News & Updates

In September 2020, the Department of Trade and Industry (DTI) Philippines has initiated a preliminary safeguards investigation on the importation of (1) High Density Polyethylene (HDPE) pellets and granules and (2) Linear Low-Density Polyethylene (LLDPE) pellets and granules from various countries including Malaysia covering the period of 2015 to 2019, as according to malaya.com.ph. The products involved are classified under the ASEAN Harmonized Tariff Nomenclature (AHTN) 3901.20.00 for HDPE and 3901.10.12, 3901.10.92, 3901.40.00 and 3901.90.90 for LLDPE. 

Preliminary Safeguards Investigation

The preliminary investigation reportedly stem from allegation made by JG Summit Petrochemical Corporation (JGSPC) stating that the substantial increase in importation of HDPE and LLDPE has caused significant injury to the domestic industry over the period covered. Apart from Malaysia, countries including Thailand, Singapore, Saudi Arabia, Japan, USA and UAE are also being investigated.

For the record, JGSPC is the largest manufacturer of polyolefin and the only integrated polyethylene (PE) and polypropylene (PP) resin manufacturer in the Philippines. The company produces HDPE, LLDPE, PP-H and PP-R resins marketed under the brand ‘Evalene’ using the world renowned Unipol technology. JGSPC caters to both local and international markets. Being the only manufacturer in the country, they control the local market by supplying to over 200 plastic manufacturers and distributors. It was reported that JGSPC has been severely affected by the ongoing COVID-19 pandemic.
 
According to portcalls.com, HDPE is used to produce products such as plastic bottles, corrosion resistant piping, geomembranes and plastic lumber. Meanwhile LLDPE is used to manufacture items such as plastic bags and sheets, plastic wrap, stretch wrap, pouches, toys, covers, lids, pipes, buckets and containers, covering of cables, geomembranes, and flexible tubing.
 
Upon JGSPC’s request, according to malaya.com.ph, DTI through its evaluation reports stated that the growth rate on imports of HDPE for the period of 5 years has recorded at 274% with significant imports surge in 2016 and 2019. Initially, the importation of HDPE recorded at 29,692MT in 2015 and rose by 53,860MT (181%) in 2016. In 2019, the imports of HDPE further increased by 22,856MT (26%) compared to 2018.
 
As for LLDPE, according to malaya.com.ph, the DTI report stated that the imports significantly grew from 80,000MT in 2015 to 121,000MT in 2019. It was reported that the importation of LLDPE in 2016 increased by 3,871MT (5%) compared to 2015. The imports further rose by 30,462MT (38%) in 2018 and 10,325MT (9%) in 2019.  The DTI evaluation report further added that the local industry suffered from decline in domestic sales, production, utilisation rate, reduced labor productivity, losses, suppression, depression and increased inventory.
 
Based on the data from Bureau of Customs (SAD-IEIRD), the importation of HDPE by the Philippines from 2015 to 2019 was mainly from Thailand, Malaysia, Singapore and Saudi Arabia, of which these countries collectively accounted for 89.1% share of total imports in 2019. While LLDPE was mainly sourced from Singapore, Thailand, Qatar, Saudi Arabia, USA, Malaysia, South Korea and Canada which collectively accounted for 96.4% share of imports. 

The Way Forward

The petrochemical industry has been one of the strategic sectors that anchors Philippines industrial development. The government of Philippines decision to initiate preliminary investigation would eventually impact Malaysia due to the possible safeguard duties. Malaysian exporters are therefore advised to be aware of the current investigation to prepare for the future outcomes.

For further information and enquiries, please contact MATRADE Manila at This email address is being protected from spambots. You need JavaScript enabled to view it.

Note 1: 
This article is based on Market Alert (MA) prepared by MATRADE Manila the information is correct at the time of the writing (29 September 2020).
 
Note 2:
The MA is available in MyExport which can be accessed at www.matrade.gov.my

Disclaimer
While every effort has been taken to ensure that the contents of the article (MATRADE’S Insight) are accurate and current, MATRADE cannot be held responsible for any inclusion, omission or error and is not liable for any loss or dispute arising from the use of the information provided

Source: MATRADE

A team of public health and medical experts from around Malaysia has been working with the Malaysian Plastics Manufacturers Association (MPMA) and the Malaysian Petrochemicals Association (MPA) to make the specialised nasopharyngeal and oropharyngeal swab sticks and plan to contribute 1.2 million swabs for the Covid-19 tests.

Two MPA members are involved in this critical collaboration.

Lotte Chemical Titan (M) Sdn Bhd, Malaysia's first and leading producer of olefins and polyolefins, sponsoring the polypropylene required for producing the shafts, and

Recron (Malaysia) Sdn Bhd, an integrated polyester and textile producer with manufacturing facilities in Melaka and Nilai, sponsoring the swabbing material made of Polyester Staple Fibre (PSF).


PETALING JAYA, 20 May 2020:
Specialised swab sticks made in Malaysia are heading for clinical trials and, if approved, will pave the way for COVID-19 mass testing which is crucial to the country‘s exit from lockdown.
 
A team of public health and medical experts from around Malaysia has been working with the Malaysian Plastics Manufacturers Association (MPMA) and the Malaysian Petrochemicals Association (MPA) to make the specialised nasopharyngeal and oropharyngeal swab sticks and contribute 1.2 million swabs for the COVID-19 tests. 

“Pre-clinical testing suggests that the swabs we produced are performing well,” said Professor Dr Tan Maw Pin from Universiti Malaya’s Medical Faculty. “Malaysia has a highly successful plastics industry which has been able to manufacture the polyester fibres and the plastics shafts which make up the swab,” she said. 

“We are currently working to expedite the process of obtaining the necessary funding and approvals for clinical trials, as well as an approval from the Medical Devices Authority (MDA) so that the swabs can go into production and distribution as soon as possible,” she said. The swabs produced will be used for diagnostic testing for flu and other virus illness in future and will continue to be useful even after the COVID-19 pandemic. 

Professor Dr Tan is part of the team drawn from experts from Hospital Kuala Lumpur (HKL), Hospital Pulau Pinang, Perdana Universiti-Royal College of Surgeons (PU-RCSI) in Ireland, and Universiti Kebangsaan Malaysia (UKM) as well as Universiti Malaya’s (UM) Medical Faculty. 

“The ability to conduct mass testing is critical to lifting the Movement Control Order (MCO), and nose swabs are critical to mass testing,” she added. “Buying the millions of nose swabs needed from overseas is probably not feasible at this time,” said Professor Dr Tan. 

Malaysia currently does not have any facilities to make these swabs, which are expected to be in short supply world-wide, said MPMA President Datuk Lim Kok Boon. “Malaysia needs to be self-sufficient in producing these specialised swabs which are in high demand around the world now,” he said. 

The US, where Malaysia’s main suppliers are, has banned the export of medical goods which includes these swabs. Alternative suppliers are in Italy and are also struggling to keep up with demand. China makes these swabs but there are hurdles in securing supply amid high demand and in importing and transporting the swabs. 

This initiative is in partnership with the Ministry of International Trade and Industry (MITI) which has allowed resumption of operations to manufacturers of essential plastics products since the beginning of the Movement Control Order on 18 March 2020.

The team of experts was able to identify and contact local factories which agreed to repurpose their production lines to make the different components for the swabs. 

“Our members worked very quickly and very hard to resolve and overcome technical obstacles to be able to make the swab material using high quality polyester fibers,” said Lim Kok Boon. 

“Malaysia is home to some of the biggest resin producers in South-east Asia and we are confident that we have the capacity to scale up and sustain this initiative for the long run,” said President of MPA, Akbar Mohd Thayoob (from Petronas Chemical Group Bhd). 

The swab sticks must be made from synthetic material such as polyester fibers and plastics shafts as natural materials such as wood, cotton and paper contain DNA which would interfere with the tests. Also, the swab sticks have to be flexible enough to insert into the nose cavity. 

Precision shafts for the swabs will be produced by Heveaplast (M) Sdn Bhd, a precision plastics extrusion manufacturer which will be contributing by producing the 1.2 million swabs. For this purpose, Heveaplast has modified its plastics extrusion process leveraging on its latest extrusion machine’s optical measurement feature. The shafts are made of polypropylene, which are being sponsored by Lotte Chemical Titan (M) Sdn Bhd, Malaysia’s first and leading producer of olefins and polyolefins. 

Silicon Creation Sdn Bhd has undertaken to wind the swabs onto the tips of the shafts, with the swabbing material of polyester staple fiber sponsored by Recron Malaysia Sdn Bhd. Recron Malaysia is an integrated polyester and textile producer with manufacturing facilities in Melaka and Nilai, Negeri Sembilan.

Article 1:  Malaysian plastic makers to mass-produce swabs for COVID-19 testing

Article 2:  大马研制鼻喉拭子·若准投产可大规模检疫

Article 3:  国产拭子棒 晋临床试验

On 12/5/2020 at 9.00 am saw a Donation Handing-Over of Face-Shields from Members of MPMA and MPA, to PPUM (Pusat Perubatan Univ Malaya). Recipient was represented by Professor Tan Maw Pin (Geriatric Medicine), PPUM.

MPA was represented by our Vice President Mr Philip Kong (also representing Lotte Chemical Titan Corp whom contributed 2.0mt of PP CoPo resins).

The contribution is most welcomed by PPUM's Front-Liners considering the regular imported Face-Shields are getting scarcier and costlier to procure from foreign suppliers.

MPMA Members (Northern Branch) jointly contributed an amount of RM55,700 in production costs, moulds,  die-cutting, pet shields and packaging, whilst Lotte Chemicals Titan's contribution is about RM7,000 of PP CoPo resins (for equiv 60,000 pieces of Face-Shields).

This exemplifies MPA Members' commitments to contribute our relevant roles in combating the Covid-19 menace in Malaysia.

 
   
Malaysian Industrial Development Finance Berhad (MIDF), being an agency under the Ministry of International Trade and Industry (MITI) is to assist companies and enterprises in business operations in the form of soft loans which will help to reduce the cost of financing.

To further broaden their roles in assisting members in adopting digitalisation and technology, MIDF had established Soft Financing Scheme for Digital & Technology (SFDT), primarily to encourage and increase utilisation of digital technologies among local SMEs as means to escalate competitiveness and efficiency and marketability.

Under SFDT, members will enjoy better financing features as depicted herein:

i. As low as 4% p.a on yearly reducing balance;
ii. Financing amount up to RM1 million;
iii. Up to 90% financing; and
iv. Up to 5 years repayment tenure


Attached is the detailed Soft Financing Scheme for Digital & Technology (SFDT) for your reference and attention.

Members who are keen to explore SFDT and wish to grow their businesses further, can e-mail to This email address is being protected from spambots. You need JavaScript enabled to view it. or speak to MIDF Business Advisory Consultant at Tel: 1-300-88-6433  

Attachment:
1.  Soft Financing Scheme for Digital & Technology (SFDT)


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Asia Petrochemical Industry Conference (APIC) 2018
Poratha Corporation Sdn Bh