Business Services

Malaysian Aerospace Engineering Sdn Bhd, a subsidiary of Malaysia Airlines System Bhd (MAS) and GMR Hyderabad International Airport Limited has set up a JV company to facilitate heavy maintenance of the A320 and the B737NG aircraft.

This project drives MAS Aerospace Engineering (MAE) as the anchor maintenance, repair and overhaul (MRO) provider in Malaysia, and in doing so, develop Malaysia into a regional MRO hub.

MAE will then develop strategic satellite centres for airframe and line maintenance work; component and engine repair work to MAE’s MRO facility at Subang Airport. MAE will streamline all line maintenance, component and engine repair work to Subang that will subsequently transform Subang into a full-fledged engine and component repairs centre.

Investment: RM192 million (USD59 million).

We will work on three fronts to achieve our aspiration. We will reach critical scale by setting up a Government-shared services centre through a public-private partnership and then use policy to grow industry leaders and encourage consolidation.

Simultaneously, we will work to build global awareness and ensure that customers in target markets are aware of the skills and capabilities of Malaysian outsourcers. To enhance industry capability and credibility, especially overseas, we will raise industry standards and foster greater competitiveness in order to challenge established foreign competitors.

Telekom Malaysia Berhad and Akamai Technologies, a leading Content Delivery Provider in the global market, are collaborating on a project which will see Akamai’s only Netstorage facilities in Asia Pacific (excluding Japan) hosted in Malaysia. These facilities are currently only available in the U.S and Japan.

To achieve our target, we will act to boost demand for green products and services, strengthen suppliers and measure, monitor and publicise Malaysia’s environmental progress.

To achieve the aim of creating two globally competitive engineering services companies, we have developed a set of initiatives to increase skills and capability, stimulate demand for engineering services and accelerate global expansion.

In order to integrate the provision of Islamic finance advisory and consultancy services that can capture global market demand, the following actions will be undertaken to reach target of having 10 banks from two regions (Southeast Asia and Gulf Cooperation Council countries) as clients of I-FACS by 2015:

• Leadership Committee to conduct feasibility study
• Integrate Malaysian expertise via an I-FACS consortium to offer specialised Islamic advisory and consultancy services
• Market capabilities overseas
• Develop Syariah-compliant auditing competencies

There is a strong link between construction-related professional services and the wider construction industry, with professional services-related fees for building projects accounting for approximately 13 to 15% of project value. The Malaysian construction sector is still over-reliant on Government demand with 40 to 60% of revenues coming from Government contracts.

Multi-disciplinary practice (MDP) construction firms provide an end-to-end solution in a turnkey manner, including architectural and engineering services, construction services and potentially even the real estate management under a single contract. Globally, multi-disciplinary contracts are gaining prominence as clients look for centralised accountability rather than having to manage a number of separate contracts.

Since Government contracts represent the bulk of the market, Government procurement processes have the potential to positively influence the skills and capabilities demanded of the industry.

We will recognise and award projects to MDP firms for Government procurement contracts. MDP firms will be recognised and allowed to bid for professional construction services tenders by mid-2011. The Ministry of Finance will enable registration as an MDP firm and award three pilot projects to MDP firms by the end of 2011. Going forward the Ministry of Finance will award larger contracts to MDP firms following a set timeline to bring the industry in line with international best practices.

The growth of the accounting sector has traditionally been linked to the size of the overall economy. Demand is primarily driven by domestic reporting requirements as well as domestic tax regulations. Furthermore, the level of competition within the sector is relatively low. Client contracts are relatively stable over time, as switching auditors sends unfavourable signals to financial markets.

However, as markets deregulate and global reporting standards converge, opportunities exist to export accountancy services in the future. To be able to capitalise on those opportunities, Malaysia must increase the quality of its accountants and develop specialised skill sets in areas such as international taxation, forensic accounting and carbon accounting, in line with future growth areas.

We will strengthen the quality of Malaysia’s chartered accountants by introducing a requirement to hold a recognised professional qualification (e.g. ACCA, CPA, ICCA) before being admitted as a chartered accountant in Malaysia. The chartered accountant qualification is currently awarded automatically to Malaysian graduates after three years of experience within the industry. The Malaysian Institute of Accountants will introduce the additional requirement to hold a professional qualification to qualify as a chartered accountant by mid-2012.

Through education and adjustments to policies on granting visas, Malaysia can develop expertise in indirect taxation, international taxation, transfer pricing, forensic accounting and carbon accounting to increase export opportunities. The Ministry of Higher Education will improve domestic capabilities by launching new Masters programmes at local universities in these areas by 2012, and the Ministry of Home Affairs will facilitate knowledge transfer by easing restrictions on the entry of foreigners with specialised skills by mid- 2011.

The subscription revenue reported by Global Insight for the online gaming market in Asia Pacific stood at RM9.0 billion (USD2.6 billion) in 2007, with a CAGR of 14.8% expected until 2012, mainly led by China and Korea. In Malaysia, our creative multimedia industry’s revenue of RM9.4 billion (USD2.7 billion) in 2008 contributed to 1.27% of the GDP. This is projected to grow by a CAGR of 11.4% to achieve RM20 billion (USD5.7 billion) in 2013. As the creative multimedia industry is still young in the Asia Pacific region, it is imperative for Malaysia to lay the foundation to capture market share. The key challenges include:

• Low level of industry exposure, profile and reputation
  This results in companies having limited access to funding and investment for production, marketing and expansion;

• Lack of awareness and enforcement of policies and regulations
  There is currently a lack of awareness and understanding of intellectual property rights for creative industries as well as methodologies to evaluate and protect intellectual property;

• Lack of access to global market
  Malaysian content creators currently generate most of their revenues from the domestic market. To ensure sustainable growth there is a need for the local content creation companies to reach out to the global market; and

• Lack of competency and capacity
  Malaysian content creators are unable to effectively secure international deals due to internal structural issues such as the lack of high quality talent on the pre- production side (writers and storyboard artists) and production managers. We will need to enhance the quality and competency of our human capital as we step up to service the needs of the global market.

The Malaysia Creative Multimedia Content Initiative (MCMCI) is the strategic framework applied by MDeC to grow the creative multimedia industry. Opportunities have been identified in two key areas within the creative multimedia industry: the development of ASEAN themed online games and the development of animation for the entertainment industry (i.e. film, television), which can be achieved by increasing marketing, increasing private investment and building a cluster of human capital with the right skills for the sector.

Malaysia will set up physical trade representative offices in the United States, United Kingdom, Japan, China and the Middle East to directly tap the needs of those markets. Trade offices coupled with strong alliances with foreign media distributors and broadcasters will enable Malaysian content companies to access markets such as MIPCOM and MIPTV.

We will target a ratio of private to public investment to 80:20 by collaborating with large regional venture capitalist firms, like Singapore-based Asia Media & Technology Capital Management Private Limited and Creative Ventures Group, to attract investors for local productions. At the same time, we will consider larger fiscal incentives – potentially including tax breaks and grants – to drive investment from our domestic private sector.

To incubate the growth of local companies in Malaysia, MDeC will focus on increasing high-valued skills (i.e. scriptwriters and storyboard artists) and production manager in the next 10 years by launching a dedicated creative education syllabus. It will also extend MDeC’s Digital Media Zone so that it can accelerate growth in economic corridors with an ecosystem of creative industry companies and infrastructure.