By MPMA

23 February 2016

2

Contents 1. Performance by market sub-sectors

Electrical and electronics

Automotive

Household

Packaging

Export

2. Overall performance

3. Outlook for 2016

Electrical and Electronics Sector: Monthly Production Statistics on TVs

Production of TV sets for 2015 reduced by 31%, compared to 2014. Production reduced from 12.5 million units to 8.6 million units.

TV producers are believed to have shifted some production to Thailand, Indonesia and Vietnam.

000 units

Source: Department of Statistics

Chart1

8331010725

884966586

11871115380

13111185381

13471129670

13041013651

19311007700

15961024812

15891006927

189011221074

18711085946

1328835770

2013

2014

2015

Sheet1

201320142015

J8331,010725

F884966586

M1,1871,115380

A1,3111,185381

M1,3471,129670

J1,3041,013651

J1,9311,007700

A1,5961,024812

S1,5891,006927

O1,8901,1221074

N1,8711,085946

D1,328835770

4

Annual Production of TV Sets million units

Source: Department of Statistics

Chart1

620072007

5.720082008

6.420092009

13.220102010

1420112011

13.0520122012

17.120132013

12.520142014

8.620152015

Series 1

Column1

Column2

Sheet1

Series 1Column1Column2

20076.0

20085.7

20096.4

201013.2

201114.0

201213.1

201317.1

201412.5

20158.6

Electrical and Electronics Sector: Monthly Production Statistics on Air-cons

Production of air-cons declined by 15%, from 2.91 million units 2014 to 2.48 million units in 2015.

Similar to the TV producers, air-con producers are also relocating their production base to the neighbouring countries.

Units (000)

Source: Department of Statistics

Chart1

222199200

245202209

290257282

276245285

231262244

217285233

216251160

193233193

200263174

187216156

163213151

195284193

2013

2014

2015

Sheet1

201320142015

J222199200

F245202209

M290257282

A276245285

M231262244

J217285233

J216251160

A193233193

S200263174

O187216156

N163213151

D195284193

6

Annual Production of Air-conds million units

Source: Department of Statistics

Chart1

1.8720072007

2.1720082008

1.9420092009

2.5920102010

2.8520112011

2.6720122012

2.6320132013

2.9120142014

2.4820152015

Series 1

Column1

Column2

Sheet1

Series 1Column1Column2

20071.87

20082.17

20091.94

20102.59

20112.85

20122.67

20132.63

20142.91

20152.48

7

Market Trends of the Electrical and Electronics Sector Japanese brands are loosing out to the Korean and

China brands. Low end models are passing out to ODM companies.

Many electronics companies started to relocate again. Samsung Senawang shifted to Samsung Vietnam. Other MNCs are relocating to Vietnam, Philippines and inland of China.

Automotive Sector: Monthly Statistics on Total Production of Passenger Cars

Total production of passenger cars by the local car producers and assemblers increased by 3.5% to 564,000 units in 2015, compared to 545,000 units in 2014.

However, sales of passenger cars increased by only 0.5% from 588,000 units in 2014 to 591,000 units in 2015.

8

units

Source: Department of Statistics

Chart1

468514987452387

369534309244023

448724680755183

457605317656745

419875385651024

392324770746875

487273739037691

376413984744812

487924562041386

452344113350974

456384288445747

485094643841171

2013

2014

2015

Sheet1

201320142015

J46,85149,87452,387

F36,95343,09244,023

M44,87246,80755,183

A45,76053,17656,745

M41,98753,85651,024

J39,23247,70746,875

J48,72737,39037,691

A37,64139,84744,812

S48,79245,62041,386

O45,23441,13350,974

N45,63842,88445,747

D48,50946,43841,171

9

Annual Production of Passenger Cars Thousand units

Source: Malaysian Automotive Association (MAA)

Chart1

40320072007

48420082008

44720092009

52320102010

48820112011

51020122012

54420132013

54520142014

56420152015

Series 1

Column1

Column2

Sheet1

Series 1Column1Column2

2007403

2008484

2009447

2010523

2011488

2012510

2013544

2014545

2015564

10

Market Trends of the Automotive Sector Implementation of GST affected the consumers

sentiment.

Weakening of ringgit, falling crude oil price raised concerns on economic growth.

Low interest rates but on increasing trends.

Credit tightening by BNM, more stringent approving criteria.

11

Market Trends of the Automotive Sector Launch of several new models at competitive

prices helped to attract new car buyers.

Innovative and attractive offers and scheme for new car buyers helped to gain some sales.

Export of Plastic Table Wares, Kitchen Wares and other Household Products (HS: 3924)

Exports of plastic household products for 2015 amounted to RM369 million, representing an increase of 3.7%, from RM356 million in 2014.

RM million

Source: Department of Statistics

Chart1

27.328.233.1

21.324.223.7

30.228.832.4

27.232.829

25.733.930.7

22.729.532.2

2531.429.1

20.227.130.3

25.226.729

2827.834

2725.433.2

23.840.332.9

2013

2014

2015

Sheet1

201320142015

J27.328.233.1

F21.324.223.7

M30.228.832.4

A27.232.829

M25.733.930.7

J22.729.532.2

J2531.429.1

A20.227.130.3

S25.226.729

O2827.834

N2725.433.2

D23.840.332.9

13

Annual Export of Plastic Household Products RM million

Source: MATRADE

Chart1

222

290

271

290

319

290

304

356

369

Column1

Sheet1

Column1

2007222

2008290

2009271

2010290

2011319

2012290

2013304

2014356

2015369

Packaging Sector: Monthly Export of Plastic Bags (HS: 3923)

Total export of plastic bags for 2015 increased by 6.5% to RM4.25 billion, compared to RM3.99 billion in 2014.

RM million

Source: Source: Department of Statistics

Chart1

292335.4378

235280.4270.9

320314.8369.9

296337360.7

306327.2327.2

285323.5340

324327.6343.7

302356.1361.5

329327.1367.7

354370.6418.8

322333353.5

323354.6359.6

2013

2014

2015

Sheet1

201320142015

J292335.4378

F235280.4270.9

M320314.8369.9

A296337360.7

M306327.2327.2

J285323.5340

J324327.6343.7

A302356.1361.5

S329327.1367.7

O354370.6418.8

N322333353.5

D323354.6359.6

15

Annual Export of Plastic Bags RM billion

Source: Department of Statistics

Chart1

3.4

3.71

2.9

3.3

3.45

3.47

3.69

3.99

4.25

Column1

Sheet1

Column1

20073.40

20083.71

20092.90

20103.30

20113.45

20123.47

20133.69

20143.99

20154.25

Packaging Sector: Monthly Export of Plastic Films and Sheets (HS 3919/20/21)

Total export of plastic films and sheets increased by 5.5% from RM4.58 billion in 2014 to RM4.83 billion in 2015.

Demand from the main markets, i.e., US and Japan is stable due to improving economies.

Malaysia is the largest stretch film producer in Asia, 3rd largest in the world.

RM million

Source: Department of Staticstics

Chart1

306.5376398.1

260.8363.2322.9

336.9397.3395.8

310.5382.9405.1

319.4387.5375.4

301.9380406.6

330.4360.2400.3

323.1401.1393.6

359.7381.6426.3

359.9401.6465.8

344.3375.1415.4

334.8376.3426.9

2013

2014

2015

Sheet1

201320142015

J306.5376398.1

F260.8363.2322.9

M336.9397.3395.8

A310.5382.9405.1

M319.4387.5375.4

J301.9380406.6

J330.4360.2400.3

A323.1401.1393.6

S359.7381.6426.3

O359.9401.6465.8

N344.3375.1415.4

D334.8376.3426.9

17

Annual Export of Plastic Films and Sheets RM billion

Source: Department of Statistics

Chart1

2.95

3.12

2.95

3.26

3.72

3.63

3.88

4.58

4.83

Column1

Sheet1

Column1

20072.95

20083.12

20092.95

20103.26

20113.72

20123.63

20133.88

20144.58

20154.83

18

Overall Performance The plastics industry registered a total sales

turnover of RM24.77 billion in 2015, representing an increase of 27.3% from RM19.46 billion in 2014. However, the huge increase was merely due to a revised method of compilation by the Department of Statistics, in which we believe that the actual growth of the plastics industry is in the region of 5% to 6%.

Export increased by 8.5% from RM11.94 billion in 2014 to RM12.96 billion in 2015.

19

Overall Performance Domestic growth was affected by the

implementation of GST, and rising imported input costs due to weakening ringgit.

Export sector benefited from the weakening of the ringgit against the world major currencies including USD, Euro, Yen and Singapore Dollar.

20

Export of Plastic Products (2001-2015)

RM billion

Source: Department of Statistics

Chart1

3.722001

3.922002

4.532003

5.572004

6.672005

7.672006

8.382007

9.32008

8.32009

9.42010

10.152011

10.052012

10.72013

11.942014

12.962015

Series 1

Column1

Sheet1

Series 1Column1Column2

20013.72

20023.92

20034.53

20045.57

20056.67

20067.67

20078.38

20089.3

20098.3

20109.4

201110.15

201210.05

201310.7

201411.94

201512.96

21

Export/Sales Turnover Ratio Turnover RM billion

E/T Ratio

Note: The Department of Statistics has revised the basis of data compilation, resulting in a 27% increase in total sales turnover for 2015.

Chart1

8.50.45

8.80.45

9.40.48

11.50.48

140.48

15.10.52

15.10.53

16.40.57

14.60.57

15.80.59

16.10.63

17.10.59

17.90.6

19.40.62

24.60.52

Turnover

E/T ratio

Sheet1

200120022003200420052006200720082009201020112012201320142015

Turnover8.58.89.411.51415.115.116.414.615.816.117.117.919.424.6

E/T ratio0.450.450.480.480.480.520.530.570.570.590.630.590.60.620.52

Sheet2

22

Main Exports of Plastic Products Films and sheets: RM4.83b

Chart1

483

425

388

Bags: RM4.25b

Others: RM3.88b

Exports 2010

Exports 2015: RM12.96b

Sheet1

Exports 2010

Films and sheets483

Bags425

Others388

To resize chart data range, drag lower right corner of range.

23

Key Data for the Malaysian Plastics Industry

2011 2012 2013 2014 2015 Malaysias gross domestic product (GDP) growth 5.1% 5.6% 4.7% 6.0% 5.0%

Number of plastics manufacturers 1,400 1,350 1,350 1,300 1,300

Employment 74,000 74,500 78,000 82,000 80,000

Turnover RM16.25b (+2.1%) RM17.16b (+6.5%)

RM17.94b (+4.5%)

RM19.37 (+7.3%)

*RM24.77 (+27%)

Export RM10.15b (+6%) RM10.05b

(-1%) RM10.69b (+6.4%)

RM11.94b (+11.5%)

RM12.96b (+8.5%)

% of export against turnover 62% 59% 60% 62% 52%

Resin consumption 1.98m MT (+5%) 2.04m MT

(+3%) 2.10m MT

(+3%) 2.15m MT

(2.5%) 2.22m MT

(3%)

Per capita consumption of resin 68kg 69kg 70kg 70kg 71kg

*Note: Revised basis of data compilation by the DOS

24

Factors Contributing to the Growth Moderate Malaysian GDP growth of 5% in 2015.

Strong US and Euro augured well for the export sector. Exports contributed more than 50% of the total sales.

25

Factors Contributing to the Growth Further improvement is expected for the world

economies in 2016. World Bank: global economy slowing 2.5% in 2015, and is projected to increase to 2.9% in 2016.

Economies in the high income countries including the US, Japan and Euro areas are expected to improve further in 2016.

26

Factors Contributing to the Growth World economic growth at a glance

2014 2015e 2016f 2017f World 2.6 2.4 2.9 3.1 High income 1.7 1.6 2.1 2.1

US 2.4 2.5 2.7 2.4 Euro Area 0.9 1.5 1.7 1.7 Japan -0.1 0.8 1.3 0.9 UK 2.9 2.4 2.4 2.2

Developing 4.9 4.3 4.8 5.3 China 7.3 6.9 6.7 6.5 India 7.3 7.3 7.8 7.9

Source: World Bank Global Economic Prospects January 2016

27

Outlook for 2016 The industry is expected to be a challenging year.

The global economies are expected to grow moderately, with the ongoing slowdown in China, as well a modest and uneven recovery in the advanced economies.

Domestically, the increase in minimum wages for workers in July 2016 is expected to add further cost burden to the manufacturers. Consumers are still struggling to adjust their spending as a result of the ringgit depreciations and GST.

28

Outlook for 2016 Labour cost is expected to increase further due to

impending levy hike for foreign workers as well as the various additional processing and handling charges.

To face the challenge of cost increase, manufacturers have to improve their cost efficiency and product quality through investing in advanced machinery, automation equipment, innovative technology and creating higher skilled manpower.

29

Outlook for 2016 The extension of the Reinvestment Allowance (RA)

for another three years for 2016-2018 will encourage more companies to expand their operations.

The growth for 2016 is expected to be slightly higher than 2015, at about 6% to 7%.

MPMA 37, Jalan 20/14, Paramount Garden, 46300 Petaling Jaya, Selangor

Tel: 03-7876 3027 Fax: 03-7876 8352

Performance of the Malaysian Plastics Industry 2015 ContentsElectrical and Electronics Sector: Monthly Production Statistics on TVs Annual Production of TV SetsElectrical and Electronics Sector: Monthly Production Statistics on Air-consAnnual Production of Air-condsMarket Trends of the Electrical and Electronics SectorAutomotive Sector: Monthly Statistics on Total Production of Passenger Cars Annual Production of Passenger CarsMarket Trends of the Automotive SectorMarket Trends of the Automotive SectorExport of Plastic Table Wares, Kitchen Wares and other Household Products (HS: 3924)Annual Export of Plastic Household ProductsPackaging Sector: Monthly Export of Plastic Bags (HS: 3923)Annual Export of Plastic BagsPackaging Sector: Monthly Export of Plastic Films and Sheets (HS 3919/20/21)Annual Export of Plastic Films and SheetsOverall Performance Overall Performance Export of Plastic Products (2001-2015)Export/Sales Turnover RatioMain Exports of Plastic ProductsKey Data for the Malaysian Plastics IndustryFactors Contributing to the Growth Factors Contributing to the Growth Factors Contributing to the Growth Outlook for 2016Outlook for 2016Outlook for 2016Thank you