@FMMBusinessBusinessin in ActionAction

KDN NO: PP 16730/08/2012 (030376)

Jul/Aug 2013VOL 4/2013

www.fmm.org.my

Current and Emerging HRTrends and Challenges

Import Duty and Sales Tax Exemption Application Processes

Updates on US Sanctions

The ASIA Petrochemical Industry Conference 2013

02 BIA@FMM | Jul – Aug 2013

PUBLISHED BYFederation of Malaysian ManufacturersWisma FMM No 3, Persiaran Dagang PJU 9Bandar Sri Damansara52200 Kuala LumpurTel: 03-62867200 Fax: 03-62741266/7288Email: webmaster@fmm.org.myWebsite: www.fmm.org.my

FMM has eight branches andtwo representative offices located inKedah, Penang, Perak, Selangor,Negeri Sembilan, Malacca, Johor,Eastern, Sabah and Sarawak.

Any material extracted fromBusiness in Action @ FMM to bequoted or reprinted should containan acknowledgement to FMM or itsacknowledged sources.

Editorial

ADVISORDr Yeoh Oon TeanChief Executive Officer

EDITORIAL TEAMMadeline LohGeneral Manager (Trade)

Ng Lee LeeSenior ManagerInternational Business Division

Florance S GabrielAssistant ManagerCommunications and Publications Unit

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Kenny LeeMarketing Unit (+6012-383 3857)

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Contents

FEDERATION OFMALAYSIANMANUFACTURERS

Cover Story

03 Current and Emerging HR

Trends and Challenges

News Highlights

04 FMM Highlights Concerns

on Import Duty and

Sales Tax Exemption

Application Processes

05 Going Mobile

06 Updates on US Sanctions

07 FMM’s First Trade and

Investment Mission to

Balikpapan, Kalimantan

The ASIA Petrochemical

Industry Conference 2013

08 Trade and Investment Mission

to Manila, Philippines

Visit to Mega Fortris

(Malaysia) Sdn Bhd

09 Potential Sales Exceeding

RM1.5 million from IFEX

SUBCON Thailand 2013

Updates

10 Is Your Business Competition

Law Compliant?

14 Events in Pictures

Trade & Policy

16 Free Customs Advisory

Services for FMM Members

Market Alerts

18 Vietnam Issues Draft Circular

on Quality of Imported

Steel Products

Happenings at Branches

20 Kedah/Perlis Penang

22 Perak

Negeri Sembilan

24 Selangor Sarawak

Representative Office

25 Johor

Malacca

Jul – Aug 2013 | BIA@FMM 03

Cover Story

About 120 human resource practitioners gathered at theSime Darby Convention Centre on June 12, 2013 for

the 7th FMM HR Conference to be updated on the latesttrends and challenges in human resource management.

The invited speakers were key government officials,consultants from HR consulting and law firms, andHR practitioners from companies acknowledged forbest practices in HR management. They were fromMinistry of Human Resources, Korn/Ferry International,Top Glove, Finisar, Lee Hishamuddin Allen and Gledhill,PwC Malaysia and PKT Logistics Group.

The speakers provided invaluable updates on HR trendsin areas including succession planning, higher retirementage, minimum wage, employment laws, human capitaltrends in Asia Pacific and management of generation Yemployees. Effective business solutions that could beapplied to mitigate the challenges were also shared withthe participants of the Conference.

The FMM HR Conference 2013 was officiated byDatuk Mohd Sahar bin Darusman, Deputy SecretaryGeneral of Policy & International, Ministry of HumanResources. Datuk Mohd Sahar assured that the Ministrywas constantly reviewing labour-related legislations andpolicies to ensure that laws are relevant to current needs.The Ministry is working at aligning its efforts with thetargets set by the Economic Transformation Programme.It has also been tasked to implement several strategicprogrammes in a number of key policy areas, namely:

• Modernising labour laws,

• Up-skilling and upgrading of the workforce;

• Strengthening human resource management;

• Undertaking labour market forecast and surveyprogramme; and

• Enhancing the labour safety net.

The Ministry is working on revisions of the key employmentlegislations such as the second phase of amendments tothe Employment Act 1955, Industrial Relations Act 1967and the Trade Unions Act 1959. Amendments made sofar provided greater clarity, ensured an appropriate levelof enforcement for fair treatment of employees and thatMalaysian labour laws are in sync with the current andfuture business environment for the economic growthof Malaysia.

The Ministry urged all parties to support the Government’sinitiatives to preserve workers’ welfare, to ensure interestand competitiveness of employers as well as to maintainindustrial harmony in the country. The Ministry welcomedFMM’s initiatives towards improving professionalism,delivery system, dynamism, productivity, competitivenessand viability of the private sector.

Key highlights from the speakers’ presentations were:

• Succession planning is an essential element in allorganisations. Good people management is the best wayto adapt to any changes in the retirement age. Open andregular communication with employees is essential.

• The fundamentals to managing salary packages andrewards systems after minimum wage implementationis holding discussions with industry peers, checking oncompliance with authorities, brainstorming within theorganisation, generating cost impact reports and mostimportantly, communicating with workers throughout theprocess so that workers are updated and well informedabout the actions taken by the company.

• On modernising employment laws, the industry islooking for coherence, consistency, competency, cost-effectiveness and correct balance in employment laws.The main provision of the Industrial Relations Act thatneeds to be reviewed is the provision of security oftenure under Section 20.

• Productivity and return on investment, attracting andretaining talent, managing and driving performance, roleof HR and priorities for business are some of the keycurrent and emerging human capital trends in AsiaPacific. Low talent engagement and development mayconstrain the growth ambition of businesses.Organisations that do not adapt to changing workforcedemands would risk being left behind. Rethinking thetalent management approach and redefining theorganisation’s value proposition are critical.

In his concluding remarks, Datuk Mohd Sahar encouragedcompanies to focus on strategies to retain local talent inMalaysia as human capital would always be a majordecisive factor in determining an organisation’s successand survival especially during rapid business andeconomic change.

Current and Emerging HR Trendsand Challenges

Participants who attended the 7th FMM HR Conference

04 BIA@FMM | Jul – Aug 2013

News Highlights

FMM Highlights Concerns on Import Duty andSales Tax Exemption Application Processes

On May 17, 2013 FMM council member, Abdul Samad Ibrahim led a delegation to meet Jaswant Singh, ExecutiveDirector, Investment ECC System Division, MIDA. FMM highlighted delays in the approval of applications for

import duty and sales tax exemptions for machinery, spare parts, consumables and raw materials using Form PC1 andForm PC2 faced by its members.

Based on MIDA’s client charter, the application foradditional quantity and new exemption applications andrenewal of the exemption should be processed within amonth. However, manufacturers highlighted that onaverage, the approval process for some applications couldtake up to five months and even years to be approved.

Taking cognisance of the complaints raised by industry,MIDA had in early January 2013 re-established the TariffDivision to clear the backlog of cases and resolve thedelays in the PC1 and PC2 approval process. The TariffDivision headed by Jasbir Kaur is manned by over30 officers.

MIDA received over 10,000 applications annually anddelays in processing was mainly due to submissions ofincomplete documents from manufacturers. To streamlinethe application process, MIDA will draw up a step-by-stepsubmission schedule to assist companies in planningtheir importation. MIDA advised businesses to submitapplications three months before importing to avoid having to apply for Bank Guarantees.

Manufacturers also complained that they were facedwith stringent application requirements which entailcollation of documents that may be difficult to providei.e. matching HS Code of overseas suppliers, supportingletters from local suppliers, documentary requirementsfrom customers. MIDA highlighted that all the informationwere required to determine if the goods were ‘useddirectly in manufacturing’. MIDA agreed to work withFMM to develop clear guidelines on the term ‘directlyused’ based on the industry requirements.

Major concerns were raised by FMM on MIDA’s DigitalCertificate Online Application System. The currentsystem used by MIDA does not connect to Customs’HS Explorer and does not store basic information ofthe applicants (companies), hence applicants arerequired to manually calculate the duties involved andalso upload company information for each application.MIDA informed FMM that online application submissionshave been operating since 2010 and could now beaccessed using Internet Explorer, version 6, 7, 8 & 9.MIDA agreed that the System should be reviewed to beable to capture static data.

MIDA agreed to work with FMM when carrying outsystem enhancement testing to ensure that the systemmeets the needs of industry. Apart from that, FMM alsoiterated that the system was not fully paperless as theCustoms Department also required companies to attachthe hard copy of the exemption approval form withMIDA’s validation upon importation. According to MIDA,all the documents that were uploaded in the systemcould be accessed by MITI, MOF and Customs and nohard copies were required to be provided by importers.

MIDA announced that the policy review for a blanketapproval for import duty and sales tax exemptionfor machinery, equipment and spares under PC1 isbeing finalised by the Attorney General’s Chambers.

(continue on page 5)

Jul – Aug 2013 | BIA@FMM 05

News Highlights

The blanket approval will be extended to exemptionsfor raw materials under PC2 in due course. For theinformation of FMM members, FMM and MIDA arecurrently in discussion to set up a Help Desk in theFMM office for a MIDA Advisor to assist members onthe PC1 and PC2 application and approval issues.

The meeting agreed that similar to the Customs Advisorbased in FMM, a MIDA officer should be placed in FMMto assist members on the PC1 and PC2 application andapproval issues. The meeting also agreed that there shouldbe similar engagements on a regular basis between FMMand MIDA to address the issues faced by the industry.

The FMM 4th Annual ICT Conference with thetheme “Going Mobile” was held on May 15, 2013.

Some 150 participants comprising Chief ExecutiveOfficers, Chief Information Officers, General Managers,IT, Marketing and Business Development Managers andExecutives attended the Conference. Dato’ Lee Ow Kim,Vice President of FMM and Chairman of FMM ICT &Multimedia Committee in his opening remarks, stressedthat businesses today should ride on the waves of mobiletechnology change to increase productivity and efficiencyand most importantly remain relevant in today’sbusiness world.

The Conference also showcased nine mobile solutionproviders that shared with participants their latesttechnology and products to drum up new businesseswith valuable leads. A total of six mobile technology andsolution providers sponsored the Conference offeringattractive prizes for conference participants. Participantsnot only gained better knowledge of mobile technologyfrom industry experts but they also learnt the securityconsiderations and pitfalls when considering adoptingnew technology.

Going Mobile

Participants at the FMM 4th Annual ICT Conference 2013Participants visiting the exhibition area at theFMM 4th Annual ICT Conference 2013

(continued from page 4)

Dato’ Lee Ow Kim, Vice President of FMM and Chairman ofFMM ICT & Multimedia Committee

News HighlightsNews Highlights

06 BIA@FMM | Jul – Aug 2013

Updates on US Sanctions

The US Embassy in Kuala Lumpur has provided FMM with the following updates on US sanctions:

• Violations of US sanctions law can lead to beingbarred from exporting to the United States, conductingforeign exchange transactions, contracts for the$500 billion US Government procurement budget,financial transactions subject to US jurisdiction, andholding property under the US jurisdiction. Sanctionsof banks and financial institutions doing businesswith Iran are even more severe. Due to this, somebanks will not support any transactions with Iran orNorth Korea.

• With whom you are doing business with is as importanta source of potential liability to US sanctions as whatproduct you are selling or buying. The US TreasuryDepartment maintains a list of sanctioned entitiesand individuals, called the Specially DesignatedNational’s (SDN) List, at: http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, but it is important to remember that this listdoes not include every sanctioned entity. Whilechecking the SDN List is a good start, it is still crucialfor companies to conduct due diligence of theirbusiness partners since many of the entities andpersons on the list use fronts to cover their trueidentity when attempting to evade sanctions.

• In addition to proscribing trade with entities on theSDN list, many US sanctions apply to trade with Iran’senergy and petrochemical sector. Selling these goodsor services to, or investing in, Iran’s energy abovecertain thresholds is already sanctionable. Under arecent law, knowingly selling, directly or indirectly, anyprecious metals to Iran and the provision of materials

like graphite, raw- or semi-finished metals, andsoftware for integrating industrial processes for usein the energy, shipping, or shipbuilding sectors isalso sanctionable after July 1, 2013.

• Even if a transaction does not directly involvesanctionable activity or sanctioned entities, it couldmake a company vulnerable to US sanctions if it issupported by a sanctioned entity. As of July 1, 2013,US sanctions will target selling, supplying, ortransferring to or from Iran any significant goodsor services used in connection with the shippingsector of Iran. Companies doing business withcertain Iranian shipping lines, the Iranian port operatorTidewater and airlines Iran Air and Mahan Air alreadyrisk sanctions.

• In keeping with longstanding US policy, transactionsrelated to the sale of agricultural commodities, food,medicine, or medical devices are permitted, as long asthe transactions does not involve a sanctioned entity(such as those on the SDN list) or front company.

FMM members should also be aware of the extensivesanctions maintained by the US on Iran, North Korea,and Syria. These sanctions regimes are complexand based on numerous, and sometime overlapping,US laws and regulations. The US Embassy stronglyrecommends anyone looking to do business with Iran,North Korea, or Syria to get the advice of a lawyer whospecialises in sanctions law.

Source: US Embassy, Kuala Lumpur

Jul – Aug 2013 | BIA@FMM 07

News Highlights

FMM’s First Trade and Investment Mission toBalikpapan, Kalimantan

Courtesy call on the Mayor of Balikpapan, HE Rizal Effendi Baskaran Nair, (left) Trade Mission leader presenting a copy of theFMM Directory to the Chairman of Balikpapan City Chamber of

Commerce and Industry, Rendy Susiswao Ismail

Atotal of seven members joined the FMM Trade and Investment Mission to Balikpapan, Indonesia from April 24 – 26,2013. The mission was led by Baskaran Nair from Cordage Industrial Rope (M) Sdn Bhd. The delegation paid a

courtesy call on the Mayor of Balikpapan H.E. Rizal Effendi and Chairman of Balikpapan City Chamber of Commerce andIndustry, Rendy Susiswao Ismail. Visits were arranged to the Kariangau Industrial Zone and Semayang Sea Port.

The ASIA Petrochemical Industry Conference2013

The Asia Petrochemical Industry Conference (APIC) 2013 held on May 9 – 10, 2013 in Taipei, Taiwan was organised bythe APIC Steering Committee. It consists of the national organisations representing petrochemical industry of seven

member countries including India, Japan, Korea, Singapore, Taiwan, Thailand and Malaysia. Malaysia is represented by theMalaysian Petrochemicals Association (MPA). This year, the President of MPA, Yusa’ Hassan led the group of 33 delegatesfrom Malaysia.

The Conference featured updates for the petrochemicalindustries in APIC member countries, updates on newdevelopments, as well as outlook and strategies for stayingahead of challenges faced by the petrochemical industry.

Keynote speakers were Axel Lorenz, Vice President ofSiemens AG, Germany, Dr Chi-Pang Wen, DistinguishedProfessor from the National Health Research Institutes,Taiwan and also Dr Jonq-Min Liu, Executive VicePresident of Industrial Technology Research Institute.At the Steering Committee meeting held on May 10,2013, Petrochemical Industry Club – The Federation ofThai Industries (Thailand) was endorsed as the host ofAPIC 2014. The event which was hosted and organisedby the Petrochemical Industry Association of Taiwan(PIAT) attracted 1,224 participants and was successfullyheld in the Taipei International Convention Centre.

MPA President, Yusa Hassan (left) presenting a token ofappreciation to Preston Chen, President of PIAT

FMM organised a trade mission to Manila, Philippines from May 20 – 22, 2013, which was led by Adrian Yeo,Managing Partner of Adrian Yeo. The participants comprised representatives from industry sectors such as accountingsolutions, ambulance, system integrations in factory, security seals, first aid kits, automotive weather strips, medicalequipment and logistics services. The FMM delegation also paid a courtesy call on the Under Secretary for Trade andInvestment Promotions, Ponciano C Manalo, Jr and he expressed interest in strengthening alliances with Malaysianmanufacturers in the region’s value chain as part of the preparations for the ASEAN Economic Community.

Philippines has a competitive advantage in terms of availability of skilled labour, world-class industrial parks, competitiveincentives and a large domestic market. Sectors with growing economic and financial trends and positive outlook includeagricultural industry, IT services, electronics, energy, logistics, mining, shipbuilding and tourism. Malaysian companies arealready investing in sectors such as construction, manufacturing, water supply, waste management, agriculture and realestates. Individual business matching meetings were arranged with the Filipino-Chinese Chambers of Commerce andIndustry, Inc. and the Philippine Chamber of Commerce & Industry. The delegation also attended the briefing sessionsorganised by the Board of Investments, Philippine Economic Zone Authority and Light Industry and Science Park as wellas an economic zone in Laguna.

Mega Fortris was established in 1996 as aspecialised developer and manufacturer of securityseals. The Company produces 40 million sealsmonthly which are exported to global markets,spanning from Asia to America. Through innovationand Research & Development, the Company hascreated a range of high quality security seals toaccommodate their customers’ requirements.

The FMM delegation also toured the production lineof the security seal laser etching/marking and theCTrack Asia Centre, a partnership with CTrack Asiato produce Integrated Security Intelligent Solution(ISIS) security seal with tracking system.

08 BIA@FMM | Jul – Aug 2013

On May 16, 2013, FMM organised a visit to Mega Fortris (Malaysia) Sdn Bhd, winner of the FMM Manufacturer ofthe Year Award 2012 (large company) to learn on the company’s winning practices. A total of 59 members led by

Tan Sri Dato’ Soong Siew Hoong, Council Member and Chairman of SMIs Working Committee visited Mega Fortris.The FMM delegation was received by its Executive Chairman/Founder, Dato’ Dr Nick Ng.

Visit to Mega Fortris (Malaysia) Sdn Bhd

News Highlights

Members looking at the security seal production line at Mega Fortris

Group photograph after the courtesy call on Department of Trade and Industry Under Secretary

Trade and Investment Mission toManila, Philippines

Jul – Aug 2013 | BIA@FMM 09

Atotal of seven Malaysian companies participated for the first time in the International Food Exhibition (IFEX) 2013 heldfrom May 16 – 19, 2013, in Manila, Philippines. IFEX which re-launched itself as “Asia’s Ethnic Food and Ingredients

Show”, is the biggest government-sponsored international food and beverage show in the Philippines. It is also animportant marketing venue for food exporters wishing to attract foreign and local buyers. Over 300 enquiries were receivedby the Malaysian exhibitors from Philippines, USA, Canada, Hong Kong, Korea, Turkey, Brunei and Egypt. Potentialsales exceeding RM1.5 million were recorded from the Fair. Some of the international food retailers such as SM Stores(the largest supermarket in Philippines) and Robinsons Supermarket visited the Malaysian pavilion and requested forsamples and quotations.

Potential Sales Exceeding RM1.5 millionfrom IFEX

Exhibition booths at the International Food Exhibition 2013 Visitors sampling food from the various exhibitors at theInternational Food Exhibition 2013

News Highlights

SUBCON Thailand 2013

Group photograph of the participants who visited Honda automobile factory

FMM facilitated the participation of five Malaysian companies in the ASEAN Supporting Industry Pavilion in SUBCONThailand held from May 16 – 18, 2013. The five companies were Water-Care Industries Sdn Bhd, Top-Mech ProvincialSdn Bhd, VSP Techonology (M) Sdn Bhd, Systech Control Sdn Bhd and Local Basic Sdn Bhd. The participants weregiven the opportunity to visit the Honda automobile factory located at Rojana Industrial Part, Ayuthaya. SUBCON Thailandis the largest subcontracting fair in ASEAN. This year, over 100 subcontractors from Thailand, Japan (Kanagawa, Osakaand Toyama), Czech Republic, Korea, Taiwan, China, and eight other ASEAN countries took up 300 exhibition booths inthe Fair. The three-day Fair held in Bangkok attracted over 43,402 visitors.

10 BIA@FMM | Jul – Aug 2013

What Are You Looking For?

The purpose of this exercise is to identify any breaches,or possible breaches, of the CA 2010. *-

Alarm bells should ring LOUDLY if any agreement containprovisions which:

• restrict the freedom of your business or any of yourcustomers or suppliers to set prices independently;

• divide up territories or markets;

• deal with the manner in which bids or tenders willbe prepared;

• restrict the ability of any business to producegoods or supply services or make investments ordevelop technology.

Agreements with your competitors should be carefullyconsidered, especially those that:

• provide for the sharing of commerciallysensitive information;

• impose standard terms;

• contain exclusive dealing provisions;

• impose restrictions on advertising;

• involve joint purchasing or selling; or

• involve extensive cooperation (such as a joint venture,a research & development agreement or jointcommercialisation).

Agreements with non-competitors may still need to beconsidered if they provide for matters such as:

• exclusive purchasing or selling;

• tying;

• up-front access payments; or

• exclusive distribution or customer allocation.

Dominant Businesses

If your business is dominant, there will be additionalconsiderations. The MyCC has said that dominance willbe presumed if your business has a market share of over60%. If your business is dominant, alarm bells should ringLOUDLY if your business has entered into agreements orengaged in practices that:

• prevent competitors from entering your market e.g.refusing to supply, buying up scarce resources orsqueezing margins;

• price goods or services at a price intended to drivecompetitors out of your market;

• make it difficult for your competitors to compete e.g.exclusive dealing, loyalty rebates, bundling or tying.

Risk areas

As you are reviewing your arrangements, you maywish to classify risks as High, Medium or Low or use aRed, Amber, Green classification. This will help identifywhich risks require immediate action.

Your review will also identify for you those areas of thebusiness that will present the greatest competition lawrisks going forward (as they will be the areas that havegiven rise to existing areas of concern).

STEP 2: ASSESSING THE RISKS

Once you have completed the review of all the agreementsand practices which your business has in place, it is timeto assess the potential breaches and risk areas that youhave identified.

If you have identified any agreements or practices that:

• fix prices;

• share markets;

• involve bid rigging; or

• limit production or supply, investment or development oftechnology,

The agreement or conduct will need to be brought to anend immediately and you will want to consider whetherit is appropriate to make an application to the MyCC forleniency. It is highly recommended that you seek yourown legal advice before taking any action.

If you have identified other agreements or practices thatmay breach the CA 2010 (it is most likely that you willhave more in this category than clear breaches), thenyou will need to undertake a more detailed assessmentto determine whether any action needs to be taken.The actions you may wish to consider taking will includeamending the agreement to remove the provision you areconcerned about or seeking an exemption. It is likely thatyou will need the assistance of a competition lawspecialist to complete this assessment.

By Rachel Burgess

"Published with permission of The Malaysian Current Law JournalSdn Bhd and CLJ Legal Network Sdn Bhd."

Is Your Business Competition Law Compliant?

Update on Competition Law (Part 2)

Part three of the article will be published in thenext issue of the BIA.

Updates

Part One of this article was published in the May/June 2013 issue

12 BIA@FMM | Jul – Aug 2013

Damaged Roads

With the assistance of FMM-IPMC Kuala Ketil and continuous discussion with government agencies,the damaged industrial roads within the Kuala Ketil area have been temporary repaired.

Phone Line DisruptionsThe Branch’s close rapport with Telekom Malaysia enabled the Branch to resolve the phone linedisruptions for Kibaru Manufacturing Sdn Bhd and Ideal Healthcare Sdn Bhd within one day.

Kedah/Perlis

Extension of Factory Lease Land Approved

Following several meetings with the Land and Mines Department, Perak and the assistance of thePEMUDAH Focus Group on Properties, the Branch obtained the extension of the lease of landfor member company Kaolin (M) Sdn Bhd for another 30 years. Kaolin’s application for renewalof the lease was earlier rejected.

Application for Raw Materials’ Sales Tax Exemption ApprovedThe Branch, after appealing to the Royal Customs Department, Perak on behalf of a member company,managed to obtain the approval for sales tax exemption for Choo Bee Metal Industries Bhd.

Conversion of Power Supply to 33KV SystemThe Branch assisted Hume Cemboard Industries Sdn Bhd to speed up efforts of Tenaga NasionalBerhad to compute the connection charges for converting the 33kv system.

Flooding at Silibin Industrial EstateThe Branch wrote to Datuk Bandar Ipoh on April 1, 2013 over the problem of floods faced by industriesin Silibin Industrial Estate in the event of heavy downpours. At the State IPMC Meeting onMay 13, 2013 it was agreed that a Special Task Force headed by Unit Perancang Ekonomi Negeriwith representations from Ipoh City Council, Drains and Irrigation Department, FMM and industriesbe established to gauge the extent of the problem and identify appropriate actions to be taken.

Perak

Assistance to Members

Bene�ts as an exhibitor• SELL directly to an estimated 30,000 consumers who are ready to buy• DEMONSTRATE and provide product samples• LAUNCH and TEST acceptance of new products or services

FEDERATION OF MALAYSIAN MANUFACTURERS

IPOHStadium Indera Mulia4 – 6 October, 2013(Friday – Sunday)

www.fmm.org.my

14 BIA@FMM | Jul – Aug 2013

Events in Pictures

FMM Tea Talk on Energy Saving Water/Liquid Heating for Industrial Applications, May 22, 2013

Business Matching Meeting at Trade & Investment Missionto Philippines, May 15 – 20, 2013

Safety Conference on Fostering an OSH Culture Towards aHealthy and Productive Workforce, April 10 – 11, 2013

FMM ICT 4th Annual Conference 2013: Going Mobile, May 15, 2013

Jul – Aug 2013 | BIA@FMM 15

Seminar on FMM Focus ASEAN Series: Cambodia and Vietnam, June 18, 2013

Asia Petrochemical Industry Conference (APIC) 2013, Taipei, May 9 – 10, 2013 Visit to Mega Fortris (Malaysia) Sdn Bhd, May 16, 2013

Events in Pictures

SUBCON, Thailand, May 16 – 19, 2013

Meeting with research team fromFaculty of Economics, Thammasat University,

Thailand, May 30, 2013

16 BIA@FMM | Jul – Aug 2013

Trade & Policy

Free Customs Advisory Services for FMM Members

Q Can I use a bank guarantee for importing goods into Malaysia? When can I use the bank guarantee and what

are the terms and conditions involved?

A LMW licence applicant who has not received the licence but has obtained a ‘principle’ approval can import machineryand raw materials/components first by submitting a bank guarantee to the Customs Department. If the application forthe licence is rejected, then the duty/tax involved will be deducted from the bank guarantee.

A company can use a bank guarantee to import its goods while waiting for MIDA’s approval to exempt the duty/tax onthe said goods under section 14(2) Customs Act 1967. If the application for the exemption is rejected, then the duty/taxinvolved will be deducted from the bank guarantee.

A company can apply to import the goods by using a bank guarantee if its application for temporary import has beenapproved. When the goods are not exported within the approved period, then Customs can claim the duty/tax involvedfrom the bank guarantee.

Q We are a Licensed Manufacturing Warehouse (LMW). What are the procedures involved in sending our goods

to a bonded warehouse, another LMW and a public warehouse?

A A LMW licensee who wants to keep its finished goods in a public bonded warehouse will have to use form GPBNo.2 to record its movement. If the finished goods are sold to another LMW as raw materials/components, then formGPB No.1 should be used.

A Senior Customs Officer from the Royal Malaysian Customs Department, Choo Kim Foong is based at FMM toassist FMM members as a Customs Advisor. The services of the Customs Advisor are available at FMM from 9.00 amto 1.00 pm every Tuesday. The Customs Advisor will assist members with the following:

• Provide advisory services and guidance on Customs related policies, procedures and requirements;

• Resolve operational related issues encountered at the company level; and

• Assist with applications for licenses and Customs facilities.

Members are encouraged to have individual meetings on a ‘one-on-one’ basis with the Customs Advisor at FMMto resolve specific issues pertaining to their company. Common issues and enquiries will be published in theBusiness in Action@FMM for members’ information. For further enquiries, please contact Arasy Velayutham atFMM Secretariat at tel: 03-62867356 or e-mail: customsadvisor@fmm.org.my.

The Customs Department also allows sales tax exemptions to institutionsand individuals who are not licensed under the Sales Tax Act 1972, to buytaxable goods without paying sales tax as provided under the Sales Tax(Exemption) Order 1980 by using the form CJ(P)2.

Some examples when CJ(P)2 can be used are:

• Sales Tax (Exemption) Order 1980, Schedule B, item 28: Trading companycan apply for sales tax exemption when it buys from a sales tax licensedmanufacturer to sell to a licensed manufacturer under section 65/65A of theCustoms Act 1967 (LMW);

• Sales Tax (Exemption) Order 1980, Schedule B, item 71: Trading companycan apply for sales tax exemption when it buys from a sales tax licensed manufacturer and exports the said products;

• Sales Tax (Exemption) Order 1980, Schedule B, item 85: These companies can apply for exemption to buy or importpacking and packaging materials from a licensed manufacturer to be used solely for the packing or packaging of fresheggs, fresh fruits, aquatic plants, aquarium marine life or cut flowers and then exported;

• Sales Tax (Exemption) Order 1980, Schedule B, item 89: All goods exported to a Free Industrial Zone or moved toa manufacturing warehouse licensed under sec 65/65A of the Customs Act 1967 for subcontract work andsubsequently re-imported or returned can apply to be exempted from sales tax; and

• Sales Tax (Exemption) Order 1980, Schedule C, item 1 – 13: Manufacturers who manufacture goods that are notsubject to sales tax can apply for sales tax exemption to buy/import raw materials/components and packaging material.This facility is only given to certain industries as stated in item 1 – 13.

18 BIA@FMM | Jul – Aug 2013

Market Alerts

On April 9, 2013, the Ministry of Industry and the Ministry of Science and Technology published a draft joint circular onmanaging the quality of steel products to collect feedback from relevant ministries and bodies. The draft circular

stipulates several new requirements relating to the quality of steel products, including implementing a quality controlsystem to ensure that that steel products’ quality conforms to the respective national technical regulations and regulationson labeling before launching the steel product into the market.

Vietnam Issues Draft Circular on Quality ofImported Steel Products

Steel manufacturers are responsible for obtaining a certificate of technicalregulation conformity issued by authorised organisations of the Ministry ofTrade (“MOT”) for certain steel products. Before importation into Vietnam,importers of steel products shall:

• Obtain a certification of product standards conformity or a certificateof technical regulations conformity issued by authorised organisationsof the MOT; and

• Make an announcement on product standards conformity or technicalregulations conformity.

If the imported steel products do not satisfy the aforesaid requirements,they shall be subject to an examination on product quality conductedby authorised organisations of the MOT. The imported steel productsare permitted to be cleared by Customs only if they passed suchquality examination.

Source: www.BryanCaveConsulting.com

FMM Directory ofMalaysian Industries 2014

In its 45th edition, FMM Directory of Malaysian Industries provides a comprehensive profile ofleading Malaysian Industries and a broad range of information important for doing business withMalaysian companies. It also has a wide circulation in the domestic and overseas market.

• Reach out to Trade Commissioners

from over 80 countries

• Target business worldwide via the

FMM’s International Chamber

network & Government Agencies

• Promote your products and services to

high-profile business leaders*

Available in:

• PRINT COPY

• CD-ROM

• e-BOOK

Circulation• FMM Members

• Major Bookstores in Malaysia

• Business Institutions and Trade Organisations

• Ministries, Government Departments and Agencies

• Foreign Embassies and Trade Commissionersin Malaysia

• Major Exhibitions/Events in Malaysia

• FMM Overseas Exhibitions, TradeMissions and Incoming Delegations

Why Should You Advertise?

WorldwideExposure

for as little as

RM6.60per day…

* Income Tax Deductible (Deduction for AdvertisingExpenditure on Malaysian Brand Name Goods/Rules 2002)

For enquiries & to advertise, please contact:

Mr Kenny Lee (Marketing Unit)E-mail: kenny@fmm.org.my HP: 012-3833857 Tel: 03-62867376

Jul – Aug 2013 | BIA@FMM 19

Interfood Indonesia2013August 29 – 31, 2013 • Jakarta, Indonesia

Visitors (2012): 51,632 from 35 countries

Exhibitors (2012): 973 from 35 countries

GIDA World FoodIstanbul 2013September 5 – 8, 2013 • Istanbul, Turkey

Visitors (2012): 15,000 from 23 countries

Exhibitors (2012): 358 from 23 countries

The 21st International Food Products &Processing Technologies Exhibition

Featuring

• Milk & Dairy Products

• Meat Products

• Confectionary Products & Chocolate

• Frozen Food

• Canned & Tinned Goods

• Natural & Organic Food

• Food Additives& Supplementary

• Alcoholic Beverages

• Non-Alcoholic Beverages

• Tea & Coffee

• Frozen Seafood

• Vegetable Oils & Olives

• Flour – based food& Pastas

• Jams, Honey, Molassesand Halva Products

• Grains & Spices

• Dried Fruit & Nuts

• Dips & Dressings

• Baby Foods

• Fresh Produce

• Food Ingredients

• Other Food Products

The 13th International Exhibitionon Food & Beverage Products,Technology, Ingredients,Additives, Raw Materials, Services,Equipment, Supplies

For more information, please contact:

Clarissa Chin at Clarissa@fmm.org.my or Koh Wee Leng at wee_leng@fmm.org.my

Featuring

• Food & Beverage (Products and Technologies) Bakery& Confectionery (Bakery & Confectionery, Machinery,Equipments, Supplies, Ingredients).

• Food & Hospitality, (Wine & Spirits, Equipments,Supplies, Storage, Services& Related Technology forHotel, Catering, Restaurant, Cafe, Supermarket).

• Food Ingredients, (Food Additives, Food Chemicals,Food Ingredients, Food Materials).

• Herbal & Health Food, (Herbal & Health Food andFood Supplements).

• Retail & Franchising, (Franchising & Licensing).

• Coffee, Tea and Cocoa, Fresh and Processed Fruits.

• Agricultures Products, Halal, Organic and NaturalHealth Food Products.

• Frozen food, Fish Seafood and Meat Products

Upcoming Fairs

20 BIA@FMM | Jul – Aug 2013

Happenings at Branches

The Branch organised the following activities:

• A Workshop on Safe Motorcycle Riding on April 22 – 23, 2013 at Industrial Training Institute, Kangar. This two-dayworkshop, held in collaboration with the National Institute for Occupational Safety and Health was attended by25 participants.

Kedah/Perlis

Participants of the Seminar on Updates onEffective Employment & Management of Foreign Workers

& Expatriates on April 30, 2013

• A Seminar on Updates on Effective Employment &Management of Foreign Workers & Expatriates onApril 30, 2013. Speakers from the Labour Department,Immigration Department and Police Force facilitated theSeminar. Representative from member company, SMTTechnologies Sdn Bhd shared their experiences in themanagement of foreign workers.

• A meeting with Prof Dr Premkumar Rajagobal, CEO andVice Chancellor of AIMST University on May 9, 2013. Themeeting was held to explore potential collaborationbetween the two organisations.

• A Workshop on Mandatory Electronic PreferentialCertificate of Origin (e-PCO) on May 16, 2013.Senior officials from MITI and Dagang Net TechnologiesSdn Bhd updated 25 participants at the workshop.

• The 5th FMM Kedah/Perlis Open Golf Tournamenton May 25, 2013. It attracted over 116 participantsfrom the public and private sectors. The new KedahState Exco for Education, Transport and WorkYB Dato’ Tajul Urus Mat Zain was the guest-of-honour.

The following activities were organised:

• Visit to SIRIM Berhad at Permatang Pauh and AdvancedMaterials Research Centre at Kulim Hi-Tech Park bymembers from Kedah, Perak and Penang on May 8, 2013.

• A Workshop on Personal Data Protection Act 2010:An Overview & Compliance Assessment held onApril 30, 2013. The objective of the Talk was to updatethe industries and manufacturers in Penang on theAct which came into effect on April 1, 2013.

• A Seminar on Mandatory Electronic Application ofPreferential Certificates of Origin on March 5, 2013which attracted 26 participants. Senior officials fromthe Ministry of International Trade and Industry andrepresentatives from Dagang Net TechnologiesSdn Bhd presented papers on Mandatory ElectronicApplication of Preferential Certificates of Origin,Online Application of Preferential Certificates of Origin.

Penang

Participants who attended the Workshop onPersonal Data Protection Act 2010 on April 30, 2013

• A Seminar on Aptis, organised in collaboration with the British Council on April 17, 2013. Aptis is an innovative globalEnglish assessment tool from the British Council which is used globally by corporate businesses, government organisationsand educational institutions.

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22 BIA@FMM | Jul – Aug 2013

The Branch organised the following activities:

• A luncheon meeting with Tenaga Nasional Berhad (TNB) on May 9, 2013 which was hosted by TNB Perak andattended by 17 member companies. Ir Abdul Aziz Abd Majid, Senior General Manager (Operations Region 2)Distribution Division of TNB thanked FMM for being proactive in solving energy issues between the manufacturersand TNB over the past 13 years.

• A briefing on April 24, 2013 which attracted a total of 76 participants from 46 companies. The speakers from Green TechCorporation, KUB Berjaya Enviro Sdn Bhd and Credit Guarantee Corporation briefed the participants on the objectivesand various schemes available to industries on green technology.

• A visit to Spritzer Group in Taiping, Perak on April 10, 2013

Perak

The participants who attended the Greentech Seminar onApril 24, 2013

Dato’ Gan Tack Kong, (right) Branch Committee Chairman presentinga souvenir to Dato’ Lim Kok Boon, Managing Director of Spritzer Group

Happenings at Branches

The Branch’s activities included:

• A Seminar on“Understanding Typesof Customs Facilities& Control” held onApril 24, 2013 whichwas facilitated bythe Tan Eok Chye,Senior Assistant Directorof Customs Department.

• A Human ResourceConference entitled“Driving HR ContinuousExcellence” held onMay 15, 2013.The Conference wasofficiated by the DeputyDirector of Labour NegeriSembilan, Chua Ah Ley.

• A visit to FibertexPersonal Care Sdn Bhdon April 20, 2013.

Negeri Sembilan

Group photograph of the participants of the Seminar on Understanding Types of Customs Facilities & Control

24 BIA@FMM | Jul – Aug 2013

Happenings at Branches

Sarawak Representative Office

The Sarawak Representative Office organised anetworking session in collaboration with MATRADESarawak and Consulate General of Brunei office inKuching April 10, 2013. The event was attended by54 participants.

Sheikh Rashid Salam, Assistant Chief Executive Officer ofBrunei Economic Development Board presenting his paper on

‘Business Opportunities in Brunei Darussalam’

Selangor

The Branch organised the following:

• New Members’ Networking Session held onApril 18, 2013 led by Dato’ Nathan Suppiah,Branch Vice-Chairman & Chairman of FMM SelangorMembership Services Working Sub-Committee.

• 2nd FMM Selangor Security Management WorkingSub Committee Meeting and factory visit to Top GloveSdn Bhd on April 23, 2013. The meeting was chairedby Dato’ Kevin Lai Tak Kuan, Chairman of FMM SelangorSecurity Management Working Sub-Committee todiscuss and update on recent security issues involvingcompanies in Selangor.

• A hi-tea session with the Selangor Chief Police Officer,YDH DCP Dato’ Haji Tun Hisan bin Dato’ Haji TunHamzah and Industries in Selangor on April 25, 2013.The hi-tea session was held to foster a closerrelationship with the Selangor Chief Police Officer and his team.

• A meeting with all quarry operators in Batu 14, HuluLangat on May 2, 2013 chaired by Zulkhairil bin Zainal,Manager of TNB, Cheras. The meeting discussedcomplaints received by a member namely Sungai LongIndustries Sdn Bhd and quarry operators on irregularelectricity supply from TNB.

• A Briefing on Personal Data Protection Act (PDPA)2010 held on May 7, 2013. Jilian Chia Yan Ping,Senior Associate from SKRINE enlightened theparticipants on the background of PDPA 2010 andprovided guidance on compliance with the requirementsof the Act and highlighted the important aspects ofdata protection practice.

A presentation by Digi Telecommunications Sdn Bhd during theSecurity Management Working Sub-Committee Meeting

Participants listening attentively during the Briefing onPersonal Data Protection Act

Jul – Aug 2013 | BIA@FMM 25

Special FeatureHappenings at Branches

Johor

The Branch organised the following activities:

• MITI-MIDA-Customs-Bank Negara Help Desks on May 7, 2013 toprovide advisory services and guidelines on related policies, proceduresand requirements, resolve operational related issues encountered at thecompany level and assist with applications for licenses, tax incentives,duty exemption and other facilities. The Help Desks also assistedmembers on various issues which included Preferential Certificates ofOrigin application issues, investment incentives offered by MIDA,Customs ruling and issues related to License ManufacturingWarehouses and latest updates on Bank Negara services.

• A joint meeting with Immigration Department Johor on May 14, 2013to discuss the recent problems faced by FMM members.

The following Industrial Park Management Committee Meetings were held:

• IPMC Yong Peng on March 13, 2013 chaired by Tuan Haji MohdKhir Johari Salleh the YDP Majlis Perbandaran Yong Peng wherethe Branch briefed IPMC Yong Peng members on FMM services.

• Meeting with Johor Bahru City Council (MBJB) Industrial Development Secretariat (formerly known as IPMC) onApril 14, 2013 – the meeting proposed to establish the Special Task Force Team to be headed by Tuan Hj JalilTasliman of MBJB’s Planning Department. The Task Force comprising representatives from FMM, MIDA, JSIC andMBJB’s Engineering Department would focus on resolving problems faced by companies in the industrial estate.

• Majlis Perbandaran Pasir Gudang meeting on March 20, 2013, chaired by Mohd Ezuddin Sanusi, Secretary ofMPPG – the Branch highlighted, among others, floods at Johor Port, transformer upgrading requested by TNB,potholes, signboards covered with moss and upgrading of Pasir Gudang Highway.

The Branch Committee Chairman Capt(R) Hj Abdullah Shariffpresenting a token of appreciation to

Aidil Hasinah Abu Baha from the Immigration Department

Malacca

The following activities were organised by the Branch:

• A Safety Conference on “Fostering an OSH Culture Towards a Healthy and Productive Workforce” held from April 10 – 11,2013 which was officiated by Dato’ Ir Dr Johari bin Basri, Director General, Department of Occupational Safety andHealth (DOSH) Putrajaya. Invited speakers were Tan Sri Dato’ Lee Lam Thye, Chairman of National Institute ofOccupational Safety & Health and Nazruddin bin Mat Ali, Director of DOSH Malacca.

• A Workshop on Behavioural-Based Interviewing Skills held from April 17 – 18, 2013 which was conducted by DanielLiew, Managing Director, Direct Results Asia Pacific Consulting Group.

Malacca Branch’s Membership Networking Session, May 14, 2013Participants preparing their presentations during the Workshop onBehavioural Based Interview Skill

26 BIA@FMM | Jul – Aug 2013

Ordinary Members

• Ajcan Sdn Bhd

• Algaetech International Sdn Bhd

• BSSB Leather and Fabric Beds Sdn Bhd

• Carpets & Rugs Industries Sdn Bhd

• CCT Innovation Sdn Bhd

• CYL Foods Sdn Bhd

• DRA Manufacturing (M) Sdn Bhd

• Danamin (M) Sdn Bhd

• EC Moulding (Malaysia) Sdn Bhd

• Eco Tower Sdn Bhd

• Grasse Oil Sdn Bhd

• Green House Ingredient Sdn Bhd

• HIA Engineering & Trading Sdn Bhd

• Hufcor Maroshumi Sdn Bhd

• Jiann Lih Safety Products (M) Sdn Bhd

• Lipta Plastic Industries Sdn Bhd

• Pintarmas Sdn Bhd

• Riso Sekken Sdn Bhd

• Ruttherford Global Power Production Sdn Bhd

• Solano Designer Bed Sdn Bhd

• Terreal (Malaysia) Sdn Bhd

• Thoyyib Pharma Industries (M) Sdn Bhd

• Tokuyama Malaysia Sdn Bhd

• Arianpour Sdn Bhd

• BDO Consulting Sdn Bhd

• IP Serverone Solutions Sdn Bhd

• MIED Capital Sdn Bhd

• Pineapple Cannery of Malaysia Sdn Bhd

Affiliate Members

New Members (May – June 2013)

The FMM welcomes the following 28 new members into the organisation,23 Ordinary Members and 5 Affiliate Members.The majority or 46% are from Selangor,

18% from Johor and Federal Territory and 4% from Malacca, Perak, Pahang andSarawak, while the rest is from other states

Happenings at Branches