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TUESDAY | APR 21, 2026

Malaysia aiming for 3,000 smart factories o Govt pushing for automation as reliance on foreign labour is unsustainable, deputy minister says at signing of MoU between FMM and Hong Kong Productivity Council

Ű BY DEEPALAKSHMI MANICKAM sunbiz@thesundaily.com

KUALA LUMPUR: Malaysia is aiming to scale up to 3,000 smart factories under its industrial transformation agenda as the government tightens foreign labour access and pushes manufacturers towards automation and higher value production. Deputy Investment, Trade and Industry Minister Sim Tze Tzin said the country currently has about 400 smart factories, but warned that reliance on low-cost foreign labour is becoming increasingly unsustainable. “What I want to say is that the government will move towards controlling labour. Industry will find it increasingly hard to get foreign labour and the only way out is automation,” he said at the Malaysia-Hong Kong Industrial Partnership Forum and memorandum of understanding signing between the Federation of Malaysian Manufacturers (FMM) and the Hong Kong Productivity Council (HKPC) yesterday. Sim said the policy direction is aligned with the New Industrial Master Plan 2030, which focuses on moving Malaysia up the value chain through higher productivity, automation and skilled workforce development. He added that the government is supporting the transition through grants and agency partnerships, including with Malaysia Pro ductivity Corporation, to help manufacturers modernise operations. Sim said companies that continue to adopt a “wait-and-see” approach risk falling behind, as structural changes in labour policy will gradually tighten supply. “Access to labour will be getting more and more challenging. It is important that manufacturers plan now to move towards automation. It is a worth while investment.” The deputy minister pointed to Malaysia’s near-full employment situation, saying the tightening labour market would naturally push firms towards technology adoption rather than manpower expansion. On geopolitical and energy-related dis ruptions, Sim said, global conflicts have continued to affect supply chains and input costs, but stressed that Malaysia has managed the situation comparatively well through subsidies and supply stability measures. “Malaysia is not unique. The world faces rising fuel costs and supply disruptions. But we have maintained subsidies for the majority and ensured supply continuity.” Sim added that inflationary pressure from global energy shocks is unavoidable, but said the government is working to cushion the impact

and commercialisation ecosystem. He added that collaboration with HKPC will help accelerate smart manufacturing adoption, particularly among SMEs, which often lack resources to invest in advanced technologies. HKPC chairman Sunny Tan said the partnership comes at a critical time as global supply chains undergo restructuring amid geopolitical tensions, tariff uncertainties and rising trade fragmentation. “Manufacturers that move early will lead the game. This is where Hong Kong plays a distinctive role as a connector between China, Asean and global markets.” Tan said HKPC is an applied technology institute focused on taking innovation from research into industrial application, particularly in smart manufacturing, AI, robotics and green technologies. He added that the collaboration with Malaysia will support supply chain diversification and resilience, while enabling SMEs to access advanced production systems at lower cost. Both sides highlighted opportunities in Industry 4.0, digitalisation and green manufacturing, with HKPC noting that energy efficiency and environmental, social and governance compliance are becoming key competitiveness factors in global trade. Lee said the collaboration with HKPC is expected to strengthen Malaysia’s industrial transformation agenda, particularly in helping SMEs move into Industry 4.0 adoption. He added that many local manufacturers are still in early stages of digitalisation due to cost concerns and reliance on labour, but partnerships like this will help bridge capability gaps through practical technology transfer and training. Tan said the council will work closely with FMM to drive applied innovation across the supply chain, not just at factory level but at cluster level as well. Subsidiary Airbus Helicopters Malaysia offers services including sale and distribution of helicopter products and services, maintenance, overhaul and modification work, logistics support, ground handling, and hangarage out of Subang in Selangor. Malaysia is also the regional helicopter maintenance, repair and overhaul hub and a regional completion and delivery centre. The Subang site also houses the region’s only H225/H225M and AS365N3/N3+ Dauphin full flight simulators. Works are now under way to expand the site to add a H175 simulator which will support pilot type rating, recurrent training, and mission training. Through the local Airbus Defence and Space teams, technical assistance is provided for the A400M, as well as space solutions for domestic stakeholders, including the Measat 3d satellite. Airbus will exhibit scale models of the A400M, C295, H225M and Flexrotor at stand No. 7700 in Hall 7 of Mitec in Kuala Lumpur during Defence Services Asia 2026, which ends on Thursday.

Federation of Malaysian Manufacturers CEO Datuk Dr Yeoh Tean Oon (centre) and Hong Kong Productivity Council executive director Mohamed Butt (second, right) after signing a memorandum of understanding between FMM and HKPC at the Malaysia-Hong Kong Industrial Partnership Forum at Wisma FMM yesterday. Also present are Lee (second, left), Tan (right) and FMM president emeritus Tan Sri Soh Thian Lai (left). – BERNAMAPIC

while maintaining industrial competitiveness. Meanwhile, FMM president Jacob Lee Chor Kok said Malaysia’s manufacturing sector remains a key economic pillar, contributing 23% to gross domestic product and employing about 2.5 million workers, with 86% of exports driven by manufacturing activities. He said Malaysia’s trade performance has reached historic levels, supported by strong electrical and electronics exports, and highlighted the need for deeper industrial

collaboration amid global supply chain realignment. “The synergy between Malaysia and Hong Kong is clear. Malaysia offers a strong manufacturing base and Asean connectivity, while Hong Kong brings technology, finance, professional services and global market access.” Lee said FMM is focusing on four key pillars to support industry transformation, including talent development, market expansion, technology and artificial intelligence adoption, and building a stronger research, development

Airbus reaffirms commitment to Malaysia, says it’s a strategic market PETALING JAYA: Airbus is reinforcing its commitment to Malaysia, a strategic market where it has maintained a long-standing presence and close cooperation with Malaysian partners for over four decades, including those in the defence sector. 3d telecommunications satellites, Malaysia benefits from a robust communications capability. Recognising Malaysia’s needs to strengthen its national defence and security, Airbus is positioning its capabilities to support this growth, through a broad range of helicopters and uncrewed aircraft systems (UAS), including the H225M, the NH90 and the Flexrotor. in high-threat environments. On military aircraft, the A400M was featured for its capability to support other aircraft through tankering missions, carry heavy loads and equipment over long distances, all of these while operating into unpaved airstrips. As the type’s first export customer, the RMAF deploys the aircraft on various military and humanitarian missions. mercial aircraft includes helicopter facilities and support for the nation’s armed forces.

Speaking to the media at the start of Defence Security Asia and National Security Exhibition Asia 2026 yesterday, Airbus executives highlighted the company’s established role in the country, and how Malaysia is a key customer base for the company across the helicopter, defence and space product lines. “Malaysia is an important market for Airbus, and we are committed to supporting the country’s long-term needs through our products and services, as well as collaboration with our local partners,” said Airbus Asia-Pacific president Anand Stanley. There are more than 80 Airbus civil, parapublic and military helicopters in service with national agencies and armed forces in Malaysia. These aircraft operate alongside four Royal Malaysian Air Force (RMAF) A400M military airlifters. With the Airbus-built Measat-3b and Measat

The NH90 was showcased for anti-submarine warfare and anti-surface warfare. Available in the tactical transport and Nato frigate helicopter versions, the NH90 NFH can cover a wide range of naval warfare and maritime security missions. The H225M enables life-saving combat search and rescue missions, where it is capable of complementing the RMAF’s current H225M fleet and the role it plays on national defence and humanitarian work. As security needs evolve, there will be a need for countries to have an asset versatile enough to take on various missions, including intelligence, surveillance, target acquisition and reconnaissance. The Flexrotor tactical UAS prioritises ultra long endurance and stealthy operations. It is a mission-proven asset with over 5,800 flight hours

The C295 was mentioned as part of a A400M C295 mixed fleet option for Malaysia, providing a full spectrum solution for missions ranging from defence, to disaster response and maritime based border security. There is also the C295 maritime surveillance aircraft version, whose long endurance of over 11 hours in the air makes it ideal for maritime surveillance. To fulfil Malaysia’s future military satellite communications needs, Airbus is offering the Eurostar Neo platform. With a 15-year operational lifetime, the Eurostar Neo can support multiple communication bands, while offering resilience for an uninterrupted operation, fully customi sable, and ease of operations. Airbus’ industrial presence beyond com