Automotive, oil and gas to drive Malaysian welding equipment demand

By Plant Engineering Staff June 23, 2006

Demand for welding equipment in Malaysia is set to expand as foreign investment boosts the general level of industrial infrastructure and manufacturing activity in the country. In 2005, the Malaysian government eased rules to allow foreign investors 100% ownership of newly established manufacturing firms, putting Malaysia on par with other countries vying for foreign capital.

Consulting firm Frost & Sullivan has found that Malaysian markets for welding equipment and consumables earned revenues of $71.6 million in 2005 and estimates this to reach $108.3 million by 2012.

“The spillover effects from other sectors benefiting from an increase in investment are likely to boost the demand for welding equipment and consumables,” notes Titus Hocevar, a research analyst for Frost & Sullivan. “The growth caused by rising foreign investment is also likely to encourage developments in welding technology as foreign companies are expected to have higher requirements for welding equipment.”

The upstream oil and gas sector will be the primary beneficiary of the foreign ownership policy, with exploration and production activities expected to take center stage in the next few years. Investment is likely to accelerate if the price of crude oil remains close to its all-time peak. Local incumbents in the automotive industry will also need to modernize their facilities and equipment to remain competitive in the liberalized domestic market.