July 2024 – In light of the supply chain disruptions, market isolation, and logistical bottlenecks experienced during the COVID-19 pandemic, the German machine tool industry is actively exploring ways to diversify its global market presence. The VDW (German Machine Tool Builders’ Association) supports its members in establishing a foothold in emerging growth markets through the symposium "Innovations in Production Technology – Machine Tools from Germany" held on July 10, 2024, in Kuala Lumpur. "The Malaysian machine tool market has a potential exceeding 700 million euros. Currently, Germany holds an 8% share of imports, indicating significant room for growth," says Klaus-Peter Kuhnmünch, responsible for organizing international symposia at the VDW.
Malaysia is the key market for German production technology within the ASEAN region. Following China’s example, the Malaysian government aims to increase domestic value creation and create high-quality jobs. Significant investments are expected in the aerospace, electronics, electrical engineering, and medical technology sectors, along with their suppliers. Eight German high-tech companies utilized the VDW symposium to explore their opportunities in the Southeast Asian market before an audience of 110 Malaysian industry professionals. The companies – DMG Mori, Chiron, Grob, Hermle, Index, Open Mind Technologies, Schütte, and United Grinding – also participated in 48 B2B meetings parallel to the presentations.
These companies aim to establish new bases in Asia alongside their presence in China, benefiting Malaysia, which offers political stability, economic growth, high legal security, and excellent infrastructure. Carl Martin Welcker, Managing Partner of Alfred H. Schütte Werkzeugmaschinenfabrik, Cologne, states, "We see potential in Asia and need to establish Malaysia as an excellent location to diversify. The market is highly competitive from the Asian side." Tara Meite, Deputy Managing Director of the German-Malaysian Chamber of Commerce in Kuala Lumpur, advocates for investment in the country, noting, "The Malaysian industry has well-trained specialists who can be quickly retrained and employed to meet the needs of German companies."
In 2023, Germany exported machinery worth 42 million euros to Malaysia. Machines for extensive and specialized applications, not available from other suppliers, are in particular demand. "This is particularly true for the automotive and aerospace industries," reports Oliver Prpic, Managing Director of Hermle SEA Co. Ltd, Thailand. Roland Merz, Sales Manager Asia, Chiron Group SE, Tuttlingen, adds, "Malaysian customers appreciate the high precision, reliability, and custom solutions of German machine tools. The higher price compared to Asian suppliers is not a deterrent."
The VDW anticipates continued growth in the demand for machine tools in Malaysia. Kevin Chue, Business Development Manager at GPI Geopile Engineering SDN BHD, Kuala Lumpur, concurs, "I appreciate German machine tools for their precision and flexibility. The focus is on technology rather than price. Our experience with German machines has shown that using cheaper and simpler machines affects our production quality."
"Modernization, capacity expansion, and efficiency improvements in Malaysian industrial production rely heavily on the latest production technology. German manufacturers not only provide machines but also offer consultancy, financing, service, maintenance, and training," says Kuhnmünch. Additionally, German manufacturers engage in long-term creative processes with their Malaysian customers, sharing their expertise and actively contributing to the modernization of Malaysian industry. "We train our apprentices on German machine tools, enabling them to operate almost any machine, particularly the German ones," concludes Fahrul Rizan Bin A. Halim, Deputy Managing Director of the GMI – German-Malaysian Institute, Selangor, Malaysia.
Source: Deutsch-malaysischen Industrie- und Handelskammer
