Malaysia Truly Asia
On the demand side for selling the Outsourced or Sourced production in the Country of Production, China and India may appear to be the most obvious countries. However, when it comes to Outsourcing or Sourcing of Production or Services meant for replacing in full or part production or services in the Western countries, a number of other important points should be considered, not least in respect of understanding the Cultures and Languages of the countries to Outsource to or Source from. The same careful approaches we wish to underline are valid in both cases.

In this context Malaysia offers one main advantage, namely a truly harmonious multi-racial and multi-lingual population with almost everybody speaking English. At the same time the entire population is fluent in Malay, a common and National language for Indonesia and Malaysia. Furthermore, 35% of the Malaysian population is Chinese, conversant in all Chinese dialects ranging from Mandarin to Cantonese. Similarly the 15% Indian population speak Hindi and Tamil. No wonder Malaysia is considered “Truly Asia”.

Compared to Malaysia countries like China and India are more recent developing countries. For a number of good reasons it should, however, always be considered whether to go direct to any of the relevant Asian countries, which well could be the case not least as far as the “Shopping Around for Off the Shelf” Purchasing Strategy is concerned.

As concerns Joint Venture, Own Set-Up as well as possible also for Contract Manufacturing, alternatively a two-step approach can be applied through first Outsourcing to Malaysia, in which context Joint Venture and Own Set-Up involves employing managers from the three major populations groups, some of whom can later be transferred to what could be the most obvious country to Outsource to as step two. Thus such transfers would take those Managers of different Cultures to where their ancestors originate, and thereby provide a “Bridge and Safety Net”, which based upon the cultural and language issues, can help avoid a number of misunderstandings.

Politically Malaysia is a very stable country with the same democratically elected Multiracial Government since the Independence in 1957, as well as having a well developed Judicial System based on English Law.

Of importance is also that Malaysia is part of the ASEAN grouping consisting of 10 countries, with Malaysia being more or less located in the Center, from where there is access to more than 500 million consumers, with no or considerably reduced import duties of maximum 5% amongst the 6.

Founding members of ASEAN being Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand. In addition, ASEAN has made special trading agreements with China, Japan and South Korea – ASEAN + 3, which will further open up for increasing Free Trade. Furthermore, Malaysia continues to make bilateral Trading Agreements with a number of other countries.

Malaysia has a number of Free Zones strategically located throughout the Country. As an example we quote from One of them – The Pelepas Free Zone, located just 15 minutes away from Singapore, stating the following 9 reasons why Malaysia is an attractive country to Outsource to :

1. Competitive operational cost
2. Full tax exemption on all activities within Pelepas Free Zone
3. Located within the award-winning Port of Tanjung Pelepas, enhancing your logistics costs savings.
4. Green Lane Concept with minimal inspection and documentation of all cargo movements.
5. No fund repatriation, currency or personnel recruitment quota restrictions.
6. No customs formalities for all Free Zone activities.
7. Modern facilities and efficient services.
8. 100% foreign ownership of equity allowed for approved activities.
9. Vast reserves of prime land for future expansion of operations.

An added incentive for manufacturing in Malaysia is that Advertising and Sales Promotional costs in connection with export qualify for double tax deductions. Thus Malaysia is a highly Cost Efficient country from which to develop Sales, Market Shares, and Brand Names in Asia and the International Markets.

It should also be noted that Malaysia has a long tradition in respect of Outsourced and Sourced Productions with hardly ever any worker unrest. Although a considerable developed country, the cost for a worker, including social costs, is competitive considering the high level of productivity.

When considering the 3 Areas of China, India, and ASEAN countries, Malaysia does represent not only an interesting “demand” country in its own right, but certainly also as a base for developing Sales and Market Shares in other Asian – International countries, as well as constitute an ideal “Bridgehead” for extending the Outsourcing further from Malaysia into the very large future consumer markets like China and India.

Finally it should be added:

1. Malaysia possesses one of the best developed infrastructures in Asia in terms of:
   • Roads.
   • Shipping.
   • Electric and Water Supply.
   • Information Technology – including the impressive Cyberjaya, “Malaysia’s Silicon Valley” located within the Multimedia Super Corridor close to Kuala Lumpur, the capital city, and also to Kuala Lumpur International Airport as well as Putrajaya – the new location of the Government of Malaysia.
2. High Value for Money Office and Residential Facilities.
3. High Standard International Schools and Universities for Expatriates.
4. Amongst all emerging economies, Malaysia has been nominated the No. 2 country with the Highest expected GDP growth during the period 2006 – 2020 (Reference: Deutche Bank Research’s “Current Issues – Global Growth Centres”, 23rd March 2005).

In conclusion:-
“Malaysia Truly Asia”, represents:
“A True Bridgehead”
For Outsourcing To Asia, in a “Middle of the Road” approach.