Rubber

RUBBER
Meaning:
Rubber is a polymer; the word polymer is derived from the Greek means
“Many parts”. Rubber material is made by chemically treating and
toughening. This substance is valued for its elasticity, no conduction of
electricity, shock absorption, and resistance to moisture, used in the
manufacture of erasers, electrical insulation, elastic bands, crepe soles,
toys, water hoses, tires, and many other products.
History:
World War II was a major event in the history of rubber that
changed the rubber industry forever. When the United States entered in
World War II there was an enormous need for rubber. The US
government set goals for rubber consumption that were way too
ambitious and that exceeded the rate that natural rubber was being
produced. Rubber was used to make an incredible amount of things that
were made for the war. Rubber was wrapped around every inch of
military wiring used in the war. Sherman tanks were made with half a ton
of rubber and some battleships contained 20,000 rubber parts.
A common classification of different types of rubber:
1. General purpose elastomers
2. Special purpose elastomers
3. Specialty elastomers
1) General purpose elastomers comprise:
Natural rubber (NR)
Polyisoprene rubber (IR)
Styrene-butadiene rubber (SBR)
Butadiene rubber (BR)
These types have good physical properties, good process ability and
compatibility, are generally economical and are typical polymers used in
tyres and mechanical rubber goods with demand for good abrasion
resistance and tensile properties. General purpose types constitute the
largest volume of polymer used.

2) Special purpose elastomers comprise:
Ethylene-propylene rubber (EPM and EPDM)
Butyl rubber (IIR)
Chloroprene rubber (CR)
Acrylonitrile-butadiene rubber or Nitrile rubber (NBR)
They have all unique properties which cannot be matched by the general
purpose types and are very important for manufacturing of industrial and
automotive rubber products.
3) Specialtypurpose elastomers comprise:
Chlorosulfonated Polyethylene (CSM)
Acrylic Rubber (ACM)
Silicone Rubber (PMQ/PV/MQ/VMQ)
Floursilicone Rubber (FPQ)
Fluor elastomers (FPM/FFKM/FEPM)
Urethane Rubber (AU/EU)
Epichlorohydrine Rubber (CO/ECO/GECO)
The Specialty elastomers are a great number of polymers with very
special properties, in many cases of great importance for the automotive-,
aircraft-, space- and offshore industries.

Characteristics of rubber:
1) Flexible, Elastic,
2) Non transparent,
3) Water proof/repellence,
4) Hard, strong,
5) Insulate electricity,
6) Acid and alkaline resistant,
7) Doesn’t conduct to heat.
Uses of rubber:
Today, rubber is as widely used as wood and this is largely due to its
beneficial proprieties like strength, long lasting, water resistance and heat
resistance all these benefits makes this material perfect for tire
production, in fact a large percentage of rubber production goes into the
automotive industry. Other benefits like being non slip, soft, durable,
resilient makes this material the first choice for playground equipment,
shoes, mats, flooring, healthcare supplies, household supplies, balls, toys
and thousands of other rubber products. Rubber comes in a large variety
of colors, styles and textures making it extremely diverse. Used rubber
tires are often recycled to make other items like mulch, shoes, bags,
jewelry and coats. It is safe and reliable and seen as a valuable material
by many

World Rubber Production:
Year
Rubber Production ('000' Tonnes)
Natural Rubber Synthetic Rubber Total Rubber
2011 11239 14091 25330
2012 11658 14042 25700
2013 12281 14199 26480
2014 12115 14179 26294
2015 12314 14460 26774
2016 2921 3635 6556
*January-March Source: International Rubber Study Group (IRSG)
0
10000
20000
30000
40000
50000
60000
1 2 3 4 5 6
Rubber Production ('000' Tonnes) Total Rubber
Rubber Production ('000' Tonnes) Synthetic Rubber
Rubber Production ('000' Tonnes) Natural Rubber
Year

World Rubber Consumption:
Year
Rubber Consumption ('000' Tonnes)
Natural Rubber Synthetic Rubber Total Rubber
2011 11304 13856 25160
2012 11046 13964 25010
2013 11370 14164 25534
2014 12137 14267 26404
2015 12167 14564 26731
2016 3040 3606 6646
*January-March Source: International Rubber Study Group (IRSG)
0
10000
20000
30000
40000
50000
60000
1 2 3 4 5 6
Rubber Consumption ('000' Tonnes) Total Rubber
Rubber Consumption ('000' Tonnes) Synthetic Rubber
Rubber Consumption ('000' Tonnes) Natural Rubber
Year

Top Ten Rubber Producing Countries in The world
Rank Country Production (Metric Tonnes)
1 Thailand 3,348,897
2 Indonesia 3,088,400
3 Malaysia 996,673
4 India 891,344
5 Vietnam 789,635
6 China 659,600
7 Philippines 547,861
8 Côte d’Ivoire 411,044
9 Nigeria 188,532
10 Srilanka 143,000
*www.perfectinsider.com/top-ten-rubber-producing-countries-in-the-world
1 Thailand
30%
2 Indonesia
28%
3 Malaysia
9%
4 India
8%
5 Vietnam
7%
6 China
6%
7 Philippines
5%
8 Cote
d'lvoire
4%
9 Nigeria
2%
10 Srilanka
1% Production (Metric Tonnes)

PESTEL ANALYSIS OF MALAYSIA FOR RUBBER
PRODUCTION:
What is PESTEL analysis?
PESTEL analysis is a frame work or tool used to analyze and monitor the
macro-environmental (external environment) that have an impact on
business organization. The result of which is used to identify threats and
weaknesses which is used in SWOT analysis.
Advantages of PESTAL analysis:
 Provides a simple and easy-to-use framework for your analysis.
 Involves cross-functional skills and expertise.
 Helps to reduce the impact and effects of potential threats to your
organization.
 Aids and encourages the development of strategic thinking within your
organization.
 Provides a mechanism that enables your organization to identify and
exploit new opportunities.
 Enables you to assess implications of entering new markets both
nationally and globally.
Disadvantages of PESTAL analysis:
 Users can oversimplify the information that is used for making
decisions.
 The process has to be conducted regularly to be effective and often
organizations do not make this investment.
 Users must not succumb to 'paralysis by analysis' where they gather
too much information and forget that the objective of this tool is the
identification of issues so that action can be taken.
 Organizations often restrict who is involved due to time and cost
considerations. This limits the technique's effectiveness as a key
perspective may be missing from the discussions.
 Users' access to quality external information is often restricted because
of the cost and time needed to collate it.
 Assumptions often form the basis for most of the data used, making
any decision made based on such data subjective.

Introduction to Malaysia
Malaysia boasts one of south-east Asia's most vibrant economies, the fruit
of decades of industrial growth and political stability. Its multi-ethnic,
multi-religious society encompasses a majority Muslim population in most
of its states and an economically-powerful Chinese community. Consisting
of two regions separated by some 640 miles of the South China Sea,
Malaysia is a federation of 13 states and three federal territories.
It is one of the region's key tourist destinations, offering excellent
beaches and brilliant scenery.
Ethnic Malays comprise some 60% of the population. Chinese constitute
around 26%; Indians and indigenous peoples make up the rest.
Although since 1971 Malays have benefited from positive discrimination in
business, education and the civil service, ethnic Chinese continue to hold
economic power and are the wealthiest community.
The country is among the world's biggest producers of computer disk
drives, palm oil, rubber and timber. It has a state-controlled car maker,
Proton, and tourism has considerable room for expansion.
Malaysia attracts a number of our clients with its large, literate, young
and largely urban population, which equates to a healthy labour market.
Foreign workers and businesses are relatively safe as Malaysia has lower
crime rates than most other emerging market economies in Asia.
Malaysia has undertaken structural reforms to enhance the
entrepreneurial environment.
Facts:
Population - 31.2 million persons in 2015
GDP (PPP) - $746.1 billion (6.0% growth) $24,654 per capita
Unemployment – 2.0%
Inflation (COI) – 3.1%
FDI Inflow - $ 10.8 billion
2016 Economic Freedom Score- 71.5 (up 0.7 point)
Economic Freedom Status- Mostly Free
Global Ranking- 29th
Interest rate – 3%
Balance of trade - 8500 MYR Million
Foreign direct investment - 8800 MYR Million

Malaysia’s Natural Rubber Production
*January-March Source: Department of Statistics Malaysia (DOSM)
Year
Production (Tonnes)
Dry Latex Total
2011 916270 79940 996210
2012 846813 75985 922798
2013 753472 72949 826421
2014 598608 70005 668613
2015 676260 45862 722122
2016 175263 12427 187690
0
200000
400000
600000
800000
1000000
1200000
1 2 3 4 5 6
Year Production (Tonnes) Dry Production (Tonnes) Latex Production (Tonnes) Total

Malaysia’s Natural Rubber Import
Year
Import (Tonnes)
Dry Latex Total
2011 361881 306561 668442
2012 541520 330909 872429
2013 660186 344619 1004805
2014 589329 315710 905039
2015 639000 318700 957700
2016 189072 78885 267957
0
200000
400000
600000
800000
1000000
1200000
1 2 3 4 5 6
Year Production (Tonnes) Dry Production (Tonnes) Latex Production (Tonnes) Total

Malaysia’s Natural Rubber Export
Year
Export (Tonnes)
Dry Latex CR TO China Total
2011 918555 41586 293505 1253646
2012 739426 31748 531855 1303029
2013 813513 33577 501361 1348451
2014 689352 32370 469277 1190999
2015 674589 31940 406121 1112650
2016 149734 8007 84827 242568
*January-March Source: Department of Statistics Malaysia (DOSM) Note:
CR-Compounded Rubber
0
500
1000
1500
2000
2500
1 2 3 4 5
#REF! #REF! #REF! #REF! #REF!

Malaysia’s Natural Rubber Consumption
Year
Consumption (Tonnes)
Dry Latex Total
2011 56906 345017 401923
2012 75828 365571 441399
2013 56210 377981 434191
2014 61504 386980 448484
2015 64161 410613 474774
2016 16405 104114 120519
0
500
1000
1500
2000
2500
1 2 3 4 5
Year Malaysia Total ('000' hec) Estate
Malaysia Total ('000' hec) Smallholding Malaysia Total ('000' hec) Malaysia

Malaysia’s Planted Hectarage by Sector
Year
Malaysia Total ('000' hec)
Estate Smallholding Malaysia
2011 64.2 962.84 1027.04
2012 65.94 975.25 1041.19
2013 77.41 979.86 1057.27
2014 80.12 985.51 1065.63
2015 86.12 991.51 1077.63
e: Estimate f: Forecast Source: Department of Statistics Malaysia (DOSM)
0
500
1000
1500
2000
2500
1 2 3 4 5
Year Malaysia Total ('000' hec) Estate
Malaysia Total ('000' hec) Smallholding Malaysia Total ('000' hec) Malaysia

POLITICAL:
Government type and stability:
Government type: federal constitutional monarchy
Federal (Federation) - a form of government in which sovereign power is
formally divided - usually by means of a constitution - between a central
authority and a number of constituent regions (states, colonies, or
provinces) so that each region retains some management of its internal
affairs.
Constitutional monarchy - a system of government in which a monarch is
guided by a constitution whereby his/her rights, duties, and
responsibilities are spelled out in written law or by custom.
Monarchy - a government in which the supreme power is lodged in the
hands of a monarch who reigns over a state or territory, usually for life
and by hereditary right.
Malaysia is one of the world's most peaceful and politically stable
countries. It boasts of being one of Southeast Asia's most vibrant
economies, which is the fruit of decades of industrial growth and political
stability.
Freedom of press, Rule of law, Level of bureaucracy and corruption:
Freedom of press is not good as per Wikipedia rankings the ranking under
freedom of press of Malaysia stands at 146cat global ranking so it is not
good.
According to World Justice Project’s (WJP) Malaysia is ranked 39th in the
World Justice Project’s World Rule of Law Index. As per the report The
country is deteriorating in global ranking.
Malaysia is the 54 least corrupt nation out of 175 countries, according to
the 2015 Corruption Perceptions Index reported by Transparency
International. Corruption Rank in Malaysia averaged 41.86 from 1995
until 2015, reaching an all-time high of 60 in 2011 and a record low of 23
in 1995.
The politics of Malaysia is based on a federal constitutional monarchy, in
which the King is head of state and the Prime Minister is the head of
government. Executive power is exercised by the federal government and
the 13 state governments. Federal legislative power is vested in the
federal parliament and the 13 state assemblies. The judiciary is

independent of the executive and the legislature, though the executive
maintains a certain level of influence in the appointment of judges to the
courts.
King of Malaysia Abdul Halim Mu'adzam Shah from Kedah.
Prime minister of Malaysia Najib Tun Razak.
Tariff controls:
Malaysia’s average tariff rate is 4.3 percent. Imported vehicles are subject
to high tariffs. State-owned enterprises play a significant role in the
economy. There are limits on foreign ownership levels in some industries.
The financial sector remains stable. Measures to open the banking sector
to greater competition have been adopted, but progress has been slow.
Tax policy:
Malaysia’s top individual and corporate income tax rates are 25 percent
The overall tax burden equals 15.8 percent of total domestic income.
Government spending amounts to 29.3 percent of GDP
Income Tax Rate 26%
Corporate Tax Rate 25%
Sales Tax / Service Rate 5% - 10%

ECONOMICAL:
Current and projected economic growth:
For the first half of 2016, GDP grew 4.1 per cent with a value of RM536.4
billion at constant and RM589.5 billion at current prices.
Gross National Product in Malaysia increased to 265.39 MYR Billion in the
second quarter of 2016 from 260.87 MYR Billion in the first quarter of
2016.
Forecasted GDP rate for Malaysia in 2016 is 1.5 per cent.
Inflation and Interest rates:
Inflation rate
2015 – 3.14%, 2015 – 2.1%, 2016 – 3.13%, Forecasted (2020) – 2%
Interest rate
2015 – 3%, 2016 – 3%, Forecasted (2020) – 3.5%
Labor supply and Unemployment:
Labor supply
Labor Force Participation Rate in Malaysia increased to 67.80 percent in
July from 67.70 percent in June of 2016. Labor Force Participation Rate in
Malaysia averaged 66.08 percent from 2010 until 2016, reaching an all
time high of 69.60 percent in September of 2013 and a record low of
62.30 percent in November of 2010.
Labor force: 2016/Q1 - 14,596.80 2016/Q2 - 14,665.40
Employment (%): 2016/Q1 - 96.6 2016/Q2 - 96.6
Unemployment:
Unemployment rate in Malaysia rose to 3.5 percent in July of 2016 from
3.4 percent in June. It was the highest jobless rate since April as there
were 516.2 thousand people unemployed, higher than 501.8 thousand
people in a month earlier.
Unemployment rate:
2016/Q1 – 3.4%, 2016/Q2 – 3.4%
Outside labor force: 2016/Q1 – 32.4% 2016/Q2 – 32.4%

Sectoral contribution to GDP growth:
Malaysia GDP from Agriculture
GDP From Agriculture in Malaysia increased to 21206 MYR Million in the
second quarter of 2016 from 20052 MYR Million in the first quarter of
2016. GDP From Agriculture in Malaysia averaged 22326 MYR Million from
2010 until 2016
Malaysia GDP from Construction
GDP from Construction in Malaysia decreased to 11899 MYR Million in the
2016. GDP from Construction in Malaysia averaged 9439 MYR Million from
2010 until 2016.
Malaysia GDP from Manufacturing
GDP from Manufacturing in Malaysia increased to 63814 MYR Million in the
2016. GDP from Manufacturing in Malaysia averaged 54928.31 MYR
Million from 2010 until 2016.
Malaysia GDP From Mining
GDP from Mining in Malaysia decreased to 24356 MYR Million in the
2016. GDP from Mining in Malaysia averaged 22494.69 MYR Million from
2010 until 2016.
Malaysia GDP from Services
GDP from Services in Malaysia increased to 146416 MYR Million in the
2016. GDP from Services in Malaysia averaged 125268.81 MYR Million
from 2010 until 2016.
Malaysia is the fifth largest recipient of foreign direct investment (FDI)
inflows in the world, in accordance with the United Nations Conference on
Trade and Development (UNCTAD) 2015 World Investment Report. In
2015, FDI inflows into Malaysia reached RM39.5 billion, 11.8 per cent
higher than that recorded for 2014.

Social:
Malaysia Demographics Profile 2016
1) Population: 30,949,962 (July 2016 est.)
2) Age structure:
0-14 years: 28.16% (male 4,484,188/female 4,231,557)
65 years and over: 5.86% (male 861,151/female 953,091) (2016 est.)
3) Population growth rate : 1.4% (2016 est.)
4) Birth rate:19.4 births/1,000 population (2016 est.)
5) Death rate: 5.1 deaths/1,000 population (2016 est.)
6)Net migration rate: -0.3 migrant(s)/1,000 population (2016 est.)
7) Languages: Bahasa Malaysia (official), English, Chinese (Cantonese,
Mandarin, Hokkien, Hakka, Hainan, Foochow), Tamil, Telugu, Malayalam,
Panjabi, Thai
8) ReligionsMuslim : (official) 61.3%, Buddhist 19.8%, Christian 9.2%,
Hindu 6.3%, Confucianism, Taoism, other traditional Chinese religions
1.3%, other 0.4%, none 0.8%, unspecified 1% (2010 est.)
9) Literacy definition: age 15 and over can read and write
total population: 94.6% male: 96.2% female: 93.2% (2015 est.)
10) Life expectancy at birth total population: 75 years
male: 72.2 years female: 78 years (2016 est.)
11) Total fertility rate : 2.53 children born/woman (2016 est.)

3 Consumer Behavior Trends In Malaysia:
1. Consumers Increasingly Going Online to Shop
2) Consumers in Travel industries are willing to spend more
3) Household debts are rising among consumers
4) Busy consumers cook less at home
5) Middle class consumers spend the most, but are starting to control

Technology:
The Ministry of Science, Technology and Innovation (Malay: Kementerian
Sains, Teknologi, dan Inovasi), abbreviated MOSTI, is a ministry of the
Government of Malaysia that is responsible for science, technology,
innovation, space science, chemistry, nuclear, meteorological, standards,
atomic energy, remote sensing, design, technology park, biotechnology,
astronautics, cyber security, nanotechnology, venture capital, venture
debt, AIDS, research.
According to Global Innovation Index 2016 Malaysia has been ranked 59th
position out of 128 countries globally.
With 20.6 million internet users in 2015 the Malaysian information
communication technology (ICT) market has strong growth fundamentals,
including rising incomes and a high-tech-focused national development
plan. Key sectors include government, telecoms, finance, health and
education. smartphone ownership in Malaysia grew by 34 per cent with
mobile subscriptions reaching 44.1 million and a penetration rate of 144
per cent.
In 2015, Malaysia became the first Asia Pacific nation to regulate for
equity crowd funding in its drive to develop the FinTech agenda.
Moreover, Malaysia recorded the highest innovation performance amongst
middle income countries. Malaysia was ranked 4th globally in financial
market development by the World Economic Forum, reflecting the
country’s position as a major financial centres.
Opportunities in Malaysia:
Malaysia strives to promote itself as an IT hub in the Asia-Pacific region.
Demand for broadband is increasing due to mobile technology. Mobile
broadband is increasingly popular in the country with growing ownership
rates of smartphone handsets and other mobile devices.
Cloud computing is expected to gain momentum, with growing
investments in data Centre’s and ICT infrastructure in Malaysia. This
model is becoming an important part of most organizations.
Bank Negara Malaysia (BNM), the country’s central bank, is responsible
for promoting monetary stability and smooth operations of national
payment and settlement systems.
Healthcare expenditure in Malaysia is increasing rapidly, forecasted to
grow more than 7 per cent to reach A$17 billion in 2016 from last year

With the growth in Business Process Outsourcing (BPO) and IT services,
Malaysia’s IT services spending is forecasted to grow 9.5 per cent over
2016-2020 and reach A$3.3 billion by 2020
Research and Development:
Despite the economic downturn in1997, R&D expenditures in Malaysia
increased substantially by 105% between 1996 and 1998. The ration
between gross expenditure on R&D and GDP rose from 0.22% in 1996 to
0.39% in 1998.
Two-third of the total R&D expenditure in 1998 came from the private
sector even though this was a bit smaller than the corresponding figure of
73% in 1996. Between 1996 and 1998, government research institutes
share of total gross expenditure on R&D increased from 20% to 22%.
In terms of field research, R&D expenditures in the country were fairly
divided amongst major areas such as applied science and technology
(29%), information, computer and communication technology (23%) and
engineering sciences (22%).
Much of the funding for R&D in the private sector came from internal
resources (83%), while the government research institute’s (65%) and
institutes of higher learning (71%) relied more on public funds.
Export of high technology goods as a percentage of total exports of
manufactured goods stood at 60% in 1998. The corresponding figure for
imports is 50%. About 70% of Malaysia’s export of high technology goods
falls in the category of radio, TV, and communication equipment. The
surplus in the balance of trade in high technology goods continues to
increase. Malaysia continues to experience a trade surplus in high-
medium technology goods.
Policies and Incentives:
Malaysia has put in place a plethora of policies and institutions to
encourage S&T development in Malaysia. They range from general tax
incentives to more specific financial incentives targeted at key industries
such as IT and multimedia. Specialized statutory institutions have also
been setup as catalyst for technological innovation in industries that are
considered to be vital for long-term growth and competitiveness of
Malaysia. They include the Malaysian Institute of Microelectronic systems
the Multimedia Super Corridor (MSC) and Malaysian Technology

Development Corporation amongst others. These incentives encourage
not only S&T development but their economic spillover as well.

ENVIRONMENTAL:
Weather and climate:
Malaysia weather benefits from a tropical climate with high temperatures
and high humidty throughout the year. Daytime temperatures rise above
30°C (86°F) year-round and night-time temperatures rarely drop below
20°C (68°F).
Geography and climate:
Malaysia is situated in central South-East Asia, bordering Thailand in the
north, with Singapore to the south and Indonesia to the south and west.
It is composed of Peninsular Malaysia and the states of Sabah and
Sarawak on the north coast of the island of Borneo, 650 to 950km (404 to
600 miles) across the South China Sea.
Peninsular Malaysia is an area of forested mountain ranges running north-
south, on either side of which are low-lying coastal plains. The coastline
extends some 1,900km (1,200 miles).
The west coast consists of mangrove swamps and mudflats which
separate into bays and inlets.
In the west, the plains have been cleared and cultivated, while the
unsheltered east coast consists of tranquil beaches backed by dense
jungle. The major islands are Langkawi, Penang and Pangkor off the west
coast, Tioman, Redang, Kapas, Perhentian and Rawa off the east coast.
Natural disasters in Malaysia:
Earthquake in Malaysia:
 1976 Sabah earthquake
 2015 Sabah earthquake
Floods in Malaysia:
1971 Kuala Lumpur floods, 2006–07 Southeast Asian floods 2010 floods
in Thailand and north Malaysia, 2013 Cameron Highlands mud floods,
2014 Cameron Highlands mud floods, 2014–15 Malaysia floods, 2014–15
floods in Southeast Asia and South Asia, 2015 East Malaysian floods,
2016 Malaysian floods Early, 2014 Sabah floods.

Landslides in Malaysia:
Bukit Antarabangsa, 2008 Bukit Antarabangsa landslide, 2011 Hulu
Langat landslide, 2006 Kampung Pasir landslide, Pantai Remis landslide,
2002 Taman Hillview landslide.
Tax and the Regulatory Environment:
Green Building Index (GBI):
A green rating tool developed for Malaysian buildings, with tax incentives
applicable to certified buildings
Carbon and tax:
Tax implications connected with its acquisition, holding, disposal and
utilization
Environmental incentives:
A series of tax incentives has been introduced to encourage a low-carbon
economy.
Malaysia’s Green Product
Malaysia is one of the earliest countries in the world that have taken a
serious consideration regarding the environment by enacting the
Environment Quality Act way back in 1974. Besides enacting acts about
environmental protection, the government has also formed the Ministry of
Energy, Green Technology and Water, recently in order to cater the rising
need and importance of green technology towards sustainable
advancement. The ministry has enacted the National Green Technology
Policy right after the formation of the ministry (Malaysia Green Forum,
2010)

Legal:
The Malaysian legal environment is a mixed legal system of English
common law (Malaysia is a member of the Commonwealth of Nations, one
of 53 independent countries which are formerly British colonies), Islamic
law and customary law. The Supreme Head of the Federation may request
judicial review of legislative acts through the Malaysian Supreme Court.
The Supreme Head of the Federation is the King of Malaysia, the Yang di-
Pertuan Agong. He appoints the Prime Minister, who heads the legislative
branch.
The British law element can be seen as an advantage to firms investing in
the country as the law will be familiar to them.
However, although the legal basis of the system is British, many of the
punishment for those who break the law are far harsher the death penalty
and flogging are still widely used.
Therefore investing in a foreign country need to be familiar with the laws
of Malaysia and confident that they will be applied fairly.
Malaysia’s legal system is largely based on the English common law
system with some areas of the law having been codified, and with many
laws being similar to those found within the Commonwealth. Malaysia has
a total of 13 states and three Federal Territories and its land mass is
divided into East Malaysia and Peninsular Malaysia.
Although the state legislatures have the power to enact specific legislation
for their states as provided for in the federal constitution and the state
constitutions, if there is a conflict between the state law and the federal
law, federal law prevails. Business-related laws are largely the same in
Peninsular Malaysia and East Malaysia.
In recent years, the Competition Act 2010, the Personal Data Protection
Act 2010, the Price Control and Anti-Profiteering Act 2011, the
Construction Industry Payment and Adjudication Act 2012, the Mediation
Act 2012, the Minimum Retirement Age Act 2012, the Minimum Wages
Order 2012 and the amendments to the Capital Market and Services Act
2007, the Arbitration Act 2005 and the Legal Profession Act 1976 have
been passed and have had an impact on the conduct of business in
Malaysia.

The lack of a legal definition of a “social enterprise” is one issue that has
been a persistent source of confusion. Often falsely perceived as charities,
social enterprises are, in fact, profit-making businesses, but with a strong
social and environmental purpose.
Malaysia ranked 18th in the World Bank's 2016 Doing Business rankings,
falling one place from 17th in the year prior. This puts Malaysia as the
second easiest country to do business among the ASEAN nations, behind
only Singapore. The rankings recognized a number of reforms enacted in
2015 which made doing business easier. This included making paying
taxes easier and less costly for companies by making electronic filing
mandatory and reducing the property tax rate. Nevertheless, at the same
time, Malaysia also increased the capital gains tax.

SWOT ANALYSIS OF MALAYSIA FOR DOING
BUSINESS
Malaysia is a multi-ethnic, multi-cultural and multi-lingual society. It is a
relatively open, state-oriented and newly industrialized market economy.
Although the economy has traditionally been commodity based, services
have gradually become the single largest component of its economic
activity.
Malaysia today is one of the world’s top locations for offshore
manufacturing and service based operations as encouraged by the
government’s pro-business environment. Over 5,000 multinational
corporations from more than 50 countries have invested in Malaysia and
continued to show their support and confidence in the country’s potential
as an ideal investment location through their numerous expansions and
diversifications over the years, particularly in high technology and
knowledge-based projects.
Strength:
Malaysia is a country on the continuous going on. Often dubbed the lucky
country because of its wealth of mineral resources and fertile soils
Malaysia did not rest on its laurels but took decisive steps to progress
from an economy dependent on agriculture, primary commodities and
electronics goods in the sixties to a manufacturing-based, export-driven
economy spurred on by high technology as well as new innovative
technologies and innovative ideas develop, knowledge-based and capital-
intensive industries. The structural transformations of Malaysia’s economy
develop from last 35 years surprise.
Their main motto is continuous development and change. Malaysia
Government also takes seriously initiative to being strongly helpful for
public sector as well as private sector business. Malaysia government
allowed 100% equity holding in project markets. And also allowed 100%
foreign direct investment in service sector.
Malaysia's company tax rate is attractive at 29% and is applicable to both
internal and external companies. Malaysia also offers a exceed of tax
incentives for manufacturing projects under the Promotion of Investments
Act 1987 and the Income Tax Act 1967.
The main incentives are the Pioneer Status, Investment Tax Allowance,
Reinvestment Allowance, and Incentives for High Technology Industries,
purchasing and selling equities and Incentives for Strategic Projects and
Incentives for the Setting-up of International/ Regional Service-based
Operations.

Weakness:
Malaysia needs to lock itself in to great Asian player’s china, India, US
and Indonesia.
Service sector growth can leverage Asia-pacific momentum while also
keeping employment and money at home.
Malaysia needs to expansion its strategic South China Sea location and
positions itself as service hub for emerging Asian middle classed- the so
called air Asia game plans.
Malaysia can drive its growth and features by providing services to only
Indonesians.
Opportunity:
Malaysia is the quiet economic player in the ASEAN region. While the
country is admittedly overshadowed by Singapore’s economic strength,
Indonesia’s size, and Thailand’s tourism industry, Malaysia is still uniquely
positioned to act as a future powerhouse within the region.
A major advantage of setting up a business in Kuala Lumpur is its
strategic location. Malaysia is an hour away (by plane) from the over
7,000 multinational companies that operate in Singapore. Malaysia has
lower cost-of-living with at least 40% of savings to that in Singapore.
According to the 2011 World Economic Forum, Malaysia ranks as the
second best in infrastructure among its ASEAN neighbors.
Globally, Malaysia is ranked in the lower third of countries in terms of
perceived government corruption. While corruption exists, the
requirement of administering bribes to facilitate business is highly unlikely
for most startup businesses. Based on Transparency International,
Malaysia ranks 53 among 175 countries.
Threat:
Malaysia’s economy is highly dependent on foreign trade, which makes it
vulnerable as it can be greatly affected by economic performance in its
trading partners, especially that of the United States, a key trading
partner and key destination for Malaysia exports. Also, though Malaysia
has been politically stable over time, the large wealth gap between

ethnicities and religious differences may pose a threat to economic
development especially in light of political instability in nearby Thailand.
Conclusion:
As taking consideration of PESTEL and SWOT analysis I personally choose
Malaysia for my Rubber production as the country is 3rd position in rubber
production and exporting country in the globe. So with good ranking in
ease of doing business with tax and government subsidies it is the
favorable country as compared to other countries as the country is
growing it will be great opportunity to set up rubber plant in Malaysia.

1) https://www.tut.fi/ms/muo/vert/8_processing/2.2.htm
2) http://www.polymer-search.com/rubber.html
3) InternationalRubber StudyGroup (IRSG)
4) www.statistics.gov.my
5) Internet World Stats 2016
6) Source:BusinessMonitor International2016
7) http://www.worldtravelguide.net/malaysia/weather-climate-geography

Rubber

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