APRIL – JUNE 2008
QUARTERLY
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Malaysian Tin Products
MANAGEMENT COMMITTEE
FOR YEAR 2007/2008
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PRESIDENT MR. MAMORU KAWASAKI(ALTERNATE – MR. LOH YOON SOON) SELAYANG SOLDER SDN BHD
VICE-PRESIDENT MR. MAKOTO HARA (ALTERNATE – MR. KONG KEAN BENG) NIHON SUPERIOR (M) SDN BHD
HON. SECRETARY MR. C.S. LIM METAL RECLAMATION (IND) SDN BHD
TREASURER MR. JASON LEE HENKEL (MALAYSIA) SDN BHD |
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COMMITTEE MEMBERS MR. CHEN TIEN YUE ROYAL SELANGOR INTERNATIONAL SDN BHD EN. AB. PATAH MOHD PERUSAHAAN SADUR TIMAH MALAYSIA (PERSTIMA) BHD MR. KOJI TSUBONO SENJU (M) SDN BHD |
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SECRETARIAT ADDRESS The Malaysian Tin Products Manufacturers’ Association (MTPMA) 8th Floor, West Block Wisma Selangor Dredging 142-C, Jalan Ampang 50450 KUALA LUMPUR. |
EDITORIAL SUB-COMMITTEEMR. MAMORU KAWASAKI MR. LOH YOON SOON MR. MAKOTO HARA MR. C.S. LIM
MR.
JASON LEE MR. CHEN TIEN YUE TN. HAJI MUHAMAD NOR MUHAMAD EN. FAIZUL AZRI AZIZAN
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Dear Members,
At the Association’s 18th Annual General Meeting held on 23rd June 2008, the incumbent Management Committee was re-elected to a further one year term of ofiice. I was also duly re-elected as President of the Association for the ensuing year. On behalf of the Management Committee, may I convey our deepest appreciation and sincere gratitute to all members for your continuing faith in us to lead the Association into the new term.
For those members who unfortunately were unable to attend our Association’s recent AGM, a reprint of the Presidential Address that I delivered at that meeting is published on page 14 of this Newsletter.
The year 2007 had been a most challenging one indeed, not only for me as your President but also every member of the Association. It was a period when our tin-based manufacturing industry suffered tremendously as a result of the joint impact of a steep increase in raw material costs and the slowing global demand for our manufactured products. Fortunately, I have not heard of any of our member companies having to wind-up. Nonetheless, we do have to continue to brace ourselves for more uncertain and tough times ahead as there are no apparent signs that the situation will improve soon in the light of the continuing weak performance in the global economy this year.
In concluding this brief remarks, may I restate the fact that the Association welcomes your contributions, suggestions and inputs on matters, issues or problems that you may have encountered that can be shared with others for our mutual benefit, understanding and resolution. So, please come forward so that we can share and share alike, and perhaps help resolve them in the best way we can.
With kind regards.
Mamoru Kawasaki
President
Electrical & Electronics Industry News
Global Chip Sales Up 1.5% in February
Global sales of semiconductors rose just 1.5% to US$20.44bil in February from US$20.14 a year ago, according to the Semiconductor Industry Association (SIA). The US-based association said sales fell by 4.9% from January’s US21.48bil. The sequential decline in February sales was in line with normal seasonal patterns for the industry.
SIA president George Scalise said the continued price attrition in dynamic random access memory (DRAMs) masked underlying strength in global chip sales in February. “Excluding memory products, worldwide semiconductor sales grew by nearly 10% year-on-year. DRAM revenues declined by more than 40% year-on-year despite a 43% increase in unit shipments,” he said in a statement posted on its website on Monday. The SIA report said average selling prices (ASPs) for DRAMs fell by nearly 60% year-on-year. Total unit shipments for all semiconductor products increased by 11.6% year-on-year, indicating strength in the end markets that drive demand for microchips.
Despite the slowing US economy, Scalise said the other markets continued to show robust demand growth for electronic products, driving semiconductor sales. “The Asia-Pacific region, which includes China, has overtaken the US as the largest market for PCs,” he added. He said the rest-of-the-world, which includes Eastern Europe, Africa and South America, equalled the number of units sold in the US in 2007 and was poised to surpass the US market in PC unit sales this year. As for handsets, the growth in international markets was even more dramatic, especially in the Asia-Pacific.
The JP Morgan report forecast unit shipments of handsets in Asia-Pacific would reach almost 540 million units in 2008, which was over three times more than the 161.6 million units they expected would be sold in the US. Scalise said high energy prices and turmoil in the US housing market reduced the American consumers’ discretionary spending. “While any decline in US consumer spending has an effect on offshore electronics manufacturers, the rapid growth of sales of consumer electronics in other markets is continuing to create opportunities for semiconductor manufacturers,” he said.
(Source: The Star, 3 April 2008)
Downward Trend in Chips demand
Manufacturers of semiconductor equipment in North America posted US$1.07bil in orders and a book-to-bill ratio of 0.81 in April, according to Semiconductor Equipment Manufacturing Industry (SEMI), a global industry association serving the manufacturing supply chains for the microelectronic, display and photovoltaic industries. The book-to-bill ratio, a benchmark used as a measure of the industry’s heath, is the lowest recorded since November last year. Analysts expect the ratio decline to continue in the semiconductor industry due to softer demand this year.
In a press statement, SEMI president and chief executive officer Stanley T. Myers said: “Relatively flat bookings and billings for North American semiconductor equipment reflect the continued conservative mood of the industry. A number of fabrication projects have been put on hold or delayed until 2009, and the current 2008 equipment data reflect this trend.”
On the local front, Malaysia’s electrical & electronics exports last year totalled RM266.38bil, down 5.2% from RM281.02bil in 2006. Aseambankers head of research Vincent Khoo said the downward trend in exports was expected to continue due to the slowdown in organic growth of chip sales in the Organisation for Economic Cooperation and Development countries. M&A Securities head of research Wee Kim Hong concurred with Khoo, saying that the decline would continue further for the local industries. “The global slowdown would impact local semiconductor manufacturers,” he said.
An analyst with another local brokerage opined that local manufacturers would not be instantly impacted by the downward trend in the US. “Companies like Unisem (M) Bhd and Malaysian Pacific Industries Bhd produce downstream products, which are in demand by emerging economies like China and India, unlike upstream products like semiconductor equipment,” he said.
(Source: The Star, 22 May 2008)
Gold Mine of Metals
Thinking of throwing out your old cell phone? Think again. Maybe you should mine it first for gold, silver, copper and a host of other metals embedded in the electronics – many of which are enjoying near-record prices. It’s called “urban mining”, scavenging through the scrap metal in old electronic products in search of such gems as iridium and gold, and it is a growth industry around the world as metal prices skyrocket.
The materials recovered are reused in new electronics parts and the gold and other precious metals are melted down and sold as ingots to jewellers and investors as well as back to manufacturers who use gold in the circuit boards of mobile phones because gold conducts electricity even better than copper. “It can be precious or minor metals, we want to recycle whatever we can,” said Tadahiko Sekigawa, president of Eco-System Recycling in Japan.
A tonne of ore from a gold mine produces just 5g of gold on average, whereas a tonne of discarded mobile phones can yield 150g or more, according to a study by Yokohama Metal, another recycling firm. The same volume of discarded mobile phones also contains around 100kg of copper and 3kg of silver, among other metals. Recycling has gained in importance as metals prices hit record highs. Gold is trading at around US$890 an ounce, after hitting a historic high of US$1,030.80 in March. Copper and tin are also around record highs and silver prices are well above long-term averages.
Recycling Metals
Recycling electronics makes sense for Japan which has few natural resources to feed its billion dollar electronics industry but does have tens of millions of old cell phones and other obsolete consumer electronic gadgets thrown away every year. “To some it’s just a mountain of garbage, but for others it’s a gold mine,” said Nozomu Yamanaka, manager of the Eco-System recycling plant where mounds of discarded cell phones and other electronics gadgets are taken apart for their metal value.
At the factory in Honjo, 80km south-west of Tokyo, 34-year-old Susumu Arai harvests some of that bounty. A ribbon of molten gold flows into a mould where it sizzles and spits fire for a few minutes before solidifying into a dull yellow slab, on its way to becoming a 3kg gold bar, worth around US$90,000 at current prices. Wearing plastic goggles to protect his eyes while he works, Arai said he was awestruck when he started his job two years ago. “Now I find it fun being able to recover not just gold, but all sorts of metals,” he said.
The scrap electronics and other industrial waste is first sorted and dismantled by hand. It is then immersed in chemicals to dissolve unwanted materials and the remaining metal is refined. Eco-System, established 20 years ago near Tokyo, typically produces about 200 to 300kg of gold bars a month with a 99.99% purity, worth about US$5.9mil to US$8.8mil. That’s about the same output as a small gold mine. Eco-System also recovers metals from old memory chips, cables and even black ink which contain silver and palladium.
Recycling Cell Phones
But despite growing interest in the environment and recycling, the industry struggles to get enough old mobile phones to feed its recycling plants. Japan’s 128 million population uses their cell phones for an average of two years and eight months. That’s a lot of cell phone phones discarded every year, yet only 10 to 20% are recycled as people often opt to store them in their cupboards due to concerns about the personal data on their phones, said Yoshinori Yajima, a director at Japan’s Ministry of Economy, Trade and Industry.
Just 558 tonnes of old phones were collected for recycling in the year to March 2007, down a third from three years earlier, industry figures show. As metals prices rise, the Japanese industry faces growing competition for scrap, which is pushing up prices. “We are seeing more competition from Chinese firms, and naturally the goods go where the money is,” Dowa’s Takashi Morise said.
In response, Japanese firms are importing used circuit boards from Singapore and Indonesia, as they also contain valuable minor metals that Japan is particularly eager to recover. These minor metals such as indium, a vital component in the production of flat panel televisions and computer screens, antimony and bismuth are indispensable for producing many high-tech products. However, they are often not easy to acquire as China has tightened export controls, making it harder for Japanese manufacturers to buy these metals. That’s where the “urban miners” step in.
(Source: The Star, 17 June 2008)
Economic News
Govt to Keep 3.1pc Fiscal Deficit Target
The government will stick to its fiscal deficit target of 3.1 per cent of gross domestic product (GDP) this year, Second Finance Minister Tan Sri Nor Mohamed Yakcop said. “At this point in time, there’s no change in our target,” he told reporters after launching Agrobank, the corporatised offshoot of Bank Pertanian Malaysia. He acknowledged, however, that it would be more difficult to achieve the target given the tougher global outlook. “Given the new global reality, the management of fiscal issues has become more challenging … but we will be able to resolve it,” he said.
Last year, the fiscal deficit was 3.2 per cent of the GDP. Nor Mohamed believes that Malaysia’s economic growth this year, estimated at between five and six per cent, will not be adversely impacted by a recession in the US. “To me, the global issue that impacts us more than the financial crisis in the US is the crisis of increasing food prices and commodity prices,” he said. This will continue to pose a challenge to all countries over the next few years, he added.
The problem is not cyclical, but structural, brought on by the huge demand from China following an increase in its middle-class population. It is thus important for Malaysia to increase its food production to avoid being dependent on imports. “This is because, in the long run, inflation related to food products will remain at certain periods,” Nor Mohamed said. He urged Agrobank, which gives out loans for agricultural development, to play a bigger role in helping ensure that the country produces food at better and more cost-effective rates.
The bank, which has 173 branches nationwide, approved 299,000 loans last year compared with 173,000 in 2004. The amount approved last year was RM15.3 billion. Agrobank, which has a paid-up capital of RM1 billion, plans to strengthen its domestic operations first before expanding abroad. “Eventually, we will either go for a merger and acquisition or organic growth. It could be either way; depending on the opportunity and cost-effectiveness,” Agrobank chairman Datuk Mohamed Salleh Bajuri said when asked about expansion plans.
(Source: New Straits Times, 16 April 2008)
Subsidies will Keep Growth Momentum
Existing subsidies will push up Malaysia’s budget deficit, but will keep the country’s growth momentum in place at a challenging time in the global economy. Malaysian Institute of Economic Research (MIER) executive director Prof Datuk Dr Mohd Ariff Abdul Kareem said subsidies on petrol at RM35bil per annum and foodstuff which were also estimated to be in the billions, had maintained economic growth momentum and mitigated inflation. “As an example, the price of rice has increased 75% over the past three years but we have not felt it here because the price is controlled,” he said after MIER’s 13th Corporate Economic Briefing yesterday.
Mohd Ariff is in favour of the budget deficit to grow to above 3.1% of gross domestic product (GDP) targeted for this year. While a high budget deficit could be a concern, the figure would be much lower after taking into account the contribution of many off-budget agencies, such as Petronas, he said. He believed that Malaysia would be able to manage a deficit of up to 5% but did not expect to go that high. On the GDP outlook, MIER estimates 5.6% growth for the first half and 5.2% for the second half of the year. Lower growth was seen for the second half on the expectation of a US recession in that period that would weaken regional growth. In absence of a US recession however, a 5.7% GDP full-year growth for Malaysia would be achievable, he said.
On global crude oil prices hitting another all-time high of above US$114.08 a barrel on Tuesday, Mohd Ariff said the impact was mixed for the world’s key economy, the US. The country benefited from its oil companies bringing back earnings from overseas operations. On top of that the US also had its own domestic crude oil production, he said. “But the net effect is expected to be negative, pushing up inflation and (contributing to) a recession,” he said. On the strengthening ringgit in the current weakening global economic environment, Mohd Ariff saw no loss in export competitiveness, “as the world’s other currencies had also increased in value.”
MIER forecasts the ringgit breaching the key three-level to the dollar but would remain above 2.90 by year-end. In the longer term, the research agency expects the ringgit to settle at 2.80 over two or more years. Malaysia was the most resilient economy in the region “which is very flattering,” he said, but cautioned against over investment in the commodity-related sector. “We should be careful how we respond to these price signals. Increasing production too much could generate a large overhang.” He said the high prices of many commodities were driven by two main factors – a shift in investment into commodities and a weakening US dollar. “These prices cannot be sustained and, once the US dollar stabilizes, will come down.”
(Source: The Star, 17 April 2008)
Time to Buy?
The economic decoupling between the US and the rest of the world is becoming all the more glaring. That the US is slowing, but the rest of the world is growing is becoming increasingly apparent if one were to pay attention to the release of economic data. Nonetheless, caution still drapes its somber veil and following the herd mentality, the world continues to focus on the downside. With that, it’s been a rocky road for financial markets with scorched investors sitting pretty on their dwindling cash holdings and the occasional write off by a large institution providing the almost mandatory amount of cardiac arrest for the market.
But are things really all that bad? China, despite the frightful winter weather and the global credit turmoil, posted a strong economic growth of 10.6% for the first quarter of 2008. This lends credence to the comforting notion that China will make up for the slack of the slowing US economy. That being the case, has the Malaysian market reached a bottom? Some investing experts are beginning to believe so.
Mid-week, Citigroup’s equity research unit shot out a note that the market is indeed bottoming out and therefore suggests, one start buying. Setting out a year-end index target of 1,449 points, its research head Choon Wai Kee, says a lot of bad news (such as the global equities meltdown and the general election results) is already in the price. “In an illiquid market like Malaysia, we urge investors to start positioning … as the index can’t fall much more,” the report added. “Some local institutions are seeing their cash levels rising to over 20%. We see buying activities picking up imminently. The upcoming 2009 budget could stir buying interest as investors expect an expansionary budget to shore consumer confidence,” says Choong, adding that valuations wise, Malaysia is also trading at discounts relative to the region and its historical valuation benchmarks.
Crisis Near End?
In a Bloomberg Television interview Thursday, Templeton’s emerging market guru mark Mobius says that the global credit-market crisis that has caused billions of dollars in losses at banks and brokerages worldwide is near the end. Mobius says he has been buying shares of banks including Bank of China Ltd and Industrial Commercial Bank of China Ltd because their valuations have fallen. “Most of the bad news is already in the market … Malaysian equities are also becoming more and more attractive while the dollar is not going to revive anytime soon,” he says during the interview.
Mobius says energy stocks are his biggest investment because of rising oil prices. “We like the general developments in Malaysia and the political debate that, hopefully, will result in a more vibrant economy,” says Mobius, in an email query to BizWeek. Meanwhile, data released worldwide is relatively encouraging. In the US, the latest March ISM (Institute for Supply Management) rose to 48.6 compared with February’s reading of 48.3. This indicates that the manufacturing sector is still contracting but at a very gradual pace. Capital Dynamics Asset Management managing director Tan Teng Boo says that for the overall economy to contract, the ISM index has to plunge to the 41- 42 level, which is not the case.
“So even as the global financial turbulence continued into the month of March, the world economy led by China, has continued expanding and benefiting the US economy. This trend is expected to persist throughout 2008,” says Tan. “Exports from Korea jumped in March. Business sentiment in France and Germany in March had unexpectedly improved. West Germany’s unemployment continues to fall, even as late as March … Even the US, the mother of all sub primes, was able to generate decently reassuring economic numbers for March as evidenced by ISM index,” he says. “The biggest market is the global economy. The biggest market is still consuming and expanding. This is why exports from almost every country are growing. If the global economy is not expanding strongly, how can every country be reporting good exporting numbers even as late as February and March?” asks Tan.
More an Internal Issue
CMS Asset Management Sdn Bhd chief investment officer Scott Lim says Malaysia is now facing its own set of internal problems due to the uncertain political scenario. “I don’t see any breakthrough until a political decision is made. What I would watch out would be whether the regional markets get re-rated. Foreigners may consider Malaysia part of the region, and hence, we get pulled up along with the region.”
Lim says the aggressive monetary policy announced by the Federal Reserve in the US will take at least 6 months before effects start showing. “I think the big money will be watching how the second quarter unfolds. If there are expectations that the economy has bottomed, then the market will run ahead of expectations. This will be an indication of a better third quarter. If however the market doesn’t bottom in the second quarter, we may see the true bottom in the second half,” says Lim.
Still adopting a cautious outlook is Alliance Investment Bank director and head of equity capital markets Sherilyn Foong. However, she says, strategy wise, long-term investors may want to accumulate quality high-yielding stocks such as the blue chips at reasonably lower entry prices. She adds that Malaysia’s unique comparative advantages include the oil & gas and plantation sectors, which can be viewed as both defensive yet blessed with growth attributes. She too agrees that Bursa Malaysia’s present valuation levels are comparable to its regional peers. “This type of volatile market that is characterised by shrinking volumes and heightened risk is not for the faint-heated, short-term traders nor momentum players. In a bear market, stock-picking is key to out perform,” she says.
In Malaysia, Lim says it is more important to look at companies that are tied to global trends. As the global economy is more integrated than ever, whatever happens outside of Malaysia will eventually unfold domestically. On this note, Lim says many construction stocks have bombed out. “Companies like IJM Corp Bhd and Zelan Bhd have half their order books coming from the overseas market and are extremely well managed. I wouldn’t look at Malaysian companies that rely only on the domestic market. Political risks have multiplied the risk of investing in these companies. Companies have to either play offensive or die as a defensive player,” says Lim.
Choong’s strategy is to add beta and be less defensive. The high beta stocks would include SP Setia Bhd, KLCC Property Bhd and UEM World Bhd. Citigroup further reiterates its bullish view on SapuraCrest Bhd and TA Enterprise Bhd. Schroders Head of Retail Sales Josephine Lip says that despite the challenging market environment, there can still be pockets of opportunities out there for eagle-eyed investors. “An asset class that tends to do well in periods of rising inflation and uncertainty is commodities. Many commodities performed strongly when the sub-prime mortgage market woes were at their peak last year. As the period of heightened volatility is likely to extend over the near term, this strengthens the positive outlook on commodities,” she says.
(Source: The Star, 19 April 2008)
Ringgit Hits New 10-year High Against US Dollar
The ringgit rose to a fresh 10-year high yesterday on the back of strong dollar selling and a stronger euro. It rose to 3.1310/1340 against the greenback in early trading against Tuesday’s close at 3.1370/1400. The ringgit closed at 3.1305/1335 against the US dollar yesterday, recording a 0.3 per cent rise, which is highest since October 1997. It was the second-best performer among the 10 most-traded Asian currencies outside Japan.
Currency strategies felt that the appreciation showed that the central bank was allowing the currency to go stronger to ease inflationary pressures. Dealers also said that the strong dollar selling was also due to another interest rate cut by the US Federal Reserve end of this month. The ringgit also traded higher against other major currencies. The Singapore dollar was another lead gainer yesterday, also due to the stronger euro, rising to a high of 1.3472 versus the dollar.
DBS Bank said that against the underlying weak US dollar, the ringgit stood as one of the favoured currencies along with the Singapore dollar, yuan and Taiwan dollar. It said the Singapore dollar, yuan and Taiwan dollar have been performing well because their central banks favour employing the exchange rates to address supply-side inflation pressures. “The Singapore dollar is also considered an attractive proxy for investors seeking exposure to a weak US dollar against the Asian currencies. The ringgit also fared well as an alternative proxy given its close correlation with the Singapore dollar, but minus the negative carry against the greenback.”
(Source: New Straits Times, 24 April 2008)
UBS Sees Modest Slowdown for M’sia This Year
UBS Investment Bank sees a modest slowdown for Malaysia this year and a slightly lower gross domestic product growth of 4.8% compared with last year. Managing director, global economies, Paul Donovan said it was unlikely that Malaysia would be able to match last year’s growth rate, which was “extremely good”. “We are expecting Malaysia’s export growth to be flat this year. I’m not looking at a disaster,” he told a press briefing yesterday.
However, he expects Government spending to rise “a little above 8% this year” and consumer spending to provide support for the economy. London-based Donovan said while there is a correlation between the US and Asian economic cycles, there could be a “partial decoupling whereby domestic demand would mitigate the loss of exports”. “The export sector is tied to what happens in the rest of the world. However, for some countries including Malaysia, domestic demand will limit the damage in the export sector,” he added.
Donovan expects the US to cut interest rates to 1.5% in June and Europe to lower rates by one percentage point in March next year. He said it would be difficult to have 70% of the world economy operating at below trend growth and yet see rising export growth in Asia this year. While there was increasing evidence that the US and Euro economies are slowing, he sees volatile times ahead for global economies, and a “more normal global environment by 2010”. “We believe that the financial system will stabilise and financial markets will begin to operate normally. I think there is every prospect of this normalisation happening relatively quickly,” he added.
On oil prices, Donovan said it was unlikely to push inflation higher than it was last year, unless oil is traded above US$185 per barrel. On the subprime woes, he said capital injection into Fannie Mae and Freddie Mac and new legislations were expected to provide stability in the subprime market.
(Source: The Star, 24 April 2008)
Intrade Malaysia 2008 may Rake in RM3.2b Worth of Sales
International Trade Malaysia 2008 Exhibition (Intrade Malaysia 2008), to be held this November, is expected to generate more than RM3.2 billion worth of on-the-spot and negotiated sales. This is in line with the anticipated increase in the number of exhibitors to 500 from 300 exhibitors at last year’s event, according to Malaysia External Trade Development Corporation (Matrade). Foreign exhibitors are expected to account for 20 per cent of the exhibitors.
Matrade chief executive officer Datuk Noharuddin Nordin said the exhibition has received encouraging response from both local and foreign companies as well as trade promotion agencies. Speaking at a media briefing before the Intrade Malaysia 2008 networking reception in Kuala Lumpur last week, Noharuddin said the good response was due to impressive results reported by exhibitors and companies participating at the business matching sessions with international buyers during the inaugural Intrade Malaysia held in November last year. Last year, Intrade Malaysia 2007 raked in total sales of RM3.38 billion for over 1,300 Malaysian companies. They recorded on-the-spot sales worth RM469.7 million, while sales under negotiation were valued at RM2.91 billion.
The top five buying nations include the United Arab Emirates with deals worth RM1.06 billion, followed by Kazakhstan (RM598.5 million), the UK (RM433.8 million), Australia (RM385.3 million) and Nigeria (RM156.3 million). With its theme, “Optimising Global Opportunities”, Noharuddin said Intrade Malaysia 2008 is aimed at providing a platform not only for Malaysian companies, but also foreign companies to expand their businesses and access new markets. He said as a general international trade fair, Intrade Malaysia offers a platform to exhibit a wide range of products and services from agro-based products, auto parts and accessories to building materials.
(Source: New Straits Times, 28 April 2008)
Bank Negara Keeps Key Rate at 3.5pc
Bank Negara Malaysia has kept the key interest rate unchanged at 3.5 per cent, but expressed concern over inflationary risks. “After evaluating the evidence on the downside risks to growth and the upside risks to inflation, the bank has decided to maintain the current stance of monetary policy,” it said in a statement after its monetary policy committee met yesterday. Economists of research houses had expected no change in Bank Negara’s monetary stance as it was seen to prefer a stronger currency to address inflationary risks.
Bank Negara said that data from the major industrial economies indicate a moderation of economic activity, which was likely to lead to slower global growth in the months ahead. “While the slower external demand will have some moderating impact on the Malaysian economy, growth continues to be supported by an expansion in domestic demand. The strong imports of capital goods, manufacturing investment approvals and foreign direct investment inflows are indicators of sustained investment activity,” it said. Despite the global financial turmoil, domestic credit conditions have remained favourable as demand for financing continues to be supported by ample liquidity in the financial system, it added.
Bank Negara said a major uncertainty at this stage was the extent of moderation in global economic activity and its impact on reducing global price pressures. “The increase in food prices reflects a structural phenomenon requiring measures that ensure the adequacy of supply, create appropriate incentive structures that promote higher food production, and enhance the efficiency of the production and distribution chain. In order to ensure a smooth transition to market prices, adjustments to administer prices need to be gradual,” it said, adding that the forecast of 2.5-3 per cent average inflation this year had built in some administered price adjustments.
(Source: New Straits Times, 30 April 2008)
Commodities Seen Lifting Exports
Commodity-based products are expected to have kept up their support of Malaysia’s export performance in March, cushioning against weakness in the electronics sector. A Business Times poll of economists expects exports to post 10.23 per cent growth year-on-year; imports, 5.58 per cent growth; and trade balance to average RM9.15 billion. The International Trade and Industry Ministry will release the trade data for March today.
DBS Bank economist Irvin Seah does not anticipate significant changes in the figures as commodity exports are expected to remain in the driving seat. “Palm oil and refined petroleum products surged 103.8 per cent and 107.9 per cent respectively in the previous month, and will most likely maintain the robust growth momentum with commodity prices still hovering around record high levels. However, electronics exports are likely to remain lacklustre and, with global demand still in the doldrums, another month of contraction will not be a surprise at all,” Seah said.
Citi’s vice president for economics and market analysis, Kit Wei Zheng, expects electronics exports to fall at an accelerated pace given the intensified headwinds from a US recession and foreign exchange losses arising from ringgit appreciation.
(Source: New Straits Times, 6 May 2008)
Malaysia Posts 4.2pc Productivity Growth
Malaysia posted strong productivity growth of 4.2 per cent last year, placing it in third place in Asia behind China and India. International Trade and Industry Minister Tan Sri Muhyiddin Mohamad Yassin attributed the growth, which is the strongest since 2001, to the vibrant domestic policies as well as productivity initiatives by industries. Last year’s productivity level, at US$12,661, was higher than that for most Asian countries. “Malaysia should strive for higher productivity growth so as to achieve the levels comparable to the more developed economies,” Muhyiddin said at the launch of the Productivity Report 2007 by Malaysia Productivity Corp in Kuala Lumpur yesterday. With the 4.2 per cent growth, productivity of the economy improved to RM48,133.
Productivity growth was seen in the construction (1.5 per cent), transport (5.7 per cent) and manufacturing (2.7 per cent) sectors. Among the industries with relatively higher productivity growth were chemicals (13.4 per cent); iron and steel (13.3 per cent); food and beverages (10.4 per cent); and electrical and electronics (9.4 per cent). The services sector registered five per cent productivity growth, a performance contributed significantly by transport, finance and trade.
The productivity performance of the public sector was a 3.6 per cent increase to RM30,905 last year. Malaysia ranks among the top 10 in terms of efficiency in public administration out of 21 selected Asian and Organisation for Economic Cooperation and Development economies. The Productivity Report has forecast the Malaysian economy to achieve growth of more than 4.3 per cent, which will be driven by the manufacturing (more than three per cent), services (more than 4.3 per cent) and agriculture (more than 3.1 per cent) sectors.
(Source: New Straits Times, 6 May 2008)
Export Growth for March Slips Into Lower Gear
Malaysian exports, which grew at a strong pace in the first two months of the year, have slowed to a disappointing pace in March due to a drop in tech exports. Malaysia’s exports in March 2008 expanded 5.3 per cent, led by palm oil (9.1 per cent), crude petroleum (6.8 per cent), refined petroleum products (5.5 per cent), manufactures of metal (4.4 per cent) and liquefied natural gas (LNG) (5.6 per cent).
The International Trade and Industry Ministry (MITI) said exports rose to RM51.57 billion from a year ago, while imports rose 2.6 per cent to RM43.59 billion with a trade surplus of RM7.98 billion. Total trade in the first quarter was valued at RM276.56 billion, an increase of 8.4 per cent from the first quarter of 2007, while exports increased by 9.8 per cent and imports grew by 6.7 per cent. The data came below market expectations and a Business Times poll which expected exports to post a 10.23 per cent growth and imports to post a 5.58 per cent growth.
Electrical and electronic products valued at RM55.91 billion or 36.9 per cent of total exports, recorded a decrease of 10.2 per cent from the corresponding period of 2007 compared to palm oil (8.1 per cent of total exports) which recorded a 96.2 per cent increase. “The plunge in tech exports in March could signal the start of a more pronounced growth slowdown going into the second quarter of 2008,” remarked Citi’s vice-president for economics and market analysis Kit Wei Zheng.
E&E exports plunged by a staggering 19.6 per cent, the sharpest decline since September 2001. “This comes on the back of similar slowdown or falls in tech exports in Singapore and Taiwan in March.” Singapore’s electronics exports fell 8.5 per cent in March, worsening from a 2.4 per cent decline in February. Kit said the strong appreciation of the ringgit may have also contributed to translation losses on tech exports, much of which are likely invoiced in US dollars.
Commodity exports could keep overall export growth in positive territory for the rest of the year, but a slide in commodity prices is a key risk that cannot be ruled out, he warned. Robert Prior-Wandesforde from HSBC Bank’s Asian Economics Team, also expressed concern about the weakness of the E&E sector, which showed a near 20 per cent year-on-year drop and is around half of merchandise exports. MITI listed Singapore, the US, Japan, China and Thailand as the top five export destinations, accounting for 50.5 per cent of total exports in March.
Exports to the US amounted to RM6.33 billion compared with RM8.1 billion in March 2007. The decline was due mainly to E&E products. Exports of other major manufactured products to the US also declined, while exports of palm oil and refined petroleum products increased. Exports to the EU amounted to RM5.64 billion, compared with RM6.3 billion in March 2007, due mainly declines in exports to the Netherlands, France, Germany and Finland. In March, exports to Australia surged 44.7 per cent from a year ago, Japan 27.6 per cent, Korea 14.6 per cent and India 23.1 per cent.
(Source: New Straits Times, 7 May 2008)
Commodity Sector Mitigates Slowdown in Exports
Malaysia’s exports in March rose 5.3% to RM51.57bil from the same month last year, according to Malaysia External Trade Development Corp (Matrade) statistics released yesterday. However, an RHB Research Institute economist said the figures actually indicated a slowdown in exports. “Year-on-year export growth of 5.3% for March is lower than the growth of 14.5% year-on-year for February, mainly from lower electrical and electronics (E&E) exports. This suggests that the past six months of slowdown in the US has had an impact,” he told StarBiz.
It had been mainly commodity exports which had mitigated the slowdown in exports of E&E manufactured goods. At the same, Malaysia’s exports to European Union (EU) had also slowed down. “This suggests EU is also feeling the impact of a US slowdown,” the economist said. However, on a month-on-month basis, exports had seen a rebound in March, he said, adding that he expected the softening trend to continue into the second quarter but a rebound was likely in the second half-year. “We believe the softening trend will continue for the next few months. Perhaps the market will rebound in the second half of the year as the US government’s aggressive rate cuts in the past few months and recent stimulus packages take effect.”
A RAM Holdings Bhd economist said the figures showed that the commodity sector had supported Malaysian exports well. “We always hear that the external sector would weaken and the domestic sector is expected to take over but I think the external sector is supporting the Malaysian economy well.” He said as E&E exports had weakened, trade figures had been supported by exports of natural resources such as crude palm oil, petroleum and rubber.
Matrade’s preliminary release yesterday said the March figure was the highest export value recorded for the month of March. Major product sectors that contributed to the higher exports were palm oil, crude petroleum, refined petroleum products, metal products and liquefied natural gas. E&E products accounted for RM17.53bil, or 33.6% of total exports, palm oil RM4.69bil or 9.1%, and crude petroleum RM3.5bil or 6.8%.
Matrade data showed exports to the US fell to RM6.33bil from RM8.1bil a year ago, mainly due to a decline in exports of E&E products. “Imports rose 2.6% to RM43.59bil from RM42.46bil a year ago. “The higher imports came mainly from intermediate goods, which rose 1.6%; capital goods by 20%; and motor gasoline, including aviation gas, by 50.5%,” it said.
Based on the imports by end-use, intermediate goods accounted for RM31.39bil or 72% of total imports, capital goods RM5.94bil (13.6%) and consumption goods RM2.46bil (5.7%). “A trade surplus of RM7.98bil was recorded in March, making it the 125th consecutive month of monthly trade surplus since November 1997.” Matrade said total trade in March amounted to RM95.16bil, an increase of 4.1% from a year ago. Total trade in the first quarter of 2008 was valued at RM276.56bil, up 8.4% from the first quarter of 2007. Exports rose by 9.8% to RM151.68bil while imports grew by 6.7% to RM124.88bil, resulting in a trade surplus of RM26.8bil.
(Source: The Star, 7 May 2008)
RAM Sees GDP Expanding at 5% to 6%
RAM Holdings’ earlier forecast of 5.8% growth for Malaysia in 2008 was predicated on low US economic growth, a slight slowdown in the global economy and stronger government spending push in 2008 under the Ninth Malaysia Plan (9MP). However, group chief economist Yeah Kim Leng said, domestic demand may be affected by a possible US economic recession, slower government spending as well as a more cautious investment sentiment in the aftermath of the local general election. “As such, a growth of between 5% and 6% this year appears more realistic,” he said, adding that the forecast was no longer as definite as 5.8%.
Yeah added that a shallow US recession combined with a slight slowdown in the global economy and lower government spending could even tilt Malaysia’s growth to the 4% to 5% range. “On the domestic side, consumers are grappling with higher food prices while the strong investors sentiments last year (due to the surge in foreign and domestic investment project approvals) has been dampened by political uncertainties and announcements of further review and possible postponements of several mega 9MP projects,” he noted.
The Malaysian economy had been expanding at above 5% per annum since 2002 and hit 6.3% last year despite the sharp slowdown of the US economy in the final quarter. “But in the first half of this year, the headwinds from abroad – ranging from a US economy teetering on the brink of a recession, record high and still rising prices of crude oil, primary commodities and in recent months, staple food, bouts of credit crunch, and rising credit spreads in the global financial markets – have taken a toll on the global economy,” he said.
The International Monetary Fund (IMF), in its latest world economic outlook report, revised it 2008 growth projection downwards by 1.1 percentage points to 3.7%. The IMF projects world economic growth at 3.7% for 2008 or 1.2 percentage points lower than the growth achieved in the previous year, while the US economy is expected to slow down to 0.5% in 2008 from 2.2% a year earlier. “The Malaysian economy is highly open whereby total trade is more than two times the size of its Gross Domestic Product. A global slowdown will have a concurrent impact on exports and consequently on imports of intermediate goods used in the production of exported goods,” Yeah said.
He said falling export earnings could translate into lower corporate earnings, reduced business spending and less income increases for employees, eventually dampening domestic spending. “The other transmission channel of a global slowdown is lower investment and foreign direct inflows as firms become more cautious in spending, hiring and capital investment,” said Yeah. He said RAM expected all sectors to contribute positively to growth although the manufacturing sector might see anaemic growth given that the global electronics and electrical sector was likely to be weighed down by lower US demand and a weak dollar.
Yeah added that resource-based industries would continue to do well on the back of high commodity prices and sustained demand of large economies. “Mining and agricultural sectors, which are benefiting from the global commodity boom and high prices, will see continuing investment in exploration and production activities,” he said. Yeah also said the services sector, which grew above trend rate in 2006 (7.2%) and 2007 (9.7%), would likely experience a moderation but should remain relatively healthy with support coming from continuing consumer and tourist spending and steady growth in real estate, financial and professional business services.
Role of Stronger Companies
Yeah said further easing of employment of foreign skilled personnel and their families was especially important in competing for world-class, high quality investment projects. “Malaysian companies in the oil and gas, plantation and other resource-based industries are currently benefiting from high prices amidst strong global demand and tight supply. With accumulated cash reserves, strong earnings and large profit margins to cope with rising cost pressures, these companies should be well protected against various headwinds,” he said.
Yeah said stronger companies must play a crucial part in strengthening the economy. “These companies are more well endowed to undertake green field projects or mergers and acquisitions (M&As) when opportunities arise as weaker companies fail or sell assets at cheap prices when economic conditions become more challenging,” he continued. Yeah said most companies in RAM’s portfolio across the spectrum of industries had a stable outlook.
Preparing for the Future
Yeah said Malaysian companies should re-examine their cost structure and find cheaper supplies arising from exchange rate changes and the strengthening of the ringgit against the dollar. “With slower demand, they could devote more resources to improving the efficiency of internal production and management processes and enhancing market research and product innovation,” he said.
Yeah also said these companies should also re-align their market strategies and focus on countries that were less susceptible to a US economic slowdown such as the oil-rich Middle Eastern countries and large growing markets in China, India, Russia and Brazil. “Companies can also review their respective national and regional industry trends and consider synergistic M&As and other forms of tie-up that will enable them to better compete through improved efficiency and competitiveness.”
(Source: The Star, 12 May 2008)
March Industrial Output Expected to Slow Down
Industrial output in Malaysia is likely to slow again in March on weaker overseas demand for electrical and electronic (E&E) products. A Business Times poll expects the industrial production index to grow at 4.5 per cent year-on-year from 6.3 per cent in February and 7.6 per cent in January. The Statistics Department will release the data today.
US investment bank Citi described the outlook for the tech sector as still bleak with electronics exports plunging 19.6 per cent in March, and this could prompt electronics manufacturers to hold back production. “However, commodity-related production could partially offset the expected slowdown in tech production. Mining production is expected to continue growing healthily on strong external demand for commodities, while growth in electricity production is expected to have remained relatively stable but slowed slightly nonetheless on cyclical effects,” said Citi.
Standard Chartered Bank regional head of economic research Southeast Asia, Tai Hui, said the overall trend of exports for Malaysia remains two-tiered. “The electronic sector is still facing a tough time with weak overseas demand, especially from the US while commodities (palm oil, LNG and other petroleum products) remain the bellwether of strong export growth.”
Looking at the recent trend data from the region, he noted that export growth could slow further as weak demand from the US is gradually spilling over into Europe and Asia. “Hence, we could see export growth easing towards single digit in the second half of 2008, with commodities offering less of an offset if prices stabilise.”
(Source: New Straits Times, 13 May 2008)
April Inflation Seen Up 2.97pc
Malaysia’s inflation rate last month is expected to show 2.97 per cent expansion year-on-year amid high energy prices and rising food inflation in both the global and domestic markets. A Business Times poll of economists is looking at an average growth of 3.04 per cent for this year. The Statistic Department will release the data tomorrow. The government’s efforts to keep prices stable are showing results as Malaysia’s inflation is among the lowest in the region, said Standard Chartered Bank’s regional head of economic research, Tai Hui.
However, global food and energy prices will continue to put upward pressure on headline inflation for much of this year. “Inflation for manufactured products should be contained considering the competition in the region. Hence, food prices and prices for services deserve close monitoring as they are more vulnerable to upside risks in the near term,” Tai said.
Last week, the government announced measures to hold down the price of rice, including securing supply of price-controlled 15 per cent broken rise and setting price caps for two other grades. The measures to sustain the price of rice will cost at least RM725 million in subsidy. US investment bank Citi said that food inflation likely accelerated after a global shortage of the staple and the subsequent increase in its price.
Other food items, such as milk, have also experienced price jumps recently, and are expected to keep food inflation elevated in the near future. “Higher transport inflation will also persist, largely due to the lingering effects of the increase in toll charges along six highways by between 7.7 per cent and 50 per cent and the commencement of toll charges on the Kuala Lumpur-Putrajaya highway in January,” Citi added.
It said inflation risks remained on the upside as the Government had announced that it was reviewing a cut in the diesel subsidy, which could result in a 30 per cent increase in diesel prices. Like all the economists in the poll, DBS Bank’s Irvin Seah said he did not expect any change in the Overnight Policy Rate when Bank Negara Malaysia’s monetary policy committee meets next Monday. “Downside risks to growth and upward inflationary pressure are pretty well balanced in Malaysia,” he said, adding that the ringgit and the existing subsidy programme have kept the lid on inflation.
(Source: New Straits Times, 20 May 2008)
April Exports Soar to Record RM55.7bil
Malaysia’s exports in April surged 20.9% to a record RM55.79bil, far exceeding economists’ consensus expectation of 7.2%, underpinned by the strong turnaround in the electrical and electronics (E&E) segment. The International Trade and Industry Ministry (MITI) said yesterday E&E exports reached RM22.06bil, or 39.5% of total exports, while palm oil accounted for RM4.58bil, or 8.2% of exports. Crude petroleum made up RM3.36bil, or 6% of total exports; refined petroleum products, RM2.76bil or 5%; and liquefied natural gas RM2.49bil, or 4.5%.
CIMB Investment Bank head of economics research Lee Heng Guie said April exports exceeded his conservative forecast of 8% growth while other economists were expecting 7.2%. “There was a strong turnaround in E&E, which rebounded to 12.8% from minus 19.6% in March,” he said. Lee said exports of commodities, including oil and crude palm oil, were major contributors to the growth due to record prices. However, he said it was still too early to ascertain if the E&E sector was out of the woods and maintains a cautious outlook for exports in the second half due to the weak global environment.
MITI said imports in April rose 10% to RM44.32bil from a year ago, with intermediate goods accounting for RM31.85bil, or 71.9%. Capital goods accounted for RM6.28bil, or 14.2% of total imports, and consumption goods RM2.53bil, or 5.7%. The April trade surplus swelled 95.8% to RM11.48bil from RM5.86bil a year ago. It was the 126th consecutive month of trade surplus since November 1997.
(Source: The Star, 4 June 2008)
Can-One Counts on Tin Products
Can-One Bhd sees demand for its tin products growing in tandem with the surge in palm oil export, said executive director and chief operating officer Chee Khay Leong. He said the group had experienced good growth for its cans due to the high demand for palm oil.
Can-One, which is one of the largest manufacturers of tin cans for the local edible oil industry, has about 70% market share. “Most of our customers have been with us for more than 20 years and our major clients for edible oil cans include Felda,” he said after the company AGM yesterday. To a question, he said Can-One was not too worried about the rising cost of raw materials, as the company could pass some of it to customers. “We are working on the price increase. Our customers generally understand the high oil price issue, raw material prices and additional production cost such as for electricity but we have to create a win-win situation for all parties,” Chee said.
He added that the price of tin had increased 30% to 40% over the past 12 months and was expected to rise further. On competition, he said challenges and opportunities were found in every business. “In our industry, everyone is facing the same problem. We just have to stand out and do our best to remain ahead of the competition,” Chee said.
Apart from edible oil, Can-One also manufactures tin cans and jerry cans for cereal, milk powder, biscuits, coffee powder, chemicals and paint. Executive director Ooi Teik Huat expected the group to continue its positive growth for the financial year ending Dec 31, based on its first-quarter results. The company charted 56.3% jump in revenue to RM75.5mil for the three months ended March 31. However, net profit was slightly lower at RM1.55mil compared with RM1.59mil previously. “We will continue to focus on our general can business and consolidate our food business this year. Going forward, we will try to defend our profit quantum,” Ooi said.
(Source: The Star, 20 June 2008)
Member News
Presidential Address 2007
The following is the full text of the Presidential Address delivered by the President of the Association, Mr. M. Kawasaki at the recent 18th AGM held on 23rd June 2008 at the Association’s Secretariat.
“Ladies and Gentlemen,
I trust that you have all received the Association's Annual Report for 2007. The report as usual, provides an overview of the activities of the Association during the past year. In this Presidential Address, I will not dwell too much on such activities but instead, my focus will be more on the current developments and future prospects of the country’s economy and our tin-based products manufacturing industry.
In the year 2007, Malaysia’s economy strengthened despite a weaker external environment epitomised by, amongst others, the slowdown in the United States economy as well as the continuing weak performance of the Japanese economy.
According to the Bank Negara Malaysia Annual Report 2007, Malaysia posted a GDP growth of 6.3 per cent in 2007, which was one of its strongest in recent years (2006 : 5.9 per cent). The growth was driven mainly by strong domestic private consumption spending and investment activities, which offset slower growth in the country’s exports of goods and services.
Last year, aggregate domestic demand expanded at a strong pace of 10.5 per cent (2006 : 7 per cent ), with the private sector continuing to be the principal driver of growth. Private consumption expanded at a faster pace of 11.7 per cent (2006 : 7 per cent) due to a steady increase in high disposable income. In addition, the upward salary adjustments for civil servants further strengthened consumption in the second half of the year. Private investment also expanded at a faster rate, recording a strong growth rate of 12.3 per cent (2006 : 7 per cent), due to acceleration in capital spending in most economic sectors amidst positive business sentiment. The Government’s move to reduce corporate tax by two percentage points in two stages, to 27 per cent in 2007 and 26 per cent in 2008, has also helped to reduce further the cost of doing business and accorded companies with greater capacity to expand capital spending. Meanwhile, public sector investment last year grew at a supportive pace of 8 %, while public sector consumption also increased steadily, by 6.4 %.
The strong overall growth in 2007 was led by the services sector, which expanded by 9.7 per cent (2006 : 7.2 per cent), and continued to be the main impetus to the country’s GDP growth. The construction sector expanded by 4.6 per cent (2006 : -0.5 per cent), which was its highest growth since 1999, whist the agriculture sector expanded by 2.2 per cent (2006 ; 5.2 per cent ).
Meanwhile, the manufacturing sector expanded only by 3.1 per cent (2006 : 7.1 per cent) in 2007. Weaker external demand led to a slowdown in the production and exports of electrical and electronic products, especially in the first half of last year. Nevertheless, from a 3.3 per cent growth registered during the third quarter, the manufacturing sector expanded to 5.6 per cent in the fourth quarter of 2007, reflecting strong expansion in the domestic-oriented industries late last year.
The manufacturing sector’s encouraging performance in the first quarter of 2008 (6.9 per cent growth) has given cause for optimism. However, the outlook for the sector this year remains uncertain. Because even though Malaysia’s export markets are increasingly diversified with almost 54 per cent of total goods and services exported to the Asian economies (excluding Japan), the current heightened uncertainties in the major financial markets, particularly in the US, give rise to a wide range of possible outcomes surrounding growth and inflation prospects.
Let me now touch on matters specific to our own cause, namely to highlight one critical aspect amongst the major programme of activities pursued by the Association. The Association's newsletter called "The Malaysian Tin Products" is published on a quarterly basis and features relevant information, news and developments, surrounding not only the local and global tin-based products industry, but also other related industry such as the semi-conductor and electronic industries. Over the years, the "The Malaysian Tin Products" newsletter has continued to improve and evolve not only in terms of form but also substance. The newsletter is the Association's most important communication media and public relation tool, and a vital instrument for not only information dissemination but also for the expression of views and opinions concerning the industry. The newsletter also provides an avenue for the exchange and sharing of ideas, knowledge and expertise that can enhance the development and advancement of our value-adding resource-based products manufacturing industry.
My concern regarding this newsletter is that whilst it already has received fairly good support in terms of advertisement support from members, however, it has not had that same support in term of articles, which I have been imploring members on this almost yearly. I do fervently hope that members will come forward to do their part in helping to further upgrade the Association’s newsletter.
As customary in this annual Presidential Address, let me on behalf of the Association, offer our gratitude to those Ministries and Government Agencies that have continued to lend us their support. Our thanks to the Ministry of Natural Resources and Environment, the Ministry of Human Resources, the Ministry of International Trade and Industry, and the Ministry of Home Affairs for their co-operation and understanding. In addition, we are ever grateful to the Tin Industry (Research and Development) Board for providing the Association with continued invaluable secretariat assistance and administrative support ever since the Association's formation in 1990.
I also wish to thank all members of the Association, especially members of the Management Committee and its various Sub-Committees, for their commitment and strong support given to me during my past two years in office.
May I also extend, on behalf of the Management Committee, our sincere thanks and gratitude to the Secretariat staff for their continued hard work and diligence.
Last but not least, may I wish everyone good business and health in the years ahead. And may I look forward to your continuing solid support of the Association and its activities, always.
Thank you and God bless us all.”
Pewter Art® - A Symbol of Quality
Pewter Art® is one of the leading pewterware manufacturers in Malaysia. The company produces high-grade fine-quality pewter, which comprises of natural woods, 97 per cent refined tin, two per cent antimony and one per cent copper for strength and hardness or colour respectively, containing no lead and safe for food and beverages. Each piece is handcrafted and produced to the exact standard and goes through many stages of inspection. Continuous improvements and investments in research, development and design (RDD) in improving and upgrading products, product designs and processes have allowed the company to differentiate itself.
Pewter Art® has been granted a patent (No. MY-125598-A) for a new method to manufacture pewterware just six years after its incorporation in 1991. The invention relates to a method of joining panels and metallic to non-metallic product using a liquid which solidifies at ambient temperatures. This new invention solves several problems faced by all industries. Normally, for products made of wood, wooden panels are joined together using adhesives such as fasteners, nails, screws and rivets.
The disadvantages of these traditional methods are that they are not aesthetically attractive, the panels are not secured together in a tight fitting manner and fine lined grooves can be found between two adjacent panels. This problem was faced by Pewter Art® and also by all industries and consumers of the related products. Before the invention, Pewter Art® used adhesive for the pewterware made out of the combination of pewter and wood. Each pewter body was joined one by one to the passages of the wooden body, leaving final products looking unsophisticated and the process was time consuming.
Another problem was the joining of metal surfaces (metallic joining) such as aluminium, to aluminium, copper, brass or steel surfaces, done by brazing. This method comprises of applying a coating to one of the metal surfaces to be joined and heating the surfaces and coating so that two surfaces will be joined when the coating cools down. However, this method cannot be adopted for non-metallic joining or metal to non-metal joining.
Pewter Art’s invention uses molten liquid (liquid solidifiable material) to join wooden panels, wooden panels to non-wooden panels, and a metallic body to a non-metallic body. As a result, the joinings are secured permanently and fitted tightly and strongly, without burning effects and aesthetically attractive. The joining agent is selective so that when two materials for the panel are used, the panels are not adversely affected in quality.
The invention is suitable for any panels made of wood, metal alloy, plastics, glass, ceramics, marble, granite. The liquid solidifiable material used as the joining agent can be plastics, molten glass, molten metal and molten alloy. Molten metal can be aluminium, lead, copper, gold or silver while molten alloy can be brass, pewter.
Pewter Art® has been using this invention to make pewterware called D’Passage Collection, which combines pewter and natural wood. Unlike the conventional methods of using glue, nails, screws or rivets, only pewter is used to hold wood pieces together or to decorate wood pieces firmly, permanently and aesthetically. Generally, pewter has a melting point at 250°C. When the hot molten pewter touches wood, the wood will burn. But, with Pewter Art’s invention, the hot molten pewter does not burn the wooden panels.
The design of the D’Passage Collection is beautiful as the joining of the pewter and wood is aesthetically attractive and are securely joined together. Same models are limited edition worldwide and come with a serial number, certificate and free lifetime maintenance guarantee. Pewter Art® has won the Product Excellence Award 2007 and the Malaysia Good Design Mark 2007.
(Source: New Straits Times, 28 May 2008)
Personalised Pewter Lid for Your La Mer
La Mer knows a thing or two about luxury. Its coveted cream, after all, is made through a three-month bio fermentation process, and each container is individually hand-filled. This month, it collaborates with Royal Selangor to give its devotees a bespoke lid made of pewter and engraved with the owner’s name. Hand-polished, the lid is decorated with sea kelp-inspired design to symbolise the La Mer heritage and the marine properties of its products.
The lid is available by special order when you buy the limited edition set of Creme de la Mer 60ml and the lifting Face Serum 30ml. Now you can personalise your creme and re-use the lid when you buy the next jar. Available at La Mer counters in Metrojaya Mid Valley Megamall and Isetan Suria KLCC.
(Source: New Straits Times 23 June 2008)