JOHOR BARU: The Malaysian Investment Development Authority (Mida) has urged SMEs to raise their efficiency levels, strengthen inter-company linkages and to quickly meet the demands of a changing market to ensure they remained competitive.
Mida deputy chief executive officer Datuk N. Rajendran said Malaysian labour-intensive companies such as those in the furniture sector industry, could reap more benefits if they adopted Industry 4.0 technology methods such as smart manufacturing, robotics and the Industrial Internet of Things (IIOT) to increase production and reduce their dependency on foreign labour.
This will help many industries to have three added benefits of boosting production volume, increased precision and accuracy, and be able to obtain high quality products at lesser costs in a shorter period of time.
"In the long run this will reduce an industry's dependency on foreign workers. For example, if one were to look at the Muar Furniture Park, the outcome that we hope for is to see it becoming a state-of-the-art project that adapts a high-level of technology in in line with the aspirations of Industry 4.0," said Rajendran after a supply chain conference organised by Mida here yesterday.
Industry 4.0 refers to a current trend of automation and data exchange methods used in the manufacturing technologies that includes cyber-based systems, IIOT, cloud computing and cognitive computing.
Rajendran said the Automation Capital Allowance (ACA) was introduced in the federal Budget two years ago to encourage the adoption of automation methods in the manufacturing sector.
Under ACA, a 200 per cent automation capital allowance is given to high-labour intensive industries such as those involved in rubber products, plastics, wood, furniture and textiles.
He said Mida has approved 32 applications under this allowance scheme last year.
"Mida is identifying suitable incentives to assist companies in their technological transformation journey.”
Mida also has the Domestic Investment Strategic Fund (DISF) fund allocation of RM1 billion under the 11th Malaysia Plan, which is given to Malaysian companies that intend to join up with the global value chain of multinational corporations.
"For instance, if a company wants to buy machinery to upgrade their product so they can enter the global value chain, the fund provides a matching grant. If the company buys RM2 million worth of machinery in this effort, we can fund half of that amount," he said.
As of June this year, Mida approved RM1.3 billion for 261 projects under the DISF with investments valued at RM12.7 billion.
Rajendran said the setting up a Robotic Future City in Johor, following the signing of an agreement between Johor Corp (JCorp) and Siasun Robot Investment Co Ltd during Prime Minister Datuk Seri Najib Razak's visit to Beijing in May this year, will spur the use of smart technologies in Malaysian industries.
He said the RM15 billion project could develop the robotic industry in Malaysia.
Mida will also work closely with JCorp and other stakeholders to develop the upcoming Muar Furniture Park, which is expected to spur the adoption of Industry 4.0 methods locally and boost Johor's position as the country's main exporter of high-value added wood furniture.
Figures from Mida show that Johor is among the top recipients of investments in the manufacturing sector.
Last year, a total of 4,464 projects with investments valued at RM145.2 billion were implemented in the state.
Johor emerged as the largest recipient of approved manufacturing projects last year with 165 projects worth RM26.4 billion.