Malaysia’s healthcare industry has experienced unprecedented growth and development for the past year, evidenced by the 24.9% double digit growth to reach USD7.47 billion in the export of medical devices to major export markets such as the United States, Germany, Japan, Singapore and Belgium.
Malaysia supplies 60% of the world market’s medical gloves and 80% for catheters. Supplies from Malaysia played a crucial role in helping front liners all over the world in their fight against COVID. Healthcare companies ramped up their production capacities by increasing domestic investment to increase exports to meet the higher global demand for healthcare products.
Other major Malaysian export categories include medical instruments, apparatus and appliances, catheters, syringes, needles and sutures, electromedical equipment, ophthalmic lenses including contact lenses, dental instruments and appliances, medical and surgical X-ray apparatus and medical furniture.
There are currently more than 30 MNCs producing high value-added medical devices, making Malaysia their offshore location for manufacturing operations, such as Agilent, B. Braun, St. Jude Medical, C.R. Bard, Symmetry Medical, Teleflex, Resmed, Ciba Vision, Kelpac Medical, Ambu, Toshiba Medical Systems and Haemonetics.
Malaysia at the Arab Health
Malaysia understands the need for physical presence at an event of this magnitude and importance. Although our presence is much smaller this year as compared to previous years where we used to bring in 35 to 40 companies, we believe it will help to reconnect with the industry. The low number of participants this year is mainly due to the ongoing movement restrictions in Malaysia. Currently there are only 4 companies physically present at this event but Malaysia Trade Centre Dubai representatives are there to connect local buyers with a host of suppliers through online platforms throughout the event.
This year MATRADE’s participation in Arab Health received strong interest from a broad range of markets, including the UAE, Egypt, Sudan, Kazakhstan, Pakistan, Nigeria, Iraq, Italy, and Saudi Arabia, for Malaysian-made medical devices, according to Mr. Omar Mohd Salleh – Trade Commissioner of Malaysia to the UAE.
One of the Malaysian delegation members, Dr. Muhammad Fauzy, from Leverage Business Sdn Bhd, mentioned, “It has been a rewarding experience for us to see tremendous demand for our health food and supplements. Although this year the show is quite small compared to previous years, we managed to have some quality meetings. It was also a good opportunity for us to meet the clients face to face”. Other Malaysian company Twin Catalyst also received several serious enquiries from the Gulf region as well from Africa for their medical consumables.
Impact of COVID on Trade and Investment in Malaysia
2020 has been an extra ordinary year throughout the world. The pandemic has hit the globe and disrupted the whole supply chain. Construction and tourism have been severely affected. However, according to Central Bank, Malaysia still managed to achieve a positive GDP growth in 2020 supported by stimulus measures, policy rate cuts, the continued progress of public projects and higher public sector expenditure.
However, we cannot deny on the negative impacts it had on the economy. Our manufacturing sector registered output losses as a result of the pandemic, the implementation of the Movement Control Order (“MCO”) resulted in commodity supply disruptions both domestically and internationally. Services sector especially Tourism was one of the severely affected not only in Malaysia but around the world.
Despite this unprecedented scenario, Malaysia’s external trade performed fairly well with exports rebounding in the second half of 2020 as compared to the negative growth recorded in the first half of the year. This could be attributed to the progressive opening of the economy and gradual recovery of external demand. In fact, exports in December was the highest monthly value recorded for 2020. Meanwhile, the trade surplus was the highest ever recorded thus maintaining a sustained surplus trend for 23 consecutive years since 1998.
Malaysian Government announced timely Economic Stimulus Package to cushion the resulting impact from the COVID-19 outbreak, as well as reinvigorate the growth of the Malaysian economy, through various strategies such as mitigating impact of COVID-19 by easing cash flow of businesses, stimulate demand for the domestic travel and tourism, boost household spending and provide incentives to encourage private investments. With all these government measures in place, Malaysian economy is expected to bounce back in 2021.
In tandem with improvement in global growth & international trade, Malaysia’s Gross Domestic Product (GDP) is expected to rebound by 6.5% to 7.5%, higher than the forecasted growth for ASEAN-5, which is 5.2%.
Bilateral trade between the UAE and Malaysia
We have seen an overall drop of around 23 percent in total bilateral trade between UAE and Malaysia during 2020 as a result of the pandemic, according to Mr. Omar. Our downward in total trade was largely contributed from the lower trade of manufacturing products and component. For example, our main exports to UAE electrical and electronic products have seen a drop of 21% respectively. Nevertheless, we are still optimistic for 2021 with the Expo 2020 around the corner. Already we have seen an 8% growth in our exports to UAE during the first quarter of 2021 compared to the same period in 2020. UAE has always maintained its position as Malaysia’s largest trading partner and exports destination in GCC. We foresee the bilateral trade between Malaysian and the UAE will further improve once the economy starts opening up in both countries.