoul, Korea giving presentation of Market Access Teams

On Monday 18th February 2008 the kick-off meeting of the project ‘European Business Organizations Capacity Building in Market information and Dissemination’ , cofinanced by the European Commission under Asia Invest program, took place at the Grand Millennium Hotel in Kuala Lumpur.

For the occasion all the project partners, namely: Eurocham Vietnam, European Union Chamber of Commerce in SouthKorea (EUCCK) and European Chamber of Commerce in Taipei (ECCT) as well as the EU-Korea Industrial Cooperation Agency (EUKICA), based in Europe, had come to Kuala Lumpur for 3 days.

EUMCCI chairman David Jones welcomed the project team

on new issues. We would like to ask all our members to visit the Malaysia site, which concludes a short (5 minutes) questionnaire. With the results of this questionnaire we will be able to get a better overview of industry-issues in Malaysia. Thank you in advance for filling in the questionnaire.

The second purpose is to develop sector committees in Malaysia and in Vietnam in order to collect issues to be lobbied to the Government. The aim is to have a position paper for both Malaysia and Vietnam containing issues per sector to discuss with the local government.

back row from left: Dieter Schmitt (Senior Director EUCCK), Jean Jacques Grauhar (Secretary-General EUCCK), Jerry Fong (Government Liaison Director ECCT), Guy Wittich (CEO ECCT), Nicholas Greenfield (Executive Director Eurocham Vietnam). Front row : Pascale Youn (Executive Director EUKICA), Minna Saneri (General Manager EUMCCI), Quynh Tram Nguyen (Director Eurocham Vietnam Ho Chi Minh office), Wendy van Dijck, (Project Manager EUMCCI)

for them to decide where to start and how to expand regionally according to a factbased regional business strategy. There is a need to compare the trade and investment environment between countries in the region. A co-ordinated promotion of European business practices, standards and norms contributes to Europe’s political and economical presence in Asia.

To address this need, the European Business Organizations (EBOs) in the region, spearheaded by EUMCCI, applied for a project to strengthen the capacity of EBO Malaysia and EBO Vietnam by benchmarking other EBOs’ experience in research of trade and regulatory issues, the organization of sectoral working groups, and the development, publication and promotion of annual “Trade Issues and Recommendations”. The European Chambers in Korea and Taiwan will be tutors for Malaysia and Vietnam during the whole duration of the project.

The kick-off meeting had an intensive agenda

During the Luncheon organised on 18th February, Raffaele Quarto, Head of Trade and Economic section of the European Commission Delegation to Seoul , gave a presentation on “Market Access Teams”, which is an initiative by the European Commission, supporting the access of the European companies to 3rd countries markets.

During the Dinner the representatives from Korea, Taiwan and Vietnam gave an overview of the market opportunities and outlook for 2008 of their respective countries.

The project has two main purposes. First purpose is to build an e-platform with all market information about trade issues for European Business in Asia. The website www.eboasia.eu will be updated regularly

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Partners discussing

In the end, the results of the project will benefit our members. To achieve that goal it is necessary intensely interact in order to find out which committees are needed and to address the issues properly. Therefore we will contact the members of different industry sectors by email asking for their cooperation and/or input. Subsequently we will deliver the position paper to the Malaysian Government for further discussion and hopefully solving most of the issues.

For more enquiries about the project, please contact: Wendy van Dijck - Project Manager Tel: 603-2162 6298, Fax: 603-2162 6198 E-mail: wendy@eumcci.com Website: www.eboasia.eu

April 5

C@W

Regional Free Trade Agreement between the EU and the ASEAN region strengthens the need for an Asia-wide sectoral review of the business environment. European companies, approaching the increasingly integrated Asian market, are facing a patchwork of business environments and regulatory frameworks making it difficult

c@w ‘Bridging the Gap’ Between Academia and Industry

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A One-Day Workshop Jointly Organized by the EU-Malaysia Chamber of Commerce and Industry and the Ministry of Higher Education Putrajaya International Convention Center, January 28, 2008 Following a dialogue session with the industry held by the Honourable Minister of Higher Education, Malaysia in 2007, EUMCCI and MOHE decided to jointly organize a one-day workshop with the aim to explore ideas and develop concrete strategies to bridge the gap between industry and academia.

workshop, which saw a sizable crowd of representatives from Malaysian universities, mainly Vice Chancellors, Deputy Vice Chancellors and Heads of the Industry Relations to come together and discuss: 1) Industrial Attachment of UnderGraduate Students in Industry 2) Industrial Attachment of Academic Faculty in Industry 3) Industry Representation in Academic Decision Making Bodies (with a Focus at Course Level)

From the academia perspective, developing graduates that are employable is of For each topic, a reprekey importance. From the sentative of academia and industry perspective, having a representative of industry a pool of readily employable set the stage for a professionals is equally imdiscussion aimed at portant. Yet, we witness developing action points. graduates that are and Following the discussion remain unemployed while among participants, key we hear the industry strugactions points were agreed gling to recruit suitable canfor implementation. didates in key areas. From a foreign direct investment EUMCCI Deputy Chairman Jean EUMCCI Chairman David Francois Jadin was the facilitator of the perspective, it is critical for Jones and Secretaryevent. investor to be assured of a General of MOHE YBhg readily available supply of a Dato’ Prof Dr Hassan Bin Said delivered suitable qualified workforce for them to their welcome addresses after which choose Malaysia as the place for their EUMCCI Deputy chairman Jean Francois investment.

Jadin took the stage. He facilitated the Three key enablers were jointly identified by EUMCCI and MOHE to be the focus of the

Ahmad Zakie from UEM, Jean Francois Jadin Deputy Chairman of EUMCCI and Professor Saran Kaur , Deputy Vice Chancellor of UKM

The first Workshop focused on Industrial Attachment of Under-Graduate Students in Industry. The panelists were Prof. Dr. Saran Kaur Gill, Deputy Vice-Chancellor (Industry & Community Relations), Universiti Kebangsaan Malaysia and Nik-Mustapa Nik-Mohamed, Head of HR & Corporate Communications, Unilever.

The second workshop focused on Industrial Attachment of Academic Faculty in Industry. The panelists were Y. Bhg. Datuk Rafiah Salim, Vice Chancellor, Universiti Malaya and Ahmad Zakie b. Hj. Ahmad Shariff, Senior General Manager, Group Business Development, UEM Group Berhad.

The third Workshop focused on Industry Representation in Academic Decision Making Bodies where Caesar Loong, Chief Executive Partner, Raslan Loong, Advocates & Socilitors presented his view of the issue.

workshop throughout the day, encouraging participants to bring up their views.

Participants discussing at the workshop

Secretary-General of MOHE consigning token of appreciation to EUMCCI chairman David Jones.

6 April

Caesar Loong, EUMCCI Director exchanging views with Datuk Rafiah Salim, Vice chancellor of UM.

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At each workshop both the academic representative and industry representative set the stage after which the participants discussed in small groups and presented the outcome of their discussions. The outcome was then commented by the panelists. Jean Francois Jadin closed the Conference and invited the participants to work together with EUMCCI building on the results of the day.

c@w Business Organisations and Society, University of Bath (UK); Kee Kim Boon, International Labour Organisation (Jakarta); and Anne-Marie O’Connor, Head of SRI at the New Zealand Superannuation Fund.

CSR in Malaysia Gains Momentum “International Corporate Social Responsibility Conference 2008 Responsibility Meets the Bottomline”

According to Dr Geoffrey Williams, EUMCCI CSR Committee member and Managing Director of OWW Consulting : “The Malaysian business community’s adoption of CSR practices is far-sighted and many Malaysian companies are now ahead of the curve in comparison with other Asian countries. This is in step with the global trend towards more responsible and responsive corporate behaviour. So, there has never been a better time for Malaysia to host an International CSR conference to keep the momentum going and to build on the sophistication of Malaysian CSR practices.”

The CSR Conference will have three major highlights. This is the first time world-class CSR specialists from 4 continents will be gathering in Kuala Lumpur to share their cutting-edge expertise with the Malaysian business and corporate community. They will also be exchanging solutions and debating ideas on hot button CSR issues with homegrown Malaysian experts from across the corporate and NGO sectors. A wide range of issues from community affairs to environmental challenges to Human Resource management will be addressed at this conference.”

Flying in especially to participate at the event will be CSR luminaries from 4 continents. Currently, the confirmed panel of speakers include: Graham Sinclair, Director of UNPRI (United Nations); Simon Collins, CEO of Resource Alliance (UK); Dr Stephen Brammer, Deputy Director of the Centre for

Dr Williams added: “Our emphasis on SRI is the third element which distinguishes this particular CSR Conference from other similar events around the region. While CSR has become a buzzword and is definitely on the radar of more corporations and NGOs, SRI is lesser known and there is a huge scope for Malaysian companies to benefit from adopting SRI. As SRI is essentially the next step up from basic CSR practices, we hope that this Conference will kick off a strong interest in Malaysian companies looking to build a more deep-seated CSR framework in their business practices.”

SRI is big business as there is around US$4 trillion (RM12.9 trillion) in Global SRI Funds, an additional US$300-500 billion (RM1-1.7 trillion) in Syariah compatible funds and in Asia around US$32.3 billion (RM104 billion) in 180 funds. Global SRI Funds are equivalent to twenty-times the size of the market capitalisation of the entire Malaysian PLCs listed on Bursa Malaysia. If just US$1 in every US$1,000 of these funds can be attracted into Malaysia there would be extra capital worth twice the size of the top-100 companies on Bursa. There is definitely enormous untapped potential there and we hope to help Malaysian companies unlock it beginning with this Conference.

In the framework of cooperation and capacity-building between European Business Organisations (EBO) network, EUMCCI, together with the European Chamber of Commerce Taipei (ECCT) and the European Union Chamber of Commerce in Korea (EUCCK) , visited the European Chamber of Commerce in Philippines (ECCP). The 3-day study visit concentrated on benchmarking the services of the Chamber.

C@W

From 29 to 31 July 2008 OWW Consulting, RUSS Consulting and the EU-Malaysia Chamber of Commerce and Industry will be hosting the first international CSR Conference in Malaysia: “International Corporate Social Responsibility Conference Where Responsibility Meets Bottomline” in recognition of Malaysia’s fast growth and leadership in CSR.

David Jones, Chairman of the EU-Malaysia Chamber of Commerce and Industry (EUMCCI) said: “The EU-Malaysia Chamber of Commerce and Industry is strongly involved in CSR through our CSR Committee, which is also publishing a book of Best practices in CSR by our member companies. EUMCCI is happy to be part of this groundbreaking conference because it is designed to facilitate not just normal networking and knowledge exchange opportunities but will also include a formal “Business Matching” programme for Malaysian companies and Fund managers from overseas who specialize in Socially Responsible Investment (SRI). This would not only make it simple for both sides to forge connections, but is also a first step towards getting more Malaysian companies to pro-actively get involved with SRI while fostering excellent bilateral business relations.”

EUMCCI visits ECCP

(l) Gerry Constantino, Manager, Membership and Business Information Services, ECCP; Elaine Garcia-Gatchalian, Marketing Services Manager, ECP; Jean-Jacques Grauhar, Secretary-General, EUCCK; Henry Schumacher, Executive Vice President, ECCP; Minna Saneri, General Manager, EUMCCI; Guy Wittich, CEO, ECCT

EUMCCI CSR Book The EU-Malaysia Chamber of Commerce and Industry CSR Committee is preparing a book for publication to be launched at the International CSR Conference in July. The book will contain case studies of good CSR practices and episodes in Malaysia, based on a number of case studies and will cover the development of CSR in Malaysian companies especially those with business links to the EU. The book will be divided into various sections representing the various corporate social responsibility activities that would be of interest to our membership, including: • ethical practices and investment • environmental practices • health and safety practices • employment practices • community projects The objective is to include a range of well accepted aspects of CSR in the European Union and Malaysia. The book will be distributed nationally as well as regionally through the European Business Organisations network so this will be a great opportunity for you to highlight your CSR successes to a wide audience. We urge our members to submit stories! For more information contact: minna.saneri@eumcci.com

EUMCCI Review

April 7

europe news Europe News

Dutch - Malaysian seminar on plants The Agricultural Office of the Embassy of the Kingdom of the Netherlands in Kuala Lumpur jointly with the Department of Agriculture, Malaysia and Dekker Chrysanten BV successfully organised on 28 February 2008 a seminar entitled: Developing the Plant Breeding Industry in the Cameron Highlands, a major centre of temperate flower growing in South East Asia.

The one-day Seminar with presentations from both Malaysia and Dutch expert from Naktuinbouw revisited the issue of conformity to UPOV ’91 (International Union for Protection of New Varieties of Plants) requirements and its attendant benefits.

Presently Malaysia’s PvP (plant variety protection) laws are adapted and based on UPOV model law, provisions of CBD (Convention of Biological Diversity) and IPRs (Intellectual Property Right) of other countries.

Seminar-participants came away with the message that conformity to UPOV ’91 will further strengthen Malaysia’s position as the region’s leading exporter of chrysanthemum to Japan.

Participants came from a cross-section of the industry: flower and vegetable growers, representatives of seed companies, research institutions, tertiary institutions, legal firms and specialists in intellectual property rights.

50 Years of Diplomatic Relations Between Malaysia and the Netherlands Roundtable

Roundtable discussion between Malaysia and the Netherlands

Recently the roundtable “50 years of diplomatic relations between Malaysia and the Netherlands: Lessons learnt” was organised at the Institute of Diplomacy and Foreign Relations.

Presentations were given by Prof. Dr. Nordin Hussin, Deputy Director, Institute of

8 April

Occidental Studies, UKM (IKON): “Malaysia-Netherlands Bilateral Relations: The last 50 Years” and by Dr. Farish Ahmad Noor, Senior Fellow, Rajaratnam School of International Studies, NTU Singapore: “InterCivilizatian Dialogue in the context of the Nether/ands” Dato’ Noor Farida Arrifin, Former Ambassador of Malaysia to the Netherlands (20002007) and Lody Embrechts, Ambassador of the Kingdom of Netherlands to Malaysia, responded to both presentations.

Minister-President of Schleswig-Holstein Leads Delegation to Malaysia From 10 to 13 November 2007, MinisterPresident of the Federal State of SchleswigHolstein, Germany, H.E. Peter Harry Carstensen, led a delegation comprising officials from the State as well as representatives from the private sector to Malaysia. Also accompanying the delegation was Dr. Bernd Bösche, Managing Director of

Also participating in the roundtable were Tan Sri Hasmy Agam, Executive Chairman of IDFR and Moderator Tan Sri Rastam Mohd Isa, Secretary General, Ministry of Foreign Affairs.

Interest of Czech companies in cooperation with Malaysian partners is growing

The Schleswig-Holstein delegation was welcomed to Malaysia by MGCC

Czech companies will be participating in 3 exhibitions and trade fairs in Malaysia this year. First opportunity to meet nearly 15 manufacturers from defense and security industry will be during exhibition DSA 2008 organized from 21st April 2008 in PWTC in Kuala Lumpur. Czech energy industry will be introduced on ElerctricAsia 2008 which will be held from 17th June 2008 in KLCC Convention Centre. Malaysian partners interested in technology and projects such as renewable energy sources, water treatment etc. are welcomed to visit Czech Republic stand. Finally Czech nanotechnology sector will be presented during exhibition and forum Nanotechnology Malaysia 2008 from 26th August 2008 in Kuala Lumpur. Czech participation will include exhibition stand and special seminar: “Czech Republic Nanotechnology: Excellent Results and Opportunities for Cooperation”. Czech Academy of Science and Czech companies and institutes will demonstrate not only up-to-date research results but also conducting matchmaking sessions where specific offers for cooperation will be introduces.

WTSH (Business Development and Technology Transfer Corporation of SchleswigHolstein). The Malaysian-German Chamber of Commerce and Industry (MGCC) had prior to the journey to Malaysia - cooperated with WTSH to organize a Business Matching for companies from the northern German state with Malaysian companies.

All above mentioned Czech participation on trade fairs are supported and coorganised by Embassy of the Czech Republic in Kuala Lumpur. For more information, please don’t hesitate to contact: commerce_kualalumpur@mzv.cz.

UK Trade & Investment held a seminar at a leading hotel in Kuala Lumpur recently flying in speakers from the UK to provide information to potential investors to the UK. Topics covered included understanding the appropriate UK legal structure; the UK

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UK-Your Strategic Partner in Europe seminar on 17th March 2008 The UK has become the European hub of the emerging global economy, and is the number one location for European Headquarters (EHQ).

More companies have established their EHQs in the UK than any other country.

Today the UK is home to 57 per cent of all EHQs for companies from around the world, and the number of companies choosing the UK is increasing. In 20042006 over 50 per cent of global companies who set up or relocated their EHQs did so in the UK.

europe n Seminar participants gaining information about investment opportunities in UK

4 Malaysian companies are listed on the London Stock Exchange and another 13 listed on the Alternative Market or AIM. There is a growing interest from Malaysian companies raising capital in the UK. UK Trade & Investment is the Government organisation that helps UK based companies succeed in international markets. We assist overseas companies to bring high quality investment to the UK’s vibrant economy.

For further information, please visit: www.uktradeinvest.gov.uk or email: Angie.Yen@fco.gov.uk

Austrian Tourism Workshop in Kuala Lumpur

Austrian Trade and the Austrian National Tourist Office held their yearly workshop for Malaysian Travel Agents on March 10th in Westin Hotel. Austria being a major tourist destination in Europe attracted again a large crowd of interested travel agents who wanted to get to know the latest travel news on EURO 2008 but also about special offers for 2008 and 2009, celebrating the famous Austrian composer Hayden.

A special focus of the workshop was the launch of the ACTS (Austrian Certified Travel Specialist) Program, which is a free online trainings course on Austrian tourism.

The training is attractively presented with engaging and fun interactive components

In this area ACERINOX GROUP has a strong commercial presence for many years, which will be definitely consolidated by this investment.

ACERINOX, S.A. and NISSHIN STEEL decide to build a new stainless steel production plant in Malaysia

With this investment, ACERINOX and NISSHIN STEEL will enhance significantly Malaysia development, its exports and the stainless steel market expansion in the ASEAN countries, contributing to offer a close supply source, with competitive materials manufactured with the highest quality levels.

ACERINOX, S.A. and NISSHIN STEEL have decided, after having carried out a feasibility study and considering various alternatives, to build a new stainless steel production plant in Malaysia.

It will be located in Johor Bahru (Malaysia), in a 140 Has (350 acres) land by the sea.

The plant will be constructed with high efficiency criteria, similar to those of North American Stainless in Ghent (Kentucky U.S.A), owned by ACERINOX. The new plant will be constructed in successive stages and in the last one it will be an integrated stainless steel production plant, with a melting capacity of 1 million Mt/year and 600.000 Mt/year of cold rolled production. The estimated total investment amounts to 1,500 million USD. The first stage, which investment will total 320 million USD, already approved, will consist of a cold rolling mill with a 1,500 mm width Sendzimir, a combined annealing and pickling line, a skinpass and a finishing shop. Its production capacity will amount to 240.000 Mt/year, out of which 182,000 Mt/year will be cold rolled production.

Its construction will start immediately after having finished the legal proceedings. The put into operation is forecasted for 2011.

During the construction and assembly stage many native workers and local companies will be employed and when the plant will be on stream it will create about 300 direct jobs in the first stage.

For this project, a new society will be incorporated in Malaysia, where ACERINOX will hold a majority stake.

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ACERINOX, AND NISSHIN STEEL, which already have a long cooperation together for 38 years, show in this way their firm decision to continue with this alliance and to open new fields of mutual cooperation.

For ACERINOX GROUP this factory in Malaysia, once completed, will be added to the other three factories in Spain, the United States and South Africa and will increase the Group installed capacity to 4.5 million Mt. This decision represents a very important strategic step in ACERINOX GROUP development, improving the assets distribution, which is already unique in the sector.

Eleven of Europe’s Largest Economies WellPlaced to Meet Lisbon Targets New study shows overall strong performance in most EU countries, but future prospects threatened by global uncertainties Productivity growth in 11 European countries now rising faster than in US Finland and Ireland rank Nos. 1 and 2; Austria, France and Italy lag; UK and Germany most improved; Netherlands suffers steep downgrade Improved energy efficiency will be a driver of future growth.

Allianz SE, one of Europe’s leading financial service providers, and the Lisbon Council, a Brussels-based think tank, released recently The 2008 European Growth and Jobs Monitor: Indicators of Success in the Knowledge Economy, the second edition of its authoritative competitiveness ranking.

The study looks at how the EU’s 14 largest economies - Austria, Belgium, Denmark, Finland, France, Greece, Germany, Ireland, Italy, Netherlands, Poland, Spain, Sweden and the United Kingdom - perform in

April 9

Europe News

regulatory framework; the question of recruiting staff; financial issues covering banking, incentives & taxation. A speaker from the London Stock Exchange provided information on raising capital and understanding listing requirements.

but also valuable marketing tips and support. Agents who successfully complete this training will be allowed to use the ACTS logo in their promotions and enjoy special benefits that come with it. The ten best Asian travel agents in this training will be invited also to a fam trip. Interest was high and many participants during the workshop subscribed already to this training program.

States - a remarkable shift, particularly in view of Europe’s “jobs miracle”, the creation of six million new jobs in the last two years alone.

- A highly skilled workforce is becoming a key competitive advantage, with Finland, Belgium and Ireland scoring highest on the respective Lisbon sub-indicator.

- Many European countries have not used the recent economic recovery to consolidate their public finances sufficiently and prepare for future challenges, particularly the coming demographic crunch.

In a special section prepared for this year’s edition, the study looks at the economic impact of strong environmental standards, and shows that - far from harming Europe’s long-term competitiveness - energy efficiency will be a driver of future growth. It adds that the EU can benefit from “firstmover advantage” with regards to ecoinnovation and application of new technologies.

Source Picture: European Community

Europe News

reaching goals set out in, or derived from, the so-called Lisbon Agenda. It ranks countries according to key criteria decisive for success in the 21st century: economic growth, productivity growth, employment, human capital, future-oriented investment and fiscal sustainability.

Among the study’s key findings: - Assuming that current performance can be upheld, the EU-15 looks to be on course to meet its Lisbon Agenda goals, as demonstrated by the current overall score of 1.05 - up from 0.89, or 89%, at the end of 2006.

- Only three of the countries surveyed France, Austria and Italy - are currently not on track to meet their Lisbon targets.

- Finland tops the ranking, with high marks on economic growth, labour productivity, human capital and fiscal sustainability; the study suggests that Finland will comfortably overshoot the Lisbon targets.

- Italy is at the bottom of the list, scoring particularly poorly in economic growth, skilled labour, labour productivity and sustainability of public finances.

- France comes in at No. 12 (third to last).

The main reasons: sluggish growth and weak public finances.

- The first new EU member state to be included in the ranking, Poland, debuts at No. 5, despite a very mixed performance on sub-indicators. Poland is strong on economic and productivity growth, but scores poorly on employment rate and educational qualifications.

- Eleven countries currently boast faster productivity growth than in the United

10 April

Says Prof. Dr. Michael Heise, chief economist of Allianz SE and principal author of the study: Our unequivocal message for Europe is: stay the course and use the Lisbon Agenda to strengthen our lead and consolidate our advances.” Adds Paul Hofheinz, president of the Lisbon Council: “We welcome the increased emphasis on human capital and energy efficiency in the Lisbon cycle 2008-2010. As our study shows, high environmental standards are not a brake on Europe’s competitiveness. To the contrary, these standards will create new markets and give innovative companies the opportunity to develop true global leadership in this field. Over time, higher energy efficiency promotes higher total factor productivity - and that can only be a good thing: high productivity generates wealth, creates jobs and contributes to our overall economic well-being.”

Source: www.lisboncouncil.net.

Denmark Tops the Global Information Technology Report 2007-2008 Denmark is the most networked economy in the world, followed by Sweden and Switzerland, according to The Global Information Technology Report 2007-2008, released on 9th April by the World Economic Forum. Among the top ten, the Republic of Korea (9) and, to a lesser extent, the United States (4) post the most notable improvements (moving up 10 and 3 positions, respectively).

“The successful experience of the Nordic countries, Singapore, the United States or Korea shows that a coherent government vision on the importance of ICT, coupled with an early focus on education and innovation, are key not only for spurring networked readiness, but also to lay the foundations for sustainable growth,” said

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Source Picture: European Community

europe news Irene Mia, Senior Economist of the Global Competitiveness Network at the World Economic Forum and Co-Editor of the Report.

Published for the seventh consecutive year with record coverage of 127 economies worldwide under the theme Fostering Innovation through Networked Readiness, this year’s Report places a particular focus on the role of networked readiness in spurring innovation through topics covered in the analytical chapters.

Networked Readliness Index 2007-2008 (Top Ten) Economy Denmark Sweden Switzerland United States Singapore Finland Netherlands Iceland Republic of Korea Norway

Rank

Rank

2007-2008

2006-2007

1 2 3 4 5 6 7 8 9 10

1 2 5 7 3 4 6 8 19 10

Change +2 +3 -2 -2 -1 +10 -

The Networked Readiness Index (NRI), featured in the Report, examines how prepared countries are to use ICT effectively on three dimensions: the general business, regulatory and infrastructure environment for ICT; the readiness of the three key stakeholder groups - individuals, businesses and governments - to use and benefit from ICT; and their actual usage of the latest information and communication technologies available.

The NRI uses a combination of data from publicly available sources, as well as the results of the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum with its network of Partner Institutes (leading research institutes and business organizations) in the countries included in the Report.

Source: www.weforum.org/gitr.

feature

Source Picture: Victor Buick Steel Sdn Bhd

Construction Sector Showing Positive Growth Following three consecutive years of decline, the construction sector turned around to record apositive growth of 4.6%.

The expansion was driven mainly by the civil engineering sub-sector,and supported by expansion in the non-residential and residential sub-sectors.

In addition, the order books of some domestic construction companies were also augmented by overseas projects, especially in the Middle East, India and Thailand.

Growth in the non-residential segment picked up further during the year in tandem with robust business activity. Increased demand from new businesses as well as expansion by existing companies in the financial services, information technology, and oil and gas-related sectors caused a sharp increase in demand for office space, particularly in Kuala Lumpur. The strong demand was further reinforced by interests from foreign institutional investors. Meanwhile, new incoming supply of office space increased to 1.6 million square metres as at end-September 2007, of which almost half was recorded in Kuala Lumpur. Despite the increase in supply, the occupancy rate of office space increased further to 83% as at end-September 2007 (end-2006: 81.8%).

The strong demand was also evidenced by increases in rentals.

Activity in the residential sub-sector remained positive during the year following several policy measures introduced by the Government since December 2006. These included the liberalisation of the Foreign Investment Committee (FIC) ruling on foreign purchases, the exemption from Real Property Gains Tax and relaxation on the number of residential or commercial property loans that foreigners could obtain.

Findings from a survey by the Real Estate and Housing Developers Association showed that these liberalisations and the attractive valuation of high-end properties in the Klang Valley contributed to increased foreign interest in this segment. Residential property transactions by foreigners rose by about 30% in the first half of 2007 (2006: 13.9%). Demand was also supported by the availability of end-financing as reflected in higher housing loan applications, approvals and disbursements of 47.6%, 45.6% and 11.1% respectively during the year.

Developers were generally cautious in launching new projects in the past two years to prevent accumulation of unsold properties. Incoming supply declined by 8% to 580,883 units as at end- September

Overall, national house prices as measured by the Malaysian House Price Index increased by 3.8% in the first half of 2007 (2006: 1.9%). One of the factors that contributed to the increase is the rising cost of building materials. Prices of steel bars were revised upwards three times during the course of the year by a total of 45%, while the price of cement was revised at end- 2006, and for the first time, was differentiated across the states based on transportation and other costs, with the quantum of increase varied between 10-78%.

During the year, the Government undertook several measures to enhance the public delivery system related to the construction sector. A One-Stop Centre was established to enable “fastlane� approval for certain categories of projects such as those under the build-then-sell concept, Government projects, high-impact projects, and those that have potential to attract foreign investment. The framework enables simultaneous processing by the different local, state and federal departments, thus shortening the approval process substantially to four months. In addition, the Certificate of Fitness for Occupation was replaced with the Certificate of Completion and Compliance during the year, enabling faster occupation of completed projects.

Value-add Growth in Construction Sector versus Growth in Federal Government Development Expenditure and Private Investment Annual change (%) 5

Annual change (%) 50

4

40

3

30

2

20

1

10

0

0

-1

-10

-2

-20

-3

The strong growth in private consumption had stimulated demand for retail properties. During the year, about 31 new shopping complexes were completed, of which nine were in the Klang Valley, resulting in the total number of let table commercial

2007. However, given the renewed enthusiasm in 2007, future planned supply rose by 1.5% to 644,354 units. In line with the demand and supply trends, overhang of residential properties declined from a high of 28,827 as at end-September 2006 to 24,488 units at end-September 2007.

-30 2002

2003

2004

2005

2006

2007

Construction Sector (LHS) Federal Government Development Expenditure (RHS) Private investment (RHS) Source: Department of Statistics, Malaysia and Accountant General's Department

EUMCCI Review

EUMCCI Construction and Building Materials Committee has got a new Head of Committee: Aat van der Horst from Victor Buick Steel Sdn Bhd. The Committee is raising and reviewing issues for MITI Dialogue and the agenda for the rest of the year includes discussions and lobbying with relevant authorities of the sector.

EUMCCI members in the construction and building materials sectors are invited to join!

Contact: wendy@eumcci.com

April 11

Construction

In the civil engineering sub-sector, the positive effects from the increased implementation of projects under the Ninth Malaysia Plan (9MP) gradually filtered through the economy during the course of the year. Federal Government development expenditure rose by 13.3% to RM40.6 billion in 2007 (2006: RM35.8 billion), to finance construction of new projects and upgrading of existing infrastructure facilities, such as roads, schools, hospitals and government quarters. The civil engineering sub-sector also benefited from increased construction activity in the oil and gas industry, comprising development and production of new oil facilities including rigs, platforms and storage terminals.

space in the Klang Valley to increase to about 40 million square feet (2006: 36.4 million square feet). The new retail space was mainly towards high-end facilities.

Given the rise in supply, rentals broadly remained unchanged except for choice properties. With the growing attraction of this sector, several shopping complexes were bought by foreign-based Real Estate Investment Trusts (REITs) in 2007.

feature Property Development-

trends and outlook of the office sector

Construction

It is no secret that foreign investors have been on a buying spree of office space in Malaysia. In 2007, foreign investors accounted for more than 40% of office transactions compared to only 20% in 2005. In total, transacted value of the office market had doubled over a period of two years, from RM1.2 million in 2005 to RM2.4 million in 2007.

Echoing popular sentiments on why foreigners are making a serious play for Malaysian properties, Goh Tian Sui, managing director of CH Williams Talhar & Wong, said that, “Real estate in Malaysia is the cheapest in the region.

We have quality stocks (properties) that are no less than international standards if you are willing to pay the price.”

The question is whether this trend will continue in light of recent political developments. Goh shares his thoughts.

Why is Malaysia still a favourable place to invest in? Do the recent general election results have an impact?

Post general elections, foreigners are adopting a ‘wait and see’ attitude because they want to see some certainty in terms of policies and a clearer picture of where the country is heading. Although Selangor has a new state government, the chief minister was an ex-corporate person and is inclined to be pro-business. The new state governments have also reiterated that they want to be investor friendly.

Aside this, we have actually achieved a respectable economic growth rate of 56%. Our political environment is stable.

The federal government is still under the same ruling coalition. Our infrastructure facilities are complete - we have modern ports, airports and highways. And we have a sizeable population of educated and English-speaking labour force who are fairly cheap too.

The legal framework for property ownership is developed and the foreign ownership rules are fairly relaxed in this country. We have a system of registration of titles. Basically, we inherited UK’s legal system. Unlike some markets, there are generally no restrictions for foreigners to sell their properties in Malaysia.

Will prices of office units continue to move upwards?

Office rent and values are under pressure to go up. Vacancy rate of purpose built office space in the Klang Valley had dropped from 13.9% in 2006 to 13.2% in 2007. 3.45 million square feet of new office space came in the Klang Valley in 2007 with a considerable take-up of 3.25 million square feet.

The average prime rent in Kuala Lumpur, excluding Petronas Twin Towers, is RM5.50 to RM7.80 psf (per square feet) per month (including service charges), compared to

year 2000, the rate was RM3.50 to RM5.50. Rental at KL Sentral has gone up to RM6.50-RM7.00 due to the MSC status.

Petronas Twin Towers is about RM11.00 psf per month in 2007, while in 2000, it was RM8.00.

Glomac sold their yet-to-be-built Glomac Tower for RM1,120 psf to KFH. Subsequently, YNH sold 50% of its Menara YNH to KFH for RM1,230 psf. Offices in Kuala Lumpur were fetching about RM500 psf only a few years ago.

From 2008 to 2011, it is estimated that about 13 million square feet of space will be coming into the market. The take up rate depends on macro economic conditions. As an indication, 2 to 2.5 million square feet were taken up per year during the last five years. Some buildings take time to refurbish and it would be vacant for some time. As at end 2007, there is a supply of 68 million square feet of office space.

Do you foresee many more offices moving from Kuala Lumpur to Petaling Jaya?

Some companies like Prudential has a back office in Jaya 33, and both Reckitt Benckiser and KPMG have moved from Damansara Heights to Mutiara Damansara (Menara UAC) and Bandar Utama (8 First Avenue) respectively.

This is not the first time people have moved out of Kuala Lumpur. In the early 1990s, offices moved out because there was

12 April

EUMCCI Review

feature Klang Valley: Cumulative Supply, Vacancy rate & Take-up rate of office Buildings

Construction

shortage of space and rental shot up. Also, people moved to new offices like Phileo Damansara and Damansara Intan when they were completed.

The choice of location depends on the nature of the company’s business. Some multinationals still want to have a Kuala Lumpur address. Basically, if the company does not need a prime address, they may look at Petaling Jaya. If the company is involved in technology or business process outsourcing (BPO) businesses, it could choose to be in Cyberjaya. An oil and gas would want to be near Petronas Twin Tower.

Petaling Jaya has grown to become city status. It has all the facilities and it is near Kuala Lumpur. Previously, a lot of companies were in Kuala Lumpur for its quality stock.

But the situation is improving in Petaling Jaya - there is more stock, giving people more choices. Now you have new offices like Jaya 33 and 3 Two Square in Petaling Jaya.

Key acquisitions by foreign players in the office market The rental in Jaya 33 and Menara UAC is still lower at RM4 psf plus. In 2000, office rental cost was only RM2.50 to RM3.50 psf. Only KL Sentral is closer to KL city prices because of the MSC status.

1 Singapore’s CIMB-Mapletree acquired CP Tower in Petaling Jaya (RM123 million) in 2005 and MRCB’s Lot A at KL Sentral (RM100 million) in 2007.

2 Singapore’s GuoccoLand established Tower REIT (real estate

In deciding whether to relocate, companies should look into how much space they require, how many more staff they need to accommodate, number of car parks they can get, access to public transport, and availability of cheap eating areas for their staff. I know of a legal firm who moved from the city to Damansara Heights.

For awhile, they provided free shuttle to retain their staff.

By Noelle Lim Source: WTW Research, March 2008

investment trust) which bought a 78% stake in Menara ING in 2007.

3 Kuwait Finance House (KFH) bought Glomac Tower for RM577million, and 50% of Menara YNH for RM920 million in 2007.

4 Australia’s Macquarie Global Property Advisors invested RM680 milion to acquire Empire Tower, City Square and Crown Princess in 2006.

5 Germany’s Union Investment Real Estate acquired Capital Square’s Office Tower 2 (RM440 million) in January 2008.

EUMCCI Review

April 13

Malaysian Furniture Sector

feature MIFF 2008 Delivers Substantial Progress Despite so many international furniture exhibitions staging almost the same time in the region during the month of March, MIFF 2008 recorded an increase of visitorship compared to last year. This year, a total of 19,549 visitors visiting the show, of which 7,410 are international visitors as compared to 7,266 in MIFF 2007. Compiled reports indicate that exhibitors showcasing outstanding design and quality received positive response from new and existing buyers. In addition, buyers also exclaimed their satisfaction as this year’s MIFF showcased variety of world class furniture besides providing the best services.

Number of Exhibitors : International(from 15 countries) Malaysia Total Number of Visitors : International (from 137 countries) Malaysia Invited Guests Total

146 350 496

7,410 7,606 4,533 19,549

VISITORSHIP BY REGION (exclude invited guests) Malaysia 7,606 Europe 1,546 Asean 1,328 Middle East 917 Australasia 717 Africa 639 Far East 562 India 497 North America 483 Japan/Korea 350 Other Asian Countries 191 South America 180 Total 15,016

YB Dato’ Dr S Vijayaratnam, Then Parliamentary Secretary, Ministry of Plantation, Industries & Commodities, YB Dato’ Sri Dr Lim Keng Yaik, Retiring Minister of Energy, Water and Communications, YBhg Dato’ Tan Chin Huat, Managing Director, MIFF Sdn Bhd, YBhg Dato’ Yong Seng Yeow, President, Malaysian Furniture Industry Council

The 14th edition of the MIFF series, MIFF 2008, successfully attracted buyers from across the globe, including various trade delegations and buying mission groups that converged at the exhibition despite global uncertainties and discouraging economic climates.

INTERNATIONAL VISITORSHIP BY REGION (%) Other Asian Countries 2.6% Japan/Korea South America 4.7% 2.4% North America Europe 6.5% 20.9% India 6.7% Far East 7.6%

ASEAN 17.9%

Africa 8.6% Australasia 9.7%

Middle East 12.4%

MIFF 2008 recorded a total of 19,549 total visitors (inclusive of invited guests) with 7,410 international buyers from 137 countries, with RM 2.17 billion (USD 690 million) worth of sales generated during the show. Buyers came from Europe (20.9%), the ASEAN region (17.9%), the Middle East (12.4%), Australiasia (9.7%), followed by the Far East (7.6%).

In general, exhibitors concluded that the quality of buyers had improved, with almost 80 percent of the visitors being importers, wholesalers, retailers and buying agents who gathered at MIFF 2008 to place orders as well as make new contacts.

The exhibition had expanded from 75,000 sq. metres last year to 80,000 sq. metres this year - about 7 percent size increase to encompass 496 exhibitors spread over 2 venues. The Interntional flavour of MIFF 2008 came in the form of top exhibitors from Malaysia, China, Hong Kong, Indonesia, India, Japan, Korea, Philippines, Singapore, Taiwan, Thailand, Vietnam, France, Turkey, Germany and USA.

14 April

EUMCCI Review

feature Malaysian Furniture Exports to European Countries Country Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Iceland Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Norway Poland Portugal Romania Slovakia Slovenia Spain Sweden Switzerland United Kingdom Vatican City Total

2006 Export (RM) 1,229,855 53,805,037 762,478 23,809,973 11,253,314 39,895,395 3,445,000 44,112,213 98,088,821 125,715,776 27,909,500 8,068,524 1,865,187 100,180,507 31,574,617 8,502,667 4,574,245 0 3,196,960 126,086,123 53,335,309 15,827,983 9,625,636 159,322 4,300,789 11,416,119 64,994,611 35,718,170 1,843,996 602,566,813 0 1,513,864,940

According to Lawrence Downs from United Kingdom, he “loves to buy from Malaysia because Malaysia traders are very efficient”.

Jon Austin from Australia “really likes dealing with Malaysia and has been coming here for last 9 years. It’s easy to find everything here, we have long-term relationships with our suppliers and we generally find everything we need right here”.

Malaysia’s retiring Minister of Energy, Water & Communications, YB Dato’ Sri Dr Lim Keng Yaik officiated the MIFF 2008. Dato’ Sri Dr Lim has been the Minister of Primary Industries back in 1980s and instrumental in the creation of the first MIFF in 1995.

“MIFF has developed beyond my wildest dreams since those early days”, he shared with the audience at the official opening ceremony, “largely as a result of MIFF’s efforts, the Malaysian furniture industry continues to grow and grow. The official statistics indicate that 30% of the country’s

2007 Export (RM) 1,009,894 65,575,827 659,479 22,640,123 10,454,978 33,892,232 4,649,983 43,723,020 140,884,934 134,987,749 45,909,942 8,122,074 3,806,252 99,496,692 38,262,191 12,259,693 10,052,630 71,719 5,442,275 92,651,444 48,130,472 36,635,358 16,793,185 129,967,062 7,686,959 9,540,053 86,986,507 28,033,619 2,301,220 591,704,641 11,030

Malaysian Furniture Sector

No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

1,732,343,237

furniture exports are concluded at MIFF each year”.

A major highlight of the MIFF event each year is a series of Prize Presentation Ceremonies to recognise Furniture Excellence, Exhibition Booth Presentation and Furniture Design. An international panel of judges from Australia, Belgium, Canada, China, France, Germany, South Africa and Malaysia provided the added credence to the Furniture Excellence Award, Best Presentation Award and Mieco Designer’s Choice Award competitions. All the competitions were held to encourage a higher level of creativity and innovation among exhibitors and furniture designers. The keenly contested competitions also enhanced the quality and standard of the fair.

MIFF 2009 will be held from 3-7 March 2009 once again at the PWTC and MECC. Source: Malaysian International Furniture Fair 2008 (MIFF 2008)

EUMCCI Review

April 15

events EU-Malaysia Golf Challenge 2008

Events

Staffield Golf Resort, 27 January 2008

One of the highlights of the EU-Malaysia Chamber of Commerce & Industry’s events calendar is the annual EU-Malaysia Golf Challenge which was held on a sunny Sunday morning 27th January at Staffield Golf Resort. The event, which reached its 5th edition, was graced by Y.B. Dato’ Seri Rafidah Aziz and several VIPs from the Government sector as well as industry captains from corporate side.

More than 120 players competed for individual prizes, team prizes, novelties as well as the Team Challenge Trophy.

Waiting for tee-off Ulf Skarp from Thysselkrup, Dato’ Seri Rafidah Aziz, David Jones and Dato’ Karunakaran from MIDA.

Results: Individual: 1. Marshidi Adnan (SYABAS) 2. Jordan Chua (TBWAISC\Malaysia Sdn Bhd) 3. Abdul Halem Hj Mat Som (SYABAS) 4. Zahirman Zarif Yusof (Skali (Alam Teknokrat) Sdn Bhd) 5. Col Rahmat Hassan (Rohde & Schwarz (M) Sdn Bhd)

Team: 1. Syarikat Bekalan Air Selangor Sdn Bhd (SYABAS) 2. Rohde & Schwarz (M) Sdn Bhd 3. Unilever (M) Holdings Sdn Bhd Nearest to the pin: Chin Wee Hua (ALSTOM Power Asia Pacific Sdn Bhd) Longest drive: Lim Ling Ling (Multi-trans) Nearest to the line: Roger Spetz (Montpelier Nordic Ltd)

TESCO Stores team: Richard Brown, Christopher Bush, Martyn Cronge and John Chen

16 April

Tan Sri Mohamad Basir bin Ahmad with H.E. Jose’ Ramon Baranano, Ambassador of Spain.

EUMCCI Review

The Challenge Trophy was wrestled back by the Malaysian team from last year’s winner the EU team by the score of 1294 1174. The trophy was received by the Malaysian Team captain Dato’

events Mustafa Mansor, Immediate Past President of FMM.

Event Co-Sponsors

Main sponsors of the event were: Alstom Power Asia Pacific Sdn Bhd, SYABAS, Elit Purnama Sdn Bhd, Rohde & Schwarz Sdn Bhd, Unigroup Worldwide and F-Secure Corporation.

Prize Sponsors Main partner : Hallbert

Events

Prizes & Goodies were sponsored by: Ciao caffe’ Ristorante, Novotel, Grand Millennium Hotel, the Old Club House, Shangri-La Hotels, JW Marriott Hotel, The Puteri Pacific Hotel, PICO, Vaisala Corporation, DZ card (Malaysia) Sdn Bhd, Pensonic, Nestle, Berjaya Hills Golf & Country Club, Staffield Golf Resort, McGill, Bukit Jambul Country Club, Scholl, Sun quick, Nivea, Carlsberg, Heineken, Unilever, Tesco, Maybank, Sanofi Aventis, TBWA-ISC Malaysia, OCE Malaysia Sdn Bhd, DHL, Ayer Keroh Golf Club, Rahman Putra Golf Club and Kajang Hills Golf Club.

Goodies Sponsors

European Wine Beer & Cheese Fest coming soon!

EUMCCI is once again proud to organise the signature European Wine, Beer and Cheese Fest. This 7th edition is just right round the corner to provide the opportunity for European companies to showcase their products and get in touch with European and local corporate guests. A host of exhibitors will showcase their wines, beer and cheese that are uniquely European throughout the evening.

Mark us on your diaries to celebrate the rich European Cuisine and Culture at a brand

new location- Imperial Hotel! Full details are as follow:

and European delicacies in the midst of splendid new surroundings. Look out also for delicious lucky draw prizes!!

Date : 27th May 2008 Venue : Imperial Hotel Kuala Lumpur (formerly Sheraton Imperial) Time : 18.00 to 21.30 Price : RM95 (members) and RM120 (non-members) An event of fun not to be missed! Keep a date with us for an evening networking while enjoying a good glass of wine, beer

EUMCCI Review

April 17

events

Events

Melia Kuala Lumpur hosted EUMCCI-FMM networking event “Let’s get down to Business” on 6th March 2008. EUMCCI chairman David Jones and Dato’ Mustafa Mansor, Immediate Past President of FMM, welcomed the guests together with GM of Hotel Melia, Arno Thöny. We wish to thank warmly Melia Hotel for its superb and elegant hospitality.

VIP Luncheon talk: Malaysia Moving Forward-Challenges and Opportunities Hotel Impiana, 15 April 2008

18 April

EUMCCI Review

events VIP Luncheon talk: Malaysia Moving ForwardChallenges and Opportunities

From left: Dato’ Michael Yeoh, Dato’ Robert Teo, Dr. Nungsari

Dato’ Dr. Ariff delivering his speech

Dato’ Michael Yeoh from ASLI continued on political agenda, where the issues to be tackled are: Judicial reform, Corruption, enhancing economic competitiveness, dealing with inflation and rising costs of fuel and food. Dr. Nungsari from Khazanah offered a wrap up of the talk and Dato’ Robert Teo acted as a moderator, providing one key for interpretation of the election results: “arrogance of power” upset people and the question is will UMNO be able to re-invent itself in the next 5 years.

EUMCCI Review

David Jones handing a farewell gift to Dr Herret.

Farewell to Dr Herret EUMCCI Director and Executive Director of MGCC, Dr Rainer Herret bade farewell to EUMCCI. The Board of EUMCCI thanks Dr Herret for his valuable support to the Chamber and wishes him the best of success in his new posting. The Board also warmly welcomes his successor, Mr Alexander Stedtfeld and is looking forward to a fruitful cooperation.

April 19

Events

The April VIP Luncheon saw a panel of distinguished speakers giving their views on the aftermath of the elections. Dato’ Dr Mohamed Ariff from Malaysian Institure of Economic Research concentrated on the economic impact. According to him it is too early to foresee the impact, the main concern for investors is if the opposition has the experience to rule. Important is to have political change without political instability.

events European Business in Korea, Taiwan and Vietnam

Events

Outlook for 2008 is also part of the name of the event, Grand Millenium Hotel

EU-Malaysia Golf Challenge 2008

20 April

Staffield Golf Resort, 27 January 2008

EUMCCI Review

members’ SKALI Shared its Business Strategy for 2008 Skali organised recently a press conference where En Aimi Aizal Nasharuddin, President of SKALI explained, “2008 will continue to be a positive year for SKALI, as we foresee improvement in earnings largely due to various local and international projects, which were started in 2007. This is the main reason for the reorganisation of the company into various subsidiaries which stands to make the corporation even stronger.

Aimi Aizal (centre), President of SKALI Group, explaining a point at SKALI’s media briefing held recently. Spokespersons included were, Maznida Mokhtar the Chief Financial Officer and Company Secretary of SKALI and Saiful Khairi the Executive Director of SKALI.

“We believe that our strategy to create human capital development between other countries will foster even better bilateral ties between Malaysia and our neighbours. SKALI is also looking into possibilities in the Middle East,” he added.

In Malaysia, SKALI Group has lined up different key projects involved in human capital development. Through subsidiary SKALI E-Ventures Sdn Bhd, SKALI would be undertaking the SPIKE@PERAK which is a three-year programme to train graduates from both ICT and business & managementrelated disciplines. The programme also involves preparing them to take up related jobs or possibly to venture onwards to become entrepreneurs. For the state of Perak, this project is set to realise the state’s plan to develop the state into becoming a fully-developed Knowledge State by 2020.

SPIKE (SKALI Pioneers and Innovators in Knowledge Economy), is a SKALI initiative to help unemployed graduates to develop their ICT knowledge and also to become entrepreneurs.

“Je t’aime” at STYLO Fashion Show in Conjunction of F1 event STYLO KL Fashion Festival 08 was one of the 8 main events of KLGP Week 08, organised by Kuala Lumpur Tourism Action Council (KLTAC), to celebrate the 10 great years of F1.

Members with European Equity (EU) Austria Belgium Cyprus Czech Republic Denmark Finland France Germany Greece Ireland Italy Luxembourg Malta Poland Portugal Slovak Republic Slovenia Spain Sweden The Netherlands United Kingdom Sub-Total

31-Dec-07 2 14 0 0 30 19 124 211 0 3 3 2 0 0 0 0 1 2 40 85 148 684

30-Mar-08 2 13 0 1 30 21 117 200 0 22 3 3 0 1 1 1 1 22 45 84 144 711

Members with European Equity (Non EU) Norway Switzerland Sub-Total

2 16 18

1 15 16

Members without European Equity Australia Bermuda Canada Hong Kong India Indonesia Japan Kuwait Malaysia Singapore United Arab Emirates United States Sub-Total Total

3 1 2 9 1 1 6 1 328 9 3 13 377

2 1 2 10 1 0 6 1 315 8 3 11 361

1079

1088

On 20th March the STYLO Fashion Show celebrated top local Malaysian designers. Elit Purnama - a local Fashion House with manufacturing capabilities - showcased their label “Je t’aime”, contemporary collection and cocktail wear. Year 2008 will be exciting for Elit Purnama, because they are going global with their collections in Paris, Madrid, London, Hong Kong and Melbourne fashion exhibitions.

Managing Director of Elit Purnama, Anita Hiong, surrounded by her models at STYLO Fashion Show

EUMCCI Review

April 21

Members’ Corner

“We are going to concentrate more on international forays for this year. We have set our sights on various human capital projects in South East Asia and possibly beyond. Currently, we are assisting the Brunei government in facilitating a training laboratory and an ICT collaboration with the West Java Government.

Membership Statistics

members’ corner MTE 2008 - UPM The Best

Members’ Corner

Universiti Putra Malaysia made an astounding sweep of medals when we clinched 11 gold, 7 silver and 12 bronze medals in the Malaysia Technology Expo 2008 (MTE) held from 21-22 February 2008 at the Putra World Trade Centre (PWTC), Kuala Lumpur.

UPM, through Prof. Dr. Faridah Abdullah from the Department of Biology, Faculty of Science, also won ‘The Very Best Award’ in MTE 2008, whom also won a gold medal for her research. Other UPM researchers whom won gold were Assoc. Prof. Dr. Lai Oi Ming, Assoc. Prof. Dr. Abdul Rashid Mohamed Shariff, Assoc. Prof. Dr. Luqman Chuah Abdullah, Dr. Zanariah Abdul Majid, Prof. Dr. Taufiq Yap Yun Hin, Dr. Ahmad Bustamam Haji Abdul, Assoc. Prof. Dr. Mohd Basyaruddin Abdul Rahman, Assoc.

Prof. Dr. Siti Nor Akmar Abdullah, Prof. Ir. Dr. Mohd Amin Mohd Soom and Assoc.

Prof. Dr. Ishak Aris.

UPM delegations with their well-earned medals.

LUKA KOPER Day The Malaysia Technology Expo (MTE 2008) is an annual event being organized by MARS (Malaysian Association of Research Scientists) and coorganized by the Ministry of Science, Prof. Dr. Faridah Abdullah Technology and Infrom the Faculty of Science, the recipient of novation. MTE 2008 “The Very Best Award”. was a three-day event starting from 21 February that focussed on research fields and innovative development on applied sciences, users’ technology and engineering. 34 organizations had participated in MTE 2008 and it opens to all research institutions and individuals to bring their research and innovative products forward.

UPM success in MTE 2008 has put UPM at the top for the overall results. This is the best achievement thus far for any UPM’s participation in product and research competitions at the national level.

This success has definitely strengthen UPM’s position as a research university in Malaysia!

Mayflower Travel Group Awarded The BrandLaureate - SMEs Asia Pacific Chapter Awards 2007

22 April

Mr. Aldo Babi , Vice President of Luka Koper, delivering the welcoming speech

Six months after opening its Far East Regional Representative Office Luka Koper, d.d. - Port of Koper (Slovenia) organized the first “LUKA KOPER DAY” business dinner. At the meeting, which took place in Kuala Lumpur on 26th March, the company Vice President Mr. Aldo Babi and his team presented the Port of Koper and its Regional Office to the Malaysian market.

Port of Koper is an excellent entry point to Central and Eastern Europe from the South. Its strategic location shortens the transit time from SE Asia to Europe for more than five days. It is believed that the use of this Adriatic port can contribute to facilitate the trade between Malaysia and other EU countries. As Luka Koper is not yet well-recognized within the Malaysian logistics and shippers market segment, this event provided the guests with the opportunities to learn more about what Luka Koper has to offer in order to aid all logistics providers in terms of transport cost reduction and increase of logistics system efficiency as a whole.

For more information, visit www.luka-kp.si

Mayflower Travel Group has been conferred the prestigious best brand for tours and travel by The BrandLaureate-SMEs Chapter Award 2007. This is the most coveted branding award for the SMEs industry in Malaysia and the Asia Pacific, recognizing the best of brands.

brands. This was further inspired by the call of the Prime Minister, Datuk Abdullah Badawi, that “Branding Malaysia is the next big task.”.

Administered by a Board of Governors, it is also in line with the government’s objectives of nurturing and facilitating the growth of the SMEs to be global

The winners were selected based on a 300point criteria, covering areas on brand identity, culture, communication, equity and performance.

EUMCCI Review

Yang di-Pertuan Agong graced this auspicious event at the Shangri-La Hotel KL on 8 Jan 2008.

members’ New Office Opening In their welcome speeches, Business Director, Ms. Lin Sheau Wei and Technical Director, Mr. Toon Moors shared future plans to expand sourcing capacity, as well as plans to enhance service quality and delivery performance to our clients.

The Ambassador of Netherlands to Malaysia, H.E. Lody Embrechts, together with the company directors, officiated the H.E. Lody Embrechts, Tonasco Directors opening. VIP guests Mr. join hands in Opening Ceremony.

David Jones, Chairman of EU-Malaysia Chamber of Commerce & Industry (EUMCCI), and Mr. Marco Winter, Executive Director of Malaysian Dutch Business Council (MDBC) were also present to grace the event.

His Excellency and the directors later join hands in the drumming ceremony to commemorate the celebration. Guests were entertained by colourful Lion Dance and vibrant Chinese Orchestra performances, while sumptuous Malaysian cuisines and refreshments were served.

EUMCCI Membership What is it for you?

• The best brands in the world are committed to EUMCCI because co-branding with the Chamber is simply good business! Any company with an interest in the European Union / Malaysia, whether it has significant investment in the region or is just testing the market, will derive value from its work with the Chamber.

• Advocate for new business and build market share by leveraging your Chamber alliances.

• Access leaders and decision makers affecting your success in Malaysia with the collective impact of most prominent corporations.

• Resolve unique issues or problems that impact your bottom line.

• Forge strategic alliances and establish customers with your fellow members.

• Advance your policy positions and enhance your position as a key player and contributor to the Malaysian economy.

• Promote awareness of your products, investments and community contributions.

• Assess market conditions for market expansion and operations optimization.

• Be part of the European Business Organisation (EBOs) worldwide network.

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The joyous and momentous celebration concluded late in the evening amid melodies of contemporary Dutch music, marking another milestone for Tonasco.

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April 23

Members’ Corner

Tonasco, a Dutch-Malaysian sourcing company, celebrated the opening of its new office and warehouse at Glenmarie on Friday, 29th February 2008.

new members New Members

Anchor Chain Sinar Malaysia Sdn Bhd

Cekap Ace Technologies Sdn Bhd

Edgar Ralph Chartered Accountants & Tax Consultants

Hallbert Sdn Bhd

Malaysia Europe Forum

24 April

Suite 20.05, Menara Citibank No.165, Jalan Ampang 50450 Kuala Lumpur Tel: 603-2383 0204 / 0205 Fax: 603-2383 0206 E-mail: lochoa@acsm.com.my

Chief Executive in Malaysia

No. 12, Jalan Nilam 1/8 Taman Teknologi Tinggi Subang 40000 Shah Alam, Selangor Tel: 603-5635 9567 Fax: 603-5635 4708 E-mail: info@cekapace.com Website: www.cekapace.com

Chief Executive In Malaysia

Suite 5A-1, 5th Floor 56 Jalan Tuanku Abdul Rahman 50100 Kuala Lumpur, Malaysia Tel: 603-2691 0888 Fax: 603-2691 3816 E-mail: edralph@hotmail.cm

Chief Executive in Malaysia

No.20, Jalan Maktab 5 Off Jalan Tan Razak 50400 Kuala Lumpur Tel: 603-2697 1085 Fax: 603-2697 5271 E-mail: info@hallbert-packaging.com Website: www.hallbert.net

Chief Executive in Malaysia

Suite 12.7, Menara Great Eastern 303 Jalan Ampang 50450 Kuala Lumpur Tel: 603-4251 3281 / 4256 2834 Fax: 603-4251 4281 E-mail: info@perceptionmanagement.com.my Website: www.malaysia-europeforum.com

Chief Executives in Malaysia

EUMCCI Review

Mr Luis Manuel Ochoa Sierra, Managing Director Brief Company Profile

ACSM is a private company based in Kuala Lumpur that supplies a wide range of mooring chains and accessories for the Oil & Gas Industry . The company operations cover South East Asia , China and Australia.

Mr Haridass N., Managing Director Brief Company Profile

Specialized in out-sourcing management of foreign workers in various industries such as manufacturing, hotel, cleaning, and hypermarket. We have government licence from Ministry of Home Affairs.

Mr Edgar Ralph Fernandez, CA (Malaysia), CMA (England), CPA (Australia), ATII, MBA (Finance) Brief Company Profile

We are a leading boutique firm that offers quality service at affordable rates, We offer friendly and personal attention and retain only fully qualified and trained staff to offer you total quality service at a one-stop centre! We offer: • Company Audits and Taxation Services • Taxation Services for Individuals • Company Incorporations / Shelf Companies • Accounting & HR Services - Business Consultancy

Mr Bertil Schuil, Managing Director Brief Company Profile

Hallbert Sdn Bhd is an international firm specialising in Retail Bags and Carton Board Packaging, your global partner for outsourced packaging, we offer a wide range of both paper and plastic bags for the retail industry and deliver many types of carton board packaging: boxes, trays, cups, displays and liquid packaging. We have established a strong, reliable network with expertise in printing, quality control, raw material and logistics management to meet the demands of our worldwide customer base. Further more we help our customers outsource printing work like books, diaries and magazines. Our aim is to realize a minimum of 20% savings compared to there own production cost.

Ms Millicent Danker, Chief Executive in Malaysia Professor Emeritus Tan Sri Dato’ Dr Lim Kok Wing, Chairman Brief Company Profile

The MEF is a not-for-profit organisation which works closely with corporate, government and nongovernmental organisations to build communities through dialogue. Towards this end, symposia, forums and educational exchange programmes will be organised. Surpluses will be directed towards charity.

new members Origenius (M) Sdn.Bhd

UEM Group Berhad

Universiti Putra Malaysia (UPM)

Universiti Sains Malaysia (USM)

Chief Executive in Malaysia

The Oxford Centre for Leadership, UK (Asia-Pacific Representative Office) 84-A, Jalan SS 21/35 Damansara Utama (Uptown) 47400 Petaling Jaya, Selangor, Malaysia Tel: 603-7729 1070 Fax: 603-7725 5071 E-mail: enquiry@oxcelasia.org Website: www.oxcelasia.org / www.oxcel.org

Chief Executive in Malaysia

MCOBA Building 42, Jalan Syed Putra 50460 Kuala Lumpur, Malaysia Tel: 603-2718 6868 Fax: 603-2718 6888 E-mail: rubaiha@uemworld.com; zakieshariff@uemworld.com; Website: www.uem.com.my

Representative in Malaysia

43400 UPM Serdang, Selangor Tel: 603-8946 6003 / 8946 6014 Fax: 603-8948 7273 E-mail: cco@admin.upm.edu.my Website: www.upm.edu.my

Chief Executive in Malaysia

11800 USM, Pulau Pinang Tel: 604-653 2902 Fax: 604-653 2903 E-mail: dvc_icn@usm.my Website: www.usm.my

Chief Executive in Malaysia

EUMCCI Review

Mr Sathiah Sudakaran, Managing Director Brief Company Profile

Origenius is a total business solutions provider specialising in media relations, below the line advertising, above the line advertising, corporate gift & premium importer and wholesaler , event management services and international film hosting. Established in 2003,the group has grown to become a leading regional player in the industry.

Dr. Saiful Bahri, CEO / Asia Representative Brief Company Profile

The Oxford Centre for Leadership (OXCEL) was established to provide opportunities for members to develop and enhance their corporate, business and general leadership skills. OXCEL runs monthly leadership seminars, ‘The CEO Talks @ KL Tower’, various networking events and international conferences

Encik Ahmad Zakie Ahmad Shariff, Senior General Manager, Group Business Development Brief Company Profile

UEM Group Berhad , Malaysia’s leading conglomerate in infrastructure-building, is a wholly-owned subsidiary of Khazanah Nasional Berhad, an investment arm of the Government. Our core businesses are in expressways, engineering & construction, healthcare, environmental services, property, manufacturing, information, communication & technology and logistics.

Prof. Datuk Dr. Nik Mustapha R. Abdullah, Vice Chancellor Education

UPM is recognized by the Ministry of Higher Education as one of the reputable ‘Research Universities’ in Malaysia. Established since 1931, UPM is acknowledge as a multidisciplinary institution for tertiary education which offers a comprehensive array of high-quality undergraduate and postgraduate programmes of worldwide recognition.

Prof. Dato’ Dzulkifli bin Abdul Razak, Vice-Chancellor Education

Established as the second university in Malaysia in 1969, Universiti Sains Malaysia now has 24 Academic Schools and14 Centres, a total enrolment of 27,800 with 5,600 as postgraduate students.

April 25

New Members

OXCEL Sdn Bhd

192-4 Jalan Tun Sambanthan Brickfields, 50470 Kuala Lumpur, Malaysia Tel: 603-2272 3443 Fax: 603-2272 4411 E-mail: sathiah@origenius.com.my Website: www.origenius.com.my www.origenius.my

malaysia news Malaysia News

Taxes on Property in Malaysia The property development industry has always been regarded as one of the major economic drivers of a country, especially so for a fast “developing” country such as Malaysia which requires space and infrastructure to meet its development needs. The multiplier effects of the industry through the economy is widespread and can be felt in the whole supply chain from building material suppliers, developers and contractors to the service providers such as architects and engineers. Undeniably, property development not only creates wealth but its products are also a store of wealth for the buyers.

If property is dear to most people’s hearts, then taxation of property is probably one of the biggest dreads on their minds. Property has always been associated with wealth and governments will seek to tax property owners in various ways. In Malaysia, property owners through mere ownership, whether or not there is a derived income, have to pay property tax in the form of quit rent and assessment on an annual and semi-annual basis to the state and local authorities respectively. If they receive rental income from the properties, they are further liable to income tax. Treated as ordinary income, this rental income is to be included in the taxable income of the taxpayer.

The Stamp Duty Encounter To the average property investor, their first encounter with property taxes is in the form of stamp duty, which is payable on the acquisition of properties at the rate of 1% - 3% of the property value. The 1% rate applies to property value below RM100,000 whilst the 2% applies to the value between RM100,000 to RM500,000, and the 3% to the balance above RM500,000. Buyers will also be required to pay additional stamp duty at the rate of 0.5% of the loan value if their purchases were financed through loans.

On the other hand, the disposer takes home his capital gains free of taxes with the “suspension” of real property gains tax which came into effect on 1 April 2007. In addition, following the change of the Malaysian tax system to the single tier tax system from 1 January 2008, a disposer which is a company, is able to distribute its

26 April

capital gains to shareholders in the form of tax free dividends. Under the single tier tax system, a company may distribute dividends without the need for franking tax credits which were previously required.

The Catch in Disposal of Properties However, one must also be aware that all disposals of properties which were not subjected to real property gains tax, may possibly be subjected to income tax if the disposal is considered an “adventure in the nature of trade”. This insidious term is to catch disposals whether by companies or individuals, who had acquired property with the intention to make quick profits and thereby deriving trading profits as opposed to making long term investments which results in capital gains. Suffice to say that this concept is a major grey area of tax law that has given rise to a significant amount of uncertainty. In the absence of any objective guidelines or clear directions by the tax authorities, every case is considered based on its facts. Disposals of properties for a “quick gain” or after value enhancement activities by the owner such as repeated renovation and sale, conversion, sub-division or development planning, may fall within this category of disposals.

In addition, a taxpayer is frequently at a disadvantage because the tax authorities has the benefit of hindsight where it is able to delve into the intention of the disposer by referring to the conduct of the disposer, even long after the transaction had been consummated. In most instances, the disposers will be oblivious of the tax consequences until challenged by the tax authorities many years later. A good case in point was the tax waiver given by the government in the year 1999, which later became an opportunity for the tax authorities to reap bounties from those who exploited the “tax waiver year” provisions.

Concessions for Property Developers Whilst property owners gained from the suspension of real property gains tax, the other major beneficiary of the tax change were property developers who had seen an influx of foreign buyers following the suspension of the tax. Property developers being entrepreneurs are taxed on income from their property development activities.

In fact, they are regarded by the tax authorities as a unique group of taxpayers and special rules have been formulated to

EUMCCI Review

tax their profits. Nonetheless, to appreciate the contribution of this sector to the economy, in 2006 the government introduced several concessions such as allowing “warranty costs” incurred during the defects liability period to relate back to the year of completion of the development.

Estimated losses incurred in a year were also allowed tax deduction against estimated profits from profitable projects, with the effect that property developers pay less tax upfront and defer their taxes, thereby improving their cashflow.

One thing that remains unchanged is that property development profits are taxed progressively over the period of development based on the stage of completion, although the meaning on stage of completion had been interpreted differently over the years. By and large, stage of completion is now determined based on the development costs incurred by the developer or based on a survey of the work done in accordance with accounting standards. The tax authorities will also allow the use of progressive billings as a measure of stage of completion provided this is used in a consistent manner.

Reasonable Tax Treatment in Malaysia A quick overview of the taxes on property therefore shows that Malaysia is relatively mild on taxation of property as compared to many countries which not only impose similar taxes but also capital gains tax on property. The reasonable tax treatment should stimulate the property development and construction industry which is a significant source of jobs, taxes and business opportunities. This is buoyed no less by Malaysians’ affinity for property as investments. Many Malaysians would subscribe to the saying by Mark Twain “buy land, they’re not making it anymore”! With the continual rise of property values and growing demand by buyers, the property market will be a happy hunting ground for investors, developers and the government alike for many more years to come.

Horwath - Kuala Lumpur Office Email: info@horwathkl.com www.horwath.com.my

Written by: Poon Yew Hoe Poon Yew Hoe is the tax partner of Horwath - Kuala Lumpur Office, Chairman of the International Tax Committee of Horwath International and a council member of the MICPA.

indicators Gross Domestic Product by Kind of Economic Activity at Constant 2000 Prices 2003

2005

2004

2006

2007p

2008f

RM million Agriculture Mining and quarrying Manufacturing Construction Services

33,369 40,959 119,687 15,031 201,568

34,929 42,627 131,127 14,903 214,528

35,822 42,076 138,014 14,637 228,994

37,672 41,914 147,756 14,559 245,550

38,501 43,245 152,367 15,223 269,276

39,817 45,840 155,150 16,063 289,982

17,654

17,705

17,742

18,347

19,720

20,862

6,453

6,099

6,017

5,287

5,517

5,959

399,414

426,508

447,818

474,392

504,408

531,949

6.0 6.1 9.2 1.8 4.2

4.7 4.1 9.6 -0.9 6.4

2.2 3.2 3.1 4.6 9.7

3.4 6.0 1.8 5.5 7.7 5.8

Less: Undistributed FISIM1 Plus: Import duties GDP at puchasers' prices2

Annual change (%)

Less: Undistributed FISIM1 Plus: Import duties GDP at purchasers' prices

2.6 -1.3 5.3 -1.8 6.7

5.2 -0.4 7.1 -0.5 7.2

3.7

0.3

0.2

3.4

7.5

-2.1

-5.5

-1.3

-12.1

4.3

8.0

5.8

6.8

5.0

5.9

6.3

5.0 ~ 6.0

Financial intermediation services indirectly measured 2 Numbers may not necessarily add up due to rounding p Preliminary f Forecast 1

Source: Department of Statistics, Malaysia and Bank Negara Malaysia

Growth in Manufacturing Production (2000=100) 2004

2005

2006

2007

2005

Index Export-oriented industries Electrical machinery, apparatus, appliances and supplies Electronics Electrical products Chemicals and chemical products Petroleum products1 Textiles, wearing apparel and footwear Wood and wood products Rubber products Off-estate processing Others Domestic-oriented industries Construction-related products Non-metallic mineral products Basic iron & steel and non-ferrous metal Food products Transport equipment Fabricated metal products Paper products Beverages Tobacco products Total 1

2006

2007

Annual change (%)

123.8

130.8

140.7

141.8

5.7

7.5

0.7

124.5 136.0 102.1 134.9 127.4 81.4 107.9 134.3 121.2 111.4

128.9 143.0 101.3 149.7 141.2 84.1 109.6 133.8 131.0 107.4

139.1 160.0 98.3 154.5 160.4 89.3 113.8 143.4 138.5 119.4

137.8 162.4 89.7 157.2 169.0 81.0 115.4 151.8 137.7 126.0

3.5 5.2 -0.8 11.0 10.8 3.4 1.5 -0.4 8.1 -3.7

7.9 11.8 -2.9 3.2 13.6 6.1 3.8 7.2 5.7 11.3

-0.9 1.5 -8.7 1.8 5.4 -9.3 1.4 5.9 -0.5 5.5

119.9 111.2 111.0

123.2 110.7 113.2

132.1 114.2 117.0

141.1 120.0 117.4

2.8 -0.5 2.0

7.2 3.2 3.3

6.8 5.0 0.4

111.7 120.5 138.5 129.9 110.7 112.4 90.5

105.8 129.7 150.2 123.5 119.0 119.3 87.8

109.0 138.3 147.9 156.3 134.6 112.9 83.6

124.8 148.8 139.0 186.5 149.5 122.3 85.9

-5.3 7.6 8.5 -4.9 7.5 6.1 -3.0

3.0 6.7 -1.5 26.5 13.1 -5.3 -4.7

14.5 7.6 -6.0 19.4 11.0 8.3 2.8

123.0

129.3

139.0

141.6

5.1

7.5

1.9

Under the new Industrial Production Index (2000=100), LNG has been reclassified as petroleum products (previously classified as chemicals and chemical products). Consequently, petroleum products have been reclassified as export-oriented industries

Source: Department of Statistics, Malaysia

Production of Primary Commodities 2003

2004

2005

2006

2007p

2004

Crude palm oil ('000 tonnes) Rubber ('000 tonnes) Saw logs ('000 cu. metres) Cocoa ('000 tonnes) Crude oil (including condensates) ('000 bpd)

2005

2006

2007p

Annual change (%)

Volume 13,355

13,976

14,961

15,881

15,823

4.7

7.0

6.1

-0.4

986 21,532 36 738

1,169 21,782 33 762

1,126 22,398 28 704

1,284 21,344 32 667

1,201 20,214 35 695

18.6 1.2 -7.8 3.3

-3.7 2.8 -16.3 -7.7

14.0 -4.7 14.2 -5.2

-6.4 -5.3 10.2 4.3

5,013 3.4

5,196 2.7

5,797 2.9

5,774 2.4

5,854 n.a.

3.7 -18.3

11.6 4.1

-0.4 -16.1

1.4 -

Natural gas (mmscfd) Tin-in-concentrates ('000 tonnes) p Preliminary n.a. Not available Source:

Malaysian Palm Oil Board Department of Statistics, Malaysia Forestry Departments (Peninsular Malaysia, Sabah & Sarawak)

Malaysian Cocoa Board PETRONAS Minerals and Geoscience Department, Malaysia

EUMCCI Review

April 27

Indicators

Agriculture Mining and quarrying Manufacturing Construction Services

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Overview of the main legislative activities and key achievements which marked the European Union’s activities over the last twelve months.

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European Economy - Report No 4/2007 Labour market and wage developments in 2006, with special focus on relative unit labour cost developments in the euro area available only in English (EN) 2007 - 228 pp. - 21 x 29.7 cm ISBN 978-92-79-04949-1 Cat. No: KC-AR-07-004-EN-C Price (excluding VAT): € 50 Target groups: Market researchers, consumer associations, entrepreneurs, experts in financial politics This report analyses labour market and wage developments in 2006 from a macroeconomic perspective, looking at the main geographical aggregations (euro area, EU-15, NMS10 and EU-27).

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