Miti seeks more funding for automation in Budget 2018

KUALA LUMPUR: The International Trade and Industry Ministry (Miti) has submitted a proposal to increase the funding for soft loans for automation in the upcoming Budget 2018.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said it has submitted the proposal to Treasury to consider increasing the funds for the Soft Loan Scheme for Automation & Modernisation parked under MIDF.

“I think the issue is the amount allocated to this programme is small; 345 companies in the last 10 years is a very small number given that there are tens of thousands of companies … there is a clear need for the government to provide more funds to MIDF to enable more companies to automate,” he told reporters after chairing a dialogue session with Federation of Malaysian Manufacturers (FMM) and Malaysian International Chamber of Commerce and Industry yesterday.

Since 2007, the fund has approved RM1.5 billion for a total of 345 companies. In July this year, the maximum loan amount was increased to RM20 million from RM10 million previously.

“This (scheme) is very relevant because the industries need funding to automate. It is important for them to have access to soft loans in order for them to increase the level of automation,” said Mustapa.

In terms of automation, he said the Malaysian Investment Development Authority will organise a showcase to highlight the capabilities of Malaysian companies producing machines and equipment for the local and international markets, especially in the electrical and electronic products sector.

“This is something that is not known and we want to be more aggressive in promoting these companies to the world, exporting these products and to make Malaysians more aware that Malaysia has companies that are doing lots of things to increase the level of automation,” he said, adding that these companies produce very sophisticated products including robotics and sensors.

Other issues discussed during the dialogue included common tax issues among the regional economic corridors and the reinstatement of the Market Development Grant (MDG).

“We decided that there are a number of tax issues that are common to all the investment promotion agencies who have proposed that we come together and submit a joint proposal to the Treasury because some issues are similar,” said Mustapa.

Miti is also in talks with the Treasury to consider reinstating the MDG, which has been instrumental in encouraging the growth and development of SMEs in the export market. The grant has been suspended until further notice.

On the issue of foreign labour, Mustapa said Miti and several government agencies will be meeting with FMM and industry players next week to further discuss the issue and to address the immediate requirements to avoid disruption in production and exports.

He said the number of foreign workers in the manufacturing sector has declined from 748,000 at end-2014 to 621,000 at end-June 2017, partly due to automation and difficulties in recruiting foreign labour.