Page 15 - Malaysia Marine & Offshore Industries Directory 2020/2021
P. 15

                 MALAYSIA MARINE & OFFSHORE INDUSTRIES DIRECTORY 2020/2021 EDITORIAL
BOOSTING SHIPBUILDING AND SHIP REPAIR
  Many outside the industry may not be aware of Malaysia’s Shipbuilding and Ship Repair (SBSR) industry. Part of the marine industry, there are over 100 shipyards that employ over 15,000 people. In 2018, the industry brought in a total revenue of RM7 billion. Of the five contributing groups under SBSR – shipyard, classification, manufacturer, design, and Maintenance, Repair and Overhaul (MRO) – shipyard recorded the highest revenue at RM4.93 billion.
Exports, however, have not been growing steadily. In 2018, it increased to RM1.29 billion from RM1.08 billion in 2017, mostly in light vessels, dredgers, floating docks and cargo ships to countries such as Australia, Indonesia, Thailand and the US. But in 2019, exports dipped to RM952.2 million.
According to figures from the Malaysian Industry-Government Group for High Technology (MIGHT), Malaysia ranked 18th in shipbuilding in 2015. This dropped to 24th in 2017. The country still only captures a very small portion of the global shipbuilding market at about 0.05%.
Although actively involved in shipbuilding since the 1900s – Sarawak’s Brooke Dockyard was established in 1912 – the
country has not been able to tap into its full potential and compete globally. In fact, it has fallen behind other countries in the region such as Vietnam, Myanmar and the Philippines. Leading the pack are China, South Korea and Japan, representing about 85% of the industry. South Korea’s shipbuilding industry began at around the same time as Malaysia’s, but it has since pulled way ahead.
The Malaysian Shipbuilding and Ship Repair Industry Strategic Plan 2020, known as SBSR Strategic Plan 2020, was the first national plan to chart a course for the industry. Jointly developed in 2011 by MIGHT and the Association of Maritime Industries of Malaysia (AMIM), the plan laid out a number of targets to help the industry become a major player in the small to medium-sized shipbuilding market by 2020. Some of the targets include capturing 80% of the local new build market, 2% of the global new build market, 3% of the Straits of Malacca repair market, and 80% of the South China Sea offshore repair market, while generating a gross national income of RM6.35 billion and creating 55,000 jobs.
Other government efforts that have earmarked shipbuilding as a strategic industry are the 11th Malaysia Plan (2016-2020), the Third Industrial Master Plan (2006-2020) and the Malaysia Shipping Master Plan (2017-2022).
Now that 2020 has arrived, figures show that the SBSR Strategic Plan 2020 has missed its targets, having only managed to meet 60% of what was intended. According to First Admiral Dato’ Ir Ahmad Murad Omar of AMIM, the SBSR sector is still troubled by long-standing local issues that were impacted by past global economic slumps and fluctuating oil prices. These issues include ill-equipped infrastructure and medium-level automation in shipyards, high cost of repair and maintenance, and lack of support from financial institutions. As a result, orders plunged.
A publication entitled Issues & Challenges: Asian Shipbuilding Industries reported that despite an increase in the number of shipping licenses issued by the Ministry of Transport, which
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