Profit From Malaysias

Petrochemical
Industry

A Perfect Time to Benefit from Malaysia's

Petrochemical Infrastructure
Through the harnessing of its oil and gas reserves and the forging
of smart partnerships with some of the world's largest petroleum
companies, Malaysia has establish the ideal infrastructure to
support a vibrant petrochemical industry.

The presence of petroleum giants such as Shell and ExxonMobil for over
100 years demonstrates their long-term confident in Malaysia's oil and
gas industry. Through efforts spearheaded by the government and the
country's national oil company, Petroliam Nasional Berhad (PETRONAS),
Malaysia has also attracted investors and business partner among
petrochemical multinationals such as, ConocoPhilips, Kaneka,
Polyplastic, Toray, Dairen, Mitsui, BP, BASF, Idemitsu, Titan and Eastman
Chemicals.
Today, investor benefit from the facilities that are already in place.
Integrated petrochemical complexes offer centralised utilities, efficient
storage services, and a comprehensive transportation network that help
reduce capital and operation costs.
In addition, Malaysia provides a wide range of tax incentives to meet the
varying needs of investor. Customised incentive package that cover tax
and non-tax incentive are also available to key project.
The ASEAN Bintulu Fertiliser
plant in Bintulu, Sarawak

The United States is the largest sources of investments in Malaysia's

petrochemical sector, followed by Japan, the United Kingdom, Germany
and Taiwan.

Rich in oil & gas reserves and

Petrochemical
Feedstocks
Malaysia...

has the world's 23rd largest crude oil reserves inclusive condensates (5.52 billion barrels)
has the world's 14th largest natural gas reserves (14.66 billion barrels)
is the world's largest production facility at a single location of liquefied natural gas

Location of Oil Refineries in Malaysia

Oil Refineries

Location

Petronas Penapisan (Terengganu) Sdn Bhd

Kertih, Terengganu

Petronas Penapisan (Melaka) Sdn Bhd

Tangga Batu, Melaka

Malaysia Refining Company Sdn Bhd

Tangga Batu, Melaka

Shell Refining Company (FOM) Bhd

Port Dickson, Negeri Sembilan

Esso (Malaysia) Bhd

Port Dickson, Negeri Sembilan

Kemaman Bitumen Company Sdn Bhd

Above:
Storage tanks in Kertih, Terengganu
Below:
The Duyong Gas Complex off Terengganu
Top, facing page:
A gas processing plant in Terengganu

Profit from Malaysias Petrochemical Industry

Telok Kalong, Terengganu

To complement the existing gas reserve and to ensure further security of gas
supply, Malaysia has forged partnerships with other ASEAN member for the
supply of gas such as Vietnam, Indonesia and the Malaysia-Thailand Joint
Development Area (JDA). In addition, gas supply will be further enhanced with
the implementation of the ASEAN gas grid, a venture to make gas available to
all the 10 ASEAN countries.
The availability of feedstock at competitive price has made Malaysia a viable
petrochemical hub in the ASEAN region, attracting more than US$9 billion of
the investments from leading petrochemical and chemical manufacturers.
The six gas processing plants located in Kertih, Terengganu - with a combined
capacity of 2,000 million cubic feet (mmscf) of sales gas per day - ensure the
industry an adequate supply of petrochemical feedstocks such as methane
(sales gas), ethane, propane, butane and condensates. Meanwhile, Malaysia's
Peninsular Gas Utilisation (PGU) trans-peninsular gas transmission pipeline
channels sales gas to industries around the country.

Production of Petrochemical Feedstocks

Petrochemical
Products

Capacity
(mtpa)

Company/Refinery

Naphtha

2.4 million

Methane (sales gas)

Ethane
Propane
Butane
Condensate
Liquefied Petroleum
Gas (LPG)

39.2 million

Petronas Gas Berhad

Malaysia LNG Tiga Sdn Bhd

Ethylene

1.63 million

Titan Petchem (M) Sdn Bhd

Ethylene Malaysia Sdn Bhd
Optimal Olefins (M) Sdn Bhd

Propylene

854 thousand Titan Petchem (M) Sdn Bhd

MTBE (M) Sdn Bhd
Optimal Olefins (M) Sdn Bhd

Benzene, Toulene
and Xylene (BTX)

775 thousand

Titan Petchem (M) Sdn Bhd

Aromatics Malaysia Sdn Bhd

Petrochemical

Petronas Penapisan (Terengganu) Sdn Bhd

Petronas Penapisan (Melaka) Sdn Bhd
Malaysia Refinery Company Sdn Bhd
Shell Refinery Company (FOM) Bhd
Esso (Malaysia) Bhd

World-class Facilities
in Petrochemical Zones

Kertih, Terengganu
Formerly a quiet fishing village, Kertih has now transformed into a petrochemical
hub. It houses the Petronas Petrochemical Integrated Complex (PPIC) that
links the entire range of the oil and gas value chain - beginning from upstream
exploration and production to the final stage of petrochemical manufacturing.
Facilities & Infrastructure
Gas processing plants
Peninsular Gas Utilisation (PGU) project
Centralised utility facilities
- Supply of utilities such as power, industrial gases, water and steam
Institut Teknologi Petroliam
- Training centre
Kertih Port
- Centralised tankage facilities
- Mainly bulk liquid port
Kuantan Port
- Centralised tankage facilities
- Container and bulk liquid port
- Railway linking Kertih, Gebeng and Kuantan Port

Petrochemical Plants in Kertih Producing:

Paraxylene
Benzene
Ammonia
Acetic Acid
Ethylene
Polyethylene
Propylene
Ethanolamines
Ethoxylates
Glycol Ethers
Butanol
Butyl Acetate
Ethylene Oxide
Ethylene Glycol
Low Density Polyethylene
Vinyl Chloride Monomer
Polyvinyl Choride

Profit from Malaysias Petrochemical Industry

Gebeng, Pahang
Gebeng is another petrochemical hub for multinational players
like BASF, Amoco, Kaneka, Eastman and Polyplastics. The
petrochemical zone provides an integrated environment that
meets the specific needs of the petrochemical industry.
Facilities & Infrastructure
Peninsular Gas Utilisation (PGU) project
Centralised utility facilities
- Supply of utilities such as power, industrial gases, water and steam
Kuantan Port
- Centralised tankage facilities
- Pipeline and piperack system connecting Gebeng to Kuantan Port
- Container and bulk liquid port
- Railway linking Kertih, Gebeng and Kuantan Port
Environment Technology Park
- Incorporating a training centre, a waste collection and processing centre as
well as raw material management and storage facilities, maintenance and
servicing facilities.
East Coast Highway

Petrochemical Plants in Gebeng Producing:

Acrylic Acid and Esters,
Syngas
Butyl Acrylate
Oxo-alcohols
Phthalic Anhydride and Plasticizers
Butanediol
Tetrahydrofurane
Gamma-butyrolactone
Polyester Copolymers
Purified Terephthalic Acid
Dispersion Polyvinyl Chloride
Methyl Methacrylates Copolymers
MTBE
Propylene
Polyacetals
Polypropylene
Polybutylene Terephthalate (PBT)

Above:
The control room of a petrochemical plant in Gebeng, Pahang
Below:
The BP Amoco plant in Gebeng
Top, facing page:
Centralised tankage facilities at the Kertih Terminal

Petrochemical

Pasir Gudang-Tanjung Langsat, Johor

Pasir Gudang, located next to the Johor Port, is now an established industrial
area. To cope with the needs of the growing petrochemical industry, the
adjacent Tanjung Langsat site has been developed to enhance manufacturing
capacity.
Facilities & Infrastructure
Peninsular Gas Utilisation (PGU) project
Tank farms are being developed for bulk storage of petrochemical liquid
Johor Port
- With a 1,000-metre berth and a hazardous cargo jetty
- Three hazardous liquid bulk terminals to handle LPG, chemicals and
petrochemicals
Tanjong Pelepas Port, a world-class container port
Tanjung Langsat Port
- Located adjacent to the 4,000 acres of industrial land in Tanjung Langsat
- Equipped with a twin-berth jetty consisting of outer (30,000 DWT) and
inner (7,000 DWT) berths

Petrochemical Plants in Pasir Gudang-Tanjung Langsat

Producing:

Ethylene
Propylene
BTX
Polyethylene
Polypropylene
High Impact Polystyrene
Ethylbenzene
Styrene Monomer
Expandable Polystyrene
Ethylene Vinyl Acetate

Malaysia has a skilled

and trainable workforce.

Profit from Malaysias Petrochemical Industry

Bintulu, Sarawak
Home to several gas-based petrochemical plants, Bintulu is also the largest
producer of liquefied natural gas (LNG) in Malaysia. There are three LNG plants
with a combined capacity of 24.2 million tonnes a year. Presently, the complex
is the world's largest LNG production facility at a single location.
Facilities & Infrastructure
Bintulu Port
Bintulu Airport

Petrochemical Plants in Bintulu Producing:

Ammonia
Urea
LNG
Synthetic Gas Oil
Synthetic Kerosene
Synthetic Naphtha
Synthetic Solvents
Synthetic Detergent Feedstock
Synthetic Paraffin Wax / Waxy Raffinate

Above:
The Malaysian Liquified Natural Gas plant in Bintulu, Sarawak

Petrochemical

Below:
A panaromic view of the Bintulu petrochemical operations

Incentives
for

Growth

A corporate tax rate of 25% applies to both local and foreign-owned companies
in Malaysia. A wide range of tax incentives is also available to these companies.
These incentives are constantly reviewed by the government to ensure that
companies in Malaysia maintain their competitive edge.
1. Incentives for Manufacturing Companies
Pioneer Status: Income tax exemption of 70% or 100% on the statutory
income for five years; or
Investment Tax Allowance: Investment tax allowance of 60% or 100%
on the qualifying capital expenditure for five years. The allowance can be
utilised to offset against 70% or 100% of the statutory income.
Reinvestment Allowance: Reinvestment allowance of 60% for 15 years
on the qualifying capital expenditure. The allowance can be offset against
70% or 100% of the statutory income.
Accelerated Capital Allowance: An accelerated capital allowance
consisting of an initial allowance of 40% and an annual allowance of 20%
is available for three years after the reinvestment allowance period.
2. Incentives for High Technology Companies
Pioneer Status with a tax exemption of 100% on the statutory income for
five years; or
Investment Tax Allowance of 60% on the qualifying capital expenditure
for five years which can be offset against 100% of the statutory income.
3. Incentives for Strategic Projects
Pioneer Status with a tax exemption of 100% on the statutory income for
ten years; or
Investment Tax Allowance of 100% on the qualifying capital expenditure
for five years which can be offset against 100% of the statutory income.
4. Pre-packaged Incentives
Customised packages that cover tax and non-tax incentives.
5. Incentives for R&D

Above and below:

Among the business
organisations foreign
investors can approach
for assistance is the
Malaysian International
Chamber of Commerce
& Industry which
represents business
communities from
about 40 countries.

6. General Incentives
Industrial Building Allowance
Tariff Related Incentives

Profit from Malaysias Petrochemical Industry

The Way Ahead

Challenges & Opportunities

ith the full realisation of the ASEAN Free Trade Area (AFTA), in 2010, total
Malaysian exports to ASEAN countries increased by 14.8 per cent to
RM2.84 billion. It shows a positive growth in ASEAN regional trade. This
is expected to receive a boost when manufacturers begin to take advantage of
the wider regional business network.

Petrochemical manufacturers based in Malaysia will not only benefit from AFTA
but also from the access to a much larger Asia Pacific market. For example,
Malaysia's total exports to China have increased from RM67.36 billion in 2009 to
RM80.59 billion in 2010. Even more impressive is Malaysia's export of
petrochemical to China which has doubled from RM88.59 million to RM192.91
million within the same period.
With China and India being net importers of petrochemical products, especially
fine chemicals and specialised products, petrochemical manufacturers can take
advantage of Malaysia strategic location to open up new business opportunities,

Malaysias Multimedia Super

Corridor has resulted in a
workforce competent
in the K-economy.

Petrochemical

Malaysia already has the infrastructure and systems in place for petrochemical
manufacturers to compete favourably with regional players. The challenge now is
to identify more value-added products, expand market segments, and develop
effective marketing strategies. The Malaysian government, on its part, will
implement measures to further enhance the business environment, infrastructure
development, human resources support and the position of feedstock supply the factors for a stable and conducive investment environment that ensures the
further development of Malaysia's petrochemical industry.

Why Investors Choose

Kuala Lumpurs light rail transit

provides a convenient mode of
commuting.

Malaysia uses the latest digital and

fibre optics technology to provide
high quality telecommunication
services at competitive prices.

Strategic location

Gateway to ASEAN and AFTA

Economic stability

Governments commitment

Rich reserves of natural gas

Competitive source of raw materials

World-class facilities

Integrated infrastructure

Skilled technical manpower

Quality of life

Life is an adventure in
Malaysiaa land of perpetual
summer.

10

Malaysia

Profit from Malaysias Petrochemical Industry

Malaysian Investment Development Authority

Block 4, Plaza Sentral, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur, Malaysia
Tel: (603) 2267 3633 Fax: (603) 2274 7970
E-mail: investmalaysia@mida.gov.my Website: www.mida.gov.my

ASIA-PACIFIC
AUSTRALIA
Consul-Investment/Director
Consulate of Malaysia
Malaysian Investment Development Authority
Level 6, MAS Building
16 Spring Street
Sydney, NSW 2000, Australia
Tel:
(612) 9251 1933
(612) 9251 4333
Fax:
E-mail:
midasyd@bigpond.net.au
JAPAN
Tokyo
Director
Malaysian Investment Development Authority
32F, Shiroyama Trust Tower
4-3-1, Toranomon, Minato-ku
Tokyo 105-6032, Japan
(813) 5777 8808
Tel:
Fax:
(813) 5777 8809
midatokyo@midajapan.or.jp
E-mail:
Website:
www.midajapan.or.jp
Osaka
Director
Malaysian Investment Development Authority
Mainichi Intecio 18F
3-4-5 Umeda, Kita-ku
Osaka 530-0001, Japan
Tel:
(816) 6451 6661
Fax:
(816) 6451 6626
midaosaka@mida.or.jp
E-mail:
PEOPLES REPUBLIC OF CHINA
Shanghai
Consul (Investment)
Consulate General of Malaysia
(Investment Section)
Malaysian Investment Development Authority
Units 807-809, Level 8
Shanghai Kerry Centre
No. 1515, Nanjing Road (West)
Shanghai, 200040
Peoples Republic of China
Tel:
(8621) 6289 4547/5298 6335
Fax:
(8621) 6279 4009
E-mail:
midash@mida.org.cn
Guangzhou
Director
Malaysian Investment Development Authority
Unit 1804B-05
CITIC Plaza Office Tower
233 Tianhe Be Road
Guangzhou, 510610
Peoples Republic of China
Tel:
(8620) 8752 0739
Fax:
(8620) 8752 0753
E-mail:
midagz@mida.org.cn
TAIWAN
Director (Investment Section)
Malaysian Friendship & Trade Centre
Malaysian Investment Development Authority
12F Suite A, Hung Kuo Building
No. 167, Tun Hua North Road
Taipei 105, Taiwan
Tel:
(8862) 2713 5020/2718 6094
Fax:
(8862) 2514 7581
E-mail:
midatpe@ms18.hinet.net
KOREA, REPUBLIC OF
Counsellor (Investment)
Embassy of Malaysia (Investment Section)
Malaysian Investment Development Authority
17th Floor, SC First Bank Building
100, Gongpyung-dong, Jongro-gu
Seoul 110-702, Republic of Korea
Tel:
(822) 733 6130/6131
Fax:
(822) 733 6132
E-mail:
midasel@chollian.net

UNITED ARAB EMIRATES

Director/Consul Investment
Malaysian Investment Development Authority
Consulate General of Malaysia
(Investment Section)
Unit 2205, 22nd Floor, Tower A
Business Central Tower, Dubai Media City
(P.O. Box: 502876) Dubai
United Arab Emirates
(9714) 4343 696/4343 697
Tel:
Fax:
(9714) 4343 698
mida@midadubai.ae
E-mail:
INDIA
Director/Consul Investment
Malaysian Investment Development Authority
Consulate General of Malaysia
(Investment Section)
81 & 87, 8th Floor, 3rd North Avenue
Marker Maxity
Bandra Kurla Complex, Bandra (E)
Mumbai 400051, India
Tel:
(9122) 2659 1155/1156
(9122) 2659 1154
Fax:
E-mail:
midamumbai@mida.ind.in
SINGAPORE
Director/Consul Investment
Malaysian Investment Development Authority
No. 7, Temasek Boulevard
26-01, Suntec Tower One
Singapore 038987
Tel:
(65) 6835 9326/9580/7069
(65) 6835 7926
Fax:
E-mail:
mida@midasing.sg
THAILAND
Director/Investment Counsellor
Malaysian Investment Development Authority
3601, 36th Floor, Q. House Lumpini Building
South Sathorn Road
Tungmahamek, Sathorn
Bangkok 10120, Thailand
Tel:
(66) 2677 7487
Fax:
(66) 2677 7488
E-mail:
midabangkok@mida.truemail.co.th

EUROPE
SWEDEN
Economic Counsellor
Embassy of Malaysia
Karlavgen 37, P.O. Box 26053
S-10041 Stockholm, Sweden
Tel:
(468) 791 7942/440 8400
Fax:
(468) 791 8761
E-mail:
mida@malemb.se
UNITED KINGDOM
Director
Malaysian Investment Development Authority
17 Curzon Street
London W1J 5HR, United Kingdom
Tel:
(4420) 7493 0616
Fax:
(4420) 7493 8804
E-mail:
midalon@btconnect.com
GERMANY, FEDERAL REPUBLIC OF
Frankfurt
Director/Consul Investment
Malaysian Investment Development Authority
Consulate General of Malaysia
(Investment Section)
17th Floor, Frankfurt Kastor
Platz der Einheit 1
60327 Frankfurt am Main, Germany
Tel:
(4969) 7680 7080
Fax:
(4969) 7680 708-20
E-mail:
mida.frankfurt@t-online.de
Munich
Director
Malaysian Investment Development Authority
6th Floor, Burkleinhaus
Burkleinstrasse 10
80538 Munich, Germany
Tel:
(4989) 2030 0430
Fax:
(4989) 2030 4315
E-mail:
midamunich@aol.de

FRANCE
Director
Malaysian Investment Development Authority
42, Avenue Kleber
75116 Paris, France
Tel:
(331) 4727 3689/6696
(331) 4755 6375
Fax:
E-mail:
mida.paris@wanadoo.fr
ITALY
Consul-Investment
Consulate of Malaysia (Investment Section)
Malaysian Investment Development Authority
5th Floor, Piazza Missori 3
20123 Milan (MI), Italy
(3902) 3046 521
Tel:
(3902) 3046 5242
Fax:
E-mail:
midamln@tin.it

NORTH AMERICA
LOS ANGELES
Consul (Investment)
Consulate General of Malaysia
(Investment Section)
550, South Hope Street, Suite 400
Los Angeles, California 90071
United States of America
Tel:
(1213) 955 9183/9877
Fax:
(1213) 955 9878
lacamida@aol.com
E-mail:
SAN JOSE
Director
Malaysian Investment Development Authority
226, Airport Parkway, Suite 480
San Jose, California 95110
United States of America
Tel:
(1408) 392 0617/8
Fax:
(1408) 392 0619
E-mail:
midasanjose@aol.com
NEW YORK
Consul (Investment)
Consulate General of Malaysia
(Investment Section)
313 East, 43rd Street, New York
New York 10017
United States of America
Tel:
(1212) 687 2491
Fax:
(1212) 490 8450
E-mail:
mida@midany.org
BOSTON
Director
Malaysian Investment Development Authority
One International Place, Floor 8
Boston, MA 02110
United States of America
Tel:
(1617) 338 1128/338 1129
Fax:
(1617) 338 6667
E-mail:
midaboston@aol.com
CHICAGO
Director
Malaysian Investment Development Authority
John Hancock Center, Suite 1515
875, North Michigan Avenue
Chicago, Illinois 60611
United States of America
Tel:
(1312) 787 4532
Fax:
(1312) 787 4769
E-mail:
mida@midachicago.org
HOUSTON
Director
Malaysian Investment Development Authority
6th Floor, Suite 630
Lakes on Post Oak
3050 Post Oak Boulevard
Houston, TX 77056
United States of America
Tel:
(1713) 979 5170
Fax:
(1713) 979 5177/78
E-mail:
mida@midahouston.org

Petrochemical

MIDAs Overseas Offices

11

For more information, please contact:

Chemical Industry Division

Malaysian Investment Development Authority
Block 4, Plaza Sentral, Jalan Stesen Sentral 5
Kuala Lumpur Sentral
50470 Kuala Lumpur, Malaysia
Tel
: (603) 2267 3557
Fax
: (603) 2274 8464
E-mail
: investmalaysia@mida.gov.my
Website : www.mida.gov.my

October 2011