The chemical and petrochemical industry registered better overall performance from January to May this year compared to the same period in 2009, said International Trade and Industry (MITI) Minister Datuk Seri Mustapa Mohamed.
“For example, the production index of the chemicals and chemical products expanded by 23% to 117.5 compared with 95.5,” he said at a dialogue with chemical and petrochemical industry players yesterday.
The increase in supply has been met by an equal upsurge of demand. Sales value over this period recorded an increase of 25.2% to RM67.7 billion from RM54.1 billion. Exports of chemicals, chemical products and petroleum products also saw a rise of 37.8% and 58.2% respectively.
This year’s level of growth was above the industry average and would expand steadily in 2011, he said.
“Last year, the industry was hit quite badly by the worldwide recession. This year, it is recovering. Next year, the industry expects to see steady growth.”
The contribution of the oil and gas (O&G) industry to GDP is expected to increase by 20% over the next five years to reach RM81.9 billion in 2015.
Mustapa said it was crucial for the chemical industry to leverage on global and regional advances, and learn from past experiences to find the right solutions to ensure future growth.
“This is an opportunity for the chemical and petrochemical industry to move up the value chain by using high technology to produce high value-added products, and reinventing into knowledge-based and skills-intensive industries which incorporate activities such as design and development, and research and development,” he said.
Malaysia has three integrated petrochemical zones — in Kertih, Terengganu; Gebeng, Pahang; and Pasir Gudang-Tanjung Langsat, Johor and a production site in Bintulu, Sarawak.
The O&G industry contributed a total of RM68.3 billion or 13.1% of GDP in 2009, of which upstream activities including petroleum and gas represented RM39.5 billion or 7.6% of GDP while downstream activities including petrochemicals contributed RM28.8 billion or 5.5% of GDP.
This article appeared in The Edge Financial Daily, July 15, 2010.
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