Musashi University Discussion Paper No.34 Emergence and Development of the Malaysian Plastic Injection Industry July 2003 Musashi University 1-26-1, Toyotama-kami, Nerima-ku, E-mail: [email protected]ocal Industry, <Abstract> ry in Malaysia country. The ctors in the course of its development: the latecomers’ advantage upon its emergence, the spillover of technology through personnel transference in the second stage of development, and backward linkage with the electrical an electronic industry, the largest manufacturing industry in today’s Malaysia, after the 1980’s. In statistical examinations to assess the importance of human capital and the locations of the firms, these factors were not found to significantly influence the growth of the industry. Ken Togo Tokyo, 176-8534, Japan Key Words－Asia, Malaysia, Industrial Development, Plastic Industry, L Field Research We studied the emergence and development of the plastic injection indust to assess the development mechanism of a local industry in a developing industry was influenced by various fa
Transcript
Musashi University Discussion Paper No.34
Emergence and Development of the Malaysian Plastic Injection Industry
ctors in the course of its development: the latecomers’ advantage upon its emergence, the spillover of technology through personnel transference in the second stage of development, and backward linkage with the electrical an electronic industry, the largest manufacturing industry in today’s Malaysia, after the 1980’s. In statistical examinations to assess the importance of human capital and the locations of the firms, these factors were not found to significantly influence the growth of the industry.
Ken Togo
Tokyo, 176-8534, Japan
Key Words－Asia, Malaysia, Industrial Development, Plastic Industry, LField Research
We studied the emergence and development of the plastic injection industto assess the development mechanism of a local industry in a developing industry was influenced by various fa
1. Introduction
Most developing countries depend on the growth of their manufacturing industries
te the risk of
have higher
productivity than others increases the national income. Notwithstanding,
policymakers may be hindered in their efforts to promote the emergence and growth of
new industries due to their incomplete understanding of the mechanisms responsible
of enterprises,
hers to rely on
field research when they want to study the mechanism of industry emergence. Though
the value of field research has been recognized in economics (e.g., Helper 2000), the
considerable time and expense entailed in such studies discourages researchers from
f field research
y in Korea and
Taiwan by Levy (1991), a study on the computer industry in Korea and Taiwan by Levy
and Kuo (1991), a study on the machine tool industry in Taiwan by Sonobe, Kawakami,
and Otsuka (2002), and a study on the garment industry in China by Sonobe, Hu, and
to continue advancing. A diversification of industries should mitiga
income fluctuations. The introduction of manufacturing industries that
for industrial emergence and growth.
As newly developing industries often comprise only small numbers
public knowledge on such industries is often unavailable, forcing researc
using this technique. In fact, we could cite only four reported accounts o
on industry emergence and development: a study on the footwear industr
1
Otsuka (2002).
Our group performed a qualitative and quantitative study on the development of
s, in order to
a developing
country. Malaysia has achieved economic development by attracting foreign direct
investments, especially in the electrical and electronic industry. The plastic industry is
an exception. Local people launched this industry and nurtured its growth to a certain
ponents to the
ite fast. The plastic injection industry
and grew in a
developing country through a linkage with multinationals.
This study has three distinct features: first, our analysis is based on data and
information collected through field research; second, we seek to elucidate the
stry; lastly, we
ry.
This introduction is followed by three more sections; the next section outlines the
development of the Malaysian plastic industry using public data, the third section
analyzes the Malaysian plastic injection industry using data collected by our field
the Malaysian plastic injection industry based on field research mission
assess the process by which a local manufacturing industry grew in
level. Among the firms in this industry, those that provide plastic com
electrical and electronic industry have grown qu
in Malaysia is an interesting example of a local industry that emerged
mechanisms responsible for the emergence and development of the indu
statistically examined the elements that affected the growth of the indust
2
research; and the final section highlights the conclusions from our results.
2.
According to the company brochure of a plastic company called Yong Kam Fook,
the man who founded the company in 1950, Mr. Yong Kam Fook, went on to become a
pioneer of the Malaysian plastic industry. Othman and Yeoh (1986) report that very
2. Malaysian plastic industry
1. Overview of the development of Malaysian plastic industry
few small Malaysian companies produced plastic goods in their backyard
The first census of the manufacturing industries in Malaysia was
1959. Since the plastic industry was grouped in
s in the 1950’s.
conducted in
the category of “all other industries,”
no specific data on this industry was provided. This evidences the small scale and
relative unimportance of the plastic industry at that time.
The plastic industry was additionally included in the category of “miscellaneous
49) the next census of 1963, but at that time
it was the only industry within that category. According to that census, there were 27
enterprises in the plastic industry of Malaysia, whose 657 workers accounted for only
0.84 percent of total workforce in manufacturing.
manufacturing industries” (industrial code
3
<Table 1 here>
sen to 76, and
the Malaysian
electric industry in the same year, the first year it became available, the electric
industry was somewhat smaller than the plastic industry at that time, comprising a
total of 37 enterprises and employing a total of 1,454 workers.
ployees in the
astic industry
he numbers of
enterprises and number of employees. The major products of the plastic industry in
1973 were polythene bags and household ware, accounting for 28 and 8 percent of total
industry sales, respectively (Census 1973, p.286). The 1973 Census, the first to
small scale of
ses, 74 percent
of the total in the industry, employed fewer than 20 employees at that time.
While the electrical industry comprised only 109 enterprises in 1973, considerably
fewer than the plastic industry, it employed 25,317 workers, far more than the plastic
By the third census of 1968, the number of enterprises rose had ri
the number employed workers had risen to 1,949. According to data on
By the fourth census of 1973, the numbers of enterprises and em
plastic industry had increased to 299 and 8,702, respectively. The pl
grew by more than 30 percent each year from 1968 to 1973, both in t
provide data on the distribution of enterprise sizes, attests to the
enterprises in the industry in the early 1970’s. As many as 221 enterpri
4
industry. Major foreign direct investment in the electrical and electronics industry
started around 1970, with large investments by Japanese electrical companies,
tsushita Electric in 1965 and Hitachi Semiconductor in 1972 (Toyo Keizai
The Malaysian plastic industry grew steadily. In the census of 1993, the number
of enterprises had risen to 1,111, and the number of employees had risen to 59,942,
accounting for 4.7 percent of the total workforce in manufacturing.
ical industry, on the other hand, grew far faster. By 1993 the number of
l workforce in
Census data after 1993 is not yet available. According to the Malaysian Plastic
Manufacturers Association (MPMA), the number of enterprises in the plastic industry
was 1,300 in 2001 (Giam 2002). In any case, the census data summarized above
ysian plastic industry and its acquisition of
rall manufacturing in the country.
2.2. Three features of The Malaysian plastic industry
(1) Locally owned industry
including Ma
Sinposha 2001).
The electr
employees had risen to 338,772, accounting for 26.7 percent of the tota
manufacturing.
clearly charts the steady growth of the Mala
a certain share of ove
5
In interviews with Malaysian manufacturers, we learned that the Malaysian
plastic industry was mostly locally owned in the very early stages of its development
Census, which
people. In addition, local people were responsible for most of the production within the
industry. The amount of value added by local people in 1973 was 36 million ringgit, or
about 81 percent of the total production in the industry that year.
Similar data has not been available since 1973, but our interview responses
is still very high.
(2) Strong relationship with electrical industry
As we will discuss later, the plastic industry has tightened its ties with the
electrical and electronic industry. In 1973, the vast majority of products manufactured
2, however, 20
ctronic parts,
according to a report from the Malaysian Industrial Development Authority (MIDA)
(MIDA 1993, p.14). In our interview with the MIDA Tokyo Office in 2001, we learned
that electrical and electronic parts now account for about one third of all parts
and later. Data supporting this argument is also available in the 1973
reports that 279 out of 299 enterprises in the plastic industry were owned by local
suggest that the rate of local ownership
by the plastic industry were polythene bags and household wares. By 199
percent of all manufactured plastic products were electrical and ele
6
manufactured in the industry.
d into several
categories, including injection molding, extrusion, blow molding, and so on. Injection
molding is best suited for the rapid production of identical products. After injecting
heated plastic resin into a mold, the plastic solidifies, the mold is opened, and the piece
roduced by
g. The merit of the technique is its reliability in producing precise
rit is that the
molds are expensive.
Extrusion is the best process for manufacturing pipes. Heated plastic resin is
poured into a chamber and forced out through a die. The machines used in extrusion
ated products.
of extrusion.
Blow molding is used to produce pet bottles. The heated plastic resin is pushed
into blow mold, then high-pressure air is pumped into the mold to form a bottle. Like
extrusion, blow molding uses inexpensive equipment but is not well suited for the
(3) Injection molding has the largest share of production process
The production processes in the plastic industry can be divide
is ejected. Plastic buckets and TV casings are good examples of products p
injection moldin
products, insofar as the molds themselves remain precise. The deme
are inexpensive, but the process is unsuitable for manufacturing complic
Inflation molding, the technique used to produce polythene bags, is a kind
7
production of complicated products.
Table 2 shows the shares of the foregoing production processes in the Malaysian
plastic industry in 2001. Injection molding had the largest share of all.
＜Table 2 here＞
3. Emergence and Development of the Plastic Injection Industry
of the plastic
from July to
September 2003. With the help of the MPMA, we made appointments with a list of
randomly selected plastic manufacturers who kindly consented to interviews. As the
interviews were conducted only with those who could speak English because the firms
e bias in the survey population.
We ed six states on the west side of the Malay Peninsula and the federal territory of
Kuala Lumpur. Of the 40 plastic injection firms visited, three failed to provide useful
information, hence 37 sample firms were used for the final study.
3.1. Analysis based on field research
In this section we will analyze the emergence and development
injection industry in Malaysia based on our field research conducted
knew that we were foreigners, there may have been som
visit
8
(1) Classification of firms
We classified the sample firms into four categories based on the dates or conditions
ecomer.” The
lastic injection
industry, from 1950 to 1970. The Followers were firms that entered the industry in the
second stage of its development, from 1971 to 1982. The one firm classified as a New
Pioneer started production by specializing in electrical and electronic parts in 1982.
e explanation.
e local plastic
manufacturers to subcontract the production of plastic parts. Some of the Malaysian
firms started to produce plastic parts for electrical appliances, while maintaining the
production of plastic household wares. The New Pioneer stood apart from the others
arts. According to our
in
sharply for most firms to commit to exclusive production. The New Pioneer’s decision
to specialize was considerably risky and marked a milestone for the industry.
Subsequently, a good number of manufacturers followed suit and began
of their establishment: “Pioneer,” “Follower,” “New Pioneer,” and “Lat
Pioneers were firms established in the early stage of development of the p
The Latecomers were firms established from 1982 to 1997.
Our reason for singling out one firm as a New Pioneer calls for som
Around 1980, multinational electrical companies began approaching th
by taking the brave step of specializing exclusively in electrical p
terview responses, the orders for electrical parts were massive, but fluctuated too
9
specializing in electrical parts themselves. Then, we classify firms before the New
Pioneer as the Followers and after him as the Latecomers.
3 summarizes the features of the four groups. Several interesting trends
could
• First, the locations of the enterprises spread out from Kuala Lumpur to other
regions as time passed. Geographically, the new industry started within an
economic center and then diffused through other regions.
ly the same
as contrary to
mely, that the founders would require more education as
time passed. This may also indicate that education is unassociated with the
birth of new companies.
• Third, about 40 percent of the founders in the Latecomers group gained
sses.
electrical
and electronic parts by the time the Latecomers started their businesses.
The third and fourth features indicate that most founders in the Latecomers group were
spin-outs from existing plastic manufacturing firms who concentrated in plastic parts
Table
be seen.
• Second, most of the founders in the four groups had approximate
length of schooling, with the exception of the Pioneers. This w
our expectation, na
experience in plastic manufacturing before starting their busine
• Fourth, 66.6 percent of the products produced in the industry were
10
for the electrical and electronic industry in their new businesses.
thods used to
acquire new technologies are quite important topics from academic and practical points
of view. This information enriches our knowledge of economic development in the field
of economics and helps governments plot out development plans for new industries.
Tab thods used to
acqu
fly above. No
information could be obtained on the founder’s motives for establishing the firm
since the founder Mr. Yong had already passed away. The company brochure
tells us that Yong invented the injection machine used in the company.
s before it starting making plastic
of the plastic
business on a trip to Taiwan and Hog Kong. He imported injection machines
and engineers from Taiwan to produce plastic goods.
• The founders of firm C grew and sold pet fish before they entered the plastic
(2) Emergence of the plastic injection industry
The factors inciting people to start new businesses and the me
le 4 summarizes the motives for founding enterprises and the me
ire technology.
• Firm A is Yong Kam Fook, a manufacturer discussed brie
• Firm B was in the food processing busines
parts. The founder of firm B realized the high profitability
11
business. Small plastic aquariums for selling pet fish were very expensive at
that time in Malaysia, as they had to be imported from foreign countries. The
in higher
uced in-house.
They imported injection machines from Japan and asked the machine maker to
teach them how to produce plastic goods.
<
d their plastic
businesses due to the influences of other local plastic manufacturers. Firms B and C
were founded for different reasons. Firm C’s motive was derived from its original
business, whereas firm B’s was unrelated to its original business. However, both B and
part from firm
described by Gerschenkron (1962), whereby less
developed countries can import their technologies from more developed countries in
order to develop their industries. The emergence of the Malaysian plastic injection
industry utilized this latecomers’ advantage.
founders realized that they could sell their pet fish at lower prices and
volume if they stored them in small plastic aquariums prod
Table 4 here>
These three firms could be called Pioneers, as none of them starte
C imported their technologies from advanced countries, which set them a
A. This is the latecomers’ advantage
12
(3) Development of the plastic injection industry in Malaysia
ad experience
plastic goods
before starting their businesses. The other four founders entered the plastic business
from unrelated businesses, but two of them hired workers from other plastic
manufacturing companies to start out. This suggests that from 1972 to 1982, the
ing for skilled
ging from the
substantially during
this decade. The second stage of development appears to have been characterized by
the spillover of technology and information through the transference of people.
The third stage of development started with the appearance of the New Pioneer.
T d wares and
982, and hired
14,000 in 2001.
Specialization in electrical and electronic parts has one merit and two demerits:
The merit is the massive volumes of the orders. The demerits are the sharp fluctuation
Table 3 shows that two of the eight founders in the Followers group h
in plastic manufacturing, while another two had experience in trading
second stage of development in the plastic injection industry, head-hunt
workers and spin-outs from existing companies were common. Jud
figures in the 1973 census, the number of enterprises increased
he founder was working at local plastic firms that produced househol
electrical parts. He started his own company with a couple of people in 1
13
in the volume of orders and the high standards of quality demanded by the electrical
companies placing the orders. Most local firms realized the merit and demerits of
ing production
ast.
After the New Pioneer was founded, the link between the plastic industry and
electrical industry strengthened considerably. By the time the Latecomer firms
started entering the industry, the production share of electrical and electronic parts was
erviewed had
l and electronic parts from the very beginning of their
t the merit of
specialization outweighed its demerits.
The development of the Malaysian plastic injection industry can be divided into
three stages: the emergence of the industry, the development based on the production of
development based on the production of electrical and
(4) Performance of the four groups
Table 5 shows the performance of the four groups in 1995 and 2001. The figures
subcontracting for foreign electrical firms and hedged the risk by continu
of household wares. The New Pioneer, however, took the risk and grew f
66.6 percent on average. Moreover, 11 out of the 26 Latecomers int
specialized exclusively in electrica
operations. Thus, it appears that many manufacturers concluded tha
household goods, and the
electronic parts.
14
tells us three things:
First, the New Pioneer was the best performer.
han the Followers and Latecomers,
• Third, the variance of performance among firms in the Follower and Latecomer
groups was relatively high. This point will be investigated more closely in the
next subsection.
(5) Features of large and small enterprises in Followers and Latecomers
We divided the firms in the Follower and Latecomer groups into two sub-groups;
large enterprises employing more than 500 workers, and small enterprises employing
500. Table 6 describes the features of the large and small enterprise
subgroups in the Follower and Latecomer categories.
<Table 6 here>
•
• Second, the Pioneer performed better t
suggesting that experience in the market matters.
<Table 5 here>
less than
15
Table 6 presents three interesting points about the performance of plastic
companies in Malaysia:
electrical and
rprises in the
Followers group were exclusive producers of electrical and electronic parts. In
the Latecomers group, large enterprises produced 86.2 percent of the electrical
and electronic parts manufactured. This suggests that the plastic companies
aster than the
ines known as
coordinate measuring machines (CMMs). CMMs are expensive, but
manufacturers need them to produce complex and precise pieces. The 100
percent ownership of CMMs among large enterprises in the Follower and
ex and precise
nufacturers in Malaysia.
• Third, the founders of large and small companies received about the same years
of schooling, suggesting that education of the founders might not have a great
effect on the performance of the plastic companies.
• First, large enterprises took up a large share of the production of
electronic parts in both groups in 2001. All of the large ente
that produced electrical and electronic parts might have grown f
others.
• Second, all large enterprises in both groups had inspection mach
Latecomer groups suggests that the capability of producing compl
products is now important for plastic ma
16
Based on the above, we determined several elements that might have affected the
growth of plastic injection companies in Malaysia; the length of operation, the
to
e complex, precise products. Next, we will examine these elements statistically.
3.2. Statistical analysis
(1) Elements affecting performance of plastic companies
ally examine
performance of plastic injection companies in
e of our survey population, we use ordinary least
square regressions for our statistical analysis.
The following hypotheses are tested:
Hypothesis 1: Older companies have performed better than the others.
e a higher proportion of electrical and electronic
Hypothesis 3: Companies with the technical capability to produce complex and precise
products have performed better than the others.
Hypothesis 4: The educations of the current managing director have not affected the
production share of electrical and electronic parts, and the technical capability
produc
Here we use data collected from our field research to statistic
elements that may have affected the
Malaysia. Given the limited siz
Hypothesis 2: Companies that produc
parts have performed better than the others.
17
performance of the companies.
Hypothesis 5: The agglomeration of industry has affected the performance of the
sis 6: The distance to customers has affected the performance of the
companies.
Hypotheses one to four were derived from the discussion above. Hypothesis five
is derived from the argument in recent literature in economics that the agglomeration of
ts company performance. We propose hypothesis six
in an important
We adopt the number of employees as a proxy variable representing company
performance. Sales levels would have been a more reliable indicator, but the sample
companies were only willing to share information on their workforces. As most of the
ant to disclose their sales figures.
tory variables in our regression are as
follows:
(a) The number of employees in 2001 (variable name: EMP01)
(b) The year of establishment(variable name: OPERAT)
companies.
Hypothe
industries positively affec
tuitively, suspecting that the delivery time to customers might have
effect on company performance.
companies were not publicly listed, they were reluct
Thus, the respondent and explana
18
(c) The production share of electrical and electronic parts within the company in 1995
(variable name: ELESH95)
(e) Years of schooling of the current managing director (variable name: EDUMD)
(f) Agglomeration dummy (variable name: SPJ)
Electrical companies agglomerate in the States of Selangor, Penang, and Johor in
s that were located in one of these three states
in
Based on the average delivery times indicated by the sample companies in the
interviews, we define the explanatory variable as the average number of minutes to the
customer in 1995.
rom our hypothesis above. As the companies in the Pioneers
group had established brand names for their products, we use this dummy variable to
cancel out the brand name effect on company performance. Here we code one for the
companies in the Pioneer group.
(d) CMM dummy (variable name: CMM)
Companies that had CMMs in 2001 are coded as one.
Malaysia. We code one for the companie
1995.
(g) Distance to customers (variable name: DISCU)
(h) Pioneer dummy (variable name: PDUM)
This variable is not f
19
Table 7 reports the estimated results for company performance. The first column
of the table shows the basic estimation, and the second and third columns show
analysis, the
arts, and
CMM ownership were significant. The length of education of the current managing
director was not significant. This provided statistical support for the hypotheses one to
four.
e other hand, agglomeration, distance to customers, and brand name
(dummy variable assigned to the Pioneers) did not statistically affect the company
<Table 7 here>
ts
electrical and
electronic parts positively affected the company performance. This brought us to a
further question, namely: What determined the production share of electrical and
electronic parts in each company? We propose the following hypothesis based on our
estimations with insignificant variables excluded. According to the
number of years in business, the production share of electrical and electronic p
On th
performance.
(2) Determinants of the production share of electrical and electronic par
According to the regression analysis above, the production share of
20
interviews.
Hypothesis 7: Managing directors with longer experience working at other plastic
ies will produce higher proportions of electrical and electronic parts in their
According to our interviews, successful companies that produced more electrical
and electronic parts tended to have managing directors with long years of experience
working at other plastic companies. We also used ordinary least square regressions to
ason explained
and electronic
tory variables
are the managing directors’ years of working experience at other plastic companies
(variable name: PPEM) and the same variables used before. The estimation results
are shown in Table 8.
The fifth and sixth columns show that PPEM was significant, providing statistical
support for hypothesis seven by regression analysis.
compan
companies.
examine the elements affecting the production share, for the the same re
above. The respondent variable is the production share of electrical
parts within the company in 1995 (variable name: ELESH95). Explana
<Table 8 here>
21
(3) Determinants of CMM
ance, we next
el companies to acquire CMMs? We expressed the
hypothesis to be tested as follows:
Hypothesis 8: New companies tend to have CMMs.
This hypothesis is derived from Table 6. As many as eight of the small companies
nies tended to
. Here we apply a probit estimation. CMM is taken as the respondent
variable, and the explanatory variables are the same as before. Table 9 shows the
estimated results.
<Table 9 here>
Acc nt, providing
statistical support for hypothesis eight.
The following points were derived from our regression analysis:
• First, the older plastic injection companies that produced more electrical and
As the ownership of a CMM positively affected the company perform
asked: What elements comp
in the Latecomers group owned CMMs, suggesting that the newer compa
acquire them
ording to the estimated results, OPERAT is positively significa
22
electronic parts using CMMs for inspection performed better than the others.
Second, plastic companies run by managing directors with longer experience at
ratios of electrical and electronic parts.
• Third, young companies tended to own CMMs.
4. Conclusion
We studied the emergence and development of the plastic injection industry in
producers of
ho imported
1950 to 1970.
In the second stage of development from 1971 to 1982, when the plastic injection
industry had emerged as a full-fledged industry in Malaysia, the industry enjoyed the
latecomers’ advantage. The transference of people through spin-outs and personnel
echnology. In
old wares and
electrical and electronic parts. The third stage of development commenced with the
appearance of the New Pioneer specializing in electrical and electronic parts. The
number of manufacturers specializing in electrical and electronic parts increased after
•
other plastic companies produced higher
Malaysia based on our field research. The first firms in the industry were
plastic household wares established mostly by local entrepreneurs w
injection machines and technology from more advanced countries from
recruitment from other plastic companies led to frequent spillovers of t
this second stage of development, manufacturers produced both househ
23
1982, and some of these newly established manufacturers grew rapidly. Thus, the
industry benefited from the backward linkage with the electrical and electronic industry,
tic companies
using the data we collected. Years of operation, production share of electrical and
electronic parts, and CMM ownership positively affected their performance. This meant
that the older plastic injection companies that produced more precise electrical and
hooling of the
performance.
These were interesting points, as human capital and agglomeration are hot issues in the
literature in economics (e.g., Mankiw et al. 1992 and Krugman 1991). Based on the
field research, we formed the following interpretation: The effect of schooling years on
t be linear. Basic education of around ten years seemed a
n in Malaysia.
More than a few managing directors with only ten years of schooling ran companies
with more than 500 employees.
As for agglomeration, Malaysia’s good infrastructure might have reduced the
the largest manufacturing industry in Malaysia today.
We statistically examined determinants of the performance of plas
electronic parts performed better than the others.
The estimates from our analysis indicate that the years of sc
managing directors and the locations of the firms did not affect their
economic growth might no
ecessary condition to manage the current plastic injection companies
24
importance of location of firms. It takes only 11 hours from Penang Island located
near the border of Thailand to Johor Baru next to Singapore by highway. Some of the
Johor.
electrical and
electronic parts and CMM ownership. The managing directors’ years of experience at
other plastic companies increased the shares of both. Most of the managing directors
had founded the companies that they managed. Those with long prior experience at
f electrical and
CMMs, indicating that they had been quick
to learn that the production of complex and precise products is the best guarantee for
surviving in the market.
The Malaysian plastic industry is now facing a crisis. Major multinational
aysia to China.
have started
semi-assembly operations or obtained contracts for work as original equipment
manufacturers (OEMs) or electronic manufacturing services (EMSs). Their survival
may depend on how quickly and far they can increase their technology, management,
manufacturers located in Selangor deliver their products to Penang and
We also statistically examined the determinants of production of
other companies might have had a keener awareness of the profitability o
electronic parts and started their own companies accordingly.
The younger companies tended to own
electrical and electronic companies are shifting their production from Mal
Local plastic manufacturers are beginning to respond. Some
25
and productivities.
ch C by Japan Society for the Promotion of Science, the Japan Economic Research Institute, and
. Our field an Industrial aysian Plastic useful advice
field research and comments on the contents of the paper. Prof. Kyoji Fukao (Hitotsubashi University), Prof. Takashi Kurosaki (Hitotsubashi Univesity), and Prof. Yasuyuki Sawada (University of Tokyo) also provided useful comments. I would like to thank them.
Acknowledgements This research was partly funded by the Grant-in-Aid for Scientific Resear
Musashi University. We thank the entities for the benefits providedresearch was greatly assisted by Mr. Lim Hock Guan (MalaysiDevelopment Authority) and Ms. ST Giam and Ms. Mandy Kok (MalManufacturers Association). Prof. Tetsushi Sonobe (FASID) providedconcerning the
26
Table 1. Plastic industry and trica ustry alay1963 1968 1973 981 1993
elec l ind in M sia 1
Manufacture
Malaysia Total ,546 9,013 11,0 20,
Number of Employees
Number of Enterprises
Manufacture of Plastic Products 27 76 299 658 1,111
of Electrical Machinery n.a. 37 109 281 787
8 60 429 23,462
Manufacture of Plastic Products 657 1,949 8,702 17,700 59,942
Manufacture of Electrical Machinery n.a. 1,454 25,317 79,607 338,772
Malaysia Total 77,853 130,257 278,935 556,414 1,266,727
Sources: Census of Manufacturing Industries, various years
(Note) Electrical machinery includes electronic apparatus.
27
Table 2. Shares of production processes in the Malaysian Plastic Industry in 2001 )
Injection Moulding 40
(unit: percent
Blow Mould
Pipes and Profile
Foam
Film Extrusion 30
ing 8
Extrusion 7
Moulding 5
ication 5
Others 5
Composite Fabr
Source: Giam (2002)
28
Table 3. Characteristics of ise cla ns Pioneers Followers New Pioneer Latecomers
enterpr ssificatio
pur (3) Ku edah (1)
(1
Schooling of founde
(Average years)
Traders 0
Other man
Other traders
(the period of enterprises)
c parts 0.00 3.75 100.00 66.60
Automotive parts 0.00 7.50 0.00 4.00
Household wares 100.00 45.00 0.00 17.80
High-technologies 0.00 0.00 0.00 7.40
Others 0.00 0.00 0.00 7.40
Number of Firms 3 8 1 26
Period of enterprise 1950 to 1970 1971 to 1982 1982 1982 to 1997
Place of enterprise Kuala Lum ala Lumpur (2) K Selangor (12)
(number of firms) Johor (3) Johor (5)
Selangor ) Perak (3)
Penang (1) Kuala Lumpur (2)
Malacca (1) Penang (2)
Malacca (1)
Kedah (1)
rs
6.3 11.0 14.0 13.2
Former occupation of founders
Plastic manufacturers 0 2 1 11
of plastic goods 0 2 1
ufacturers 2 2 0 5
0 0 0 1
Others (e.g., services) 0 2 0 5
Not available 1 0 0 3
Productions shares
Electrical and electroni
Source: Author’s interview
29
Table 4. M hing ent ds for acquiring technology M of enterpri f technology
otives for establis erprises and metho otives ses Acquisition o
and realize the profitab lity of from Tai
Import m
Firm A n.a. Invention of injection machines
Firm B Travel to Taiwan and Hong Kong
i
plastic goods
Import machines and engineers
wan
Firm C Need to produce plastic aquarium achines from Japan and
ask machine makers to teach
technology
Source: Author’s interview
30
Table 5. Performance rise g ne Followers New on Latecomers
of enterp roups
Pio ers Pi eer
199 1
Sales (million Ringgit)
Average 50.5 .5 3 18.7 50.0 100. 20.8
icients of Varia .8 0.0 0.0 106.7 123.7
s
Average 402.0 446.7 253.1 331.0 800.0 1400.0 133.1 225.0
6, Malaysia Industry Development Authority (MIDA),
rocess of Cluster Development
・Othman, Khairuddin and Yeoh Hock Eng (1986), “An Overview of the Plin Malaysia,” a paper presented at Special Technical Extension WorksTechnology, 8-24 July, 198Malaysia
・Sonobe, Tetushi, Dinghuan Hu, and Keijiro Otsuka (2002), “PFormation in China: A Case Study of a Garment Town,” Journal ofStudies, Vol. 39, No. 1, pp. 118-139.
・Sonobe, Tetsushi, Momoko Kawakami, and Keijiro Otsuka (2003), “Changing Roles of Innovation and Imitation in Industrial Development: The Case of the Machine Tool Industry in Taiwan,” Economic Development and Cultural Change, forthcoming.
・Giam, ST (2002), “An Overview of the Malaysian Plastic Industry and MPMA,” a paper presented at Seminar on Metallocene Technology in Plastic & Rubber, 4 July, 2002, Malaysia.
