KUALA LUMPUR: Increased operational costs due to the depreciation of the Malaysian ringgit which is impacting businesses and industries as a whole are among the main challenges faced by the government in achieving its objectives and targets of the New Industrial Master Plan 2030 (NIMP 2030).

In a parliamentary written reply, the Investment, Trade, and Industry Ministry (MITI) said this challenge is faced by high-impact sectors such as electrical and electronics (E&E), chemicals, aerospace, and pharmaceuticals.

The ministry added that the shortage of local talent in the Malaysian labour market, especially in critical sectors like technology and engineering was another challenge driven by better-paying job opportunities abroad.

"A weaker currency can undermine foreign investor confidence in Malaysia's economy, thereby affecting the growth and development of local industries," said the ministry.

The ministry said this in response to Datuk Seri Hasni Mohammad (BN-Simpang Renggam) who enquired about the challenges faced by the government in implementing NIMP 2030, particularly in engaging and collaborating with high-impact sectors to drive a more sustainable national economy.

Regarding raw materials, the ministry added that the increased cost of importing raw materials and goods, especially for industries reliant on imports, directly impacts production costs and competitiveness in both local and international markets.

"Businesses dependent on imported components and raw materials also face supply chain uncertainties due to fluctuating costs, leading to disruptions in operational supply chains.

"These challenges require industries to adapt their strategies, including optimising costs, enhancing operational efficiency, and re-evaluating business models.

"Diversifying supply sources and markets can also help mitigate the negative impacts of the local currency, thereby enhancing industry competitiveness."

Last September, Prime Minister Datuk Seri Anwar Ibrahim launched NIMP 2030, Malaysia's fourth industrial master plan aimed at revitalising the country's manufacturing sector and increasing its value-added output to RM587.5 billion by 2030.

With a total investment cost of RM95 billion throughout its implementation, the seven-year plan is expected to create 3.3 million jobs, focusing on high-skilled positions as Malaysia progresses towards higher value-added activities and improves automation and technological advancements.

The four missions of NIMP 2030 are to advance economic complexity, technologically empower a digitally vibrant nation, strive for a net-zero future, and safeguard economic security and inclusivity.

https://www.nst.com.my/news/nation/2024/07/1071093/increased-operational-costs-due-ringgit-depreciation-among-challenges