A UNITED STATES DEPARTMENT OF COMMERCE PUBLICATION C W. 3/ / May INTERNATIONAL MARKETING INFORMATION SERVICE COUNTRY MARKET SURVEY INGAPORE U.S. DEPARTMENT OF COMMERCE/Bureau of International Commerce /\ COUNTRY MARKET SURVEY Malaysia Singapore INTERNATIONAL MARKETING INFORMATION SERVICE ^ TOFc o, \ c Sf AT ES O* h U.S. DEPARTMENT OF COMMERCE Maurice H. Stans Secretary Rocco C. Siciliano Under Secretary K. N. Davis, Jr., Assistant Secretary for Domestic and International Business BUREAU OF INTERNATIONAL COMMERCE Harold B. Scott, Director October 1969 For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C., 20402 - Price $1.25 BY FLOYD J. DUBAS BUREAU OF INTERNATIONAL COMMERCE The author supervises a group of foreign country officers in the Far Eastern Division in the surveillance of the Department's commercial interests in certain Southeast Asian countries. Previously, he served as Commercial Attache in the Embassy in Kuala Lumpur, and as a foreign country officer for several Far Eastern countries in the Department. He was also on the faculty of Georgetown University as assistant lecturer on international commerce and surveying foreign markets. Much of the factual content of this report has been drawn from material for- warded to Washington by the American Embassies in Kuala Lumpur and Singapore. Serving as Commercial Attache in Malaysia has given the author valuable market background and insights, and a visit to these countries for consultations with repre- sentatives of business firms and Government agencies offered a means to up date market facts and assessments. This project owes much to the help of others including Cornells J. Goinga, Com- mercial Attache in Kuala Lumpur, Albert K. Ludy, head of the economic and com- mercial section in Singapore, and their staffs. The excellent response from business and Government officials in Malaysia and Singapore also is acknowledged. The survey project and the preparation of this report have been directed by Eugene J. Kaplan, Director of the Far Eastern Division. Photo Credits: Cover, Page 31, Port of Singapore Authority; Pages 2, 50, 79, United States Information Service; Page 4, Malaysian Information Service; Pages 9, 20, 34, 48, Singapore Ministry of Culture; Pages 12, 23, 57, 59, 63, 74, World Bank; Pages 14, 46, International Finance Corporation; Pages 25, 28, 40, 44, Department of Information, Kuala Lumpur; Pages 35, 37, Caterpillar Far East Limited, Singapore li FOREWORD We in the Bureau of International Commerce often have reason to believe that American exporters are not giving enough attention to market opportunities in some of the developing countries in Asia. The ,present small 6 percent U.S. share of the $2.5 billion market in Malaysia and Singapore is a sharp reminder that this may be so. These countries have stable governments and viable and prosperous economies. Both are endowed with talented and resourceful citizens, and an abundance of natural resources. They have a history of efficient public administration and have conceived and implemented sound social and economic development plans which have yielded very gratifying results. Imports are free from regulatory restraints and increasingly open to competition. Some of the past indifference by U.S. exporters to these markets may be because they were virtually shut out of them by restrictions until a few years ago. These markets also were reserved for British suppliers due to recent colonial attachments. Many American suppliers have already found that imports into these countries are unrestricted and increasingly competitive, and that there are ready customers for foreign goods and know-how who are receptive to American products and services. The purpose of this report is to tell other American exporters about these and other important features of the markets in Malaysia and Singapore, and to encourage them to include these countries in their future foreign market development plans. October 1969 Harold B. Scott Director, Bureau of International Commerce in U. S, Depository Copy CONTENTS Page Foreword iii Map of Singapore vii Map of Malaysia viii Chapters I. The Market Setting 1 II. Scope and Character of Market 7 Market Scope 7 Supplier Pattern and Performance 9 Economic Development and Plans 12 III. Import Regulations and Tariffs 17 Import and Exchange Licensing 17 Tariffs and Other Levies 17 Documentation 18 IV. The Distribution System 21 Marketing Structure and Characteristics 21 Transport 24 Communications 25 V. Commercial Facilities and Marketing Aids 27 Banking 27 Warehousing 28 Trade Promotion 29 Business and Government Groups 30 U.S. Marketing Aids 30 VI. Marketing Factors 33 Selling 33 Credit 34 Price and Quotation 36 Delivery 36 IV VII. The Market Sectors 39 Agriculture 39 Fisheries 42 Mining 43 Forestry 44 Manufacturing 45 Construction 48 Government Procurement 50 Market for Technical Services 52 Consumer Goods 53 VIII. The Market for Producer Goods 55 Best U. S. Sales Prospects 56 Materials Handling Equipment 56 Pumps and Centrifuges 58 Piston Engines and Parts 59 Measuring and Controlling Instruments 60 Food Processing Equipment 61 Hand Tools 62 Electric Power Equipment 63 Motor Vehicle Parts and Electrical Systems 64 Farm Tractors and Machinery 64 Pesticides and Wood Preservatives 65 Aircraft Engines and Parts 66 Industrial Air Conditioning Equipment 66 Printing and Binding Machinery 66 IX. The Market for Consumer Goods 67 Canned Meats and Fish 68 Fruits 68 Food Preparations 70 Cigarettes 70 Perfume and Cosmetics 70 Paper and Paper Products 70 Tires and Tubes 71 Room Air Conditioners 71 Refrigerators 71 Passenger Cars , 72 Travel Goods 72 Cotton Wearing Apparel 73 Outdoor Sports Equipment 73 X. The Market for Industrial Raw Materials 75 Unmanufactured Tobacco 75 Waste Paper 76 Raw Cotton 76 XI. Notes for Business Travelers 77 APPENDIXES A. Economic Data 81 Tables 1. Estimated Population: West Malaysia 81 2. Estimated Population: Singapore 81 3. Estimated Population: East Malaysia 81 4. Annual Gross Domestic Product Growth Rate During First Malaysia Plan 1966-70 81 5. Estimate of Gross Domestic Product in Malaysia in Current Prices 82 6. Estimates of Gross Domestic Product by Sector in Singapore 82 7. Production of Principal Farm Crops in West Malaysia 82 8. Production of Mineral Products in West Malaysia 82 9. Output of Selected Industries in West Malaysia 82 10. Quantity Output of Selected Industries in Singapore 83 11. Employment in West Malaysia by Sectors, 1965 and 1970 83 12. Estimate of Employed Persons in Singapore, 1966 83 B. Development Plan Information — Malaysia, Singapore 84 Tables 13. Malaysia Development Plan Allocation of Selected Development Expenditures 84 14. Singapore Development Plan Estimates 84 C. Foreign Trade Statistics Tables 15. Value of West Malaysia's Imports and Exports, 1957-67 86 16. Singapore Imports and Exports, 1961-67 86 17. West Malaysia Total Imports and U.S. Market Share, 1960-1967 86 18. West Malaysia Imports from Major Sources, 1960-67 87 19. Singapore Total Imports and U.S. Market Share, 1960-67 87 20. Singapore Imports from Major Sources, 1960-67 87 21. East Malaysia (Sabah and Sarawak) Imports and Exports, 1962-67 87 22. East Malaysia (Sabah and Sarawak) Imports From Major Sources, 1965-67 88 23. Principal Imports Into West Malaysia of Producer Goods From Major Sources, 1962 and 1967 88 24. Principal Imports Into Singapore of Producer Goods From Major Sources, 1962 and 1967 90 25. Principal Imports Into West Malaysia of Consumer Goods From Major Sources, 1962 and 1967 91 26. Principal Imports Into Singapore of Consumer Goods From Major Sources 94 27. Principal Imports Into West Malaysia of Industrial Raw Materials From Major Sources, 1962 and 1967 96 28. Principal Imports Into Singapore of Industrial Raw Materials From Major Sources, 1962 and 1967 96 D. Existing and Proposed Manufacturing Establishments 97 E. Market Information Sources 108 F. Selected Listings 110 vi Ilj 1 !■ Q. < z CO 5 S h d < a: < o o -^ ^ 1 \I < ^ \ I • o or a- n < /? 1 \ \ '■$ & fc * \i * / / / V Vll \ i EQ n \ ...A <> #/&> T *<^l oF - tK Vlll CHAPTER The Market Setting This survey discusses the market prospects for U.S. products in two countries: Malaysia and Singapore. Both areas were merged into a single Malaysian nation for a period of two years, 1963-1965, ending with the withdrawal of Singapore, which became an independent nation. Before the merger, West Malay- sia had been an independent nation as the Federa- tion of Malaya since 1957, and Singapore, Sabah, known as North Borneo, and Sarawak (the latter two are now East Malaysia), were under British colonial administration. During the brief span when these areas were a single state, one of their major economic goals was the gradual implementation of an integrated indus- trial and marketing community. This concept antici- pated appropriately dispersed industrial development with no tariff barriers to impede the flow of goods from one area to the other. The withdrawal of Singa- pore from Malaysia ended the common market com- mitment of these areas. Subsequent events have at least proven the viabil- ity and vitality of the economies in Malaysia and Singapore. Malaysia continues to move forward, and is benefiting from earlier diversification efforts which included a particularly effective rubber replanting program that materially raised the yield of rubber trees and counteracted somewhat the consequences of a worsening world price for natural rubber. Singapore, with more limited development alternatives, has forged ahead in industrial development by accenting production for export and winning new markets for local products and entrepot trade. Geographically, these countries comprise three areas: Singapore and West and East Malaysia, the latter two separated by several hundred miles of ocean. Mar- ket demands and marketing characteristics are com- mon to all three areas, and are based on the recent colonial attachment to the United Kingdom. This may entitle these areas, in some respects, to be re- garded as a single market by U.S. suppliers. Customers in all three areas are equally oriented toward British products, customs and techniques; British standards generally apply equally in all areas in engineering, construction and industrial products; marketing prac- tices and techniques are alike; and international com- merce is dominated by a small number of large foreign- owned, mostly British, trading establishments which NOTE: All value figures in this report are in U.S. dollars. The currencies of both Malaysia and Singapore are the local dollar. For the sake of convenience and with minimal deviation from accuracy, the values stated in this report have been in most instances converted from Malaysian and Singapore currencies at a rounded rate of 3 local dollars per U.S. $1. Thus, readers who com- pare the U.S. dollar amounts in this report with those appearing elsewhere which are based on more exact conversions, may find small discrepancies. Lighters transport incoming goods from ships to warehouses along the busy Singapore River. Singapore serves a major role as a distribution and reexport center. together with locally owned companies operate through a network of sales branches, representatives and salesmen capable of marketing effectively in all three areas. In many respects, the West Malaysia and East Ma- laysia markets and their import requirements are alike. A major difference is West Malaysia's more advanced economic development and hence larger import demands. Import requirements stress capital equipment mainly for development of agricultural resources, infrastructure, and rapidly expanding manu- facturing industries. There are fewer markets in Singa- pore in view of its limited land area and natural re- sources and small population. But the markets in Singapore, which are also common to Malaysia, e.g., social and economic infrastructure development and manufacturing, are indeed significant. Although they are presently smaller than in Malaysia, expansion is taking place at a faster rate. In view of Singapore's important entrepot activi- ties, its import requirements of interest to U.S. sup- pliers are not limited to internal needs. Malaysia's import demands may also be regarded as import re- quirements in Singapore, whose importers purchase from foreign suppliers for direct, reexport, or trans- shipment deliveries to Malaysia. Also, since Singapore is a distribution center for other Asian countries, American suppliers may wish to identify market re- quirements in Southeast Asia which may be most effectively supplied via distribution outlets in Singapore. There are significant differences between the three geographic areas of interest to U.S. suppliers exploring these markets. West Malaysia is primarily a well developed agrarian society with significant development in forestry and minerals, and growing industries. In East Malaysia, agriculture and forestry have remained the pillars of the economy; manufac- turing makes only a minor contribution. In both areas, but mainly in West Malaysia, other important markets are created by the development of social and economic infrastructure and construction activity in the public and private sectors. Singapore's principal economic activities are foreign trade, including entrepot, and the supporting services consisting of shipping, warehousing, banking and do- mestic trade. Manufacturing in Singapore is fast be- coming a major economic activity which receives high priority from government and business. Some of Singapore's other economic pursuits duplicate those in the Malaysian areas, but on a smaller scale. Singapore's imports are for internal consumption and for reexport and transshipment. In 1967, about one-third of all Singapore exports were mostly to West Malaysia and some to East Malaysia. The bulk of the shipments to Malaysia were reexports; products of Singapore industries were only a minor part of these cargoes. Also, since Singapore possesses more adequate port and allied shipping services, many shipments destined for Malaysian ports are often off-loaded in Singapore and transshipped to Malaysia. Important Singapore reexports consist of raw materials imported from Malaysia, Indonesia and other Southeast Asian areas for processing and reexport to developed countries. Another important feature of Singapore as a market is its expanding role as a regional distribution depot for goods suitable for warehousing and redistribution, and headquarters for regional market development activities. West Malaysia is the most heavily and widely settled and most socially and economically developed of the Malaysian areas. It has 85 percent of Malaysia's 10 million people, and accounts for 75 percent of the annual gross national product (GNP) and more than 80 percent of annual imports. Malaysia's economy is mainly free enterprise with the public sector largely involved in infrastructure projects which are unat- tractive to private investors. These include the trans- port and communications systems, except bus and truck facilities, the bulk of the electric power industry and water resources including irrigation. Agriculture and the initial processing of farm crops contribute about 25 percent to the annual GNP and constitute the principal support of the economy. Major crops are rubber, rice, palm oil and kernels, pineapples, copra and tea. All of these except rice are mostly for export and are important foreign exchange earners. West Malaysia obviously outranks East Malaysia as a market. West Malaysia's extensive farming activities gen- erate a steady and significant demand for equipment and supplies for existing operations, and continued expansion is seen. Major growth is expected in the production of rice, palm oil and pineapples, which will generate import demands. Rice farming which is growing in land area, crop yield and becoming more mechanized, will offer the best market for foreign sup- pliers of agribusiness equipment and supplies. U. S. suppliers are now meeting some of these demands, but they can increase their sales. Manufacturing in West Malaysia, mainly in light industry products, is now contributing 10 percent of the nation's GNP, and promises to grow at a rate of 10 percent annually for the duration of the develop- ment plan (1966-70). Generous government incentive programs include tax relief, plant sites on industrial estates and protective tariffs. Emphasis has been on new factories to make import substitute goods, and a substantial dent has already been made in the im- portation of manufactured consumer goods by local producers who now have about 40 percent of the market. All plant equipment is imported and the market is openly competitive. Sales are made by foreign sup- pliers capable and willing to cultivate customers who often demand adequate technical assistance and give liberal payment terms more weight than they give to price considerations in purchase decisions. Though U.S. sales have lagged in this field, it probably holds the most promise for U.S. suppliers in the West Malaysian market. The Malaysian Government is an important cus- tomer for imported producer equipment and supplies. In the First Malaysia Plan for 1966-70, an average annual expenditure of $305.6 million is indicated for government development programs alone. These in- clude national irrigation projects, expansion of power production and distribution facilities, land reclama- tion projects, transport and communications projects, and water works. Consumer incomes and the market for consumer products are limited by western standards, and until a faster rate of industrial development is reached which will draw more heavily on the labor force, relatively small wage increases are envisioned. Although the Malaysian population is located mostly in rural areas, the market for consumer products is primarily in the pMfHT ■I* — L .-■■■■■ • ■L_— ■■» ■* «- m WHEE Modern buildings dot the Malaysian Federal Capital of Kuala Lumpur. U.S. suppliers to the construction industry benefit from the flow of world traders and tourists to Malaysia through increasing demands for new accommodations such as the Hotel Merlin. cities and towns where consumer incomes are con- siderably higher. East Malaysia is the least developed of the two Malaysian areas. Sarawak has about 888,000 people, and Sabah, 558,000. Together, they comprise a land area larger than West Malaysia, but account for only about one fourth of the Malaysian GNP. Sarawak's imports were $163.1 million in 1967; Sabah 's amounted to $94.5 million. Both areas are included in the First Malaysia Plan, and substantial sums are earmarked mainly for infrastructure projects con- sidered essential to stimulate and support economic development on a free enterprise basis. Forestry and agriculture dominate the economy with the former making the principal contribution through log exports which exceed all other sources of foreign exchange. Other important Sarawak exports are rub- ber, pepper and sago flour. Sabah's other major prod- ucts are rubber, copra, palm oil, hemp and coco beans; these are mainly exported. Rice farming is to be materially expanded in East Malaysia and a rising palm oil industry is expected to continue its fast growth. A rich copper deposit was recently discovered in Sabah and is being developed by Japanese interests. Sabah produces frozen prawns in volume for export, an industry capable of expan- sion. A very small light manufacturing industry is ex- pected to expand, with best growth potential in the manufacture of plywood, veneer and other wood products. Except in mining and manufacturing, the markets in East Malaysia are similar to those in West Malaysia with the main difference one of size. Another differ- ence of significance to the U.S. supplier is in channels of distribution. East Malaysian customers in most cases are reached through agency establishments in Singapore. Singapore is often appropriately characterized as a city state. It is a land area of 225 square miles but with most of its 2 million energetic and resourceful people concentrated in a smaller area which constitutes Singapore City. Singapore's natural resources are limited, though its people make a comfortable living (per capita income is the highest in Asia, next to Japan) mainly in the service industries which com- prise entrepot and domestic trade and its allied ac- tivities, and in a rapidly growing manufacturing sector. Important Singapore assets are a strategic location on international sea and air routes; an excellent, well- equipped and efficiently operated port; quick ship- ping access to small and large ports in the region; competence in the conduct of commerce; and the availability of capital. Lacking the customary natural resources, Singapore has chosen to expand its entrepot trade and supporting commercial services, and to expand manufacturing. This nation has made better than average progress in economic development since 1960. In the first half of this decade, GNP growth has averaged 8 percent per year. In 1967, which was the second year of Singa- pore's independence, GNP amounted to $1,250 mil- lion, or an increase of 18 percent over the previous year. A highly sensitive element in Singapore's economic life is its employment level which must keep pace with rapid population growth. But there is also concern with maintenance of a healthy balance of international payments. Since entrepot trade has shown less promise in recent years, Singapore has stressed growth in manufacturing for export. This trend is demonstrated by the recent addition of a third major oil refinery, and the announcement by a large oil company of plans to install a fourth refinery in the near future. Promise is also seen for more employment and enhanced foreign exchange earnings through greatly increased tourism, accelerated construction activities and expan- sion of commercial services. Singapore's leaders respond quickly to problems of national economic development. Upon separation from Malaysia, Singapore soon modified its development strategy by accenting the creation of new industries to produce for export. Additional impetus was given to already extensive infrastructure development, and new industry incentives were adopted to offset the invest- ment advantages in other Asian areas in labor costs, access to raw materials and availability of markets. The problem stemming from British plans to with- draw defense forces and facilities by 1971, which ac- count for about 20 percent of Singapore's annual GNP, is being met by rapid changes in policies and programs to stimulate new economic activities. There is optim- ism in business circles that new public works and private construction, new factories and the fruition of entrepot trade opportunities will fill the gap created by British withdrawal. Singapore's market sectors of interest to U.S. ex- porters bear a close resemblance to those in Malaysia. Import requirements for these sectors from western suppliers are generally identical; the main difference is in volume and the fact that Singapore distributors import goods for reexport to Malaysia and other Asian destinations. Singapore, in common with Malaysia, has a large demand for imported machinery and equipment for government projects. Import transactions in this cate- gory are with government procurement officials, often on a tendering basis. Obviously, the selling efforts in most cases are most effective for Singapore require- ments if they are initiated in that area, and for Ma- laysia's requirements if undertaken by sales outlets in Malaysia. Yet in some cases, this is not an inflexible approach. The sales clinching factor in the marketing of complex producer goods unfamiliar to local customers, may be supplied by a manufacturer's representative function- ing in several Asian countries from a regional base. Singapore is an ideal base for such an operation; it may also be appropriate in other Asian commercial centers. Furthermore, government procurement may be handled by a local agent in Singapore or a Malay- sian city, but with deliveries made from a centrally located warehouse. The best marketing sites for sales of machinery and equipment used in Malaysia, but not in Singapore, e.g., by rubber planters, rice farms and palm oil groves, may be in West Malaysia for customers in that area. How- ever, import transactions may also take place in Singa- pore for deliveries to West and East Malaysia, and possibly for reexport to other Asian countries. Central marketing and distribution facilities are being increas- ingly developed in Singapore by U.S. suppliers. The best example of the latter is a computerized depot for the distribution of replacement parts for earthmoving equipment to several Asian markets by a single U.S. firm. This system is also applicable for consumer products, and probably will be increasingly adopted by suppliers of both types of products. U.S. suppliers assessing the market for their prod- ucts in any one of the geographic areas that comprise Malaysia and Singapore, may find that the market demand in all three areas should be explored as a pre- lude to devising marketing strategy and location of distributors or sales branches. Following an assess- ment of the various aspects of selling products in the several economic sectors, U.S. suppliers may arrange the most effective dispersal of market development and distribution facilities, their own or those available locally, to reach potential customers. An arrangement to disperse market facilities appropriately to maximize sales in all three areas may be expedited by consulta- tions with experienced local trading firms which are capable of functioning in Malaysia and Singapore, and regionally as well. A discussion of the major market sectors, identifica- tion of imported product needs in each of them, the size of the market and the present and potential U.S. exporter participation in sales is presented in Chapter VII which is entitled The Market Sectors, and in the chapters that follow dealing with product identifica- tion. The relative positions in the economies of Malaysia and Singapore of the various economic ac- tivities may be seen in the economic data tables in Appendix A. CHAPTER II Scope and Character of Market MARKET SCOPE West Malaysia's imports are predominantly manu- factured products, although local manufacturers now produce about 40 percent of domestic requirements. Local plants produce forest and petroleum products, auto and tractor tires, cigarettes, refined sugar, canned milk, beverages, chemical fertilizers, soaps and detergents, cement and cement pipes, asbestos cement building material, clay products, steel pipes, sheets and structural forms, aluminum sheets, leather and rubber footwear, textiles, foam rubber and other rub- ber products, plastic products and animal feeds. These are some of the principal products of this country's young industrial establishments, and most of them are protected by fairly high tariffs. For a more compre- hensive listing of Malaysian manufactures, see Ap- pendix D. Most of West Malaysia's imports of manufactured products, valued at $416 million in 1967. included these principal categories: machinery and transport equipment valued at $192 million, or 22 percent of total imports, and chemicals worth $74 million, or 9 percent of all imports. Imports of raw materials which consisted largely of crude petroleum amounted to $121 million, or 14 percent of total imports, and other im- portant crude material imports were tobacco, and rub- ber and oil seeds for processing and export. The bulk of West Malaysia's foodstuffs require- ments are locally produced. However, there are signifi- cant imports of rice which in 19f>7 amounted to $208 million, or 24 percent of total imports. Rice is pur- chased in the region, non- Asian countries are im- portant sources of imported food items which include dried milk, cereal grains and preparations, and fresh and preserved fruits and preserved vegetables, and compete in the sale of these items mainly with Australian exporters. In addition, communist China has moved up recently as a source of prepared meats and fish, cereal preparations and processed fruits and vegetables. Domestic consumption requirements in West Malay- sia increased at an annual rate of 9 percent during 1960-65. The bulk of this increased demand has been met by stepped up local production, since the annual rate of increase in imports in recent years has been 4 percent. Planning officials see a slower growth rate in domestic production during the development plan period (1966-70), possibly at a rate of 7 percent in real terms; however, imports are not expected to rise at a higher, rate than in recent years. No substantial shift has occurred between 1961 and 1967 in the composition of import categories, except in machinery and transport equipment, which moved up from 16 percent of total imports in 1961 to 22 per- cent in 1967. Since the rate of expansion expected in domestic production may be higher than in imports, more significant shifts may be anticipated. For ex- ample, an anticipated increase in production of im- port substitute goods by light industries would sug- gest that imported industrial equipment may become more important. Also, planned expansion of rice pro- duction will reduce or eliminate rice imports in the early 1970's; expansion to the second stage of the steel plant in Prai will further reduce dependence on imports of structural steel and the initiation of new plants making consumer goods will lessen the demand for many of these items via the import route. The Government's present involvement in large scale irrigation projects to increase rice production, which will result in bringing more than 250,000 acres of rice land into double cropping, may also produce signifi- cant changes in import demands. These projects in conjunction with programs to improve rice farming technology are expected to raise the level of farm incomes and enable the satisfaction of new demands for farm equipment and supplies and for consumer requirements in the rice farming communities. Imports into Singapore, like those of Malaysia, are also predominantly manufactured goods and are sup- plied by developed Western and Asian countries. How- ever, imports of raw materials, mostly from the region, for processing and export are also significant. In view of Singapore's small size and limited resources, import requirements for domestic consumption are smaller than in Malaysia. However, this strategically located city-state has developed a prosperous reexport trade and imports a wide range of manufactured goods for shipment to the markets in West and East Malaysia and other Asian countries. In addition, Singapore has developed a thriving entrepot trade activity in process- ing imported crude materials for export to world markets. Only about 46 percent of Singapore's total imports of $1.5 billion are retained for consumption in that country, while the remainder is reexported in original or processed form. The bulk of Singapore's reexports are to West and East Malaysia, although some of these cargoes, often purchased in these areas by branches of trading firms serving the sub-region of Malaysia and Singapore, are merely transshipped through Singa- pore. See Marketing Structure and Characteristics in Chapter IV. No estimate is available of Singapore's future im- port expectations. It appears likely, however, that growth will continue during the balance of the de- velopment plan period (1966-70) at the average annual rate of 8-9 percent, which prevailed since 1965 when recovery began from the effects of the Indonesian trade embargo adopted in 1963. This rate of increase probably would be higher if the trade figures used in its calculation had included trade with Indonesia which is flourishing again at pre-confrontation levels. Some variation in progress of imports is seen in the principal import categories. Imports of machinery and transport equipment rose from 11 percent of total im- ports in 1962 to 13 percent of total imports of $193 million in 1967, reflecting Singapore's effort to expand manufacturing. About 64 percent were retained for use in Singapore as compared with a retention of 46 percent of all imports. This improved trend probably will accelerate in view of increased emphasis by the Government on manufacturing for export, shown in its recent actions to establish joint government/private sector financing for new factories and export market development facilities. These requirements are entirely imported, and exporters in Western nations and Japan are the principal suppliers. Imports of manufactured products moved up from 11 percent of total imports in 1962 to about 18 percent of $266 million in 1967. About one half of these are reexported. Since further expansion in local manu- facturing may displace imports for consumption and slower gains are likely in reexports of goods in this category, a more gradual growth in imports is there- fore a possibility. On the other hand, a more rapid development of distribution facilities in Singapore by outside suppliers in order to be more competitive in the regional markets, may lead to increased orders for manufactured goods in Singapore. Major industrial production in Singapore mainly for export includes plywood and veneer, structural steel, cotton clothing and piece goods. The most im- portant products of Singapore's processing industries are rubber, petroleum products, sawn lumber, vege- table oils and two food items, spices and coffee. Singa- pore's light industries in which there already has been considerable development and whose products are for the domestic market and generally protected by tariffs, are in most cases those established in Malaysia. See listing in Appendix D of existing industries and prod- ucts manufactured in Singapore. With only a modest part of the foodstuff require- ments of Singapore's 2 million people locally pro- duced, imports are meeting the major needs. Food imports, particularly rice, are mostly from sources in the region. About one third of the food imports are reexported, and there are significant imports from Western sources for reexport as well as for local re- quirements. In the drive for industrialization new food processing plants which will cater to the domestic market will be established and displace imports fur- ther. However, rapid growth is expected in Singa- pore's already impressive consumer purchasing power which may expand food imports and offset those lost through local production of import substitutes. SUPPLIER PATTERN AND PERFORMANCE While no major changes have been noted in recent years in the relative strength in the Malaysia and Singapore markets of principal foreign suppliers with whom U.S. suppliers are competitive, some gains have been made by Japanese and Australian exporters in both areas. West German exporters became relatively stronger in the Malaysian market, but maintained a static relative position in sales to Singapore. The strong relative position of United Kingdom suppliers was unaltered in the Singapore market, but became slightly weaker in the Malaysian market. U.S. sup- pliers have gained only slightly in both markets since 1961. Though imports from Indonesia, Thailand, Hong Kong and Mainland China are significant, these are mostly commodities in which there is only limited competition from suppliers in Western nations. Indo- nesian suppliers, whose sales in these markets were severely curtailed during the confrontation period 1963-66, have traditionally made sales, mostly to Singapore, of raw materials including natural rubber, vegetable oils, spices and logs, which after processing are reexported to world markets. Some Indonesian tin concentrates have been shipped to Penang for smelting and export. Indonesian trade with these areas has been resumed, and now equals pre-confrontation levels. Imports from Thailand are almost exclusively rice, and crude rubber for processing and reexport. Main- land China imports mainly comprise a wide range of consumer goods including foodstuffs and finished textiles. Hong Kong mainly supplies foodstuffs transshipped from Mainland China, and locally made textile products. Despite the advantage of an historical presence in these markets, United Kingdom suppliers slipped from a market share in Malaysia of 21.5 percent in 1960 to 15.3 percent in 1967, and from a share in Singa- pore of 9 percent in 1960 to 8 percent in 1967. Since British exports were abnormally low in 1967, it should be noted that the British market shares in 1966 were 19.3 percent in Malaysia and 10 percent in Singapore. Nevertheless, British suppliers continue to have con- siderable strength in these markets which may be at- tributed to the advantages gained when these countries were British colonies. These include initial and con- tinuing access to representation in both markets by A recent addition to Singapore industrialization is this new petroleum refinery, the third to go into operation. A fourth will be started soon by the Esso Company. Mii^w*^ j several large, competent, and well financed trading firms, owned by their compatriots, which deal in a wide range of products, some of which enjoy a tariff advantage. British sales of capital equipment are often aided by procurement orientation toward British suppliers of U.K. engineering and construction firms which are dominant in the area. Imports required by rubber estates, tin mines and other facilities, in which U.K. nationals have invested more than $1 billion, also are frequently bought from British suppliers. It is apparent that long exposure in these markets by British suppliers has oriented customers toward U.K. products. British suppliers are also helped by the ap- plication of British standards to the procurement of materials and equipment and by the pro-British sup- plier influence on procurement decisions by British technicians who are in positions of responsibility in procurement for public works and other infra- structure. Some of these advantages extend to other Common- wealth suppliers, particularly those in Australia and Canada, who are making significant gains in these markets. These ties with British and Commonwealth sup- pliers are still significant although they have weakened somewhat and probably will become even less bind- ing. The British owned trading firms usually are quite open-minded regarding marketing arrangements with foreign suppliers and are interested in representa- tion based mainly on the market potential and a work- ing partnership in the market penetration effort. Buying decisions by government agencies on im- portant import requirements are increasingly made without regard to traditional sources, and there is a growing tendency to shop on a world-wide basis and make purchases through open competition. The British standards problem is being resolved with increasing success by non-British suppliers who are modifying product design to fit the required standards. Efforts are also being made to provide equivalent products and to supply full information to qualify them in the mar- ket. In addition, the Malaysian Government has be- gun to draft Malaysian standards for equipment, materials and construction which will probably follow the British pattern but with modifications to suit local requirements. In short, the more customary competitive forces pre- vailing in Far Eastern market places are becoming ap- plicable in government procurement with the conse- quence that suppliers in the United States, Japan, European and other countries may increasingly com- pete for sales on an equal basis with British suppliers. Japanese suppliers now have 12.5 percent of the market in Singapore and 14.3 percent in Malaysia as compared with slightly over 8 percent in both markets in 1961. The Japanese success in these markets is based on forceful and all-inclusive marketing tech- niques which they generally apply in export trade, but with the advantages of proximity to these markets and a good understanding of customer psychology. Japanese suppliers concentrate on the principal problems in the Malaysian marketing scene, which are a lack of know-how in the identification, ordering, installation and operation of industrial equipment, and scarcity of experienced and uncommitted marketing outlets. They have approached these problems by in- stalling sales branches staffed with technician/sales- men, as well as by negotiating representation arrange- ments in many cases with the smaller local trading companies. They are known to support their agents by placing company representatives in residence or by quick journeys from headquarters in Japan. They also provide agents with financing and training in sales- manship and equipment handling. This approach has a strong appeal to customers in Malaysia and Singapore who require and seek the most comprehensive selling services. Japanese sup- pliers also have a distinct advantage in supplying the growing needs in the rural areas of Malaysia because of their nearness to the market, their willingness to engage in pre-sales market development, and their ex- perience in tailoring the design and manufacture of farm equipment to the unique needs of the small Asian farms. Australian exporters have made modest gains in these markets over the past several years, particularly in Malaysia. They had 7.8 percent of the market in Malaysia and 4.5 percent of the Singapore market in 1967; their combined stake in these markets in 1960 was about 3 percent. Although Australian sales gains in these markets are mostly in foodstuffs, e.g., meat, dairy products and cereal grains and products, in which U.S. suppliers are not competitive, important progress has been made in a wide range of manufac- tured goods in which American exporters are com- petitive. Australian success in these markets is the result of vigorous and continuing sales campaigns. Th?y place considerable importance on the organiza- tion of frequent trade missions, comprising Malaysian businessmen to visit Australian plants, and large groups of Australian manufacturers to visit Malaysia and Singapore, often accompanied by product ex- hibits of a wide range of products carefully selected 10 This Kuala Lumpur supermarket retains its distinctly Malaysian touch marketing methods. n a blending of East and West with modern for marketability in these markets. The Australian trade missions program is mainly supported by trade and industry associations and concessional rates for transportation and other accommodations are granted by Australian firms. Australian exporters have diligently searched out the most effective agents, though they are sometimes difficult to locate, and continue to regard their dis- tributors as an integral part of their entire selling activities by giving them full support. In this close and effective liaison with distributors, Australian sup- pliers are quickly alerted to lagging sales performance and other problems and lose no time in applying cor- rective measures. Sales by West German exporters to these markets went up from 2 percent of total imports in 1960 to 4 percent in 1967 when they were valued at $89 million. This success is attributed to the adoption by West German suppliers of an aggressive and comprehensive selling approach which includes assignment to these areas of technician/salesmen and company representa- tives. This approach enables them to give direct and continuing attention to selling industrial equipment to end users in both private and government sectors, and to the establishment and maintenance of effective agency relationships. Agents selected are often rela- tively uncommitted small and medium sized, but growth-minded dealers. They receive close supervision and assistance, and their sales staffs are given training to improve their marketing performance to be com- petitive with the large and long-established distributors. The position of U.S. suppliers moved up slightly from 4.1 percent in 1960 to 6 percent in 1967 in the Malaysian market, and from 4 percent to 5.6 percent in Singapore during the same period. It is probably more accurate to choose 1961 as a base year since this was the first year when all imports from dollar areas were admitted without restrictions. In 1961, the market share was 5 percent in Malaysia and 4.7 per- cent in Singapore. U.S. sales were even smaller dur- 11 Malaysia is taking steps to alleviate severe shortages of technicians and eraftsmen needed to implement the Govern- ment's plans for industrial development and more diversified agriculture. A World Hank loan of U.S. $8.8 million, being negotiated here, calls for school construction and expansion which will provide 10,900 new student places of which over 8,100 will be in vocational, technical and agricultural schools. ing the 1950's when the dollar was still unconvertible and Malaya imposed restrictions on purchases from dollar areas along with other countries in the Sterling Area. In this situation, U.S. exporters had limited access to these markets during the period of rising post-World War II demands, which were being filled by countries not affected by restrictions. The bans were removed in consecutive stages during 1959 and 1960, and today, these markets are free from official restraints to all suppliers except for quotas on some products which compete with those of new local manu- facturing plants. On the whole, active U.S. suppliers are performing creditably in these markets; unfortunately, the number of U.S. exporters in this category is altogether too small. It is suspected that many distributors in these areas engaged by U.S. suppliers of manufactured goods are relatively inactive, with the result that U.S. sales are lagging. In some machinery and equipment and other manufactured goods, U.S. supplier performance is excellent. Full support is given to local distributors; equipment and parts inventories are maintained, some- times with the help of U.S. supplier financing; constant vigilance, often through a regional base, is maintained over the performance of distributors with early modi- fication of lagging sales programs including the ap- pointment of new agents if necessary. A small number of U.S. manufacturers operate sales branches in these markets and maintain a marketing momentum equal to that applied in the domestic market. ECONOMIC DEVELOPMENT AND PLANS Malaysia is primarily an agricultural state which has made considerable progress in industrial development. The recent 5-year economic development plan and the present one (1966-70) have stressed balanced ap- proaches to development to build essential infrastruc- ture and harmonize progress in rural and urban Malaysia. The main support of the Malaysian economy has been the production, mostly for export, of natural rub- ber, tin, forest products, coconut and palm oil, palm kernels and iron ore. These major exports from West Malaysia only, reached a value of $789 million or about 80 percent of total exports in 1967. The rubber industry makes by far the most important contribu- 12 tion in terms of economic impact and provides the widest diffusion of income. Of 926,000 long tons pro- duced in West Malaysia in 1967, 528,000 tons or 57 percent were produced on the large estates, many of them owned by British and other foreign companies, and the balance of 398,000 tons or 43 percent were produced on small holdings of less than 100 acres each which are owned by Malaysians. Anticipating the growing competitiveness of syn- thetic rubber in world markets, the Malaysian Govern- ment has wisely supported a replanting program for several years to replace old trees with high yield va- rieties. Under the Government's financial assistance program, about 80 percent of the rubber estates and 50 percent of the small holder acreage in West Malaysia have now been replanted to high yield trees. This conversion has helped to maintain a high value level of rubber exports despite a substantial decline in natural rubber prices. In addition, rubber exports were increased by planting on new acreage developed and settled under the Government's land development program. Production of rubber will continue to be important in the Malaysian economy, but in view of declining prices in consumer markets, Malaysian planners have sought diversification by expanding other crops, plant- ing new crops, and creating light industries. Tin mining has been an important industry for many years, and continues to provide major economic support. Production amounted to 72,121 long tons in 1967, all for export which was valued at about $252 million, or 25 percent of total exports. However, only moderate expansion has taken place in recent years mainly by reworking of deposits which became profit- able as a result of improved world tin prices. Pro- grams are under way to explore offshore areas for new deposits which will enable the industry to make an increased contribution to the economy. Iron ore production dropped from a high of $59 million in 1963 to $41 million in 1967, indicating gradual deple- tion of known reserves which will be exhausted within a few years. Rice was harvested in the 1965/66 crop year from about 851,000 acres by approximately 300,000 farm operators whose farms average in size between 3 and 4 acres. Most rice farms are under 10 acres in size. No figures are available on the size of the West Malaysian population dependent on the production of rice. But, counting the families of farm operators, the 100 or so rice mill operators and their employees and depend- ents, and the number of people involved in the mar- keting of rice, it may be assumed that the production of this cereal grain is the sole and principal means of livelihood of a larger segment of the population than any other economic activitity. The Government has recently undertaken a water conservation project with the help of a $45 million World Bank loan, which is scheduled to open 131,000 acres for rice double cropping, and provide irriga- tion for 131,000 acres for double cropping which now grow a single crop. This development to be completed by the early 1970's will raise the income level on small rice farms and result in increased buying, largely from foreign suppliers, of farm machinery, equipment and supplies needed to support a double cropping activity as well as manufactured goods to meet rising con- sumer demands. An average net farm benefit of $11.7 million is expected in 1970, and an annual income increment of $30 million is seen when the project comes into full fruition. The exploitation of Malaysian forest resources has progressed rapidly, and promises to make a greatly increased contribution to Malaysia's economic develop- ment. The total value of Malaysian log and sawn tim- ber shipments to foreign markets in 1967 was $193.9 million as compared with $155.4 million in the previ- ous year. Total production was about $322 million of which about 60 percent is exported. The total forest area in all of Malaysia is about 91,000 square miles, or about 70 percent of total land area. Productive re- serves earmarked for the permanent growing of tim- ber crops is about 12,000 square miles in each of the following, West Malaysia, Sarawak and Sabah. Although presently of secondary importance, manu- facturing is expanding, and in the next few years is bound to make a considerably larger contribution to the nation's rising GNP. The share of the manufac- turing sector in the nation's economy rose from 8.7 percent in 1960 to 11 percent in 1966. The 5-year plan target for manufacturing in 1970 is a product value of $360 million, or an annual gain of 10 percent during the plan period. This anticipated growth is exceeded only by forestry and matched by public utilities. Em- ployment in manufacturing in 1970 is targeted at 209,000, or an increase of 20.8 percent over 1965. The projected annual increase in industrial output is expected in such major groups as food and beverages; wood products; rubber products; chemicals; basic metals and machinery manufacturing. Important manufacturing industries which will come into full production by 1970 include sugar refining; textiles; motor vehicle assembly; flour milling; chemical plants; an iron and steel mill; a jute mill; a pulp and 13 Manufacturing is expanding in Malaysia with tlie encouragement and assistance of the Government. Mill hands are at work here in the new Malayawata integrated steel plant at Prai in northwestern Malaysia. paper plant and a feedstock plant in conjunction with a petroleum refining operation. Manufacturing in Malaysia is a combination of processing raw materials for export markets, most of which started during the colonial period, and light industry manufacturing which started after Malaysian independence in 1957. The Malaysian Government has encouraged and assisted the private sector (most industrial production is in private hands) to expand manufacturing with the enactment of industry in- centives legislation in 1958 and by providing essential infrastructure which included the creation of industrial estates. An investment incentives law was enacted on Janu- ary 1, 1968 which continues all of the previous in- centives for new industries and adds others. The new act redefines industries entitled to incentives by adding non-manufacturing industries and industries manufac- turing for export and contributing to economic de- velopment. Tax relief is liberalized by exempting pro- ducers who export more than 20 percent of their out- put; by exempting dividends paid by qualifying com- panies; by providing an allowance of an investment tax credit; and granting a more favorable capital al- lowance. Export incentives have been added which include tax deductions for certain export market de- velopment expenses, an accelerated depreciation al- lowance, and deduction of 20 percent of wages and cost of Malaysian materials when related to increased exports. The First Malaysia Plan, now in its fourth year, gives private enterprise a slightly larger share over the public sector in responsibility for national develop- ment. Infrastructure development, of major import- ance to the private sector, is the largest of the public sector projects, with agriculture and rural development a close second. Defense build-up is next in import- ance, and education and health improvement is in fourth place. In a mid-term upward revision of Plan objectives, the target for agriculture and rural development was set at $393 million out of a total development plan cost of $1,613 million. The remainder of this project for completion during 1969-70 is 53 percent. The new target for agriculture includes $114 million to support agricultural education, extension services, and crop subsidies, mainly for upgrading rubber plantations and diversifying to oil palm; $131 million for settle- ment of reclaimed forest lands; and $117 million for drainage and irrigation mainly of benefit to rice farming. The revised Plan estimates are given for other sec- tors as follows with percentage remaining for comple- tion during 1969-70 stated in parenthesis. For indus- trial development which mainly includes credits for new industries and the expansion of industrial estates, $45 million (32) ; for road and bridge construction, $144 million (55) ; telecommunication, $58 million (57) ; electric power, $183 million (34) ; water, $82 million (60) ; education and training, $131 million 14 (51) ; and social and community services, $108 mil- lion (46). The foundations of the Singapore economy are com- merce and its various related services. The entrepot trade which consists of imports of raw materials, food- stuffs and manufactured products for reexport, with the addition of processing in some cases, reached a value of $151 million, or 13.7 percent of total GNP in 1966. Domestic trade amounted to $167 million, or 15 percent of the national product. All commerce activities employ about 128,000 persons. The role of manufacturing has risen rapidly in the economy. For example, the contribution of entrepot trade in the national product dropped from 18 percent in 1960 to 13.7 percent in 1966, while manufacturing contributed 7.4 percent in 1960, and 10.8 percent in 1966 when factory employment reached 109,000. Fac- tory employment rose from about 16 percent of the population in 1957 to 20 percent in 1966. Transporta- tion, storage, communication and banking are im- portant Singapore activities which are also expanding. Singapore's agricultural base is very small, and with fisheries, provides a living for about 175,000 or 7 per- cent of the population. Singapore leaders are planning for rapid economic development and have decided that industrialization offers the best means to this end. They have adopted a program of promotion and assistance to local and foreign private investment to expand manufacturing in Singapore. The program, administered by a single agency — the Economic Development Board (EDB), consists chiefly of generous tax exemption incentives, market protection in some cases, and the creation of industrial estates complete with factory and residential sites and all of the supporting infrastructure including roads, utilities and social services. A major develop- ment in this respect is the Jurong Industrial Estate which encompasses an area of 17,000 acres and is an integrated business, industry and residential com- munity complete with port facilities and road and railway linkage with Singapore City. While private capital is plentiful in Singapore and a great deal is being funneled into new industries, investors often prefer commerce, construction and real estate. Therefore, the Government established an in- dustrial development lending facility in EDB, capital- ized at $33 million, to finance new production facilities. In addition, investment promotion offices were opened in New York City, Chicago and San Fran- cisco to encourage U.S. firms to consider investment in Singapore commercial and industrial ventures. With advancement by the British of their schedule to withdraw defense facilities, Singapore decided to expedite the flow of local capital into new plants by creating the Development Bank of Singapore capital- ized by the Government ($16.3 million), commercial banks ($8.3 million) and public subscription ($8.7 million). In addition to this equity capital, the Gov- ernment agreed to make $43 million available for lending, and further lines of credit would be sought from West Germany, the Asian Development Bank and the World Bank. This move has terminated new in- dustry financing by EDB, and was designed to pro- vide more funds for new industries and encourage more local involvement in these activities. Annual output of manufacturing plants employing 10 or more workers more than doubled from $188 mil- lion to $503 million from 1960 to 1967. Firms op- erating under the Government's incentive program are estimated to have produced goods valued at $216 mil- lion in 1967. The new industries include a modern shipyard, an iron and steel mill making structural steel products, cement plants, oil refineries, integrated tex- tile mills, chemical plants, a sugar refinery, fertilizer production, plywood and veneer factories, a tire plant, steel fabrication and electric cable plants and a wide range of light industry enterprises. The First Singapore Economic Development Plan, which ended in 1965, targeted total development out- lays at $371 million; about 85 percent of targets were realized. Investment expenditures rose substantially from about $57 million in 1961 to about $160 million in 1966. During the plan, public sector investment was roughly equal to private investment, and the rapid increase in both private and public investment was one of the chief reasons for the favorable growth of the economy in a period when entrepot trade was retarded by the break in economic relations with Indonesia. Singapore is in the fourth year of the second Singa- pore plan (1966-70) which calls for a total public sector investment of $577 million, an 82 percent in- crease over the previous plan. Investment in the pri- vate sector is set at $533 million, and anticipated annual growth rates are 7 percent in GNP; 4.5 per- cent in per capita income and 4.3 percent in employ- ment. Major government input is in economic develop- ment ($385 million or 66.7 percent of which 23.6 per- cent is in public utilities; 17.6 percent in industry and 16.9 percent in transport and communications. A total of $168 million is planned for social services of which housing will get 14.2 percent. 15 When the British announced their plan early in 1968 to accelerate their withdrawal of military facili- ties from Singapore and Malaysia for completion in 1971, the Singapore Government reassessed its eco- nomic development plan in terms of offsetting the considerable economic gap resulting from the pullout. Discussing a "counter-recession strategy" recently, the Finance Minister estimated that the withdrawal would result in a $300 million reduction of British outlays in Singapore over the period 1968-1971 and stated that an equivalent amount would have to be expended by the Singapore Government to prevent a recession. The Minister of Finance proposed three categories of financing within this sum. An item of $133.3 mil- lion would be spent for accelerated development in the public sector which would include urban renewal, the opening up of new industrial sites, improvement of the roadways, land reclamation and the expansion of water storage facilities. A second item is induced private investment of an additional $66.6 million which would go mainly into buildings and construction of projects with Government participation. Another item is a sum of $100 million for additional defense outlays which are local costs. 16 CHAPTER IH Import Regulations and Tariffs IMPORT AND EXCHANGE LICENSING Mayalsia and Singapore, both of which have been free of balance of payments problems for many years, do not restrict the use of foreign exchange for imports for the purpose of conserving foreign exchange. Al- though both areas had favorable balance of payments situations during the 1950's, they applied restrictions on imports from dollar areas as a part of the foreign exchange policy of the United Kingdom. Malaysia's foreign exchange reserves amounted to $642 million at the end of 1967, and those of Singapore were $595 million. Given the present stability of the economy, good exporting performance, a continuing pattern of efficient fiscal management, and despite some depletion of Malaysian reserves, there is no forseeable prospect for import controls. Both countries control by licensing the entry of dangerous or obnoxious goods, and ban the entry of goods for security or health reasons. In addition, both areas resort to an import licensing procedure to limit by quotas, or prohibit outright, certain products in the interest of protecting and encouraging infant industries. The vast majority of imports are admitted under open general license; this means that goods may enter without the issuance of a formal license. A validated license must be obtained by importers in Malaysia and Singapore for certain goods designated in West Malaysian customs ordinances and Singapore import orders. The officials of the Trade Division of the Ministry of Commerce and Industry administer import licensing in Malaysia, and the Trade Division of the Ministry of Finance exercises this function in Singapore. In East Malaysia (Sabah and Sarawak) the licensing system and objectives are basically simi- lar to those of West Malaysia. The three Malaysian areas administer their separate controls systems, but the central government in Kuala Lumpur may legislate to control imports throughout Malaysia. Ultimately, trade control systems in all of Malaysia will be unified. The products subject to import licensing by docu- mentation are designated in the following publications of the U.S. Department of Commerce: OBR 67-35- Foreign Trade Regulations of Malaysia; and OBR 67- 73-Foreign Trade Regulations of Singapore. More detailed and current information on the subject may be obtained from the Far Eastern Division, Office of International Regional Economics, Bureau of Inter- national Commerce, U.S. Department of Commerce, Washington, D. C. 20230. TARIFFS AND OTHER LEVIES The three Malaysian areas, West Malaysia, Sabah and Sarawak, administer their tariff systems separate- ly; however, many of the rates have been harmonized, and will be further coordinated until a single rate structure is applied throughout Malaysia. The BTN (Brussels Tariff Nomenclature) and dual column system of rates on a full and preferential basis are used in the Malaysian system. Preferential tariff rates are applied on many imports from the United 17 Kingdom and most of the Commonwealth countries; however, the list of goods subject to preferential tariffs has recently been reduced by the Malaysian Govern- ment. Ad valorem rates range from nil to 100 percent, but only a few items are dutiable at more than a 25 percent rate. The average tariff rate is about 15 per- cent, which is lower than the rates in many Far Eastern countries. Duty rates on many manufactured items range from 15 to 25 percent, and most machinery, ex- cept electrical and telecommunications equipment, enter duty free. The function of the Malaysian tariff system for many years was to raise revenues. Since the advent of industrialization in the late 1950's, Malaysia has adopted a protective policy, and tariffs have been levied on many products to protect and encourage the growth of new industries. Though the new levies have been carefully reviewed to prevent over-protection, there are a number of commodities which appear to be largely excluded from the market as a consequence of tariff levies. For example, imports of tires of cer- tain sizes made locally have become prohibitive. Most goods may continue to be shipped to the free port of Penang free of duty levies. However, because Penang wants to develop industries to produce goods marketable duty free in the Malaysian Common Cus- toms Area, it has recently placed 25 items on the dutiable list, and will gradually add other items and ultimately apply all of the levies in effect in Malaysia. Penang will continue to carry on its important entre- pot and reexport trade by the creation of free trade zones. The tariff systems of Sabah and Sarawak are essen- tially similar to the system in West Malaysia, but sev- eral rates are different. Duties on an ad valorem basis range from nil to 30 percent, and most are between 10 and 20 percent. Both of the East Malaysia areas par- ticipate in the preferential rate system giving rate concessions to imports from the United Kingdom and Commonwealth countries. The tariff rates of these countries will be harmonized with those in West Malaysia when a common customs structure is estab- lished for all of Malaysia. Malaysia has recently enacted a 2 percent surtax on imports into all areas except Penang and Labuan in East Malaysia. Excise taxes of long-standing are levied on certain products including manufactured petroleum products, liquor and tobacco. The traditional regis- tration tax on motor vehicles which have always been imported duty free, is now being supplemented by an import duty for the protection of the recently estab- lished motor vehicle assembly plants. Singapore has traditionally been a free port area mainly dependent on entrepot trade and reexports, and has levied tariffs on only a few items to produce revenue. In its move toward industrialization, Singa- port has adopted a protectionist policy to encourage new industries manufacturing for the local market. Singapore continues to operate as a free port but collects duties on a growing list of products. Singa- pore will eventually establish free trade zones to ac- commodate entrepot trade and reexports when the tariff structure has broadened enough to justify this action. The present Singapore customs tariff was introduced in 1965, and incorporates the Standard International Trade Classification system for commodity identifica- tion. There is a dual column of levies to continue par- ticipation in the Commonwealth tariff preferential sys- tem. About two-fifths of the present rates are on a specific rate basis; two-fifths are on an ad valorem basis, and one-fifth are subject to either type of rate, whichever is higher. Ad valorem rates range from 10 to 40 percent, but are concentrated around 20 and 25 percent. Duty rates levied in Malaysia and Singapore on spe- cific commodities are available from the Far Eastern Division, Office of International Regional Economics, Bureau of International Commerce, U.S. Department of Commerce, Washington, D. C. 20230. DOCUMENTATION The usual documentation for clearing air and sur- face shipments in international trade is required in Malaysia and Singapore. This includes the commer- cial invoice and bill of lading which are provided by the exporter. A certificate of origin is required for banking purposes when dollar exchange is supplied by the local exchange authorities. Other instances when a certificate of origin is needed to clear imports do not concern the entry of goods from the United States, as they relate to claiming tariff preferences by im- porters of United Kingdom and commonwealth goods, and moving goods in the Malaysian Common Customs Area. Certain labeling and marking procedures are desig- nated for incoming shipments by both countries. These relate mainly to foods and drugs, and are often no more than those required by U.S. laws and regulations which apply in U.S. domestic trade. On packaged foods, the name and address of the producer or seller and the country of origin are needed. When packaged 18 food is enriched, fortified, or vitamized, the quantity of added material per pound or ounce must be stated. Marks of origin are also required for drugs and liquors. Though not a requirement, it is advisable in West Malaysia to inscribe marks on the exterior of packing cases to correspond with marks shown on the bill of lading and to show the port of discharge. Full information on documentation requirements, including the number of copies needed, may be ob- tained from the office of the nearest freight forwarder. Detailed information on marking and labeling may be obtained from the U.S. Department of Commerce. Further information on the subject matter in this chapter may be obtained from the following U.S. De- partment of Commerce publications available at a nominal cost from any field office of the Department or from the U.S. Government Printing Office, Washing- ton, D. C. 20402: Foreign Trade Regulations of Malaysia, OBR 67-35, July 1967 and Foreign Trade Regulations of Singapore, OBR 67-73, November 1967. 19 a— in ii a mm m CHAPTER IV The Distribution System MARKETING STRUCTURE A1SD CHARACTERISTICS The marketing of imported goods in Malaysia and Singapore is in most part conducted by trading com- panies which operate sales outlets in Singapore and in the principal cities in West and East Malaysia. They regard both areas as a composite market to be culti- vated by branches and traveling salesmen. These firms are often headquartered in Singapore with branches in Malaysia, but many have head offices in Kuala Lumpur which is Malaysia's principal city, and maintain branches throughout Malaysia and in Singapore. A significant volume of imports is handled by a large number of small and medium sized firms, most of which are owned by local nationals. These are located mainly in the smaller West Malaysian cities, Ipoh, Penang and Malacca, and in the East Malaysian cities of Kuching and Kota Kinabalu. Their import activities relate largely to local customers or end users in these cities and the adjacent market territories. For example, Ipoh in the heart of the tin mining region, and close to the rice bowl sections of West Malaysia, is served by trading firms which specialize in tin mining and rice farming equipment and supplies, and in addi- tion, by the branches of the large trading complexes which have country-wide marketing facilities. Downtown Singapore hums with business activity. Singa- pore is the world's fourth largest port in terms of ton- nage of shipping entering and clearing port and is a major distribution center for the Far East. Probably more than 90 percent of the foreign goods moving into and out of East Malaysia (Sabah and Sarawak) are handled by trading firms headquartered in Singapore and West Malaysia, either through branch sales outlets located in these areas or by sales- men who make frequent visits there to take orders from small local dealers and distributors, or end users. Only a small amount of international trade is con- ducted directly between foreign suppliers and strictly local East Malaysian importers and distributors; how- ever, the branch sales offices of Malaysian and Singa- pore trading firms are often given autonomy in ar- ranging import transactions with foreign suppliers who have agency contracts with the parent firms or on a single transaction basis. A relatively small number of large foreign owned and managed trading companies are responsible for moving as much as one half of the import trade of Malaysia and Singapore. Included among the major trading companies are over a dozen large and success- ful British trading houses, most of which started their trading activities supplying the requirements of the rubber plantations and tin mines started by British investors in the early days of the former colonial rela- tionship. Many of these firms perform as managers or custodians of British firms which have large invest- ments in Malaysian rubber, tin producing and palm oil operations. Also included in the major trading company cate- gory are several firms owned and managed by other foreign nationals which operate mostly as branches. 21 This includes several branches of U.S. owned firms, but although their parent firms in some cases have considerable assets and a large international sales volume, their marketing role in Malaysia and Singa- pore is secondary to that of the large British companies. A large number of small and medium sized locally owned and managed trading firms and a smaller num- ber of locally owned major firms now account for about 50 percent of Malaysian and Singapore foreign trade. These firms are usually owned by Chinese Malaysians and to a lesser extent, by Indian Malaysi- ans. Participation in foreign trade by Malays is small, but they are being encouraged by government authori- ties and progress is being made. A typical major trading company may claim repre- sentation of several hundred foreign suppliers and be involved in the marketing of several thousand indi- vidual product items. It may sell to factories and other producing enterprises, to government agencies owning and operating public facilities, to construction and building companies, and to wholesale and retail out- lets. The medium and smaller sized firms are usually also well diversified in the range of products they handle; however, these are sometimes found to prefer a specialization such as electrical equipment; medical and scientific instruments and equipment; and auto vehicles, parts and supplies. These firms also take orders from customers, sell to end users and engage in wholesale and retail trade as well. There are other variations in the distribution pat- tern. A large department store operates as an im- porter/retailer, and also imports through indent orders placed with trading companies representing foreign suppliers whose merchandise the store requires. Retail dealers specializing in food provisions and other shelf goods may follow the same pattern. There are in- stances of local sales branches maintained by foreign manufacturers who staff them with local management and technical personnel, though maintaining home office management and supervision in residence or by frequent visits as the case requires, and who provide full sales and service facilities. U.S. firms are included in this category. There are instances of direct infrastructure equip- ment procurement by government agencies for power, water, irrigation and transport development. These purchases are arranged with foreign suppliers in re- sponse to international tendering. However, this kind of transaction is waning as it becomes clearer to foreign suppliers that dealing through a local agent or distributor greatly enhances their chances of making sales to government agencies. The entire range of importing services is available in Malaysia and Singapore. The larger houses provide the full gamut of marketing services; they import for their own account; maintain inventories of goods and spare parts in the case of equipment; provide main- tenance services; sell or process indent orders for delivery to the customers including end users; and sell to wholesalers and retailers. Many of the small and medium sized companies function in the same way, while a larger number owe their success largely to operating as indent merchants. Although there is increasing competence among im- porters in modern selling methods, they often pursue the easy order taking approach to marketing. Import firms which have advanced to the role of selling the market have often had the benefit of advice and help from foreign suppliers who understand and apply the concept. The conversion from a habit of order filling to a role of finding buyers has been and continues to be a gradual process, and success is found in propor- tion to the competitve spirit and market development interest shown by the supplier. Thus, a foreign sup- plier who has found a likely distributor or agent in these markets has reached only the first plateau of market entry, and may then anticipate working with the agent to advance his selling techniques and pursue an effective market development program. (See com- ments on selling in Chapter VI.) Trade directories show a large number of trading companies in Malaysia and Singapore with trading capabilities in a wide range of products. However, foreign suppliers are hard-pressed to find distributors to represent them. The larger and more successful firms are generally overcommitted in representation of foreign firms, and are reluctant to represent a sup- plier of a product already established in the market by another distributor. Competent smaller firms which are more frequently available for agency arrangements often turn down an offer because the supplier refuses to provide appropriate marketing support. Despite the problem of finding a suitable outlet, foreign suppliers are succeeding in making representa- tion arrangements and selling their products in these markets. Their success is based largely on a genuine interest in exporting, an awareness of the market situa- tion, active support in a sales campaign, and appropri- ate surveillance over distributor performance. The implementation by a supplier of a marketing program should be a continuing process in which there is room for restructuring of an agency arrangement and sales campaign. 22 ^"-'>---\ Negotiating a difficult bend in the road, heavy equipment is transported to the site of Malaya's Cameron Highlands hydroelectric project. The following guidelines for the development of a supplier-agent relationship, which are common knowl- edge among successful exporters, may help to initiate a successful penetration of these markets by an American supplier: Because exporter credit is a common feature in import transactions, even well-financed importers seek reasonable credit and payment terms from foreign suppliers. Because the American supplier is remote from these markets, he may improve his chances to compete if he insists on an adequate inventory plan for goods which should be stocked in the market area. Because repeat sales in products requiring spare parts and service cannot be assured unless after- sales service is provided, the U.S. supplier should insist on such a service, and if necessary, assist the distributor in the arrangement. Because the market creation feature of selling con- sumer goods is not generally applied, a U.S. sup- plier particularly skilled in this concept may have an advantage in developing a successful agency relationship. The selection of a suitable distributor is only the first stage in market development in Malaysia and Singapore. After that, follow-up attention to the dis- tributor and his performance by the U.S. supplier is a key factor in the success of the agency arrangement. An important, and probably more difficult requirement because these are distant markets, is to make the dis- tributor feel that he is a member of the supplier firm. All of the support elements are needed in such a rela- tionship, but probably the most vital is technical and training support. Effective marketing of hard goods in these countries through a local distributor demands full assistance from the U.S. supplier in all phases of selling but particularly in identification of require- ments, installation, operation and maintenance of fa- cilities and equipment, and training in salesmanship and use of equipment. To give this supplier role proper meaning, frequent contracts between the U.S. supplier and his local dis- tributor are necessary. Because these markets are far away, it may be desirable for the American supplier to maintain a regional office in the Far East from which such contacts may be made as needed. Singapore is strategically located to serve as a regional marketing headquarters for Asian markets; Hong Kong is also very appropriate for this purpose. Many U.S. and foreign suppliers who can claim good success in ex- porting to the Far East now maintain regional market- ing offices, and in some cases distribution facilities, in one or the other of these locations. 23 Many U.S. suppliers conducting their regional dis- tributor relations activities in Singapore locate com- pany representatives in the premises of their Singa- pore distributors. These officials may be of U.S., foreign or local nationality, and function as sales man- agers in relation to the entire network of distributor- ship arrangements in the countries of the region. They are subject to direct supervision from their home offices, and are responsible for handling marketing programs and problems in Singapore and elsewhere in the region. A paramount role, however, is to provide the management bridge between their companies and appointed marketing outlets in the region, which are quite widely separated, to implement company policy and marketing strategy. TRA1SSPORT West Malaysia and Singapore are very well con- nected by surface transportation. However, internal transportation in East Malaysia is relatively unde- veloped. All of the principal cities of West Malaysia (Penang, Ipoh, Kuala Lumpur and Malacca) and Singapore are linked by an excellent system of hard- surfaced roads, and by adequate rail lines and efficient- ly operated rail services. There were 4,392 buses and 46,930 trucks registered in West Malaysia in April 1968. There is a short rail line on the coast of Sabah, but none in Sarawak. Both areas have a roadway system connecting the principal towns. There are also fre- quent scheduled air flights between the commercial centers of West Malaysia and Singapore, and in addi- tion, chartered flights can be arranged to reach cities connected by scheduled flights, and smaller towns which have airports for light aircraft. Regular and chartered flights are available to connect Singapore with Kuching in Sarawak and Kota Kinabalu in Sabah. Singapore reported 554 miles of roads in 1966, most of which were hard surfaced and in excellent condition. The recently developed Jurong industrial and residential estate is connected by a 12-mile branch rail line with the main terminal in Singapore. Of 590,267 vehicles registered in Singapore in May 1968, 1,828 were motor buses and 25,945 were trucks. West Malaysia and Singapore are both included in the Far Eastern routes of the major international air- lines, and air transport linkage with the world is readily available. International airports accommodat- ing the largest jets are located in Kuala Lumpur and Singapore; the Penang airport can accommodate smaller jets. The Governments of Malaysia and Singa- pore jointly own and operate an airline which is cur- rently being expanded by the purchase of several Boeing 707's and 727's to operate in international flights between Malaysia and Singapore and the major cities in the Far East. Air cargo service in these areas is growing in importance; air freight discharged and loaded in Singapore in 1967 amounted to 19.6 million pounds, and in Kuala Lumpur it amounted to 6.4 million pounds. Ocean shipping facilities are vital to Malaysia and Singapore in view of their heavy dependence on foreign trade and the separation by water of West from East Malaysia. Port facilities are modern and well administered, though some congestion is noted in Port Swettenham where cargo handling demands continue to exceed available facilities. Port Swettenham has only recently been expanded to handle more of the international cargo destined for and originating in central Malaysia and the principal commercial center, Kuala Lumpur. In addition, the 27-mile highway con- necting the port with Kuala Lumpur has been con- verted into a dual highway, and freight hauling facili- ties have been expanded on the rail line linking these two points. Port facilities being constructed on the mainland opposite the port of Penang, consisting of six deep water wharves, are scheduled for completion in 1971. Present Penang port facilities are located on the Island of Penang and consist of docking area and lighterage with ships at anchor which accommodated slightly over 3 million tons of cargo in 1967. Goods landed on the Island and destined for the mainland are moved mainly by trucks which ferry across the 3 miles of waterway between the Island and the main- land. There is also some lighterage of cargo direct to limited docking facilities on the mainland. The Penang port presently serves international shipping require- ments of the Penang area and a 100-mile radius from Penang which extends southward to the city of Ipoh and northward to the Thai border. West Malaysia's so-called smaller ports currently handle an aggregate of almost 10 million tons of this area's international cargo, or about 60 percent; how- ever, iron ore shipments from two of these account for more than one half of this amount. Except for Port Dickson and the Ports of Dungan and Kuala Rompin, docking is limited largely to smaller vessels many of which serve in regional coastal shipping; also, a large percentage of the cargoes in these ports are handled by lighter and barge. The Port Dickson cargo traffic con- 24 £££««£$ j An efficient road network used by 1.1 million motor vehicles provides Malaysia and Singapore with above average mobility of goods and people. sists mainly of incoming crude oil tankers which serve the two large oil refineries located there, while the Ports of Dungan and Kuala Rompin are loading areas for iron ore shipments to Japan. Singapore is the world's fourth largest port in terms of tonnage of shipping entering and clearing the port. Cargo handled in 1967 amounted to 30.3 million tons as compared with a total of 3 million tons handled in Port Swettenham and 15.9 million tons in all West Malaysian ports. Singapore's cargo handling is ahout 83 percent by lighterage with vessels anchored in the "roads", and 17 percent at the wharves. Increased demand for cargo handling has occurred in both ports, but Port Swettenham's facilities have not been adequate to meet the demand with the result that some cargo is diverted to Singapore. This diver- sion and the earlier established pattern of inward and outward Malaysian cargo flow via Singapore continue to give Singapore an important role in servicing Malaysia's foreign trade. Construction of two deep water berths in the old port area of Port Swettenham is nearing completion, and a West German firm has just been awarded a con- tract for the expansion of the North Port area of Port Swettenham in three stages. The first will consist of 900 feet of ocean berth for completion in 1970, a further 900 feet for operation in 1971, and a final 1000 feet scheduled for 1972. This project, to cost about $19.3 million, will more than double the capacity of the North Port which will be capable of accommodat- ing containerized cargoes. Sabah's ocean freight handling facilities in East Malaysia are less advanced, but were capable of mov- ing 3 million tons of cargo in a recent year; logs and timber are major cargo items. Principal ports which have wharfage facilities are Sandakan; Tawau which borders on Indonesia; and Kota Kinabalu (formerly Jesselton), the capital of Sabah. Labuan in Sabah is a free port whose present shipping activities relate mainly to Brunei's needs. Since Brunei is now con- structing port facilities at Muara which are scheduled for completion in early 1970, shipping will be drawn away from Labuan. There are also several timber and log loading points and minor ports in Sabah. Sarawak ports handled a total of 8.8 million tons of cargo in a recent year. Principal ports are Miri, which has open sea anchorage, and Kuching. Other lesser ports are Sibu, which large vessels are now able to reach via channel, and Tanjong Mani which mainly handles logs and timber. The First Malaysia Plan (1966-70) provides $8 million for Sarawak port development, mostly for Kuching and Sibu. A sum of $2.4 million is provided for port projects in Sabah which include development of the port of Lahad Datu. COMMUNICATIONS Malaysia and Singapore have modern systems of communication which are efficiently operated by gov- ernment agencies. All of the principal cities and towns in Malaysia are linked by telephone, and calls may be placed immedi- 25 ately to most points by direct dialing. Overseas radio- telephone service between West Malaysia and most foreign countries is available via Singapore, and tele- phone and telegraphic connections can be made through the Southeast Asia Commonwealth Communi- cations System (SEACOM) to the Commonwealth global system. Thus, calls can be placed by direct dialing between Kuala Lumpur and Singapore, and the United Kingdom, the United States, Canada, Australia and Japan. The SEACOM system also reaches to Kota Kinabalu in East Malaysia, and Brunei. Telex service, a quick means of international communication for commercial establishments, is avail- able to subscribers in West Malaysia and Singapore. An efficiently operated telegraph system serves the principal cities and towns in West and East Malaysia, and Singapore, and local and overseas telegrams may be processed at telegraph offices, post offices and rail- way offices. Overseas telegrams from Malaysia are sent by the Malaysian Telecommunications Department to Bangkok, East Malaysia and other Asian points via the Singapore Telecommunications Department using radio-teletype facilities. Telegrams to Hong Kong and Kota Kinabalu are transmitted directly from Kuala Lumpur and Singapore via the SEACOM cable, and to all other countries, they are transmitted by the Singa- pore Telecommunications Department via submarine telegraphic cable or short-wave radio. Radio communication reaches a wide audience in Singapore and West Malaysia. Virtually the entire Singapore population is served by radio, while in Malaysia, most of the urban dwellers have access to radio broadcasting. Radio coverage in East Malaysia is still limtied. Radio transmission takes place in all of the languages common in the areas — Malay, Chinese, Tamil and English. In Malaysia, commercial broad- casting has been integrated with national service in a 60/40 ratio. In Singapore, almost one half of the radio time is commercially sponsored. Radio set own- ership continues to expand; Malaysia imported receiv- ing sets valued at $5.2 million in 1967 while Singapore imported a value of $12.6 million. A large number of sets imported into Singapore are reexported to coun- tries in the region. Singapore and West Malaysia are served by televi- sion transmission, and each area transmits on two channels in the four common languages. Set ownership in Singapore is at the rate of one set per every six households; ownership frequency is smaller in Malaysia. Both areas operate an effective postal service, and mail deliveries are maintained twice daily in the larger commercial centers in Malaysia, and three times daily in the central city area of Singapore. Airmail service between Malaysia and Singapore, and the United States is considered excellent; mail deliveries are made to and from Singapore in 3 to 5 days, and to and from Malaysia in 4 to 7 days. Ocean surface mail takes several weeks. 26 CHAPTER V Commercial Facilities and Marketing Aids BANKING A common currency system for Malaysia, Singapore and Brunei, which was consistently stable over the years, was terminated in June 1967. Each country then adopted an independent currency with the same par value. The International Monetary Fund par value rate for the Malaysian dollar (M$) and the Singapore dollar (S|) is 3.06122 per U.S. $1.00. This was also the par value rate for the previous common currency, and the market rate is maintained within a small mar- gin of this value. Though they have separate cur- rencies, Malaysia and Singapore have implemented a simple procedure to freely interchange their respective currencies. There were 37 banks at the end of 1967 operating a total of 314 banking offices in Malaysia. Of this num- ber, 16 are incorporated in Malaysia. Of the remaining banks, five are incorporated in Singapore with 56 offices, with a total of 163 banking offices and 16 are incorporated in foreign countries. There is a con- siderable dispersal of banking offices throughout the Malaysian states. There are 81 banks in Selangor, with the largest population where Kuala Lumpur is located, 21 bank branches in Sabah and 24 in Sarawak. Foreign incorporated banks with branches in West Malaysia and Singapore include the First National City Bank of New York and the Bank of America. The Chase Man- hattan Bank has a branch in Singapore. Interest rates applicable in West Malaysia and Singapore are generally related to rates charged in the United Kingdom; rates in East Malaysia are somewhat higher. The general minimum interest rate on bank loans is 8 percent; the average rate is about 9.2 per- cent per annum. Maximum rates on fixed deposits for 9 and 12 months are 6 percent, and on savings deposits, 3 percent. Loans and advances by commercial banks in Singa- pore as of December 1967 were $156 million to the foreign and wholesale trade sector, or 42^2 percent of all credits extended to the private sector. Commercial bank loans and advances in Malaysia as of December 1967 were $477.6 million of which $100.6 million was in import, export and wholesale transactions and $39.6 million in retail trade. Commercial banking facilities are considered sophis- ticated by world standards, and are well managed and dependable. Although they provide all-inclusive financ- ing required by the trading community, the extension of credits to foreign and domestic traders is mostly on a short term basis. However, considerable medium- term financing of trade transactions does take place, and the proportion of this kind of trade support financ- ing is growing. (For further comments on the use of medium-term credits in foreign trade, see Chapter VI.) Commercial banking operations which relate to foreign trade include the issuance of letters of credit in the usual variations of payment upon the acceptance of documents with a specified payment period, or upon payment bv the importer on presentation of documents but in advance of deliveries; the acceptance of letters of credit and honoring them upon acceptance of docu- 27 Commercial banking facilities in both Malaysia and Sing- apore are well managed and dependable. A lotal of 37 banks operate 314 banking offices throughout Malaysia. There are 163 banking oflices in Singapore. ments by the foreign importer on an immediate or deferred basis; outward and inward remittances when accounts are settled either on an immediate or open account basis; discounting export bills; accepting foreign currency deposits; and providing credit infor- mation directly to foreign suppliers, via foreign bank- ing representatives, or to central reporting bodies in- cluding the commercial offices of foreign Embassies. The overdraft device of extending financing to cli- ents in international and domestic trade is frequently used by commercial banks in which the indebtedness is simply carried on the bank's current accounts ledger, with the levy of the going interest rate. These arrange- ments may be made orally, but are generally based on written commitments. B AREHOUSIISG Warehousing is discussed mainly in the context of facilitating international commerce in Malaysia and Singapore. Emphasis is on this activity in Singapore where it has a unique international marketing signifi- cance because of Singapore's important role in entre- pot trade. Warehousing facilities to accommodate in- ternational trade are also important in Penang. The existence of extensive warehousing space and transit sheds in the Port of Singapore and the free entry and exit status of Singapore currently make possible the efficient handling of products entering the port for local distribution. Goods are entered for im- mediate on-loading for transshipment to ports in Malaysia and adjacent countries, for removal to processing facilities in the case of raw materials and ultimate reexport, or simply for storage and ultimate internal distribution or reexport in their original form. Foreign suppliers have for many years utilized the services of Singapore traders who own their own ware- houses and have access to public warehousing and other entrepot facilities, which gave these suppliers a significant competitive advantage in Malaysia, Singa- pore and other Asian countries. This advantage con- sists mainly of reducing the delivery period involved in shipping goods from distant ports by making early deliveries from stocks held in Singapore. This market- ing service is becoming more widely known to foreign suppliers selling in Asian markets, and more of them are expanding their distribution activities in Singa- pore, or exploring the potential for such operations. Public warehousing facilities in Singapore which are of major importance in servicing international commerce are those under supervision of the Port of Singapore Authority. The Port area consists of 48 transit sheds located alongside the wharves which en- compass a floor area of 1.3 million square feet. These are supplemented by 20 additional units which provide 500,000 square feet of covered storage space. Nine of these units are leased to private firms. In addition, the Authority makes available some 855,000 square feet of concrete aproned open storage area, and special sheds are provided for dangerous goods and other special cargo. Public storage space is also maintained in the wharves area of the new Jurong Industrial Estate. All facilities are managed by personnel of the Singapore Port Authority, and present storage space consists of about 20 acres which includes a covered warehouse measuring 120 by 270 feet. Additional open storage space and covered warehouses are being planned. Singapore trading companies also own and operate a large complex of warehouses in connection with their trading activities in the Singapore market and re- exports to Malaysia and other Asian countries. Many of these warehouses are located on the banks of the 28 Singapore River, and receive cargoes by lighters from vessels anchored in the "Roads". With warehousing demands in the principal port area outstripping availability, present expansion plans include the replacement of transit sheds and construc- tion of additional storage space including a single warehouse measuring 780 by 120 feet in size. The present Penang warehousing facilities are lo- cated on the Island of Penang which continues for the present to have a free port status, and accommodates a significant volume of international commerce on a transshipment and entrepot basis. There are four transit sheds on the wharf with 87,800 square feet of space and 12 storage godowns with 133,600 square feet. Open or uncovered space amounts to 760,000 square feet. With the adoption by Malaysia of a national market concept, procedures have been started to provide a tariff-free market in all parts of Malaysia for goods manufactured in Malaysia. The inclusion of Penang in this procedure will require a free trade zone arrange- ment to enable the expansion of manufacturing for the Malaysian market and the continuance of entrepot trading activities. Such an arrangement is now pro- posed for location in Butterworth on the mainland, and will include as a first step the completion of bonded warehouses which will be used to accommodate im- ports to be reexported. TRADE PROMOTION Market research as it is known in developed coun- tries is being increasingly recognized in these countries as an essential marketing tool, and is more frequently applied in Singapore than in Malaysia. As a conse- quence, several market research firms have been estab- lished in these countries which have developed an acceptable competence in professional market research services, and are ready to expand their activities to meet new demands. (See Appendix F — Market Re- search Firms). Although professional market investigation services are available, many local trading firms conduct market inquiries on a rule of thumb basis to guide them in market development planning. The results are often good, but vary according to the business competence of the firms and their staffs responsible for market planning and development. Foreign suppliers having agency contracts with local firms are able in many cases to obtain most useful market assessments and market development guidance from their agents. American suppliers seeking in-depth information and assessments of the sales potential for their prod- ucts in the Malaysia/Singapore markets have several alternatives. They may engage a U.S. or third country market research facility which has capabilities in these markets; they may send their own market specialists to these areas to conduct the necessary market research; or they may engage market research facilities located in Malaysia and Singapore. Since the first two alterna- tives are likely to be considerably more costly than the third, it may be advisable to use local market research services. The promotion of sales of goods by advertising is a well developed and frequently used service. There are several effective and prosperous advertising and public relations firms which help foreign suppliers and local distributors merchandise products in these markets; some of these are branches of foreign owned com- panies: a U.S. firm is included among them. Many of the large trading companies advertise the products they offer in the market and their various services as well, and customers are often known to identify a product with a particular local distributor instead of the foreign supplier. However, foreign suppliers are known to frequently buy space in well-circulated news dailies in which they advertise their wares in a format laid out by local advertising firms. Media for advertising are adequate to reach the bulk of the customers for producer and consumer goods. The most effective are the daily newspapers which circulate to readers in the three major languages — English. Malay and Chinese. Most of these people, by reason of their long association with the British, are able to communicate in the English language, and most of the members of the business community are reachable in English. Good results are also obtained, particularly for consumer goods, from films shown in movie theaters throughout Malaysia and Singapore. Almost every home can now be reached by radio, a medium that is increasingly used by distributors to advertise consumer goods. Television, a more recent innovation in these areas, is also being widely used to advertise consumer goods; but this medium is avail- able in a limited number of homes. Not to be overlooked is the promotional value of institutional and product advertising space frequently bought by large American firms in the popular U.S. consumer and trade publications. These have world- wide circulation, and reach many customers in these countries, particularly the more affluent ones who are business and professional customers for producer goods and the principal buyers of consumer goods. 29 BUSINESS AND GOVERNMENT GROUPS There are several chambers of commerce organized on an ethnic basis. These have good membership sup- port, and are loosely tied into a single united chamber in an effort to achieve a consolidated approach when representing the viewpoint of private enterprise in its relations with government. The largest of the cham- bers have been organized by Malaysian businessmen of Chinese origin and are located in Singapore, Kuala Lumpur, Ipoh and Penang. Membership in these in- cludes a large segment of importers and exporters. The largest and most active of these are the Selangor Chinese Chamber of Commerce located in Kuala Lumpur, and the Singapore Chamber of Commerce. The chamber in Kuala Lumpur provides some assist- ance to its trading members by publishing an annual report on the commerce of Malaysia and by servicing inquiries received from foreign suppliers indicating an interest in exporting to and finding distributors in the local market. This chamber also makes space avail- able to foreign distributors for the purpose of ex- hibiting their products locally. The Indian and Malay chambers of commerce in Kuala Lumpur also provide assistance to importers, but not on an extensive scale, by bringing to their attention business inquiries re- ceived from foreign suppliers. Facilities of the Singapore and Malaysian govern- ments to promote commerce and industry have only limited application to the promotion of foreign export opportunities in the local markets; principal emphasis is on promotion and assistance to local industrial ex- pansion and to exports from these areas. In Singapore, the Economic Development Board (EDB) has the responsibility for industry and trade promotion. Since new Singapore industries must rely mainly on exports, the Singapore Government has recently established a trading company, Intraco Ltd., a joint venture of government and private business, which will have offices abroad to conduct exports. The Singapore Foreign Service is being gradually organ- ized, and at present, business promotion activities abroad are limited to investment promotion offices in selected countries. Such offices are maintained in New York City, Chicago and San Francisco. EDB publishes a monthly journal — Singapore Trade and Industry, in which a small number of foreign export opportunities sought by foreign suppliers in the Singapore market are published. In Malaysia, foreign trade activities are adminis- tered by the Ministry of Commerce and Industry, and principal emphasis is on promotion and assistance to Malaysian exporters. The Malaysian Government has only recently started to organize a trade promotion service as a part of its foreign service, and thus far has located trade commissioners in selected countries. The Malaysian Trade Commissioner in the United States is located in New York City. U.S. MARKETING AIDS American exporters planning to do business in Malaysia and Singapore and those already on the scene have convenient and inexpensive access to a wide range of information and services provided by private and government agencies on a world-wide basis. These are available in the United States, and for U.S. business- men who travel abroad, they are available from American Embassies and from U.S. firms operating in foreign countries. Extensive economic, business and market informa- tion, sometimes including the market situation for specific products, is readily available in published form and by consultation with informed officials. Check- lists and guides are published which contain references to a wide variety of up-to-date publications on inter- national commerce including reports on business and economic conditions, trade regulations, tax legislation, development plans, foreign trade, and the market po- tential for specific products in many countries. Reports for Malaysia and Singapore are included. These pub- lications are obtainable at a nominal charge from the Superintendent of Documents, U.S. Government Print- ing Office, Washington, D. C. 20402, the Field Offices of the U.S. Department of Commerce and in the case of reports relating to Malaysia and Singapore, the Far Eastern Division, Bureau of International Commerce, U.S. Department of Commerce, Washington, D. C. 20230. Listings of foreign firms known as Trade Lists, and background information about the operations scope and business reliability of foreign distributors known as World Trade Directory Reports (WTDR) are avail- able from the Commerce Field Offices or direct from the Commercial Intelligence Division, Office of Trade Promotion, Bureau of International Commerce, U.S. Department of Commerce, Washington, D. C. 20230. WTD Reports on many firms are immediately avail- able; information may be requested on others. This office may also on request furnish at a cost of $50 a survey identifying up to three potential distributors in a foreign market, with comment about their capa- 30 Singapore's role as a distribution center and transhipnien point emphasizes the importance of warehousing and storage space. Here is one of the Port Authority's modern portal-frame structures for covered storage. bilities and the market for a particular product of interest. These surveys are prepared by the commer- cial staff in the American Embassy located in the country of interest. Information about economic and business conditions in Malaysia and Singapore may also be obtained in consultations with specialists in the Far Eastern Divi- sion, and about industries and products of these coun- tries from industry specialists in the office of Business and Defense Services Administration, U.S. Department of Commerce, Washington, D. C. 20230. Information on agriculture and the market for farm products in Malaysia and Singapore is available from the Foreign Agricultural Service of the U.S. Department of Agri- culture, Washington, D. C. 20250. Headquarters offices of American banks, shipping, airline and other business firms established in business in Malaysia and Singapore are also good sources of market and business information in these countries. Names and addresses of these firms are available in Trade Lists as indicated above. U.S. businessmen planning to visit Malaysia and Singapore may discuss their itineraries with the inter- national trade specialist in their nearest Commerce Field Office, or communicate their plans direct to the Commercial Intelligence Division. The latter office will transmit trip information to the Embassies in Malaysia and Singapore to alert the commercial offices about their visit plans. This service enables Embassies to plan to assist the visiting businessman upon arrival by identifying information sources and local business and government officials to be contacted. The Com- mercial Attache in the Embassy in Kuala Lumpur pub- lishes a monthly commercial newsletter which circu- lates to a mailing list of several hundred importers and businessmen in Malaysia and Singapore. The news- letter includes a section which contains a list of trade opportunities received from U.S. exporters. American firms exporting to Malaysia and Singa- pore should also investigate the financing and export insurance facilities of the Export-Import Bank located at 811 Vermont Avenue, N.W., Washington, D. C. 20005. The Export-Import Bank backs export credit insurance coverage on a short and medium term basis provided by the Foreign Credit Insurance Association (FCIA), a consortium of private insurance companies. An export credit insurance policy protects the exporter, when he has extended export credit to a foreign im- porter, against non-payment due to certain political and commercial considerations; he may choose com- prehensive protection against both of these types of risks or political risk coverage only. This insurance is available on a short term (up to 180 days) or medium term (180 days to 5 years) basis. The former is generally sought in consumer goods export transactions, while the medium term policy is generally sought in the case of equipment and durable goods export sales. Medium term coverage is available on an individual transaction basis, while short-term coverage is generally provided only on a "total turnover" basis. In the latter, the exporter in- sures all his export shipments, to all his foreign cus- tomers, under his short-term policy. As an alternative to the FCIA medium term export credit insurance policy to protect his extension of credit, an exporter may obtain financing from a com- mercial bank without recourse to the exporter, for which repayment is guaranteed by the Export-Import Bank. In this financing, the exporter seeks credit from his bank which then obtains a guarantee from the 31 Export-Import Bank for credit the bank is willing to extend to the exporter. A full explanation of the export credit insurance protection program of FCIA and the medium term guarantee system of Export-Import Bank is provided in the September 18, 1967, issue of INTERNATIONAL COMMERCE. Inquiries may also be addressed to FCIA headquarters at 250 Broadway, New York, New York 10007, or the Export-Import Bank in Washing- ton, D. C. The Export-Import Bank's principal long-term credit activity is making direct loans, generally called project loans, to public and private borrowers abroad for the purchase of U.S. goods and services. This type of direct financing by the Bank amounted to almost $1.7 billion in fiscal year 1968. The essential criteria for granting these credits are a reasonable assurance of repayment, and that the loans supplement rather than compete with private lending facilities. The standard interest rate for direct loans is currently 6 percent. In addition, commercial banks may participate in individual loans made by the Export-Import Bank, and sometimes the Bank helps finance a project jointly with loans from other official lending sources. Applications for these loans must be initiated by foreign private and public borrowers, but frequently after negotiations have been started with U.S. suppliers for the procurement of goods and services in which suitable credit terms are a vital consideration. These loans have ranged from $1 million and up in the past. U.S. firms offering goods and services for sale abroad in substantial value in which credit terms were an im- portant competitive factor have been able to consumate large transactions over the years with credit assistance from the Export-Import Bank which otherwise would not have taken place. Loans are also made by the Export-Import Bank to foreign development and commercial banks which re- lend the proceeds to local private firms to expand pro- duction and open new facilities but not to finance products for resale. The local firm may borrow up to 80 percent of the C.I.F. U.S. dollar value of the goods, and related services, which must be imported from the United States. A more complete discussion of the direct lending operations of the Export-Import Bank to finance U.S. exports appears in the March 11, 1968, issue of INTERNATIONAL COMMERCE. Inquiries may also be addressed direct to the Export-Import Bank in Washington, D. C. 32 CHAPTER VI Marketing Factors Importers in Malaysia and Singapore generally agree that many U.S. products cannot be offered at competitive prices, e.g., at comparable prices or within the premium price range which is acceptable for many U.S. products. Higher shipping costs, for example, to which U.S. goods are subjected, are sometimes a factor in pricing them out of the market. In many instances, U.S. producer goods and consumer durables are higher priced because they possess a high quality ratio; these are often eschewed in these markets for goods with a lower price tag. Nevertheless, importers in these countries also agree that the full sales potential for many U.S. products which are available at competitive prices or at premium prices acceptable to customers in these markets, is not realized. They point out that a better U.S. market penetration may be possible if U.S. exporters give more attention to other key marketing factors, e.g., selling, financing, delivery, as well as pricing and quoting. SELLING Many of the skills in selling goods are well developed in the importing and distributing establishments in Malaysia and Singapore, and are generally vigorously applied. Foreign trading firms, which account for about one half of the imports into these countries, have gradually substituted local for foreign sales staffs, and have trained them in selling methods and product know-how. Also, supervisory and management posi- tions in these firms are being increasingly filled by promotion from within. Salesmanship training by the foreign trading firms has spilled over into local trading firms as sales personnel have transferred to better job opportunities. In-job training of local nationals in salesmanship by foreign trading firms has been frequently supple- mented by training abroad in the headquarters offices of foreign suppliers whom they represent in the Malaysia and Singapore markets. This training, gen- erally financed by suppliers, includes product orienta- tion and application by exposure of trainees to the manufacturing processes in plants of suppliers. In addition, local talent for selling positions in foreign and local trading establishments is increasingly drawn from college graduates who have received degrees in business administration and other specialties from universities in the United Kingdom, Canada, Australia and the United States. Salesmanship training of local sales staffs is also provided by company representatives of foreign sup- pliers, who are stationed in Malaysia and Singapore, or make frequent visits to these areas from company headquarters or from regional marketing offices. This training is available to sales personnel of local as well as foreign trading firms. Competence in product application among sales staffs of local distributors, which is vital in the sale of machinery and equipment, is not as widely available in these countries as are other selling skills. While this situation is being corrected by increased education and training, as previously stated, foreign suppliers of 33 *H ,# V-M Malaysia and Singapore botli place heavy emphasis on education which is resulting in many benefits including increased demand for goods. Here a science class watches a demonstration in a Singapore elementary school. machinery and equipment frequently augment the product know-how and engineering skills of their agents in Malaysia and Singapore by locating company representatives in these areas, or in an office else- where in the region. These company officials, particu- larly in the case of important requirements for factory equipment in the private sector or government pro- curement of infrastructure equipment, are able to pro- vide the essential product application knowledge which helps to swing sales in their company's favor. Although trading companies serving foreign sup- pliers in these markets are generally capable of effec- tive salesmanship, foreign suppliers often face the problem of inadequate agency selling performance. A contributing factor is the over-commitment by a large number of local distributors, particularly the larger firms, in representation of foreign suppliers in these markets, with the result that they give appropriate at- tention only to some of the more salable products they handle and ignore those which require more effort to sell. Foreign suppliers, including many American ex- porters, have learned to cope with this situation by making a careful search for more flexible agents, which are often found among the less committed trading firms, and by providing market promotion and de- velopment support. CREDIT Since both Malaysia and Singapore have a history of good fiscal management and financial stability, and there has been a steady growth of well financed and efficiently operated commercial banking facilities, the business community has developed considerable con- fidence in the commercial banking structure. Both commercial and savings deposits are substantial and on the rise, and banks are active in financing business activities, particularly domestic and foreign commerce. The minimum interest rate on loans is 8 percent, and the average rate is slightly over 9 percent. Prefer- ence in commercial bank lending is for short term loans, although the banks are more frequently meeting middle and long term credit demands. Since the pre- vailing interest rate compares favorably with the rates in many exporting countries whose producers sell in Malaysia and Singapore, the credit factor in importing is relatively less significant than in markets where a tight money situation has created unfavorable interest rates. Foreign supplier credit is neverthelss an important element of competition in these markets in a number of situations, and U.S. suppliers may not be fully com- petitive if they fail to give maximum consideration to 34 the credit factor. Though many of the locally owned trading firms are regular loan clients of the commer- cial banks, some of them are reluctant to borrow from banks and prefer to finance trading activities with their own capital, or with funds borrowed from friends or members of the family. Foreign owned trading firms are probably more frequent loan clients of the local banks, and are served by both the local and foreign branch banks. Foreign supplier credit on a medium and long term basis to finance the imports of capital goods is of particular importance in these markets, since local banks prefer to concentrate on short term lending and give lower priority to medium and long term loans. To cite an illustration, a Malaysian entrepreneur recently sought to import plant equipment for which he needed financing. An offer from a Japanese source included four year financing at a moderate rate of interest, but required a guarantee from a Malaysian commercial bank. A bank in Malaysia, asked to provide such a guarantee, reflected with sound banking logic that if it is able to guarantee the credit, it may as well extend the loan and earn the interest thereon, and proceeded to do so. It is reasonable to speculate that if the entrepreneur had approached a local bank for long term credit be- fore seeking it from a foreign supplier, the response probably would have been negative. The implication therefore seems clear that importers of capital goods in Malaysia and Singapore often expect foreign sup- pliers to grant them medium and long term credits. Thus, when they choose to seek foreign supplier credits for capital goods, the deciding factor in a sales trans- action may be the most favorable financing terms. Medium and long term supplier credits to support product inventories in these markets are also begin- ning to assume greater importance, and Singapore because of its free port and other trading advantages appears to offer a good site for warehousing and regional distribution. The use of Singapore as a marketing and distribution center to serve the mar- kets in Malaysia and other Asian countries has a strong appeal to U.S. and other foreign suppliers who are remote from these markets, because the location gives them an improved competitive position with respect to such nearby supplying nations as Japan and Australia. Financing is a key factor in a ware- housing operation, and the cost relationship of such a procedure to the normal cost of deliveries from re- mote sources would have to be carefully weighed. Although local banks are frequently ready to meet the short term financing demands of importers in Malaysia and Singapore, their response may be nega- tive in many transactions which are regarded as bank- able by foreign suppliers. Obviously, there are wide variations in the application of standards for reaching judgments in the evaluation of credit worthiness. For example, under local banking practices, the evaluation of a credit risk may depend more heavily on the per- sonal element than on a professional assessment of The Government of Malaysia's continuing land development program demands heavy equipment and creates new agriculture customers. the market. Also, suppliers in many developed coun- tries have access to government financing for their exports which increases their risk taking capacity in bankable transactions over that of banks in Malaysia and Singapore. Though located some distance from the local busi- ness scene, U.S. exporters have convenient access to market information and facts about the business and financial competence and reliability of local im- porters. (See topic entitled U.S. Marketing Aids in Chapter V.) This information will enable them to judge more accurately the credit worthiness of im- porters in Malaysia and Singapore, and reach decisions on the extension of export credits that are competitive with those granted by suppliers in third countries. Retail credit in the form of "hire purchase", which is the local designation for installment buying, is be- coming increasingly important in facilitating the sale of consumer durables, and therefore is a factor in the marketing of imported goods. The commercial banks are not directly involved in this aspect of trade financing; it is provided mainly by finance companies, some of whom are branches of banks. Installment buy- ing is most extensive in consumer durables, but in Malaysia some capital goods are financed in this way. The present product range covered in installment buy- ing includes motor vehicles, both autos and motor scooters; household equipment including refrigerators and deep-freeze food preservers and sewing machines; and radio, television and record-playing sets and tape recorders. Malaysia and Singapore have enacted legis- lation which prescribes ground rules for all phases of hire purchase financing, including limitations on charges. PRICE 4I\D QUOTATION The price factor is undoubtedly very carefully weighed by customers in Malaysia and Singapore in reaching decisions to buy goods from foreign sup- pliers. But it is usually not the sole criterion in a purchase decision, and the buyer relates it to other pertinent considerations. A decision to buy is often reached even though the price itself is not competitive. This kind of reasoning is commonplace in the pro- curement of industrial equipment in which the credit factor often becomes outstanding. If no major varia- tions in equipment quality are obvious to the buyer, who often lacks the technical competence to make an accurate appraisal, he is inclined to favor a purchase based on lenient payment terms rather than low price. Also, it is not unusual for an importer to place an order for capital equipment he recognizes as of lower quality and less efficient but which carries more liberal financing terms. The price factor is also often submerged when the products desired have achieved a special acceptability in the market. These may be product or equipment items which have earned special reputations for quality and performance on the basis of consumption experi- ence, or have gained wide acceptance through trade promotion and advertising such as in printed media circulated internationally, or have achieved a prefer- ence through long and successful exposure in these markets. Many of these items have gained a so-called brand name reputation. Since the price factor often has a bearing on a purchasing decision, it is of course important that the exporter adopts a realistic pricing procedure. Many importers in these markets, particularly the medium sized and small firms, prefer to place import orders directly with or to serve as agents for manu- facturers abroad. This preference is based on the belief that if they deal through an intermediate source, e.g., combination export manager (CEM) or a mer- chant exporter, the import price of the product they purchase is necessarily higher in order to support out- side exporting facilities. U.S. CEM's and export mer- chants have a missionary role in dealing with im- porters in Malaysia and Singapore who raise this question to convince them that costs relating to the export process are basically the same whether borne by them as intermediaries or by the manufacturer. Words of caution on pricing for export to Malaysia and Singapore, as well as other foreign markets, may be desirable, at least to inexperienced exporters. It may be a mistake for a manufacturer to include in the price of his product quoted to a customer in Malaysia and Singapore the cost of the domestic sales depart- ment if it takes no part in the exporting process. Only the selling costs which relate to the export process are entitled to be included in the export price. The differ- ence between an export price quotation which in- cludes the cost of domestic selling and a price that excludes this expense may be sufficient to influence a purchase transaction. DELIVERY The problem of prompt delivery of an order for goods is universal in merchandising. However, the time involved in the physical movement of goods from 36 This is the control room of a parts depot maintained by the Caterpillar Tractor Company in Singapore, an ideal location for a distribution center to expedite deliveries to Asian markets. exporter to importer is greatly expanded, and the de- livery problem is undoubtedly more troublesome in U.S. exports to Malaysia and Singapore because these countries are so remote from the United States. In addition, the filling of an export order from inventory or placing the order in a supplier's production sched- ule, and transfer of goods to the port of embarkation may further widen the delivery gap. Best estimates of order-to-arrival time for ship- ments to Malaysia and Singapore for most products available from inventory or requiring a short time to manufacture indicate that U.S. shipments generally take considerably longer than from the United King- dom or European countries. Shipment time from Australia and Japan is, of course, less than from dis- tant countries. Too often, therefore, importers in Malaysia and Singapore decide against placing orders with U.S. suppliers because their delivery dates are distinctly less favorable than those offered by Japanese and even European suppliers. Some aspects of the delivery problem are probably more easily resolved than others. American suppliers may readily exercise more care in expediting the paper work involved in processing export orders. Also, a better balancing of production schedules between domestic and foreign orders as well as better plan- ning to expedite inland transportation and to obtain the earliest shipment date with ocean carriers may be desirable to compete more effectively in these markets. When slack has been taken up in cargo delivery time by the above measures, there remains the major prob- lem of competition in cargo delivery which results from the greater time involved in moving cargoes from U.S. ports to ports in Malaysia and Singapore than in shipping goods from Japan and Australia, and even from distant European ports. Although this problem cannot be resolved readily in all U.S. cargo delivery situations, the following alternatives may provide a measure of relief to American exporters of certain products, and greatly improve their competitive posi- tion in these markets. Foreign suppliers are finding it feasible and com- petitive to ship a widening range of goods to these markets via air freight. Almost 4 million pounds of air cargo was landed in West Malaysia during 1967. More than twice that amount was landed in Singapore where incoming air freight increased 55 percent over 1963. Both areas have modern international airports and are served regularly and frequently by most of the international airlines. Singapore is served by 23 world airlines and has a total of 490 inbound and outbound flights per week. A single U.S. airline serves Singapore twice weekly, and air service to nearby Malaysian cities is frequent. The advent of the jumbo jet and its more efficient accommodation of freight cargo may be expected to help U.S. exporters over- come the time-distance delivery problem. The Singapore Government is preparing to meet the rapidly expanding air cargo demands in the region by resurfacing and extending runways at the international 37 airport, and installing parking aprons which will ac- commodate as many as 20 of the jumbo Boeing 747's at a time. U.S. exporters of a variety of products also may be able to overcome the time-distance delivery problem by developing facilities in a single commercial center for warehousing and regional marketing and distribu- tion. Several Far Eastern cities may be suitable for this operation, and Singapore is well qualified to be included among them. A basic element in a regional marketing operation is the storage of selected products in warehouses for fu- ture delivery to customers in markets located a reason- able distance from the distribution point. Require- ments for this operation are adequate free port fa- cilities including warehouses, inland transportation and lighterage, frequent shipping connections with the market areas in the region, capable trading estab- lishments and banking services. Singapore has an abundance of the necessary facili- ties, and is being used increasingly by foreign sup- pliers as a regional distribution and marketing center. It is essentially a free port area with no customs pro- cedures relating to non-dutiable goods imported for reexport. Documentation requirements are rapidly met in the case of a small number of products on which tariffs are levied to protect local industries. There is considerable public warehouse space in the port areas. Also, many of the trading firms maintain warehouses in the city from which port areas are con- veniently reached. See Warehousing in Chapter V. New warehouses are being added steadily, particu- larly in the port areas. The cost of open or covered storage space in the two port areas — Port of Singa- pore Authority and the Jurong Industrial Wharves — is at the rate of $.013 per square foot or $.13 per long ton per week for an indefinite time. Financing of inventories is an important factor in a regional warehousing operation. A large number of local banks are available in Singapore to finance foreign trade; these include three branch banks owned by large American banking institutions which operate internationally. Interest rates on commercial loans range from 8 to 9 percent. See Banking in Chapter V. The Government of Singapore welcomes foreign business enterprises, both as investors in production facilities and in establishment of regional distribution operations. The granting of a special tax concession to regional marketing firms engaging in international trade is now under study by the Government. Mean- while, a tax concession may be granted on a case-by- case basis provided that such a benefit does not result in transferring the tax obligation to a foreign government. The regional warehousing and distribution opera- tion in Singapore has been discussed here in the con- text of improving U.S. exporters' competitiveness by enabling earlier deliveries of goods ordered in Malaysia and Singapore and other market areas in Asia. This kind of operation may also result in in- creased sales by U.S. exporters to customers in Asian countries where delivery time is an important factor because regulations require them to make advance import deposits. There are abount 200 international companies with Asian regional or sub-regional marketing and dis- tribution offices in Singapore. Many of these are pro- ducing in Singapore for export to Asian markets. Those which conduct distribution and marketing opera- tions include Borg-Warner, Caterpillar, Cluett-Pea- body, Eastman Kodak, International Business Ma- chines, National Cash Register, Singer Sewing Ma- chines and Minnesota Mining and Manufacturing. American suppliers are reminded that they may have the local and regional market situations assessed for their products and services by market research firms located in Malaysia and Singapore. A list of market research firms in these areas is included in Appendix F. 38 CHAPTER VII The Market Sectors AGRICULTURE Malaysia provides by far the larger market for agri- business equipment and supplies, but Singapore, al- though a small area with limited land resources, car- ries on a limited and highly specialized agriculture. Although agriculture makes the largest contribution to the Malaysian economy (25 percent in 1966), and provides direct employment for the largest number of persons, this sector does not account for a proportion- ate consumption of producer and consumer goods. The rice growing industry which supports a major segment of the rural population has only entered the first stages of mechanization, and the manpower/out- put ratio is quite low. Rice farmers are presently not heavy buyers of producer equipment and their de- mands for imported consumer products are negligible. However, mechanization and improved farming tech- niques are being introduced which will bring increased buying power to rice farmers. The important perennial crops such as rubber, oil palm and coconut palm, once they are planted, rely mainly on manual labor and thus do not generate a major demand for crop tending and harvesting equip- ment. However, per capita earnings in these activities are considerably larger than in rice production. In rubber production, a major agricultural activity, over one half of the output is from large plantations owned and managed by absentee owners; another large segment comes from the so-called small holdings which average about 100 acres in size. The balance, a rela- tively small portion, is produced by small farmers, who are settled on new land development estates, and each of whom cultivates not over 7 acres of rubber trees. In contrast with rice farming, rubber growing is quite profitable for owner-operators of plantations and small holdings who demand the latest technology and equipment. Most of the equipment and supplies for rubber growing are imported, and include the follow- ing items for which imports in millions of U.S. dollars in 1967 are stated in parenthesis: piston engines (18.5), pesticides and weedicides (9.3), farm tractors (2.8) and agricultural machinery including spraying equipment (1.4). Some of these imports are for other farming activities, and for other market sectors as well. U.S. sales are only fair in farm tractors, but good in the other items. The development plan calls for expansion of rubber production which will be achieved mainly by a con- tinued, and possibly accelerated, rubber tree replanting program financed by the government. Some expan- sion in rubber acreage is seen, but this will be limited to new acreage under the rural land development pro- gram. However, expansion may be somewhat cur- tailed by the substitution of oil palm and other crops in order to diversify agriculture. Buying of producer goods by rubber growers, there- more, will probably not exceed existing levels, though some increased buying of consumer goods is likely in the newly settled farms as their owners begin to tap 39 Agriculture makes a large contribution to the Malaysian economy with rubber production one of the major ac- tivities. new trees. New customers will also be found among the smaller rubber planters who are gradually acquir- ing small holdings from the large estate owners who continue to fragment their plantations. Workers on the rubber plantations and farms re- ceived an average income of $430 during a recent year; also, a majority of them were recipients of free housing. They are therefore not significant buyers of imported consumer products. The small rubber hold- ings, which account for about one half of total rubber production, are owned by Malaysian nationals who are in effect an entrepreneural group whose incomes from rubber growing are high enough to meet their require- ments for consumer products. Although rice farming makes the second ranking contribution to the Malaysian economy, this sector in its present stage of development presents only modest demands for producer and consumer goods. Rice farms are usually small, averaging from 3 to 4 acres, farming methods are backward, and farm in- come is currently lower than in any other economic group. Farmer purchases are limited to the bare essen- tials such as the simpler tools and implements and minimal personal requirements. There is little or no use of fertilizers and other farm chemicals on the rice farms. With government assistance, some progress has been made in the introduction of modern farming methods including the use of machinery, farm chemicals and farm credits. This development has formed the nucleus for a large-scale rice farm modernization program now being implemented in conjunction with the govern- ment's vast water conservation and irrigation projects, one of which will enable the double cropping of more than 250,000 acres of rice land in the early 1970's. In the long view, therefore, the rice farming sector promises to become an attractive market for imported producer goods, with some potential for consumer goods. It is estimated that farm income in the double cropped areas will be doubled. This will result in new purchases of such items as small engine-powered vehicles capable of soil tilling, crop harvesting and farm transport; rice planting and other crop tending equipment; grain drying facilities; and farm chemi- cals including fertilizers. A new prosperity among rice farmers will also lead to new and larger markets for consumer goods. Although of lesser importance to the economy than rubber, rice and palm oil, there are other agricultural pursuits for which there is a significant demand for imports. Some of these appear to offer a faster growth potential than the traditional staples, and will there- fore increase the demand for imported products. Al- ready an important crop, the growing of pineapples for canning and export has a good potential and is expected to attract the attention of entrepreneurs look- ing for new profitable ventures. Import requirements are processing, packaging and materials handling equipment, in addition to the customary farming and transport equipment. The growing of bananas for home consumption will soon be expanded for export. A banana production scheme worth exploring is the organization and super- vision of banana growing on the 3-acre tracts of the newly settled farms by entrepreneurs knowledgeable in the production and marketing of bananas who would handle transportation and marketing. Expansion of these crops will create new demands for the usual pro- ducer equipment and supplies, and growers with new incomes will become customers for consumer goods. The raising of hogs and poultry and egg production are important and steadily growing economic activi- ties in Malaysia and Singapore. Modern technology, equipment and feeds, already introduced in livestock and poultry raising, are being increasingly used in the expansion and establishment of new producing units. With the new emphasis in Singapore on industrializa- 40 tion, particularly for export, it is conceivable that the country's hog and poultry raising industry, stimulated by the mass market demand for low-priced high pro- tein foods in Asian countries, could gear up to an economy of scale level and supply this market. This development could lead to new import demands for animal and poultry vitamin processed feeds; feed- mixing and storing equipment; feed containers and feeding equipment; and incubation equipment. Ameri- can suppliers are presently active in supplying this in- dustry, and can achieve increased penetration with additional effort. Foreign suppliers do not enjoy equal opportunity in the sale of producer equipment to the large rubber estates which are owned and operated by foreign in- vestors. These estates account for more than one half of Malaysia's rubber production, and are owned by British investors except for the substantial holdings of a single American company. British estates are in many cases managed and operated by local branches of British companies whose extensive trading facilities are favored in providing the major import require- ments of the rubber estates. It may be assumed that U.S. suppliers who have agents in these countries are also favored in meeting the import needs of the U.S. rubber plantation. The market is openly competitive, however, for the import requirements of the small rubber grower seg- ment of the rubber industry, and in the non-rubber farming activities. The usual competitive factors em- phasize price, credit, quality, deliveries and service; however, it is noted that Japanese suppliers are mak- ing the best selling progress, probably because they concentrate more effort on testing and demonstrating their farm equipment in the market area and are will- ing to adapt it to local requirements. . In view of the anticipated market potential in the rice growing and other farm crop areas which is being generated by government agricultural development programs in Malaysia and in other Southeast Asian countries, U.S. suppliers of farm equipment and sup- plies may overlook some attractive market opportuni- ties unless they take a long range view of these mar- kets and begin cultivating them now. The growing of oil palm and production of palm oil and kernels has within a few years developed rapid- ly to become a major economic activity in West Malay- sia and Sabah. Malaysia is now the world's leading exporter of palm oil. Total acreage in West Malaysia was 346,879 in 1967 as compared with 135,000 in 1960; growth in acreage was at a spectacular annual rate of 22.3 percent. (6 . ,.j^-:''-': .:■ '--•-- Mining is an important activity in West Malaysia with tin mining of major importance. This tin dredge is at work at a mine just outside Kuala Lumpur. Production of palm oil in West Malaysia amounted to 213,403 long tons, and in view of rapid new crop planting and a bearing capacity reached 4 years after planting, about one half of the trees are now in pro- duction. Output of palm kernels was 48,303 long tons in 1967. Oil palm growing has also been started in a large project in Sabah where 15,000 acres were in cultiva- tion and about 5,000 long tons of oil were produced in 1966. The project in all phases including land development and conversion from virgin forests, access road construction, oil extraction plants, and other equipment, cost about $16.8 million. The principal incentives for the industry had been the increasing world demand for palm oil, the urge for diversification in Malaysian agriculture fed largely by the declining world price of natural rubber, and the availability of virgin land for conversion to farm pro- duction by government programs and by an enterpris- ing private sector. Some of these incentives are no longer present. A recent shift in the world supply and demand situation for palm oil, and an increasingly 41 unfavorable price relationship of this commodity with an improved market for natural rubber may slow down growth in this industry. Although substantial producer equipment requirements are expected to continue, greater emphasis is expected on improvements in pro- duction technology and marketing. Since the palm oil industry has developed mainly on large estates which have access to ample capital, mod- ern production machinery and equipment are in de- mand. These include the usual cultivation equipment and supplies needed, largely from imports, in tending such a perennial crop as rubber, e.g., farm tractors, cultivating implements and machinery, spraying equip- ment, farm utility trucks, tank trucks, fertilizer, and pesticides. The market characteristics are similar to those discussed relative to import requirements for rubber production. The logistics factor in oil palm processing does not differ greatly from that of rubber. Oil extraction plants are usually located adjacent to the oil palm estates, and in each of the Government's new farm develop- ment schemes on which oil palm is planted. The Gov- ernment obtained a loan of $2.8 million from the Asian Development Bank in February 1969 to finance the foreign exchange requirements to build two palm oil extraction plants in Government land development schemes now being planted with oil palm. Construc- tion will be in two stages, the first starting in 1970 for completion in 1971, and the second starting in mid- 1972 for completion at the end of 1973. Plant construction draws largely on local products, in one recent case to the extent of 70 percent. How- ever, important machinery requirements must be im- ported; these include steam sterilizing vats to soften the palm fruit pulp, threshing or stripping machines, pulping or digester machinery, hydraulic presses, and centrifuges. The market for plant machinery is held largely by suppliers in the Netherlands. However, in view of the possible long-term growth potential of the oil palm in- dustry in Malaysia, it may be profitable for U.S. equipment suppliers to investigate the market. FISHERIES Total contribution by fisheries to the gross national product in West Malaysia is slightly over 2 percent, and probably less in Singapore. The Malaysian De- velopment Plan for 1966-70 projects an annual growth of 6 percent during the period of the plan to reach a GNP value of $70 million in 1970. Recent figures show about 72,000 persons were engaged in fishing in West Malaysia and 3,783 registered fishermen in Singapore. The fish catch in West Malaysia amounted to 301,000 long tons in 1967 while the auctioned catch in Singapore was about 10,000 tons. Current production in West Malaysia is mainly for local consumption; however, there is a cannery in Penang which processes tuna for the export market. Production in Sabah consists largely of frozen prawns for export; shipments were $1.5 million in 1966, most- ly to Japan and the United States. The Singapore catch is presently for local consumption. Present requirements for imported equipment in- clude engines to propel fishing craft as owners gradu- ally convert them to engine power. The fishing fleet in West Malaysia consisted of 13,032 powered and 7,204 non-powered boats in 1967; there were almost 10,000 fishing vessels in Singapore most of which are powered by engines. The governments of both countries are increasingly promoting the growth of the fishing industry by pro- viding infrastructure facilities. The Malaysian de- velopment plan provides for an outlay of $7.4 million to support research; training of fishermen in the use of modern facilities including the processing and mar- keting of their catch; and the construction of infra- structure to accommodate large-scale and efficient ma- rine fishing. In the field of extension and education, a fisheries college is planned for location in Penang. An ambitious program to promote the Singapore fishing industry calls for a minimum investment of $20 million to be made over a 10-year period. A sum of $12.7 million will be spent to develop infrastructure which includes a fishing harbor, fish auction market, and refrigerated storage facilities. About $17.3 mil- lion is expected to be invested by private enterprise in the construction and operation of private fishing fleets and shore processing and storage facilities; with foreign participation on a joint venture basis. The combination of ample fishing waters and gov- ernment programs to promote and assist the industry may stimulate increased activity which could mean substantial new demands for imported marine engines, electronic depth finders, fish finding sonar equipment, navigation equipment and steering gear, processing equipment including ice plants, canning and packag- ing equipment, fish nets and wire rope, and other essentials. Foreign technology and equipment are in demand. The Malaysian Government engaged a French firm of 42 consultant engineers on fishing ports to investigate the feasibility of a fishing harbor complex in Penang. The survey was completed in mid-1968, and is expected to be followed by the development of fishing facilities by foreign companies. MINING Mining and quarrying are mainly West Malaysian activities, but also have market significance in Singa- pore where trading firms participate in the purchase of machinery and equipment for Malaysian mines. There are also tin smelters in Singapore which smelt tin con- centrates produced in Malaysia. The mining and quarrying sector contributed a value of $198 million to Malaysia's GNP in 1966, or 7 percent of the total. These industries have made good progress in recent years; their contribution to the national product rising by 74 percent in 1966 over 1960. Tin mining is by far the leading mining activity, and output of the tin mines accounted for exports valued at $252 million in 1967, or 29 percent of total exports. The production of iron ore is second in im- portance in the mining sector, and has made good progress since 1960. Malaysian Government planners do not foresee any growth during the period of the development plan (1966-70) ; but anticipate some loss of ground. They expect a considerable depletion of known tin deposits, particularly in the major dredging segment, though some expansion is indicated in the gravel pump mines which account for more than one half of production. This indicates a need for more gravel pumps, internal combustion engines and electric motors. Production of iron ore is expected to decline during the plan period as existing deposits become depleted; however, there are prospects for the location and development of new ore deposits. In the long view, prospects appear good for in- creased production of tin, iron ore, and copper as a consequence of present exploration and development of new ore fields. New tin deposits are being explored in the offshore areas of the State of Perak which is presently the major tin region; prospects of new iron ore deposits are not to be discounted. Also, the de- velopment of a rich copper strike in East Malaysia has recently been started by a major Japanese mining firm. Some government financial assistance is also being pro- vided in the present development plan to carry on prospecting for tin ore reserves on the Malay Reser- vations which are believed to contain about 15 percent of the total present known reserves. Previously not available for development, it is planned to develop these reserves for the benefit of the Malay segment of the population to give them a larger share in economic development. The mining sector is an important market for pro- ducer equipment and consumer goods, in its present state of development, and in the course of anticipated development and expansion in future years. No figure is available to indicate the amount of wages and salaries paid, but the industry employed a total of 61,000 persons and produced a value of $307.8 million in 1965. Free housing is provided to 64 percent of the workers employed in tin mines operated by dredges, and 80 percent in the gravel pump tin mines. The in- dustry, particularly the tin mining sector, may be regarded as a profitable one for mine owners; it was singled out by the government fiscal authorities in 1965 for the application of a newly enacted excess profits tax levy because it was considered a particularly pros- perous economic activity and able to absorb an addi- tional tax. The mining equipment market, supplied mostly by imports, is the largest in the tin mining industry. Here, the range of producer equipment needed to re- place worn out or obsolete equipment includes all of the moving parts of various sized dredges. Dredging accounts for somewhat less than one half of total tin production. Expansion and replacement equipment needed for gravel pump mines is mainly electric motors, gravel pumps principally of the centrifugal types, steel gravel conveying pipe, usually 10" diame- ter, water pipe, and water pump monitoring devices. Open cast mines require hydraulic elevators, power shovels, excavators, basket wheels, rubber conveying belts, hoisting equipment and ore buckets. Replace- ment equipment is needed for dressing shed opera- tions which encompass various types of separators, and tilting tables. Replacement equipment is also needed for the Penang and Singapore smelters. Foreign-owned mining operations are favored equip- ment markets for foreign suppliers who are compatri- ots of the mine owners. Most of the foreign-owned mines, mainly the dredge-operated facilities, are in the hands of British owners. Their import requirements are obtained largely from British suppliers. There is a single U.S. -owned dredge mining enterprise of sub- stantial dimensions whose requirements of imported equipment are supplied mostly by U.S. suppliers. A U.S. financed company mines about 60 percent of the iron ore output valued at $41.5 million in 1967, and U.S. suppliers have a favored position in supplying the 43 equipment requirements of this firm. There is sub- stantial ownership by British interests in ilmenite min- ing operations, and the important bauxite mining fa- cilties are owned principally by Canadian interests. Local entrepreneurs, mostly Chinese Malaysians, are the principal owners and operators of the gravel pump tin mines which account for more than one half of Malaysian tin production. Foreign suppliers of equip- ment needed by these miners find opportunities in this market to be openly competitive, and succeed in mak- ing sales in direct proportion to their marketing effort. American suppliers are well represented in the sale of pumps and engines needed by the gravel pump tin mines. FORESTRY Forestry as it relates to the production of logs has undergone significant development in Malaysia, and provides an important market for machinery, equip- ment and tools in which American suppliers are competitive. This industry is of lesser significance in West Malaysia where it is exceeded by more important eco- nomic pursuits. However, it contributed $30.7 million or 1.6 percent to the gross national product in 1966, and makes a major contribution to the national econo- my in Sabah which was $68 million or 39.4 percent in 1966. Forestry is an important activity in Sarawak where it probably contributed about $13 million to the GNP in 1966, or 16 percent. The contribution to the national economy resulting from the production of wood products such as sawn timber, plywood, pre-fabricated houses, and flooring, an extension of the logging industry, is discussed in the section dealing with manufacturing. This activity is considerably smaller in West Malaysia than logging, and is of minor importance in Sabah and Sarawak where most of the log production is exported. Some concept of the scope of the logging and wood products industries in Malaysia is indicated by export statistics. Exports of logs and sawn timber from all of Malaysia were valued at $194 million in 1967, of which 82 precent was in the form of logs. West Malaysia exported a value of $43.2 million, less than one half in logs; Sabah's exports were $105.4 million, almost entirely as logs; and Sarawak exported $45.3 million of which 73 percent was in logs. Activities relating to the clearance of forest area, construction of access roads and rail lines; felling of trees, stripping and sawing of logs into proper lengths, Forestry, the fourth ranking industry in Malaysia, is an important outlet for imported producer equipment. 44 and transporting logs to sawmills and export ports require a substantial importation of producer equip- ment in terms of present development of the industry. There are ample reasons to believe that the rapid growth in recent years will be duplicated in the future. Malaysia is rich in forest resources, and private enterprise, including foreign investors, has been show- ing increased interest in obtaining forest land conces- sions, developing logging ventures and initiating new wood products manufacturing enterprises. Govern- ment planners have included a forestry development program in the current development plan, which will cost $4.1 million. Using financial and technical help from the United Nations Development Program and the Food and Agriculture Organization, an operation plan was adopted in September, 1968 which in three consecutive phases will survey forestry practice and policies; produce a national plan for the development of forestry; and implement development programs in- cluding the promotion of investment. A GNP value of $68 million is estimated for forestry in 1970 in the development plan for West Malaysia alone, which means an annual growth rate over 1966 of 11 percent. Sabah and Sarawak with GNP con- tributions by forestry of $68 million and $13 million respectively in 1966, are expected to show a faster annual growth rate during the development plan period which ends in 1970. The logging industry in Malaysia is as highly mech- anized as anywhere in the world, and generates a substantial demand for a variety of machinery and equipment which must be filled by imports. No esti- mates of the size of the import requirements are avail- able since many of the items needed have a wide ap- plication in other market sectors, and import figures cannot be broken down by end uses. The more important items needed by this expanding industry are excavating machinery including large earthmoving tractors and tractors with drawing power and earthgrading attachments; steel wire, steel cables and pulleys; steel log chains and short chain strips; motor trucks capable of carrying from three to twelve logs of several foot diameters and as much as 30 foot lengths; lifting cranes and winches; small tugs to pull rafts of logs in rivers and harbors; cutting equipment and tools including axes and gasoline-powered chain saws; and replacement parts for equipment. U.S. suppliers are actively represented in these mar- kets for the above products, with the possible exception of steel products including chains, cable, wire, pulleys and hand tools. In fact, the U.S. supplier position in these markets for excavating equipment, tractors for truck trailers, motor vehicle parts and powered chain saws may be regarded as very satisfactory, while the U.S. share of the market for lifting and loading equip- ment is about 12 percent. U.S. sales in the other items are in a more modest volume, and it is believed that increased opportunities can be found for a greater penetration of the market in these items, particularly in chains, cables, pulleys and hand cutting tools. MANUFACTURING The manufacturing sector is believed to promise the most rapid development growth in West Malaysia. From a gross national product value of $263 million in 1966, manufacturing is projected to increase at an annual rate of over 10 percent during the period of the development plan ending in 1970. Main emphasis will be on the production of consumer goods; about 60 per- cent of the present annual demand of over $2 billion is imported. Malaysia, which has a sizable domestic market, will continue to stress import substitution in its efforts to promote more manufacturing, but also will emphasize export orientation, particularly in products which make maximum use of local raw ma- terials and other resources. In addition, special atten- tion will be given to the development of small plants for processing agricultural products. Progress in manufacturing in the recent past, al- though not spectacular, supports the promise of brisk growth in this sector. For example, the annual growth rate was slightly over 11 percent during the develop- ment plan period ending in 1965, which greatly ex- ceeded the growth rate of a little more than 4 percent in the major economic sectors comprising agriculture, forestry and mining. More substantial government assistance for develop- ment is in infrastructure projects and agriculture. However, the Government has also come forth with broad scope assistance programs to promote new fac- tories. These include strategically located and fully equipped industrial estates, tax relief legislation, finan- cing sources, and agencies to help private investors plan and implement manufacturing plants. Financing for manufacturing expansion has come from the savings of local entrepreneurs and from foreign investors. Commercial banks reported out- standing loans to manufacturers of $71 million as of December 1967. In addition, the Malaysian Industrial Development Finance Berhard (MIDFB), a lending institution financed jointly by government and private banks to finance new factories, made new loans total- 45 Steel ingots are being cast here at the new steel plant at Prai, Malaysia, relying on local iron ore and rubber tree coke. The plant features import substitution, ing $3.7 million to industries in 1967 for 40 projects. As of 1967, a total of 129 companies benefiting from the government's industries incentives programs, had an investment of $135.6 million of which 57 percent was from foreign investors. Most of these are located in West Malaysia. The manufacturing sector generates demand for producer goods and raw materials. A large part of the 1967 imports of machinery valued at about $192 mil- lion was purchased for this sector, although significant machinery purchases were also made for government infrastructure and services which are discussed in this chapter under the topic, Government Procurement. Plant equipment is in demand for replacement, expan- sion and modernization; the latter is probably on a modest scale. Not to be overlooked, however, are the sizable new demands for producer equipment and raw materials as a consequence of the faster rate of growth anticipated in this sector. Complete identification of advance import needs of factory machinery and equipment has not been at- tempted in this report. However, the Federal Indus- trial Development Authority (FIDA) which is pro- moting and coordinating the development of manu- facturing in Malaysia is responsible for the identifica- tion of suitable manufacturing projects and prepara- tion of feasibility information regarding them. FIDA has prepared a list of products which have a good potential for manufacture in Malaysia. This list, shown in Appendix D, names such food products as confectionery, starch and jellies; chemicals including carbon black and sodium chlorate; wood products in- cluding furniture, doors and windows, parquet flooring and veneer; and miscellaneous items including rub- ber gloves, tools, bolts and nuts and boats. U.S. sup- pliers interested in marketing factory machinery and equipment in Malaysia may wish to communicate with the Federal Industrial Development Authority, P.O. Box 618, Kuala Lumpur. A listing of some of the manufacturing enterprises recently established in Malaysia and the products they manufacture is shown in Appendix D. The list includes more than 100 firms which make a wide range of products in the following categories: foodstuffs, wood 46 and rattan, furniture and fixtures, leather, chemicals and pharmaceuticals, petroleum, metal and machinery. It should not be overlooked that management and other personnel employed in manufacturing are among the best customers for consumer goods, and that this group will increase at the rate of about 4 percent per annum during the period of the present development plan. Employment in 1966 in major industries ac- counting for four-fifths of all industries, was 81,163, and wages and salaries paid were $61 million, or an average of $751. About one seventh of all factory employees receive free housing, and about one half of this number receive free groceries. Before 1960, manufacturing in Singapore consisted mainly of initial processing of raw materials imported from Malaysia. Indonesia and other Southeast Asian markets, and reexporting the finished products. Addi- tional industries were developed to service the entre- pot trade, including shipbuilding and repairing facili- ties, engineering workshops, and motor vehicle assem- bly and servicing. These were supplemented by ex- panding food and beverage production facilities, the growth of light engineering works; printing and pub- lishing and production of building materials. Singapore began accelerating industrial development in the early 1960's when it appeared that entrepot trade development was not sufficient to provide em- ployment for a fast growing population. Spurred by the government's generous industry incentives program and progressive installation of infrastructure, new in- dustries were introduced. The most important of these are a steel plant de- signed to produce mild steel bars, high tensile bars, sections and angles for the construction industry at an annual capacity of 120,000 tons; flour mills; three petroleum refineries and a fourth under construction; a shipbuilding and repairing facility; motor vehicle assembly plants; a cotton textile industry including knitting mills, weaving plants and apparel and piece goods making facilities; chemicals plants including a fertilizer factory; animal feed mills; electrical appli- ance and cable manufacturing. Since 1960 the manufacturing sector in Singapore has made rapid progress which is expected to continue or accelerate in years to come. In GNP terms, from 1960 to 1966 manufacturing climbed at an annual rate of almost 24 percent. In the development plan ending in 1970, the annual growth rate is projected at 25 percent. Based on census figures covering industries employ- ing 10 and more persons, which probably account for 80 percent of total industrial production, there were 1,102 industrial establishments in Singapore in 1966 whose output was valued at $435 million. These plants employed 52,594 persons whose earnings amounted to $49 million or an average of $931. (Per capita GNP was about $600 in 1966). Total capital expenditures in these industries during the 7-year period 1960-66 was $168 million. Singapore's industrial growth has been spurred by a stable and solvent government; competent and dy- namic leadership in government and business; and manpower resources willing to absorb new methods of production and capable of intense application. Other assets are a central location on international sea and air routes; an excellent and well equipped port; and skill in commercial pursuits. The Government takes a lively interest in promoting economic development, and actively supports industrial development by providing liberal incentives to industry and adequate infra- structure facilities. These include several industrial estates of which the Jurong industrial park encom- passing 17,000 acres is the largest. A total of 234 firms had received benefits under the Government's incentives program at the end of 1967; these have a paid-up investment of $75 million of which 50 percent is foreign capital. About 159 of these firms were in production at the end of 1967, with an output for that year of $216 million as com- pared with $163 million by a smaller number of firms benefitting from incentives in the previous year. Pro- duction of benefiting firms was about 43 percent of total output in 1967 by all industries hiring 10 and more workers. Financing for industrial development has come from the resources of local entrepreneurs; commercial banks; the lending facilities of the Economic Develop- ment Board; and from foreign, including U. S., firms which participate in Singapore enterprises on a wholly owned or joint venture basis. In order to accelerate industrial expansion, the Government recent- ly terminated the facilities for financing new factories in the Economic Development Board and created the Development Bank of Singapore with joint capitaliza- tion by government and commercial banks. The range of machinery and equipment which has figured in Singapore's manufacturing build-up in re- cent years is shown in a listing of manufacturing com- panies and the products they are making prepared by the Economic Development Board. This list incor- porated in Appendix D, includes a wide variety of product items in these categories: food and beverages, textile and leather garments, wood and paper, rubber, 47 chemical, petroleum, non-metalic minerals, metals and metal working, transport equipment and electrical. A guide to the scope of machinery and equipment import requirements for new factories in Singapore in the years to come is provided in a listing of products regarded as feasible for manufacture in Singapore. This list, prepared by the Economic Development Board, is shown in Appendix D and names a wide range of products in the following categories: food- stuffs, including fish products and spices, textiles in- cluding garments, wood and paper including furniture, chemicals and pharmaceuticals, household wares, metal products, electrical goods including fans, motors, tele- vision sets and radios and surgical instruments. Manufacturers who are not subsidiaries or otherwise affiliated with foreign firms, are more likely to buy their equipment and supplies on the open market. Much of the manufacturing sector in Malaysia and Singapore is locally owned. However, a large part of the recent investment in manufacturing enterprises, probably about one half, is in joint ventures of foreign investors with local businessmen or in wholly owned subsidiaries of foreign firms. The management of these establishments is inclined to import plant re- quirements from compatriot foreign suppliers. This is not a firm procedure, however, and procurement of plant equipment and supplies by manufacturing estab- lishments with foreign ownership is frequently on an international basis. Although they enjoy equal opportunities in a large segment of the market for plant equipment and sup- plies, American suppliers are not performing in the market as effectively as other foreign suppliers. It is believed that with the exceptions noted above, U.S. suppliers can find good opportunities in selling to cus- tomers in the manufacturing sectors in Malaysia and Singapore, provided they are well represented in these markets and apply the key marketing factors discussed in Chapter VI. CONSTRUCTION The following information relates mainly to con- struction of buildings in the private and government sectors, and includes housing, hotels, office structures, hospitals and schools, and other public buildings. Government public works programs which emphasize project construction are discussed further in this chap- ter under the topic Government Procurement. This housing project in Toa Payoh, Singapore, includes 8,000 flats and is typical of other projects presently underway and others that are planned totaling 130,000 units and housing 750,000 by 1970. ^^SZSfS^r*^- 48 Progress in building and construction has been spec- tacular in Malaysia and Singapore. Contribution of the construction sector to the gross national product in West Malaysia was $53 million in 1960, or 3 per- cent, and became $120 million in 1965, or 5 percent of the total GNP. The annual rate of growth was almost 18 percent. In Singapore, construction accounted for $14 million in 1960, or 2 percent, and climbed to $43.7 million in 1965, or 4.5 percent. The annual growth rate was over 40 percent. Rapid growth in construction is seen in the near future in both areas. This sector, under the First Malaysia Plan (1966-70), is expected to reach a value of $177 million in the GNP, or an annual growth of 8 percent. Allocation of public funds for housing alone amounts to $62.7 million during the development plan period as compared with $28.9 million in the previous 5-year plan, or an increase of about 116 percent. A spending provision of $37.5 million for new hospitals accounts for another major part of the construction program. No figures are available to show construction plans in the private sector, but loans of $31.2 million in 1966 and $47.5 million in 1967 by commercial banks for construction indicate a sizable and growing program. In Singapore, the Government's Five Year Plan (1966-70) for construction is aimed primarily at hous- ing for which the Plan target is $101.6 million. This is almost 16 percent of total public development ex- penditures for the Plan period. The bulk of this pro- posed outlay is for the continuance of Singapore's low- cost subsidized housing in the form of high-rise resi- dential flats. The total private sector outlay for construction amounted to $21.6 million during the 12 months end- ing July 1968, or an increase of 27.2 percent over the previous 12 months period. Extensive new private construction is now in evidence, and increased activi- ty is indicated in the near future in the construction of office buildings, luxury hotels and apartment houses, warehouses, other commercial buildings and private dwellings. As a counter-recession measure in anticipation of the withdrawal of British military forces and facili- ties, the Singapore Government is implementing a program to stimulate private investment in construction of tourist hotels and encourage private enterprise to undertake essential city re-building with Government loans, guarantees and equity participation. A sum of $20 million has been allocated for this program in which the Government will encourage private firms to rebuild slum buildings by subsidizing them through the mortgage period at reduced interest rates ranging from 21/2 to 4 percent. The most important private sector building projects in Singapore to take place during 1967-70 are con- centrated in the so-called "Golden Gateway" to Singa- pore urban renewal program. The Singapore Govern- ment, which initiated this program, will use a large part of its multi-million dollar economic development budget, discussed in the section on Government Pro- curement, for the levelling of a 1,500-acre old city area and equipping it with essential infrastructure facilities. The project, to be developed in a series of 14 planned sites, will include private enterprise. Pri- vate developers were invited in mid-1967 to bid for lease rights to build this new addition to the Singa- pore skyline. Malaysia and Singapore are capable of producing an important segment of the building materials needed by the construction industry. This capability ranges from almost total self-sufficiency in cement, crushed rock, bricks, roofing materials including ceramic and asbestos tile, sawmill products including plywood, par- quet and other hardwood flooring, and paints, to a major reliance on local production for the more com- mon structural steel such as steel bars and rounds, architectural metal products, and window glass. There is also considerable local production of interior fur- nishings including office and household furniture and ceramic and steel sinks and water closet equipment. Both areas depend upon imports for all or a large part of the requirements for the hardware, equipment, implements and furnishings needed by the construc- tion industry. These include earthmoving equipment, hoisting machinery including lift cranes and winches, plumbing wares and equipment including sinks and other sanitary fittings, pipes including soil and interior, locksmith- wares including hasps, hinges and metal fit- tings, passenger and vehicle elevators, refrigeration and air conditioning equipment, concrete mixers, builders tools including wheel barrows, telephone ap- paratus and cables, lamps and lighting fixtures, office and household furniture, and flooring material. American suppliers have a significant share of the market in earthmoving equipment, hoisting machinery, elevators and refrigeration and air conditioning equip- ment. In the following there are small but significant U.S. sales, though there appear to be good prospects for more substantial market penetration: plumbing wares and equipment, locksmith wares, builders' tools and telephone equipment. U.S. lighting fixtures would probably sell in these markets if they were modified to meet the local electricity and installation requirements. 49 This is the new University of Malaysia Hospital near Kuala Lumpur with the suburb of Petaling Jaya visible in the background. The Government's current Five Year Plan earmarks $25 million for community services. These markets are now highly competitive in furniture and wire and cable which are being increasingly sup- plied by local facilities. GOVERNMENT PROCUREMENT The role assumed by the national governments of Malaysia and Singapore in providing services and infrastructure facilities is considerable, and they are therefore important customers of imported producer equipment for use in the maintenance and construction of public projects. The development objectives of Malaysia in the Plan for 1966-70 were estimated in a mid-term revision to cost $1,613 million, or an annual average of $338 million. The Plan is now in its fourth year and the performance record at the end of the third year (1968) indicates that less than one half of the amount ear- marked for development projects had been spent. The Plan targets stated for the following categories are also mid-term revisions. Among the Malaysian Government's major develop- ment projects, in which large purchases of foreign equipment are being made, is the expansion program of the National Electricity Board. A sum of $183 mil- lion was projected for this program, much of which would finance the purchase of imported equipment in- cluding hydro-electric and thermal generating equip- ment, power transformers, and conductor cable. Extensive irrigation projects of the Drainage and Irrigation Department of the Ministry of Agriculture and Cooperatives for all of Malaysia in the Plan period was projected to cost $117 million. A sub- stantial part of this sum would go for the Muda River Irrigation Project which is estimated to cost $83.1 million, and for which an IBRD loan of $45 million has been obtained. Foreign exchange requirements for this project are estimated at $35.7 million which will finance imports of a variety of equipment including trucks and jeeps, excavators (dragline), tractors (crawler, bulldozer, loader, etc.), portable welding equipment, portable compressors, dredging equipment, mobile cranes, air tools, pile drivers, water pumps, rock crushers, concrete mixers and electric generators. A major economic development activity in Malaysia is the reclamation of land for new farm sites under- taken by the Land Development Authority of the Minis- try of National and Rural Development, at an esti- mated cost of $131 million during the Plan period. Under this program, an American firm is presently conducting a feasibility study of a major land develop- ment program in central West Malaysia. A substantial part of the proposed outlay will be spent for imports of excavating equipment and other capital goods for water and sewer projects. Transport development projects are projected in the Plan to cost $235 million. An outlay of $144 million is earmarked for roads and bridges; port development, $48.4 million; the modernization of railway equip- ment, $22 million; and civil aviation projects, $21.4 million. Projects contemplated, some of which are under way, include the purchase of imported loco- motives, rolling stock and signalling equipment for the Malayan Railway Administration; telecommunica- 50 tions equipment, navigational aids and control tower equipment for the Civilian Aviation Department; and small marine craft and telecom equipment for the Marine Department. A new study is under way for an East-West highway across the northern part of the peninsula, an Australian government grant of $4.8 million will be used for con- struction of an East-West highway in Sabah which will link Kota Kinabalu with Sandakan. Highway con- struction will require imports of excavation and other road building equipment. Major expansion of port facilities will take place at Port Swettenham, to begin in the second half of 1969, at a cost of $19.3 million. Port expansion is also plan- ned in Kuching, Kota Kinabalu and Sandakan in East Malaysia, and tenders were announced in January 1969 for feasibility studies of port expansion require- ments in the latter two port cities with funds from the United States regional economic development program of the Agency for International Development. Implementation of plans for two new water supply projects, costing an estimated $81.5 million, was be- gun in 1968 when the Malaysian Government obtained two loans to finance the foreign exchange require- ments. One loan of $3.6 million from the World Bank, is to expand the water supply in Kuala Lumpur, and another of $7.2 million from the Asian Development Bank, is for a water project in Penang. Both projects will require imported equipment for excavation work and the installation of pumping stations, pumps, water mains, and water treatment and filtration facilities. The Plan target for telecommunications development is $58 million. An important project was started in 1968 under a $4.4 million World Bank loan which will help meet a foreign exchange requirement of $25 mil- lion, some of which has already been obtained bi- laterally from several foreign countries. Imported equipment needs consist of all of the local and long distance network equipment, including telephone in- struments and telex apparatus. The Ministry of Defense has a relatively new pro- gram to organize and equip the Malaysian defense forces at a cost of $200 million during the development plan period. The program will require purchases of imported vehicles and spares, aircraft and parts, vessels, and radio communications equipment. The equip- ment budget for the Royal Malaysian Police is $13 million, much of which will be spent for imported launches, vehicles, arms and ammunition and tele- communications equipment. The Ministry of Informa- tion and Broadcasting plans to spend $16.1 million for the expansion of radio facilities, which will require imported transmitting equipment. The Ministry of Health has a substantial budget for expansion and construction of hospitals and health clinics which will require imported medical, surgical, and dental equip- ment and supplies. The Singapore economic development plan (1966- 70) includes several proposals for project construc- tion and services development for which significant quantities of imported producer goods will be needed. The major projects and the amounts budgeted are dis- cussed here and also listed in Appendix B. The exact expenditures for local products and serv- ices and imported capital goods cannot be calculated; however it is expected that substantial quantities of imported products will be required. The largest of these projects is being undertaken by the National Development Division and involves an expenditure of $46 million for various building con- struction, land reclamation and urban redevelopment projects. Also identified with this program are the projected 14 construction sites comprising the "Golden Gateway" to Singapore development on which private enterprise has already started building activities as reported in the section of this chapter entitled "Construction." Planning additional measures to offset the economic loss of the British withdrawal of forces, the Singapore Government has proposed modification of its develop- ment plan to include a substantial expansion of its public works program. A sum of $133 million has been proposed for accelerated development in the public sector which will include a rapid program of urban renewal, opening of new industrial sites, im- proving the road network, land reclamation and im- proving the water supply. These projects will require the usual producer equip- ment, largely imported, consisting of excavating and leveling machinery, air conditioning and elevator equipment, and building hardware. Other government programs in the Five Year Plan which will require major imports of earthmoving equipment are drainage and flood control projects to cost $5.1 million; road and bridge construction to cost $15 million; and sewerage facility installation to cost $18.3 million. Among the larger of the government programs is the expansion of defense facilities at a proposed estimated cost of $16 million. (An additional $100 million has been proposed which will be spent largely in Singa- pore for expanded forces and for local services and supplies. ) Procurement of foreign goods will include motor vehicles and parts and arms and ammunition. 51 Expenditures for public health projects are estimated at $3.1 million and will include $1.7 million for a refuse disposal plant and $700,000 for vehicles. Proj- ects of the telecommunications department are esti- mated at $6.9 million and include the purchase and installation of telegraph and radio transmitting facili- ties and trunk and junction equipment; and $3.7 million for the installation of the Southeast Asia Commonwealth Communications System (SEACOM). The Broadcasting Division of the Office of Culture and Social Affairs plans to spend $2.4 million for a perma- nent television center and the improvement of tele- vision and broadcasting services. Government agencies are obligated to initiate pro- curement transactions by inviting suppliers to submit tenders within standards and specifications stated in the bid invitations. In the case of procurement financed by international lending institutions, tendering must be on an international basis. The International Bank for Rehabilitation and Development has loans outstanding totaling $88.7 million to finance infrastructure in these countries. Procurement by government agencies is sometimes financed on a bilateral basis by private foreign banks and by national export financing institutions. In these cases, the international tendering procedure is fol- lowed, and suppliers submitting bids initiate the arrangements for financing. For example, the Malayan Railway Administration has purchased locomotives from Japanese suppliers for which financing assistance was provided by Japan's Export Import Bank. Credit for a recent purchase by the Malaysia Singapore Air- line of commercial jet aircraft from a U.S. producer >s being provided by the U.S. Export Import Bank. Government procurement comprises buying for the immediate end use by government agencies, and by contracting firms undertaking projects for the govern- ment which involves them as immediate users. Ex- amples of the former are locomotives and airplanes for direct use by the railway and airline services. Ex- amples of the latter are multi-purpose projects under- taken by the National Electricity Board for dam construction and expansion of power producing and distributing facilities, and the projects of the Federal Land Development Authority to develop virgin land areas into small farm settlements. Procurement of equipment for the latter projects, e.g., excavating equipment, power generating and distribution equip- ment, is by the service firms which are awarded engi- neering and construction contracts by the government. MARKET FOR TECHNICAL SERVICES Foreign consulting and engineering firms are fre- quently called on for technical assistance in the prepa- ration of plans and specifications for many govern- ment projects in Malaysia and Singapore. When re- sponding firms are oriented to American standards and equipment, U.S. suppliers of the equipment needed for these projects may have an advantage over their com- petitors. The same circumstances may work against U.S. suppliers when foreign firms are engaged to pro- vide the necessary technical assistance. It continues to be apparent that custom and fa- miliarity with the performance of British firms long established in Malaysia and Singapore frequently result in the award of contracts for technical services to these firms. Other factors in their favor are the local requirement that resident consulting engineers be trained in British or Commonwealth colleges, and the application of British standards in engineering and equipment requirements for which specifications are often prepared by British technicians who are serving in positions of procurement responsibility in Malaysi- an and Singapore Government Bureaus. Nevertheless, penetration of the engineering and construction services market by non-British firms granted case by case exemption from the education requirement, has taken place, and a greater degree of open competition is expected in the future. A West German firm has the engineering and construction contract for the development of port facilities in But- terworth, an extension of the Port of Penang. A Japanese firm has a contract from the Drainage and Irrigation Department for the construction of a part of the Muda River irrigation project. American firms have participated with British companies in several major development projects which included the con- struction of the international airport in Malaysia. Also, a feasibility study of a major land development project in central Malaysia is being undertaken by an American firm. Foreign firms which stand the best chance of com- peting for government contracts to supply technical services and equipment are those which provide maxi- mum technical advice and assistance in advance of a tender invitation, and when responding to bid invita- tions. Successful bidders have found that it pays to provide advance missionary services, and that in addi- tion to having competent representation in these mar- kets, it is often desirable to make technicians available by frequent visits from the home or a regional office. 52 CONSUMER GOODS The market sectors discussed thus far refer mostly to the market for producer goods in Malaysia and Singapore. Some coverage is given to the major con- sumer requirements in Malaysia, but less is said about these demands in Singapore. This section identifies several of the more important home consumer groups in both areas, and gives some background on their ca- pacity to buy imported consumer goods. One of the largest consumer groups in West Malaysia comprises the employees in the trades and services, which numbered 429,000 in 1965. This group is expected to grow at an annual rate of 3.4 percent to a total of over 500,000 in 1970. The per capita annual income of this group is nearly $800. An important segment of this group receives a considerably higher income. For example, a chief clerk in a bank receives between $1200 and $1500; salesmen in the leading trading companies receive a range of from $2000 to $3000; while the management and executive personnel of many commercial establishments receive salaries in the range of $4000 to $5000. Included in the latter salary range are almost 2000 doctors and dentists in West Malaysia alone. Another major consumer group comprises govern- ment personnel which includes the defense forces, school teachers and employees of the service agencies operated by the government, e.g., telecommunications, railroads and electric power. This group numbered 257.000 in 1965, and it is estimated that national gov- ernment employment will increase to 460,000 in 1970, or at an annual rate of 4 percent. Total income of this group in 1967 was $176.7 million, or a per capita income of $635. This is lower than in the private manufacturing sector ($710), but amenities granted to federal em ; ployees are more generous than in the private sectors and include free housing and medical services. Individual prosperity in Singapore is the highest in Asia, except Japan, and income is more widely and evenly dispersed. Agriculture, usually a low-income sector in Asia, is very limited in Singapore. Thus the bulk of the working population is made up of laborers, clerks and technicians whose average income was about $733 in 1966. The per capita income of Singa- pore Government employees is $721. The general wage and salary scale is higher than for most Asian coun- tries, and higher than in Malaysia where the per capita annual income in government is $635. Total personal income of the 541,700 persons em- ployed in Singapore in 1966 is estimated at $397.4 million. There is some degree of income variation from one economic sector to another which is ex- plained by the need for a higher level of technical and professional competence in some sectors. The highest earnings are $113 million in the services sector where the per capita income is $612. Income in commerce activities was $94.3 million, or a per capita income of $807. The third ranking personal income is in manu- facturing which amounted to $81.8 million, or a per capita income of $770. While the per capita consumption of imported con- sumer goods is slightly higher in Singapore than in Malaysia, the range of products imported is about the same in both areas. American suppliers are less suc- cessful in the sale of consumer goods than producer products in these countries, but substantial sales are made in a limited range of products, and there is a good potential for increasing the volume and range. Sales by U.S. exporters in both areas were in excess of $1 million in 1967 in each of several food categories, e.g., canned milk, wheat, fresh fruits and nuts and preserved fruit. U.S. sales were also substantial in dried fruit, canned meats and miscellaneous food preparations including soups. Other American consumer goods are well received by Malaysia and Singapore customers whose imports from the United States in 1967 included air condition- ers valued at $3.4 million, refrigerators, $500,000, cosmetics and perfumes, $1.6 million; paper products, $1.9 million, clothing and accessories, $1.7 million, recording equipment and tapes, $1 million, printed books, $1.5 million and toys and games, $1.1 million. For more detailed information on U.S. consumer prod- ucts sales in these countries, see Chapter IX, The Mar- ket for Consumer Goods. Having the second highest individual income in Asia, next to Japan, Singaporeans have made the best showing as customers for consumer goods, particularly imported goods. A household and personal posses- sions survey made in several Far Eastern cities in 1964 shows Singapore families to be well ahead in the own- ership of several major consumer items which indi- cates an income level that leaves a surplus for spend- ing on consumer conveniences. In a comparison of Singapore family ownership of certain important consumer products with family own- ership in five other Far Eastern cities (Bangkok, Manila, Hong Kong, Taipei and Seoul), Singapore families owned more of the following items, shown with ownership percentages: autos, 31; transistor radios, 58; television sets, 45; home typewriters, 29; electric and gas ranges, 43; and refrigerators, 52. The 53 percentage of family ownership of autos, motor scoot- salary and wage earners, out of a total employed popu- ers and cooking ranges is larger in Singapore than in lation of 541,700 (1966), held $12.2 million in postal Tokyo. savings deposits. At the same time, individual savings There is further evidence of surplus personal income deposits in commercial banks, which include sub- in the savings performance of Singaporeans. As of stantial deposits by affluent entrepreneurs and in- November 1967, a total of 259,928 persons, mostly vestors, amounted to $95.1 million. 54 CHAPTER VIII The Market for Producer Goods Best prospects for increased sales by U.S. exporters in Malaysia and Singapore are in producer goods. U.S. sales are the largest in this category and constitute an important share of the market. Recent sales by U.S. exporters also have shown the most gains in this group. Since these goods figure heavily in government de- velopment plans and in private sector expansion as well, imports are proceeding at a faster rate than purchases of consumer goods. For example, imports into West Malaysia of producer goods during 1960-66 increased at an annual rate of about 10 percent, while imports of consumer goods rose at an annual rate of less than 3 percent. There is a considerable segment of the market which is openly competitive to all exporters, as contrasted with some areas where traditional supplier ties are more rigidly maintained. There are signs that the range of products marketable in open competition will gradually become broader. It is believed, therefore, that American suppliers can find increased opportuni- ties for sales if they pursue these markets with skill and determination. The best potential for increased sales of U.S. pro- ducer goods in Malaysia and Singapore is in some of the product categories listed in the following tables designated Group I and Group II. These tables show total imports into both market areas during 1967, and the U.S. share of the market. The first group comprises items in which U.S. sales were $1 million and over, and averaged 29 percent of total imports which amounted to $143 million. The second group includes items in which U.S. sales ranged from approximately $200,000 to $1 million, and averaged 8.6 percent of total imports of $63 million. GROUP I Selected Imports Into West Malaysia and Singapore in which Imports from the United States were Over $1 million — 1967 (Thousands of U.S. Dollars) Imports Percent From From Total United United Items Imports States States Excavating, levelling and boring machinery 26,973 10,721 40 Motor vehicle parts 26,018 3,732 14 Piston engines 18,471 5,677 31 Tractors for trailers 11,389 4,803 42 Telecommunications equipment 10,594 2,585 24 Pumps and centrifuges 10,201 1,844 18 Pesticides and wood preservatives 9,300 1,228 13 Materials handling equipment 7,397 1,224 17 Anti-knock preparations 5,873 2,010 34 Industrial air conditioners 5,873 1,052 18 Kraft paper board 5,665 3,261 58 Machinery, parts and accessories 5,588 1,288 23 Total 143,542 39,425 29 Source : The above figures have been supplied by the Department of Statistics in Kuala Lumpur, Malaysia, and a similar agency in Singapore. 55 GROUP II Selected Imports Into West Malaysia and Singapore in which Imports from the United States were less than $1 million — 1967 (Thousands of U.S. Dollars) Imports Percent From From Total United United Items Imports States States Electrical power machinery and switchgear 23,063 920 4.0 Aircraft engines and parts 7,843 395 5.0 Hand tools 6,208 267 4.3 Auto electrical equipment 3,959 623 16.0 Printing and binding machines 3,201 271 8.5 Steel and copper nails and bolts 3,221 314 9.8 Accounting and computing equipment 3,055 682 22.7 Synthetic perfume and flavor materials 2,855 405 14.0 Farm tractors 2,799 188 6.7 Office duplicating and addressing machines 2,470 198 8.0 Soldering rods 1,566 328 21.0 Packaging and filling machinery 1,443 440 30.6 Agricultural machinery 1,358 379 28.0 Total 63,041 5,410 8.6 Source: The above figures have been supplied by the Department of Statistics in Kuala Lumpur, Malaysia, and a similar agency in Singapore. and after-sales services including the training of op- erators of equipment and maintenance of equipment and spares inventories. Import demands for most of the items in Group I have risen rapidly in recent years and will continue to grow at a fast rate in future years. U.S. exporters already in these markets can hope to share in supply- ing the increasing demands, and possibly raise their market shares. Obviously, new U.S. participants in the producer goods market in which the U.S. share is considerable, will be competing with other American suppliers of similar products. However, they may develop sales for products which have been neglected by their colleagues. In addition, there is frequently room for technical and quality improvements in equip- ment which may displace what is now offered in these markets. The U.S. exporters' share of the Malaysia/Singa- pore markets in the sale of products listed in Group II in 1967 averaged over 8 percent and ranged from 4 percent in electrical power equipment to 30 percent in packaging and filling machinery. Import requirements will rise steadily in coming years, and displacement by local production is not likely for some time. Even though the competition is keen in this group of prod- ucts, and in some cases third country suppliers tend to be favored, there are good sales prospects for new U.S. exporters in most of these products, and for in- creased sales by those already in the market. Important factors in the outstanding success in these markets of U.S. exporters of products in Group I are: a demand large enough to warrant a determined mar- keting effort, a world-wide reputation for quality and performance, and promotion through advertising in mass media and trade journals which have interna- tional circulation. Since these are highly competitive markets for pro- ducer goods, the success of U.S. suppliers may be additionally attributed to their thorough approach to all aspects of marketing. They have selected competent agents and distributors for their products, and given them full support in every respect including financing. Also, they have maintained close liaison with their representatives through visits by company officials from plant headquarters or regional offices, and have pro- vided them with necessary information and services regarding their products and assistance in selling which has included training of salesmen. Finally, they have provided their representatives with technical assistance in identification of customer requirements BEST U. S. SALES PROSPECTS The following comments relate to the market poten- tial in Malaysia and Singapore for selected categories of producer goods. All of these product categories are listed in the tables designated Group I and Group II. Trade figures showing imports of these categories into Malaysia and Singapore separately, and amounts brought in from principal supplying countries are given in Tables 23 and 24 in Appendix C. The broader aspects of the producer goods market are discussed in Chapter VII which describes present and future ac- tivities in agriculture, mining, forestry, manufacturing, public works and other sectors of the economies of these countries. MATERIALS HANDLING EQUIPMENT Import needs are chiefly hoisting machinery, in- cluding lift cranes and winches; jacks, pulleys and tackles; belt conveyors and other loading and handling 56 \ ' / The control room of Singapore's thermal power station represents part of the and Singapore for measuring and controlling equipment. .6 million market in both Malaysia machinery; self-propelled tractors and fork lift trucks. All of the substantial needs for this equipment are im- ported. In 1967, imports into West Malaysia were $3.9 million, and into Singapore, $3.5 million. Present expansion plans for government infrastructure, and the growth prospects in manufacturing indicate that the recent brisk demand for this equipment should con- tinue and probably accelerate. Port development projects of the Malaysian Govern- ment for which this equipment is needed include a new port in Butterworth on the mainland opposite Penang which will comprise six new berths by 1971 at a cost of $16 million; the reconstruction of two berths and addition of two berths at Port Swettenham to cost $9 million; and port expansion and new development in East Malaysian ports to cost $10.4 million. All exist- ing port facilities can expect a continuation of the rapid rate of increased freight traffic which has taken place in recent years. A moderate expansion of cargo handling at existing airports may also be expected. In Singapore, new port development projects are being financed by a $15 million World Bank loan. These include replacement of transit sheds and con- struction of additional storage space, including a single warehouse measuring 780 by 120 feet. Considerable buying of fork lift trucks and other cargo handling equipment has taken place; more is contemplated. Good demand for this equipment has resulted from the current construction in Singapore of wharfage facilities to accommodate containerized cargo. This project, begun in 1967 and scheduled for completion in 1971, comprises a 120-acre facility which will in- clude container terminals, depots for loading and un- loading, stocking areas, repair sheds and transit sheds. While major requirements are in the government infrastructure sector, there are substantial demands in the private enterprise area, e.g., the booming construc- tion industry, the expanding manufacturing industry, the continuing needs of the rubber plantations and tin mines, and the trucking industry. This equipment is also in considerable demand in the extensive ware- house operations of many trading companies. Total imports into West Malaysia and Singapore of all types of materials handling equipment, and amounts from principal supplying countries during 1962, 1966 and 1967 are given on the following page. 57 (In Thousands of U.S. Dollars) 1962 1966 1967 Into West Malaysia 2,012 3,939 3,898 From: United States 357 215 195 West Germany 103 303 638 United Kingdom 1,117 1,509 632 Japan 68 839 1,379 Into Singapore 2,637 7,997 3,499 From: United States 922 1,247 1,029 West Germany 43 2,146 237 United Kingdom 793 1,564 540 Japan 331 1,300 961 It is noted that annual imports into West Malaysia increased from 1962 to 1967 by 94 percent. Singa- pore's annual import requirements went up sharply in 1966 but moderated to a 33 percent rise in 1967. Local imports and distribution of materials handling equipment are mostly in the hands of the larger trad- ing firms which specialize in industrial equipment and engineering services. These show a great deal of initia- tive in cultivating the market. Sales are largely on an indent basis; inventories are minimal in equipment but are maintained in replacement parts. Government agencies are important customers, and their require- ments are met to a great extent on an open competitive basis. However, some buying in Malaysia takes place on a preferred basis from United Kingdom suppliers. Almost 38 percent of West Malaysian imports were supplied from the United Kingdom in 1966. The U.K. share of the market dropped off in 1967, and the Japanese and West German shares improved. Since government agencies are important customers, effective selling must include extensive advice and assistance in product identification, including specifi- cations, during the early stages of procurement, with ample follow-up attention leading up to the procure- ment decision. Equipment performance and credit and payment terms loom large as factors in procurement decisions in the government sector. Price considera- tions are not ignored, but may be submerged in favor of the more important elements of conformity to speci- fications, and payment terms. When equipment suita- bility is equal among bidders, credit and payment terms may become determining factors in a purchase decision. Sales by U.S. suppliers have been only nominal in Malaysia, with some slippage in recent years, but quite gratifying in Singapore. While the market in Malaysia is less openly competitive than in Singapore in government procurement, West German and Japa- nese suppliers have made good progress there. It is believed that U.S. exporters also have a chance of penetrating these markets in greater volume. Adequate representation, always a problem in thinner markets, is undoubtedly a problem here. But more U.S. suppliers are finding it possible to meet this problem by estab- lishing a regional marketing base in Singapore. PUMPS AND CENTRIFUGES The demand in these markets is principally for rotary pumps for the open pit gravel pump tin mines; air compressors for the rubber processing industry; gas compressors for refrigeration equipment; centri- fuges for the rubber and palm oil industries; rotary and centrifugal pumps for irrigation projects; indus- trial blower fans; liquid fuel pumps and parts for pumps and centrifuges. The following are total imports into West Malaysia and Singapore of pumps and centrifuges, and amounts from principal source countries during 1962, 1966 and 1967: (In Thousands of U.S. Dollars) 1962 1966 1967 Into West Malaysia 3,174 6,658 5,519 From: United States 349 1,093 855 West Germany 198 744 2,059 United Kingdom 2,125 2,195 284 Japan 59 828 54 Into Singapore 2,211 4,908 4,681 From: United States 373 741 989 West Germany 143 178 204 United Kingdom 1,104 1,590 1,344 Japan 61 735 491 U.S. suppliers have been providing a full range of pump requirements in these markets, but their most important sales were in gas and air compressors and centrifugal and rotary pumps. British suppliers have made substantial sales in all pump categories, and have led in centrifuges and purifying apparatus and industrial blower fans. Japanese suppliers are strong in centrifugal and rotary pumps, air and gas pumps and industrial blower fans. It is understood that West German suppliers, who have made the most rapid gains in these markets in 1967 over the previous year, have competed mostly in the types being supplied by British and American exporters. Most pump sales are made to end users by the large trading companies, but an important volume of sales are made by small and medium-sized firms. Most of the pump sales are made in open competition to end 58 4f Statistics, Kuala 1964 532.3 308.2 840.5 660.5 264.3 924.8 Lumpur. 1965 556.6 312.9 869.5 736.5 295.4 1,031.9 1966 574.9 302.5 877.4 724.5 315.3 1,039.8 1967 581.0 274.9 855.9 693.3 279.6 972.9 Source: Monthly Statistical Bulletin of West Malaysia, Department of Statistics, Kuala Lumpur. 86 Table 18. — West Malaysia Imports from Major Sources, 1960-67 Table 20. — Singapore Imports from Major Sources, 1960-67 (Millions of U.S. dollars) (Millions of U.S. dollars) Com- Calendar United United Thai- Singa- Aus- Calendar United United West munist Year Total States kingdom laud Japan pore tralia Year Total States Kingdom Malaysia Japan China 1960 716.9 29.7 154.1 83.2 57.4 64.1 33.3 1960 1,359.3 52.0 121.0 284.4 99.4 46.6 1961 743.5 37.5 168.4 82.8 61.7 68.4 31.8 1961 1,321.1 62.4 135.6 241.2 113.0 43.3 1962 815.8 48.1 177.8 80.3 71.4 80.9 38.2 1962 1 , 345 . 3 67.1 128.2 242.6 122.2 52.1 1963 844.6 44.4 178.1 80.0 84.1 78.6 43.5 1963 1,429.6 75.3 142.4 252.2 135.9 70.6 1964 840.5 43.5 162.3 94.2 88.8 82.6 49.3 1964 1,159.6 64.4 116.6 263.6 121.5 65.5 1965 869.4 46.5 177.4 91.5 100.1 91.4 53.2 1965 1,269.1 64.5 134.6 294.9 140.4 74.5 1966 877.5 51.5 170.4 61.6 119.1 93.6 55.5 1966 1,355.2 70.2 136.0 314.5 154.6 90.6 1967 855.9 51.8 133.6 61.3 123.1 73.1 65.7 1967 1,468.8 81.9 117.8 279.9 182.5 127.6 Co III- Calendar Hong Aus- West East Indo- Calendar IllUIUSt West Hong Nether- New Indo- Year Thailand Kong tralia Germany Malaysia nesia Year China Germai y Kong lands Zealand nesia & 1960 48.6 29.9 19.0 13.6 74.1 333.1 1960 27.8 25.6 27.2 16.1 1.5 108.2 1961 39.6 36.6 41.4 32.8 59.3 276.4 1961 36.5 27.8 28.2 18.8 2.8 83.3 1962 39.9 35.9 42.4 32.9 47.9 242.1 1962 28.8 28.0 28.3 21.7 2.') 97.8 1963 40.8 40.8 50.9 37.3 42.4 253.0 1963 44.1 31.6 28.2 19.8 1.0 70.8 1964 43.3 38.1 53.5 30.3 61.7 («) 1964 58.0 35.6 28.9 19.6 3.8 14.3 1965 49.1 36.3 55.3 34.8 74.7 (») 1965 57.9 43.1 25.1 18.9 :>.u 3.3 1966 53.9 34.3 63.1 37.1 74.3 (') 1966 57.7 42.9 27.3 16.6 8.2 4.4 1967 48.4 41.9 65.8 42.5 76.7 w 1967 64.2 46.6 21.0 12.1 10.3 15.7 * Trade with Indonesia was a flee ted by a break In eeonomie relations between Indonesia and Malaysia during the period from August 1963 to late 1965. Source: States of Malaya (West Malaysia), External Trade, Department of Statistics, Kuala Lumpur. a Trade with Indonesia was disrupted by Indonesia's termination of economic relations with Singapore and Malaysia. Statistics showing trade with Indonesia are not available during these years. Source: Singapore, External Trade Statistics, Department of Statistics. Singapore. Table 19. — Singapore Total Imports and U.S. Market Share, 1960-67 (Millions U.S. dollars) Imports from Pe reent from Calendar Year Total Imports U nited States United States 1960 1,359.3 52.0 1.0 1961 1,321.1 62.4 4.7 1962 1,345.3 67.1 S . 1963 1,429.6 75.3 5.3 1964 1,159.6 64.4 5.0 1965 1,269.1 64.5 5.1 1966 1,355.2 70.2 5.2 1967 1,468.8 81.9 5.2 Source: Singapore, External Trade Statistics, Department of Statistics, Singapore. Table 21. — East Malaysia (Sabah and Sarawak) Imports and Exports, 1962—67 (Millions of U.S. dollars) Calendar Year Sahah Imports Exports 1962 1963 1964 1965 1966 1967 79.6 101.2 100.8 112.1 115.6 94.5 78.2 91.6 86.6 101.7 119.4 134.0 Source: Annual Bulletin of Statistics, Sahah, Department of Statistics, Kuala Lumpur. Calendar \ ear Sarawak Imports Exports 1962 1963 1964 1965 1966 1967 133.5 132.2 149.5 161.6 175.2 163.1 136.0 124.6 127.0 144.6 154.5 159.2 Source: Statistics of External Trade, Kuching. 87 Table 22. — East Malaysia (Sabah and Sarawak) Imports From Major Sources, 1965—67 (Millions of U.S. dollars) Sabah United West Calendar United King- Singa- Aus- Ger- Year Total States dom pore Japan tralia many 1965 112.1 13.0 21.3 14.0 7.9 3.3 1.5 1966 115.6 12.4 23.8 17.1 9.6 3.4 1.9 1967 94.5 11.9 15.8 16.2 12.8 3.0 2.0 Sarawa k United West Calendar United King- Singa- Aus- Ger- Year Total States dom pore Japan tralia many 1965 161.6 0.2 21.4 18.6 6.9 21.4 2.0 1966 175.2 7.3 20.2 19.6 7.4 20.2 n.a. 1967 163.1 8.4 15.7 16.2 8.2 n.:t. 2.7 Source: Official External Trade Statistics, Kuching and Kuala Lumpur. Table 23. — Principal Imports Into West Malaysia of Producer Goods From Major Sources, 1962 and 1967 (Thousands U.S. dollars) Years Total United States United Kingdom Japan West Germany Other Pesticides and disinfectants Anti-knock preparations Kraft paper board Steel and copper nails & bolts Hand tools Locksmith wares Soldering rods Aircraft engines Piston engines Farm tractors Agricultural machinery 1962 3,218 188 1,308 73 350 Communist China Hong Kong 1967 6,175 841 2,616 2,747 770 Communist China Hong Kong 1962 41 18 20 2 _ _ 1967 771 511 263 — 2 — 1962 907 82 173 96 34 _ 1967 2,806 1,651 12 401 - Australia 1962 935 12 313 212 22 _ 1967 1,467 61 239 316 47 Communist China 1962 2,002 380 780 166 380 _ 1967 3,347 119 592 402 505 Communist China Hong Kong 1962 1,417 56 691 100 138 Hong Kong Australia 1967 2,499 56 793 301 226 Communist China Australia 1962 902 160 485 11 7 Australia 1967 1,070 270 263 170 30 Australia 1962 364 112 252 — _ — 1967 216 1 92 — — Australia 1962 7,084 1,269 3,549 870 1,016 _ 1967 7,952 2,419 2,716 941 1,336 Communist China Australia 1962 1,159 350 738 47 22 _ 1967 1,961 180 1,670 71 28 — 1962 1,206 318 491 68 117 Australia 1967 1,119 370 325 151 72 Netherlands See footnotes at end of table. 88 Table 23. — Principal Imports Into West Malaysia of Producer Goods from Major Sources, 1962 and 1967 — Continued (Thousands U.S. dollars) Items Years Total United States United Kingdom Japan West Germany Othe Accounting & computing equipment Office duplicating & addressing machinery Metal working machinery Printing & binding machinery Food processing machinery Excavating & levelling machinery Crushing and glass working mahcinery Pumps & centrifuges Air conditioning equipment — industrial Lifting and loading equipment Powered tools Packaging & filling machinery Taps, cocks and valves Shafts, cranks & pulleys Machinery parts & accessories n.e.s. Electrical power machinery Switchgear Insulated cable Telecom equipment Battery cells Auto electrical equipment Aircraft parts 1962 1,042 452 137 4 98 Australia 1967 1,423 450 281 19 254 Australia 1962 503 61 186 3 25 Australia 1967 1,862 46 488 17 83 Australia 1962 1,564 45 586 215 160 Communist China 1967 1,804 32 114 1,094 88 Hong Kong 1962 2,003 SO 967 81 490 Hong Kong 1967 1,553 141 505 106 429 Hong Kong 1962 468 53 163 10 69 _ 1967 1,382 130 208 376 130 Netherlands 1962 12,865 4,969 5,481 581 511 Australia 1967 11,175 244 5,299 560 510 Singapore* 1962 2,486 252 1,774 212 124 _ 1967 1,848 4() 675 788 68 Australia 1962 3,174 344 2,125 59 198 Netherlands 1967 5,520 855 284 54 2,059 Netherlands 1962 3,304 388 1,942 30 422 Netherlands 1967 3,417 304 735 633 523 Australia 1962 1,594 277 815 38 97 _ 1967 3,898 195 632 1,379 638 — 1962 1,522 445 478 70 119 _ 1967 2,703 667 419 447 383 Australia 1962 878 57 433 43 198 _ 1967 662 173 173 67 91 — 1962 909 64 686 26 52 _ 1967 1,764 53 740 265 53 Australia 1962 431 50 263 27 19 _ 1967 782 34 360 101 58 Communist China Hong Kong 1962 2,330 460 1,285 64 207 _ 1967 3,187 756 1,000 502 231 Netherlands Aust ralia 1962 5,091 452 2,718 36 87 _ 1967 7,917 160 2,799 1,363 60 Australia 1962 3,623 28 3,176 22 54 _ 1967 5,385 60 3,310 361 340 Australia 1962 3,296 3 3,047 57 88 _ 1967 4,315 6 2,312 1,146 411 - 1962 4,582 228 3,822 86 28 Netherlands 1967 5,054 2,368 2,151 286 290 Netherlands 1962 2,522 28 1,169 488 117 Hong Kong 1967 1,314 31 361 365 78 Australia 1962 503 65 218 173 37 1967 1,111 188 362 332 103 - 1962 367 85 278 _ _ _ 1967 4,342 174 1,096 — 2 Australia *Reexported; see Table 24. A single large U.S. supplier maintains an extensive parts depot in Singapore for reexport of parts. Source: 1962 figures from Market Share Reports: Malaysia, Sales and Distribution, Department of Commerce, Washington, D.C., 20230. 1967 figures from Department of Statistics, Kuala Lumpur. 89 Table 24. — Principal Imports Into Singapore of Producer Goods From Major Sources, 1962 and 1967 {Thousands U.S. dollars) Items Years United States United Kingdom Japan West Germany Othe Pesticides & disinfectants Anti-knock preparations Kraft paper board Steel & copper nails & bolts Hand tools Locksmith wares Soldering rods Aircraft engines Piston engines Farm tractors Agricultural machinery Accounting & computing equipment Office duplicating & addressing machinery Metal working machinery Printing & binding machinery Food processing machinery Excavating & levelling machinery Crushing & glass working machinery Pumps and centrifuges Air conditioning equiment — industrial Lifting & loading equipment 1962 1,796 192 530 103 144 Communist China Hong Kong 1967 3,175 387 622 40 242 Communist China Hong Kong 1962 436 24 407 _ 1 1967 5,096 1,499 2,607 26 3 Netherlands 1962 1,679 126 122 525 59 Communist China 1967 2,859 1,602 11 378 - Communist China 1962 1,378 38 252 481 47 Communist China 1967 1,754 253 399 353 69 Communist China 1962 2,076 153 604 283 541 Communist China 1967 2,861 148 565 480 450 Communist China 1962 2,358 78 749 218 272 Communist China 1967 2,704 129 778 264 285 Communist China 1962 562 35 277 13 2 Australia Communist China 1967 496 58 91 94 5 Australia Communist China 1962 86 53 29 _ 1967 2,415 129 2,108 — - — 1962 6,497 1,250 2,616 749 695 Australia 1967 10,497 3,258 2,692 1.144 828 Australia Communist China 1962 3:>7 _ 232 6 16 _ 1967 838 9 618 — - 1962 331 46 77 27 10 Australia 1967 239 43 14 3 7 Australia 1962 1,600 635 147 4 101 Italy 1967 1,632 232 89 142 328 — 1962 500 80 237 15 66 _ 1967 608 152 214 41 66 - 1962 929 28 400 33 125 Communist China 1967 869 29 27 459 12 — 1962 1,363 31 381 65 468 Italy 1967 1,648 130 214 75 792 — 1962 652 4 26 5 44 _ 1967 973 11 41 88 83 — 1962 7,155 3,761 1,932 180 288 _ 1967 * 15,798 10,477 2,174 1,476 752 — 1962 908 391 339 2 28 Italy 1967 950 68 217 225 3 — 1962 2,211 373 1,104 61 143 1967 4,681 989 1,344 491 204 Australia 1962 710 91 310 19 97 _ 1967 2,456 748 119 684 113 Australia 1962 2,083 875 519 284 41 — 1967 3.499 1,029 540 961 237 — See footnotes at end of table. 90 Table 24. — Principal Imports Inlo Singapore of Producer Goods From Major Sources, L962 and 1967 — Continued (Thousands U.S. dollars) Items United United West Years Total States Kingdom Japan Germany Other 1962 1,066 411 L89 47 87 _ 1967 2,307 682 211'. 125 367 Australia 1962 111 4 37 — — — 1967 781 26o 144 21 51 Australia 1962 761 33 552 19 21 Italy 1967 2,109 142 951 331 68 Australia 1962 378 19 210 60 18 _ 1967 472 51 194 65 22 Communist China 1962 2,737 665 1,310 1(10 98 _ 1967 2,401 532 626 327 172 Australia 1962 3,548 781 1,595 132 181 Italy 1967 4,635 559 1,291 1,247 278 Communist China 1962 2,687 34] 1,803 1117 41 _ 1967 5,126 141 2,196 701 1,070 Netherlands 1962 5,105 17 1,344 2,195 707 _ 1967 5,451 20 1,709 2,279 331 — 1962 2,567 149 1,383 357 102 — 1967 5,540 251 2,125 1,376 127 — 1962 3,130 119 812 652 150 _ 1967 3,554 109 358 271 129 Communist China 1962 1,550 205 631 353 218 _ 1967 2,848 435 1,069 510 457 — 1962 216 134 61 _ _ _ 1967 870 91 675 1 — — 1962 9,667 6,935 915 173 121 — 1967 6,352 3,740 1,076 1 54 52 — Powered tools Packaging & filling equipment Taps, cocks & valves Shafts, cranks & pulleys Machinery parts & accessories n.e.s. Electrical power machinery Sw itchgear Insulated cable Telecom equipment Battery cells Auto electrical equipment Aircraft parts Tractors for trailers ( a ) Almost $7 million reexported to West and East Malaysia. Source: Figures from Market Share Reports: Singapore, available from Sales and Distribution, Room 2119, Department of Commerce, Washington, D.C. 2U230. Table 25. — Principal Imports Into West Malaysia of Consumer Goods from Major Sources, 1962 and 1967 {Thonsaruls U.S. dollars) Items United United Communist \ ears Total States Kingdom Japan China Australia Meat, canned and preparations Milk and cream Wheat Fish, canned and prepared See footnotes at end of table. 1962 3,068 77 1,665 10 459 146 Denmark Argentine 1967 4,295 315 1,764 1 1,741 L30 — 1962 21,594 204 5,073 4,649 Netherlands Denmark New Zealand 1967 16,153 627 2,342 38 3 3,950 1962 1,454 _ _ _ — 1,454 _ 1967 20,818 550 — — 6 19,069 — 1962 4,419 166 82 1 ,424 42 2 Indonesia Mexico 1967 3,313 6 66 1 ,599 81 183 — 91 Table 25. — Principal Imports Into West Malaysia of Consumer Goods from Major Sources, 1962 and 1967 — Continued (Thousands U.S. dollars) Items Years Total United United States Kingdom Communist Japan China Australia Other Wheat flour Cereals and flour mixes Fruits and nuts, fresh Fr.uit, dried Fruit, preserved Vegetables, preserved Sugar and honey Animal feeds Food preparations, n.e.s. Cigarettes and other tobacco mfrs. Ginseng Pharmaceuticals Perfume and cosmetics Soaps Washing preparations, including detergents Hunting & sporting ammunition Rubber tires and tubes Paper, wrapping, packing and paperboard Coated paper Paper articles Glassware Laboratory glass Cutlery Stoves, domestic See footnotes at end of table. 1962 13,504 82 49 1,752 — 11,577 — 1967 195 68 7 — — 39 — 1962 7,205 82 2,546 It 356 1,704 Canada 1967 10,853 93 2,660 L85 526 1,150 — 1962 6,585 599 209 435 859 1,996 Taiwan 1967 7,531 796 20 186 819 849 — 1962 1,343 214 5 6 363 25 Hong Kong, Iraq 1967 1,505 218 1 2 231 21 — 1962 1,729 298 261 16 234 270 Taiwan, Hong Kong 1967 3,016 320 316 61 319 206 — 1962 2,631 68 296 828 858 38 Taiwan, Hong Kong 1967 3,245 46 313 504 1,344 102 — 1962 15,090 60 1,626 6 4,258 35 USSR, Taiwan 1967 13,136 130 60 23 237 3,049 Taiwan 1962 12,826 95 220 935 44 2,153 Thailand 1967 15,906 141 82 79 1,552 1,833 Thailand 1962 1,724 335 187 15 32 27 Singapore 1967 2,641 378 8.11 102 191 (>2 Singapore 1962 5,735 1,604 3,505 _ _ _ 1967 3,275 1,277 568 - 7 — — 1962 582 231 _ 35 34 _ _ 1967 546 204 — 106 8 — — 1962 658 8 322 177 5 1 _ 1967 HI? 23 406 208 22 13 — 1962 5,204 232 1,434 107 921 8 Hong Kong (1,760) 1967 3,188 516 1,213 306 135 62 — 1962 855 40 604 6 4 13 _ 1967 945 35 230 18 338 179 — 1962 1,337 576 559 8 1 9 _ 1967 695 132 182 47 18 3 — 1962 160 30 105 — — — — 1967 204 57 104 — — — — 1962 8,073 388 4,889 992 197 12 West Germany (745) 1967 1,830 62 255 179 102 6 — 1962 918 32 71 260 106 3 _ 1967 2,828 107 264 728 349 264 — 1962 358 39 53 35 61 37 _ 1967 1,851 155 319 115 203 57 Hong Kong 1962 2,319 230 1,311 16 32 30 _ 1967 2,580 780 777 158 118 99 Hong Kong 1962 452 17 64 28 44 _ _ 1967 819 4] 84 70 232 1 — 1962 200 10 138 3 _ _ _ 1967 289 39 163 18 13 — West Germany 1962 903 29 403 126 12 2 West Germany (200) 1967 1,326 125 396 190 286 3 West Germany 1962 526 3 142 43 _ 1 Hong Kong (228) 1967 1,085 11 145 178 56 35 Hong Kong (408) 92 Table 25. — Principal Imports Into West Malaysia of Consumer Goods from Major Sources, 1962 and L967 — Continued (Thousands U.S. dollars) Items Years Total United States United Kingdom Communiei Japan China Australia Other Radio receivers Refrigerators Air conditioners, room Passenger cars Mortorcycles & parts Furniture Travel goods Cotton clothes Textile clothing accessories, non-knit Clothing & accessories, knit Footwear, leather Optical instruments Sound recorders, players Tapes & disks Printed hooks Newspapers & magazines Printed matter, n.e.s. Toys & games Outdoor sports equipment Pens and pencils Brooms and mops Candles, matches 1962 4,809 28 L80 1,997 1967 5,160 7 635 3,600 1962 1,359 346 405 198 1967 2,330 260 258 729 1962 1,011 931 21 8 1967 1,204 1,117 13 55 1962 20,450 113 10,550 934 1967 24,292 80 4,835 3,206 1962 5,570 6 864 2,790 1967 8,578 6 96 7,136 1962 1,265 33 542 96 1967 1,199 38 227 183 1962 184 III 114 59 1967 022 6 7 1 56 101 1962 6,953 1211 I7H 492 1967 5,809 187 66 524 1962 549 42 98 146 1967 641 106 66 86 1962 2,790 22 208 226 1967 3,543 86 r.a 181 1962 1,293 _ 460 12 1967 1,536 15 339 20 1962 162 13 46 31 1967 258 34 29 104 1962 772 33 L38 168 1967 1,971 101 194 1,119 1962 412 51 9 7 10 1967 773 128 161 72 1962 4,251 221 1,698 5 1967 4,460 848 1,921 90 1962 1,828 1 53 117 17 1967 1,843 167 221 245 1962 2,158 75 868 62 1967 5,133 143 3.545 168 1962 1,636 272 253 578 1967 1,796 226 262 433 1962 537 25 206 131 1967 1,227 86 361 206 1962 1,091 241 39 162 1967 1,100 27 43 201 1962 558 63 216 55 1967 710 20 173 108 -1962 479 25 98 40 1967 1,395 16 314 50 60 125 6 154 576 812 123 231 354 332 53 174 31 409 31 393 127 326 52 213 1 24 940 595 421 1 15 62 33 34 4 19 32 34 7 16 13 63 17 24 Netherlands (2,048) Netherlands (510) West Germany West Germany West Germany (3,770) West Germany (7,067) 4 52 West Germany 2 Hong Kong (160) 1, Hong Kong (188) 1, Hong Kong (2,116) (,1 Hong Kong (1,370) 3 — 46 — 1 Hong Kong (1,931) 8 Hong Kong (2,168) Hong Kong (409) Hong Kong (304) West Germany (60) West Germany (66) Netherlands (326) Netherlands (390) Hong Kong (79) West Germany (141) Hong Kong (1,197) Hong Kong (469) Hong Kong (495) Hong Kong (334) Hong Kong (330) Hong Kong (376) West Germany (381) West Germany (235) Hong Kong (133) Hong Kong (111) Source: 1962 figures from publication States of Malaya, Annual Statistics of External Trade, Department of Statistics, Kuala Lumpur; 1967 figures supplied by Department of Statistics, Kuala Lumpur. 93 Table 26. — Principal Imports Into Singapore of Consumer Goods from Major Sources, 1962 and 1967 {Thousands U.S. dollars) Items Years United United Total States Kingdom Communist Japan China Australia Other Meat, canned and preparations Milk and cream Wheat Fish, canned and prepared Wheat flour Cereals and flour mixes Fruit and nuts, fresh Fruit, dried Fruit, preserved Vegetables, preserved Sugar and honey Animal feeds Food preparations, n.e.s. Cigarettes Ginseng Pharmaceuticals Perfume and cosmetics Soaps Washing preparations, including detergents Hunting and sporting ammunition Rubber tires and tubes Paper, wrapping, packing and paperboard Coated paper See footnotes at end of table. 1962 3,814 187 1,618 12 654 346 1967 4,941 180 1,579 — 1,588 281 Netherlands (193) 1962 15,845 184 2,024 — — 2 524 Netherlands (7,322) 1967 11,242 391 731 1 to 2. 252 Netherlands (1,519) 1962 255 _ _ _ _ 251 _ 1967 15,019 463 — — — 13, ,973 — 1962 2,745 111. 36 836 82 6 1967 4,622 82 40 2,365 263 391 — 1962 9,700 274 68 1,340 _ 5 ,834 Canada (1,145) 1967 426 22 38 10 — 79 — 1962 7,744 113 1,652 22 a 2 3 2 ,735 1967 8,280 121 1,358 88 2,092 2 ,199 — 1962 13,921 1,106 35 710 1,316 2 ,882 1967 20,352 1,998 21 476 5,118 5 ,328 — 1962 940 296 2 2 Kll 30 _ 1967 1,313 478 — — 581 118 — 1962 12,635 869 345 08 735 301 Malaysia (canned 1967 20,406 855 327 73 2,712 437 Pineapple for reexport) 1962 5,679 216 294 1,098 2,189 25 _ 1967 8,029 186 380 1,379 3,818 86 — 1962 10,135 187 227 _ 2,936 31 Taiwan 1967 10,660 217 585 4 6,350 1 ,417 Taiwan 1962 18,613 101 50 1,145 261 1 ,353 Burma. Thailand 1967 26,762 168 99 244 3,162 1 ,655 Burma, Thailand 1962 1,853 412 638 30 77 29 1967 2,889 018 973 100 431 62 — 1962 11,270 4,418 5,292 45 3 1 _ 1967 7,850 2,640 4,139 — 15 — — 1962 869 593 143 58 _ 1967 2,036 1,132 — 159 224 — — 1962 842 35 335 241 22 2 West Germany (43) 1967 1,056 47 251 290 37 1 West Germany (113) 1962 7,081 863 1,506 270 1,379 11 Hong Kong West Germany 1967 8,055 1,090 1,942 870 948 83 Hong Kong West Germany 1962 1,454 (.8 540 19 57 _ _ 1967 2,402 164 490 19 530 83 — 1962 2,364 618 312 1 — 25] West Germany 1967 1,703 58 257 84 100 6J Malaysia 1962 L39 31 70 _ — _ _ 1967 279 49 32 — — — — 1962 6,367 544 2,457 1,069 343 17 _ 1967 2,794 37 294 1,154 387 6 — 1962 1,649 55 180 505 53 2 — 1967 2,422 390 150 717 256 131 West Germany (122) 1962 611 126 81 201 2 41 West Germany (43) 1967 1,580 164 291 526 94 69 Hong Kong (99) 94 Table 26. — Principal Imports Into Singapore of Consumer Goods from Major Sources, 1962 and 1967 — Continued (Thousands U.S. dollars) United United Communist Items Years Tola I States Kingdom Japan China Australia Other Paper articles Cutlery Stoves, domestic Rad io receivers Refrigerators Air conditioners, room Passenger cars Motorcycles and parts Furniture Travel goods Cotton clothes Textile clothing accessories, non-knit Clothing and accessories, knit Footwear, leather Optical instruments Sound recorders and record players Tapes and disks Printed hooks Newspapers and magazines Printed matter, n.e.s. Toys and games Outdoor sports equipment See footnotes at end of table. 1962 2,256 2K2 1,119 71, 23 47 West Germany (114) 1967 2,503 27(> 668 268 183 81 West Germany (252) 1962 1,304 74 307 330 57 _ West Germany (330) 1967 2,422 1 45 333 503 642 8 West Germany (388) 1962 623 12 153 32 3 1 Hong Kong (252) 1967 1,324 19 111 121 80 17 Hong Kong (370) 1962 7,145 It 215 4,164 15 2 Netherlands 1967 12,497 57 50 7,416 101 2 Netherlands (3,701) 1962 2,929 1,128 456 345 - 4 West Germany Italy 1967 1,535 27.', IB 211 5 West Germany Italy 1962 2,222 2,035 22 44 _ — 1967 3,492 2,517 51 251, - - - 1962 20,715 12') 8,811 447 - 1,234 West Germany (3,794) 1967 13,872 63 5,250 415 005 West Germany (4,105) 1962 6,788 4 275 2 , 069 _ 1 Italy 1967 5,411 — 26 3,172 - - Italy 1962 2,034 25 347 71 103 7 Malaysia 1967 1,958 14 IKK 100 37 t 15 Hong Kong (76) 1962 838 <,<) 90 221, 40 2 Hong Kong (292) 1967 1,757 18(, 130 351, 434 10 Hong Kong (363) 1962 12,999 724 215 2 , 000 1,475 43 Hong Kong (4,369) 1967 14,534 758 150 2,424 3,082 120 Hong Kong (3,761) 1962 1,779 304 73 7(,o 302 10 1967 2,654 360 109 702 744 125 Hong Kong (258) 1962 4,021 151 1 54 655 830 1 Hong Kong (2,133) 1967 8,960 131) 224 3,734 2,246 39 Hong Kong (1,851) 1962 2,492 8 OK, 1 1 151 _ Hong Kong (595) 1967 1,285 19 133 21 253 62 Hong Kong (77) 1962 321 8 It loa _ 1 West Germany (68) 1967 422 7 10 325 14 — West Germany (29) 1962 2,307 38 166 532 _ 1 West Germany (825) 1967 6,020 Ml 171 3,369 — 6 West Germany (403) 1962 1,910 525 30(, 80 3 120 West Germany (195) 1967 3,425 (,37 316 270 — 382 West Germany (654) 1962 3,521 504 1,301 42 28 20 Hong Kong (1,038) 1967 5,529 660 2,189 130 8 51 Hong Kong (1,523) 1962 1,341 126 321 206 _ 11 Hong Kong (492) 1967 1,917 38 749 201! — 47 Hong Kong (654) 1962 1,887 201 856 02 4 16 Hong Kong (502) 1967 5,051 111, 1,291 286 It 64 Hong Kong (450) 1962 3,458 574 427 1,374 103 21 Hong Kong (621) 1967 6,116 B84 466 1,415 1,396 52 Hong Kong (1,110) 1962 1,436 155 393 324 60 40 1967 1,820 220 410 402 314 141 — 95 Table 26. — Principal Imports Into Singapore of Consumer Goods from Major Sources, 1962 and 1967 — Continued (Thousands U.S. dollars) Items United United Communist Years Total States Kingdom Japan China Australia Other Pens and pencils Candles, matches 1962 2,520 716 58 289 402 1967 2,899 112 43 262 1,251 1962 1,094 11 182 240 19 1967 2,202 23 488 473 761 17 West Germany (660) 52 West Gremany (808) Source: 1962 figures from reports of Singapore external trade published by Department of Statistics, Singapore; 1967 figures supplied by Department of Statistics, Singapore. Table 27. — Principal Imports Into West Malaysia of Industrial Haw Materials From Major Sources, 1962 and 1967 (Thousands U.S. dollars) Item Years Total United United States Kingdom Japan Other Unmanufactured tobacco Waste paper Raw cotton 1962 6,093 3 544 — 1967 7,655 5 020 — 1962 1,050 510 216 1967 1,234 258 152 1962 137 24 17 1967 3,571 1 ,025 34 India, Rhodesia India, Rhodesia India, Brazil India, Brazil Source: Department of Statistics, Kuala Lumpur. Table 28. — Principal Imports Into Singapore of Industrial Raw Materials From Major Sources, 1962 and 1967 (Thousands U.S. dollars) United United States Kingdom Japan Other Unmanufactured tobacco Waste paper Raw cotton 1962 4,704 2 ,024 — — 1967 5,259 2 ,744 — — 1962 525 406 74 _ 1967 903 448 83 — 1962 253 175 _ 37 1967 2,573 1 ,047 — 43 India, Rhodesia India. Rhodesia Denmark Hong Kong, West Germany Source: Department of Statistics, Singapore. 96 APPENDIX D Existing and Proposed Manufacturing Establishments FIRMS MANUFACTURING IN WEST MALAYSIA UNDER BENEFITS FROM GOVERNMENT INCENTIVES PROGRAM AND PRODUCTS MANUFACTURED (As of May 31, 1968) Food Products: Beatrice Foods (M) Ltd. Food Specialties Malaya Ltd. Pacific Milk Industries Malayan Marine Industries Ltd. Federal Flour Mills Ltd. Malayan Flour Mills Ltd. Malayan Sugar Manufacturing Co. Ltd. Asia Chemical Corp. Ltd. Sin Heng Chan (M) Ltd. Zephyr Chemical Feedstuffs Ltd. Zuellig Feedmills (M) Ltd. Goodmeal Biochemical Mfg. Ltd. Naarden (M) (Pty) Ltd. Ajinomoto (M) Ltd. Malayan Frozen Foods Ltd. Franco-Malayan Mfg. Co. Ltd. Glaxo-Allenburrys (M) Ltd. Stamford Chemical Industries Ltd. Chemical Industries (M) Ltd. Guiness Malaysia Ltd. Malayan Breweries (M) Ltd. Textiles : Condensed milk Condensed milk Condensed milk Canned and Frozen tuna, fish balls, fish sausages, fish meal and powder Wheat flour and bran Wheat flour and bran Refined sugar and molasses Chemical animal feeds Chemical animal feeds Chemical animal feeds Chemical animal feeds Dried yeast Flavoring and coloring materials, fruit bases and tobacco sauce, synthetic perfumes Monosodium glutamate and glutamic acid waste as adjuncts for soya sauce Frozen vegetable, fish, fruit, poultry, meat, pre-cooked Chinese dishes, curry and satay Specialized infant and invalid food Pharmaceuticals Maltose, adhesives and glues Ethyl alcohol Beer and stout Beer and stout Malayan Weaving Mills Ltd. South Pacific Textiles Industries Ltd. Bleached, dyed and printed cotton and synthetic fabrics Knitted hosiery and other garments and face and bath towels 97 Textile Corporation of Malaya Ltd. Peony Blanket Industrial Company Goodhill Ltd. Min Ngai Knitting Factory (M.) Ltd. Federal Industries Ltd. Malayan Umbrella Factory Ltd. Spun cotton Blankets of cotton waste, wool and spun rayon Hosiery, gloves and other knitted goods Vests, singlets and jerseys Incandescent mantles, gauze, lint and other medical dressing and sanitary towels Umbrellas and parasols Wood and Rattan Manufactures: Insulations (Malaya) Ltd Malaya Plywood & Veneer Factory Ltd. Malayan Industrial & Engineering Co. Ltd. Malayan Veneer Ltd. South East Asia Lumber Corp. Ltd. Prefabricated Timber Houses Ltd. Malaysia Senju Plywood Co. Ltd. Sentosa Veneer Lumber Ltd. Woodwool light-weight partitions and outer walls, in- sulating slabs for cold room and refrigerators Veneer and plywood Plain and veneered particle board sheets, doors, pan- els, including acoustic, phenol and metal faced Corestock, veneers and plywood Corestock, veneers and plywood Prefabricated housing units Corestock, veneers and plywood Veneer and plywood Furniture and Fixtures: Office Equipment Manufacturers (M.) Ltd. Khinco Limited Kayar (M) Ltd. Metal furniture for home, hospital, school and office Metal furniture for home, hospital, school and office Processed coir, rubberized coir, upholstery mattresses Paper and Paper Products: Malayan Fibre Containers Ltd. Tien Wah Press (M) Ltd. Leather Manufactures: Corrugated and solid fiberboard cartons and sheets Printed and unprinted paper boxes, cartons and containers Malaya Leather Co. Ltd. Side, army-retan, split, pigskin and fancy leather Rubber Products: Dunlop Malayan Industries Ltd. Vehicle tires and tubes, except for bicycles and solid Chemicals and Chemical Products: Esso Standard Malaya Ltd. Chemical Company of Malaysia Ltd. Malaya Acid Works Ltd. Liquid anhydrous ammonia and sulphur Acids: hydrochloric, nitric; ammonium nitrate, granu- lar compounds containing nitrogen phosphate, potash Sulphuric acid including battery acid and hydrochloric acid and formic acid 98 Cement Aids Ltd. Colorcem (M) Ltd. Federal Paints LCI. Paints (M) Ltd. P. A. R. Malayan Paint Works (F) Ltd. Sissons Paints (East) Ltd. The National Lacquer & Paint Products Co. ( M ) Ltd. Taiping Chemcial Industries (M) Ltd. New Era Lubricants (Malaya) Ltd. Glaxo Allenburys (M) Ltd. Franco-Malayan Mfg. Co. Ltd. Colgate Palmolive (Asia) Co. Ltd. Malayan N.S.D. Ltd. Lam Soon Corporation Ltd. A. S. Watson Company Dumex Limited Malayan Pharmaceutical Factory Ltd. Beecham (Manufacturing) Ltd. Johnson & Johnson (M) Ltd. Lion Dentrifice (M) Ltd. Malayan Consumer Industries (Fed.) Ltd. Kelantan Match Factory Ltd. Perak Match Factory Sincere Match and Tobacco Fty. Ltd. Blood Protection Co. (M) Ltd. Pokong Industries Ltd. Sin Kheng Lee (M) Industrial Co. Ltd. Cement and concrete admixtures and surface treatment Cement based paints, emulsion paint, woodstain Enamel paints, lacquers, varnishes and distempers Enamel paints, lacquers, varnishes and distempers Enamel paints, lacquers, varnishes and distempers Enamel paints, lacquers, varnishes and distempers Paints, enamel, lacquer and varnish Coal tar-wood preservatives, candles and joss paper Recovered and regenerated lubricating oil (veg. and animal) Pharmaceuticals Pharmaceuticals Synthetic detergents, toothpaste Synthetic detergents Abrasive scouring powder Pharmaceuticals and toilet preparations Pharmaceuticals for human and veterinary use, anti- biotics, infant and invalid foods, patent medicines Pharmaceuticals, ointments, antibiotics, patent medicines Hair cream Talcum dusting medicinal and baby powders, sanitary towels and belts Toothpaste Toothpaste Matches Matches Matches Mosquito repellent coils Mosquito repellent coils Mosquito repellent coils Petroleum Products: Esso Standard (M) Ltd. Shell Refiining Co. (Fed. of M.) Ltd. Asphalts & Allied Products (Malaya) Ltd. Malayan Bitumen Products (M) Ltd. Aviation and motor gasoline, diesel oil, kerosene, asphalt, bottled gas Aviation and motor gasoline, diesel oil, kerosene, asphalt, bottled gas Bitumen emulsion and other associated products Bitumen impregnated fabrics and paper, and compounds Other Non-Metallic Mineral Products: The Malaya Glass Factory Ltd. Federal Tile Manufacture Ltd. United Asbestos Cement Ltd. Hume Industries (M) Ltd. Malayan Nozawa Asbestos Cement Co. Ltd. Brady's (M) Ltd. Glassware Baked clay roofing tiles Asbestos cement pipes Asbestos cement sheets and fabricated products Asbestos cement sheets and fabricated products Plaster board and acoustic ceiling board 99 Metal and Metal Products: Malayawata Steel Ltd. Boon & Cheah Steel Pipes Ltd. Malaysia Casting Co. Ltd. Alcan Malayan Aluminum Co. Ltd. Crittall Malaya Ltd. Seng Chong Metal Works Ltd. Tacam Ltd. Sincere Rolling Mills Ltd. Hock Joo Factory Ltd. Federal Metal Printing Ltd. The Metal Box Company of Malaya (F) Ltd. Kuala Lumpur Metal Printing Factory Ltd. Malayan Aluminum-ware Manufacturing Co. Ltd. Malaysia Galvanized Iron Pipes Ltd. Malayan Steel Products Ltd. Malayan Ceramic Industries Ltd. Tong Meng Co. (Malaya) Ltd. General Container Co. Ltd. Malayan United Industrial Co. Ltd. Freezinhot Bottle Co. (M) Ltd. Federal Iron Works Ltd. Sponge iron, pig iron, steel ingots, structural bars and rods Steel Pipes Cast iron pipes and fittings and ingots Aluminum and aluminum alloy sheets and circles Metal windows, doors, frames, metal louvre window fittings Metal windows, doors, and frames Metal louvre window frames, window fittings Metal windows, doors and frames, bolts, nuts and washers Steel bolts, nuts, washers, rivets and dog spikes Decorated lithographed metal containers Decorated metal containers made of tin plate and lithographed and embossed products made of tin plate and aluminum Decorated metal containers Aluminum household utensils and food containers Galvanized steel pipes Panel pins, wire nails Household utensils or iron and steel Aluminum household utensils Crown corks Household utensils or iron and steel and vacuum flasks Vacuum flasks Galvanized iron sheets Machinery, etc: Singer Industries (M) Ltd. Carrier International (M) Ltd. Century Batteries (M) Ltd. Malayan Batteries Ltd. Malayan Cables Ltd. Malayan Welding Products Ltd. Malaysian Lamps Ltd. Khinco Ltd. Far East Metal Works Ltd. Electric & Allied Industries Ltd. Matsushita Electric Co. (M) Ltd. Job & Henshaw Ltd. Din-Wai Electrical Manufacturing Co. (M) Ltd. Sewing machine heads Air conditioning plants and components Lead acid accumulators and parts Dry cells, including radio batteries Land and submarine cables and wire conductors of all types Mild steel electrodes Filament lamps, fluorescent tubes Seat frame assembly, pipe inlet, pipe outlet, muffler assembly and drain tube, bus seats, bus window regulators, hand trucks, wheelbarrows Bicycles, tricycles, perambulators and parts Domestic refrigerators and airconditioners Electric fans, T. V. and radio sets, refrigerators, elec- tric rice cookers, irons, toasters and kettles, tape recorders Electric kettles, irons, rice cookers, hot plates, table fans, ovenettes Ceiling and table fans, switches and plugs 100 Miscellaneous : Federal Plastics Industries Ltd. Lison Co. Ltd. Liton Industries (M) Ltd. Malayan Industrial Plastic Ltd. Poly Plastic (M) Ltd. United Plastics Ltd. Malayan Polythene & Cellulose Ltd. Ferranti Ltd. J. & J. Ho (M) Ltd. Malayan Zips Ltd. Source: Industrial Development Division, Ministry (if Comme Plastic articles by injection, moulding, vacuum form- ing, extrusion and coating, compression high fre- quency welding Plastic articles produced by injection, moulding, vacuum forming, extrusion and coating Polythene bags and wrappers Plastic articles produced by injection, moulding, vacuum forming, extrusion and coating Plastic articles, produced by injection, moulding, vacuum forming, extrusion and coating, compres- sion moulding, high frequency welding Plastic articles, produced by injection, moulding, vacuum forming, extrusion and coating, compression moulding, high frequency welding. Polythene tubes, sheets and bags Electric power watt-hour meters Tooth brushes Zip fasteners Kuala Lumpur. FIRMS MANUFACTURING IN SINGAPORE UNDER BENEFITS FROM GOVERNMENT INCENTIVES PROGRAMS AND PRODUCTS MANUFACTURED As of August 1, 1968 Food and Beverages: Federal Chemical Industries (S) Ltd. Khong Guan Flour Mill Ltd. Prima Ltd. Kwang Joo Seng Co. Ltd. Mishamex Ltd. Magnolia Dairies Ltd. Magnolia Dairies (S) Ltd. New Zealand Dairy Supplies (S) Ltd. Malaysia Dairy Industries Ltd. Sheng Huo Enterprise Ltd. Zuellig (Gold Coin) Mills Ltd. Merrymay (Industries) Ltd. Semangat Ayer Ltd. Sugar Industry (S) Ltd. Malaysian Feedmills Ltd. Barrow Linton (Malaysia) Ltd. Cathay Food Industries Ltd. Hodgson Co. Ltd. Siong Hoe Confectionery Factory Ltd. Southern Industrial Corp. Ltd. Monosodium glutamate Wheat flour and by-products Wheat flour and by-products Vegetable oil Chewing gum and chocolates Condensed milk Reconstituted milk Reconstituted milk Condensed milk and reconstituted milk Chocolate products and instant food beverages Animal feedmix Chewing gum and confectionery Bottled mineral and spring water Refined sugar Animal feedmix Rolled oats for human consumption Agar agar and sugar confectionery Fish meal, sauce and oils Sugar confectionery Preserved fruits and food preparations 101 Textile and Leather Garments : Chenta Rayon Co. (M) Ltd. Swan Socks Manufacturing Co. Malaysia Ltd. Pelican Textiles Ltd. Min Ngai Knitting Fty. Ltd. Malaysia Net & Twine Co. Ltd. National Textiles Ltd. International Textiles Ltd. General Leather Ltd. Hoowah Mfg. Co. Ocean Garments Ltd. Malaysia Garmet Manufacturers Ltd. Yangtzekiang Garment Mfg. Co. Ltd. Wing Tai Garment Manufacturers (S) Ltd. Mayalsia Dyeing & Printing Fty. Ltd. Sin Chew Garment Fty. (M) Ltd. Textile Corp. of Singapore Ltd. Unitex (Mayalsia) Ltd. Singapore Garment Factory Ltd. Great Malaysia Textile Mfg. Co. Ltd. Bhadelia Industries Ltd. Hong Kong Dyeing & Weaving (S) Ltd. Hoo Sung Knitting Factory Ltd. Lim Seng Huat Industries Ltd. Raya Mills Corp. Ltd. Singapore Textile Industries Ltd. Tai Wah Garments & Knitting Factory Ltd. Nylon yarn, cloth, knitted hosiery, men's and chil- dren's garments Nylon yarn and knitted hosiery Woven, dyed, printed and bleached fabrics and house- hold textiles Wearing apparel Fishing nets and twine of synthetic yarn Spun, woven, bleached, dyed, finished or knitted goods Spun, woven, bleached, dyed, finished or knitted goods Dressed leather, tannery by-products, artificial leather and fiber board Wearing apparel Wearing apparel and nylon knitted goods Boy's and men's shirts, blouses, pyjamas, pants and nightgowns Wearing apparel Wearing apparel Wearing apparel: shirts and blouses and fabrics Wearing apparel Men's, women's and children's wearing apparel and fabrics Wearing apparel Wearing apparel Wearing apparel Spun, woven, bleached, dyed, finished or knitted textiles Bleached, dyed and printed textile fabrics Household linens made from locally woven fabrics Wearing apparel Wearing apparel, knitted goods, cotton and synthetic thread and yarn Spun, woven, bleached, dyed, finished or knitted textiles Wearing apparel (shirts and knitted garments) Wood and Paper Products: Pan-Malaysia Industries Ltd. Veneer Products Ltd. Camel Plywood Corp. Ltd. Starlight Timber Products Ltd. United Industrial Paper Products Mfg. Ltd. Eupoc Pulp & Paper Industries Ltd. Moiz Yoosuf & Co. (Kilning) Ltd. Plywood Veneer and plywood Veneer and plywood Veneer and plywood Industrial paper bags Paper Kiln dried timber Rubber Products: Bridgestone Malaysia Co. Ltd. Rubber tires, tubes, belts, hose, sheets, camelback, rubber compounds 102 Dunlop Singapore Ltd. Malaysia Rubber Products Ltd. Power Foam Rubber Factory (S) Ltd. Foam rubber products Camel back for retreading tires, foam rubber prod- ucts, rubber rods, hose, pipes and sheets Foam rubber products Chemical Products: Chemical Corp. of Singapore Ltd. Standard Chemical Corp. Ltd. Columbia International Corp. Ltd. Malaysia Mosquito Spiral Coil Mfg. United Industrial Corp. Ltd. Chemical Industries (F.E.) Ltd. Cement Aids (S) Ltd. Lam Soon Oil & Soap (S) Ltd. Public Industrial Mfg. Co. Singamas Chemical Industries Ltd. Mizrahie&Co. (1961) Ltd. Adler Cosmetics Ltd. Beecham (Mfg.) Singapore Ltd. Coates Brothers (S) Ltd. Collie (Asia) Ltd. Dainippon Ink & Chemicals (S) Co. Ltd. Federal Match Co. Ltd. Fonta Beauty Products Ltd. Health Products Ltd. Haratex Industries Ltd. Jack Chia Industries (S) Ltd. Kailey Associates Ltd. Mobil Chemical Singapore Ltd. Singapore Adhesives & Chemicals Ltd. Singapore Essential Oils Distillation Ltd. Tancho Corp. Ltd. Warner Cosmetic Ltd. Welco (S) Mfg. Co. Ltd. Wheelmar Chemicals (S) Ltd. Yardley Jardine Ltd. Agricultural & Industrial Chemicals Ltd. Sulphuric acid, formic acid, hydrochloric acid, nitric acid, aluminum sulphate, copper sulphate, ferrous sulphate Sulphuric acid and aluminum sulphate Pharmaceutical preparations and ointments Mosquito incense coils with D.D.T. Detergents, liquid and powder Sodium hydroxide, hydrochloric acid, chlorine, sodium chlorate, hydrogen Water repellent concrete additives, additives against oil and concrete setting retarders Tiolet soap Naphthalene balls and tablets Industrial ethyl alcohol Pharmaceutical products Toilet and medicated soap, glycerine Hair creams and lotions Printing inks and pigments, printers rollers Printing inks Printing inks Matches Cosmetics Pharmaceuticals and hair dressing Printing inks and water colors Phermaceuticals and cosmetics Cosmetics Sulphur Urea and phenol resin adhesives, formalin Essential oils Cosmetics Hair dressing material Flavoring essences and perfume compounds Pharmaceuticals, tablets, cosmetics and baby power Cosmetics Chemical fertilizers, including ammonium phosphates and sulphate, super-phosphates, ammonia, insec- ticides, fungicides and herbicides Petroleum and Petroleum Products: Mobile Oil Malaysia Co. Ltd. Caltex Overseas Ltd. Castrol (F.E.) Ltd. Gasoline, naptha, aviation turbine fuel, kerosene, gas oil, diesel fuel and fuel oil Lubricants including additives and brake fluids Lubricants including additives and brake fluids 103 British Petroleum Refinery (S) Ltd. Shell Refinery Co. (S) Ltd. Shell Bitumen Mfg. Co. Gasoline, fuel oil, kerosene Gasoline, petroleum, naphthas, aviation turbine fuel, kerosene, gas oil, diesel fuel, fuel oil, liquid petro- leum gas, lubricants, grease Bitumen Non-Metallic Mineral Products: Ceramics (Malaysia) Ltd. Pan-Malaysia Cement Works (S) Jurong Tile Works Ltd. Singapore Cement Mfg. Co. Ltd. Brady's (S) Ltd. Fibrite Fiberglass (S) Ltd. Goh Bee Firebricks Ltd. Kaoline Ceramics Ltd. National Tiles Private Ltd. Ltd. Ornamental clay products, roof tiles, clay sewer pipes, ceramic ware Cement Clay roof tiles and ornamental clay products Cement Ceiling and lining boards, acoustic tiles Fiberglass reinforced plastic products Refractory bricks Ceramic sanitary ware Terrazo tiles and artificial marble tiles Metal and Metal Working and Transport Equipment: Jurong Shipyard Ltd. Malaysia Wire Co. Ltd. Afro-Asia Industrial Co. Ltd. Aluminum Pioneer Ltd. Asia Tractor Spares Ltd. Billion Zippers Mfg. Co. Ltd. Eastern Wire Mfg. Co. Ltd. Kent Precision Engineering Ltd. Khinco (S) Ltd. Malaysia Associated Industries Ltd. McAlister Industries Ltd. Metal Products Ltd. Perfect Industries (S) Ltd. Primus-Sievert Private Ltd. Singapore Metal Factory, Ltd. South East Metal Industries Ltd. South East Asia Wire Co. Ltd. Techno Industries Ltd. Tong Meng Co. Ltd. Tuck Heng Metal Industry Ltd. Van Leer Containers (S) Ltd. National Iron Steel Mills Ltd. Steel ships, cranes, coal and ore loading and un- loading equipment Hard drawn steel and iron wire Metal household utensils and hurricane lamps Aluminum sheets, circles and rolled products Components, accessories, spares, and fittings for tractors Zip fasteners Metal wire, wire nails and other wire products Water meters Steel office furniture, spring mattresses and motor vehicle seats and frames Bicycles and parts Fire extinguishers, hose reels and cradles, electric and gas cookers, fire fighting vehicles Pressed steel sectional water tanks, light gauge sec- tions of iron and steel Zip fasteners Liquid petroleum gas cylinders Spun iron pipes Metal louvers Steel and iron wire Razor blades Metal household utensils and metal hardware Metal slotted angles Bitumen containers Ingots, billets, rolled steel products, hard drawn iron and steel wire, galvanized wire, nails, staples and screws 104 Metal Industries Ltd. Simalpan Steel Industries Ltd. The Crown Cork Co. (M) Ltd. Malaysia Steel Pipe Co. Ltd. Nanyang Iron Nail Fty. Co. Ltd. Singapore Galvanizing Industries Ltd. John Lysaught (M) Ltd. Bitumen Packaging (P.B.) Ltd. Malaysia Nails Mfg. Co. Baey Kim Swee (Bolts & Nuts Works) Ltd. Daiwa (Malaysia) Ltd. Metal Tubes & Chemical Products Ltd. Office Equipment Mfg. Co. Ltd. South East Metal Industries Ltd. Siong Huat Industries Co. Eastern Industries Ltd. Metal & Ores Ltd. Es Ltd. Davis Hardware (M) Ltd. Universal Crown Cork Ltd. Yanmar Diesel Malaysia Co. Ltd. steel pipes, steel pipes gal- and floor Spun iron pipes and metal louvres Galvanized iron sheets, galvanized vanized steel plates and shapes, tubes, black and galvanized Crown cork Steel tubes, black or galvanized Iron nails Galvanized iron sheet Rolled formed steel roof wall cladding and decking Bitumen containers Wire nails Bolts, nuts, screws, seamed metal tubes Prefabricated standard steel frames for buildings Aluminum collapsible tubes with plastic caps and plastic tooth brushes Office desks, tables, stands, filing cabinets, lockers, cup- boards, shelves, chairs and other office accessories Metal louvres, except aluminum Detinned scrap iron and recovered tin Detinned scrap iron and recovered tin Milled manganese dioxide zinc cabots Woven wire netting, galvanized and non-galvanized Metal fasteners and locks Crown cork Internal combustion engines Electrical Products : Far Eastern Cables & Switchgear Ltd. Sigma Cable Co. Ltd. Singapore Battery Mfg. Co. Ltd. Ferris Industries (M) Ltd. Electrical Mfg. of Malaysia Ltd. Setron Ltd. Pan-Electric Industries Milhan Industries Ltd. Roxy Electric Industrial (S) Std. Acma Electrical Industries Ltd. Alliance Mfg. Co. Ltd. Light Electronic Industries Ltd. Morphy Richards (Far East) Ltd. Power Industries Ltd. Patco (S) Ltd. Sanyo Industries (S) Ltd. Singapore Welding Ltd. Cables Cables, interior building wire and cable Lead acid batteries Television aerials, electrical supplies Bulbs for photography and motor vehicles, fluorescent lamps and tubes, switches and lampholders Television assembly Air conditioners, refrigerators and electric and gas stoves Switches, plugs, sockets and lampholders Television assembly Refrigerators, airconditioners, electric motors and ap- pliances Plastic products, electrical supplies, transistor radios and radio sets Cathode ray tubes Electrical appliances (irons) Welding electrodes Airconditioners for autos, refrigeration equipment for rolling stock Room airconditioners and electrical appliances Welding electrodes, nitrous oxide 105 Miscellaneous : Camel Industries Corp. Ltd. Genaplast Ltd. Foam Plastic Ltd. Plasbon Malaysia Ltd. Hop Lion Feather Works Ltd. Polykem Industries Ltd. Singa Plastics Ltd. Ya matai Plastic Industries Ltd. Blue Box Toy Factory Ltd. E.M.I. Records (S.E.A.) Ltd. Fair Lady Fashions Ltd. Fullmark Hair Products Ltd. National Grain Elevator Ltd. Phonographic Industries Ltd. Regency Wigs Ltd. Simpak Co. Ltd. Singapore Wigs Manufacturing Co. Ltd. Tumasek Enterprises Ltd. Sekisui Mayalsia Co. Ltd. Kimberly-Clark (Far East) Ltd. Fiberglass Reinforced Products Ltd. Fullmark Industries Ltd. J. & J. Ho (S) Ltd. Source: Economic Development Board, Singapore. Plastic products — PVC floor tiles, footwear Plastic products, performed rigid polyureatheane slabs) Foam plastics Plastic products (PVC leather cloth) Processed feather and feather products Plastic overlay plywood Plastic products Plastic products and rubberized sheets Plastic toys Phonograph records Hair wigs and processed hair Hair wigs and processed hair Grain treated and processed in silos of minimum stor- age capacity of 20,000 tons Phonograph records Hair wigs and processed hair Footwear with plastic soles and uppers of leather, textile material, or PVC leather Hair wigs and processed hair Sanitary towels, baby napkins, gauze, lints and other medical dressing Plastic products — rigid PVC pipes, rain gutters and roofing panels Sanitary towels Fiberglass reinforced plastic products Pencils, pens and stencil paper Plastic toothbrushes MANUFACTURING PROJECTS FOR MALAYSIA PROPOSED BY THE MALAYSIAN GOVERNMENT Chocolate and chocolate preparations Starch processing Dehydrated molasses Jams and jellies Pineapple bran from pineapple waste Veterinary feed concentrates Carbon black Carbon black masterbatch Glass High-level cisterns Furazolidone Sodium chlorate Tetracycline capsules PVC leather cloth Sliced veneer Parquet flooring Furniture Wooden doors and windows Rubberized coir Rubber gloves Woven mosquito netting Tools Tin plate Steel foundry complex High tensile bolts and nuts Ancillary industries for motor vehicle assembly Boat building and repair facilities Weighing machines Sign pen assembly plant Source: Federal Industrial Development Authority (FIDA), P.O. Box 618, Kuala Lumpur. 106 PRODUCTS CONSIDERED FEASIBLE FOR MANUFACTURING OR FURTHER EXPANSION IN SINGAPORE Coconut oil, solvent extracted Off-shore and deep-sea fishing Fish canning Fish meal Fish oil Processing chicken and complete utilization of by- products Utilization of slaughter house waste products and im- ported bone for production of meal and fertilizer Margarine Preserved ginger Packaged spices Knitted garments Weaving of woolen and worsted materials Lace and embroidery Spinning and weaving of synthetic fibers Bleaching, dyeing and printing of textiles Jute/khenaf bags Coir & coir products Chipboard or particle board Hard board Pulp and paper from hard wood waste Wood distillation Briquettes from sawdust Bleached, split and PVC coated rattan Rattan furniture (broken down for export) Printing and publishing V-belts and other transmission belts Conveyor belts Pressed articles of rubber Dipped and cast articles of rubber Formaldehydes Synthetic resins Adhesive glue Plastic products Polyurethane foam plastics Glass fiber — reinforced polyester products Synthetic fiber Garbage composting Carbon black including acetylene black Pharmaceuticals Industrial alcohol Poly-vinyl acetate emulsion Wood preserving compounds Tanning extracts Essential oils Insecticides, fungicides and herbicides Firecrackers and pyrotechnics Source: Economic Development Board, Fullerton Building, Singapore. Welding electrodes Manganese dioxide and other products from manga- nese ore Ceramic sanitary ware Household wares of porcelain Household wares of fine earth and clay Artificial marble and products Prestressed concrete products including pipes Abrasive wheels Pig iron (charcoal blast furnace) Iron ore benefication Aluminum plates, sheets, foils and extruded products Copper refining, rolling and drawing Extrusions of copper and its alloys Handtoools, axes, agricultural and gardening imple- ments Building hardware (locks, hinges, hasps) Plumbers brassware Flexible steel conduit Spun iron pipes Automobile coil springs Automobile leaf springs Steel office equipment Boilers, tanks, pressure vessels and other steel fabri- cation Fire extinguishers Tool and die shop Refrigerators (assembly and part manufacture) Air-conditioners (assembly and part manufacture) Typewriters (assembly and part manufacture) Pumps and internal combustion engines (assembly and part manufacture) Reconditioned machinery and engines Bicycles Components, spare parts, accessories, fittings and sup- plies for motor vehicles Ship-breaking yard Electric motors Electric fans Flat irons Transformers and chokes Underground cables Fluorescent lamps TV sets, radios, tape-recorders (assembly and part mfr.) Iron-ore loading terminal Surgical instruments Feather products and feather meal Buttons 107 APPENDIX E Market Information Sources Governments of Malaysia and Singapore: Malaysia Official Yearbook, 1966, Government Printer, Kuala Lumpur Singapore Yearbook. 1967, Government Printing Office, Singapore Bank Negara Malaysia Annual Report, 1967, Kuala Lumpur A Guide to Investment in Malaysia, Industrial De- velopment Division, Ministry of Commerce and In- dustry, Kuala Lumpur What Singapore Offers the Investor, March 1968, edition, Economic Development Board, Singapore First Malaysia Plan, 1966-1970, Government Printer, Kuala Lumpur Monthly Statistical Bulletin of West Malaysia, De- perament of Statistics, Kuala Lumpur Monthly Digest of Statistics, Department of Statis- tics, Government Printer, Singapore Singapore Trade, monthly publication of the Ministry of Finance printed by the Straits Times Press, Singapore Annual Bulletin of Statistics, Sabah, 1966, Depart- ment of Statistics, Kuala Lumpur Annual Bulletin of Statistics, State of Sarawak, 1965, Department of Statistics, Kuching, Sarawak Malaysia Statistics of External Trade, December 1966, Department of Statistics, Kuala Lumpur West Malaysia Monthly, Statistics of External Trade, Department of Statistics, Kuala Lumpur Singapore External Trade Statistics, December 1966, Department of Statistics, Singapore Singapore Investment News, a newsletter issued by the Singapore Investment Center, 745 Fifth Avenue, New York, N. Y. 10022 Guide for Overseas Buyers of Singapore Products, Economic Development Board, Singapore Survey of Manufacturing Industries in West Malaysia, 1966, Department of Statistics, Kuala Lumpur Non-Government in Malaysia : The Federation of Malaysia Manufacturers Associa- tion Bangkok Bank Building No. 105, Jalan Bandar, Kuala Lumpur The Sarawak Manufacturers Association P. 0. Box 698, Kushing, Sarawak United Chambers of Commerce of Malaya c/o Chinese Assembly Hall, Jalan Birch, Kuala Lumpur States of Malaya Chambers of Commerce Hong Kong and Shanghai Bank Building Kuala Lumpur Associated Chinese Chambers of Commerce of Malaya Chinese Assembly Hall Jalan Birch, Kuala Lumpur Associated Malay Chambers of Commerce of Malaya Pudu Road, Kuala Lumpur Sabah United Chinese Chambers of Commerce P. 0. Box 63 Kota Kinabalu, Sabah Associated Chinese Chambers of Commerce of Sarawak 108 Non-Government In Singapore : Singapore Manufacturers Association 13th Floor, Shell House, Collyer Quay, Singapore, 1 Singapore International Chamber of Commerce 12, Raffles Quay, Singapore, 1 Singapore Chinese Chamber of Commerce 47, Hill Street, Singapore 7 Singapore Indian Chamber of Commerce 55A, Robinson Road, Singapore, 1 Singapore Malay Chamber of Commerce The Arcade, Raffles Quay, Singapore, 1 U.S. Government: International Commerce (weekly), Department of Commerce, available in single copy and subscrip- tion Semiannual Checklist, International Business Pub- lications, September 1969. Bureau of International Commerce Reports on Economic Trends in Malaysia and Singa- pore, prepared by U. S. Embassies, from Office of Publications and Information, U. S. Department of Commerce, Washington, D. C. 20230 Labor Law and Practice in Malaysia and Singa- pore, U. S. Department of Labor LInited Nations: Industrial Development in Asia and the Far East, Volume III. United Nations, New York, 1966 Market Share Reports: Malaysia, Bureau of Inter- national Commerce, available from Sales & Distri- bution, Room 2119, Department of Commerce, Washington, D. C. 20230 Market Share Reports: Singapore, Bureau of In- ternational Commerce, available from Sales & Dis- tribution, Room 2119, Department of Commerce, Washington, D. C. 20230 Overseas Business Reports on Malaysia and Singa- pore, Bureau of International Commerce, Washing- ton, D. C. 20230, available in single copy and sub- scription Non-Government : The Straits Times, an English-language daily, pub- lished by the Straits Times Press, Kuala Lumpur and Singapore Asian Industry, published monthly by Asia Market- ing Media Ltd., 6 Duddell Street, Hong Kong Far Eastern Economic Review, published weekly in Hong Kong, 401-406 Marine House The Straits Times Directory of Singapore and Malaysia, published by the Straits Times Press, Kuala Lumpur and Singapore 109 APPENDIX F Selected Listings Representation in the United States by Malaysian and Singapore Governments: Embassy of Malaysia 2401 Massachusetts Avenue, N. W. Washington, D. C. 20008 Embassy of Malaysia Commercial Office 845 Third Avenue 16th Floor New York, N. Y. 10022 Embassy of the Republic of Singapore 1825 Connecticut Avenue, N. W. Suite 426 Washington, D. C. 20009 Singapore Investment Center 745 Fifth Avenue New York, N. Y. 10022 Singapore Investment Center Wells Fargo Building San Francisco, California 94104 Singapore Investment Center 500 N. Michigan Avenue Chicago, Illinois 60611 Government Agencies Involved in Development of Industry and Commerce: Ministry of Commerce and Industry Government of Malaysia, Kuala Lumpur Industries Division Trade Division Malaysian Industrial Development Finance Berhad 63-65 Jalan Ampang Kuala Lumpur Federal Industrial Development Authority Bank Bumiputra Building 21, Malacca Street Kuala Lumpur Economic Development Board 2nd Floor, Fullerton Building Singapore 1 Investment Promotion Division Economic Development Board Malayan Bank Chambers Singapore 1 Market Researeh Firms: The Far East Research Organization Ltd. 400 Jalan Tuanku Abdul Rahman Kuala Lumpur Marketing Research Malaysia 11 Jalan Keng Hooi Kuala Lumpur Marketing Research Services, Sdn. Berhad Bangunan Straits Trading Building 4 Leboh Pasar Besar Kuala Lumpur Survey Research Malaysia 143 Jalan Terap Kuala Lumpur Export Marketing Bureau Room 707 Asia Insurance Building Kuala Lumpur The Far East Research Organization Ltd. Chinese Chamber of Commerce Hill Street Singapore James Knight & Co. (Singapore) Private Ltd. Room 3, Amber Mansion 7 B, Orchard Road Singapore, 9 110