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Oil and gas sectors help drive demand in Malaysian welding equipment and consumables markets
Demand for welding equipment in Malaysia is set to expand as foreign investment boosts the general level of industrial infrastructure and manufacturing activity in the country.
In 2005, the Malaysian Government eased rules to allow foreign investors 100percent ownership of newly established manufacturing firms, thus putting Malaysia on par with other countries vying for foreign capital.
Frost & Sullivan finds that Malaysian Markets for Welding Equipment and Consumables earned revenues of US$71.6million in 2005 and estimates this to reach US$108.3million in 2012.
“The spill over effects from other sectors benefiting from an increase in investment are likely to boost the demand for welding equipment and consumables,” notes Frost & Sullivan Research Analyst Titus Hocevar.
“The growth caused by rising foreign investment is,” he says, “also likely to encourage developments in welding technology as foreign companies are expected to have higher requirements for welding equipment.”
The upstream oil and gas sector will be the prime beneficiary of the foreign ownership policy, with exploration and production activities expected to take centre stage in the next few years. Investment is likely to accelerate if the price of crude oil remains close to its all-time peak.
Lack of technological expertise has led to an underdeveloped domestic welding equipment industry in Malaysia, due the lack of resources for research and development, emphasising price competition.
“Employees and staff are not given direct and proper training on handling welding equipment, as appropriate welding standards have yet to be established in Malaysia,” says Mr Hocevar. “Production engineers are also unaware of the best ways to improve welding productivity.
“This leads to companies buying relatively standard, but low-technology solutions.”
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