Once known as a low-cost, low-wage country, Malaysia today boasts a business sector made up for the most part of highly digitalised industries and e-commerce-oriented SMEs, said Zuhaila Sedek, the Frankfurt-based Trade Commissioner for Matrade, the national trade promotion agency for Malaysia. And as the sustainability trend continues to grow, Malaysia’s industries, keen to explore the worldwide market, are joining in.
With government support and a focus on digitalization and automation, the Malaysian plastics and rubber industry has been working to achieve higher levels of technological expertise and efficiency.
“However, in order to compete in the global marketplace, it is necessary to be more responsible and sustainable nowadays,” said Zuhaila Sedek, speaking at an interview with Sustainable Plastics at the K fair in Düsseldorf last year.
The Malaysian government has created numerous facilities to influence and support the industries’ transformation in that direction.
This support is essential, as some 97% of the businesses in Malaysia are SMEs - and these also provide great social value. “This is why it is important for these companies to be nurtured by the government,” she explained.
As a trade commissioner in Western Europe for Matrade, a government agency for trade development and promotion under Malaysia’s Ministry of international trade, she is tasked, among others, with providing Malaysian companies with the guidance they need to comply with the evolving legislation and standards in Europe.
Malaysia, she emphasised, is dependent on external trade. “We are currently listed in the top-25 trading nations in the world and in the top-5 ASEAN nations, notwithstanding a wide range of political and geopolitical situations, including market conditions and, of course, the pandemic,” she added.
Because of this, it is vital for the company to align its policies on sustainability with the partners it trades with. In fact, the EU is one of the country’s top trading partners, with Germany as the largest destination market on the continent.
Malaysia is one of the signatories of the Paris agreement; the country also collects data on the readiness of its industrial sector for achieving the SDGs as well as developing forward-thinking blueprints to drive sectoral transformations in the area of sustainability.
Currently, however, only the listed companies in Malaysia are required to report their sustainability practices, ‘although we are encouraging the SMEs to explore sustainability reporting’.
“It can be a good tool to articulate sustainability readiness, for when they are approached by the prospects in the EU region,” she said. “Besides, it's no longer an option: it's a necessity if you want to access the EU market.”
Sustainability in plastics
Malaysia has developed the Malaysia plastics sustainability road map: a policy launched by the Ministry of the Environment and Water of Malaysia aimed at addressing plastic pollution in a sustainable way, promoting sustainable business practices and harmonizing approaches along the value chain through the adoption of a life cycle approach.
This will be attained by phasing out the use of virgin plastics through the development of recycled and recyclable products, encouraging reuse and creating the infrastructure to promote plastics circularity.
For this to succeed, however, various preconditions must be fulfilled in terms of the market economy and technology; plus, a functioning regulatory framework must be in place and the commitment of the population is required, said Zuhaila. As well, support from the community - in the form of public-private-people partnership - is needed to transform the industry.
“In Malaysia, we're looking at identifying specific strengths in the sustainability pillar. Right now, ocean-bound plastics and PET recycling are a focus, and we're also looking at service provision, such as traceability solutions. Right now, several startups are showing some potential, but we do definitely have some prospects that we want to work with, especially in the commodity sector. They use blockchain to secure the information but again, we have to be careful on data gathering, especially in a highly-regulated market such as the EU.”
“In fact,” she added, “I think this is going to be a game changer. They are creating a whole new industry of providing services and solutions to help companies become more sustainable. I think it's an economy driver. And I think it's important for Southeast Asian companies in general to be at the forefront of this development.
Due to our strong focus on enhancing our sustainability-readiness, I believe Malaysia makes an ideal business partner for the world. At events like K, we wish to communicate this strength to the rest of the world.”