How do raw material costs compare for Malaysian plastics manufacturers versus competitors?

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Raw Material Cost Disparities Affecting Malaysian Plastics Manufacturers

The Malaysian Plastics Manufacturers Association (MPMA) has highlighted a significant concern regarding the cost structure and competitiveness of the local plastics industry, specifically pointing to disparities in raw material costs when compared to competing nations. These concerns have been formally presented to the National Economic Action Council (NEAC), which has subsequently directed the Ministry of Investment, Trade and Industry (Miti) and the Economy Ministry to conduct a thorough examination of the submitted proposals. The government acknowledges the challenges faced by the plastics sector, exacerbated by global supply chain disruptions and escalating raw material prices.
Industry Submissions to NEAC

The MPMA presented its views on various cost structure and competitiveness issues to the NEAC, with a particular focus on the differential in raw material expenses faced by downstream manufacturers in Malaysia relative to their international counterparts. This submission is part of a broader effort to address the pressures impacting the plastics industry. The NEAC’s decision to have Miti and the Economy Ministry review these proposals underscores the government's commitment to considering the interests of the entire industrial value chain, fiscal stability, and Malaysia's long-term economic competitiveness.
Economic Significance of the Plastics Sector

The plastics industry plays a crucial supporting role across numerous sectors within the Malaysian economy. In 2024, the industry's sales value stood at RM64.78 billion, a slight decrease from RM62.69 billion projected for 2025. Packaging constitutes the largest segment of the market, accounting for 45 per cent of sales, followed by the electrical and electronics sector at 29 per cent. The economic health of this industry is therefore intrinsically linked to the performance of these key downstream sectors.
Broader Economic Context and Performance

Beyond the specific challenges within the plastics industry, the government remains confident in maintaining Malaysia's economic growth momentum, with a target of 4.0 to 5.0 per cent for the current year. Economic indicators from the first half of the year suggest strong and resilient national fundamentals. Malaysia's economy experienced a 5.4 per cent growth in the first quarter of 2026, driven by robust domestic demand, growth in the services and manufacturing sectors, and steady electrical and electronics exports. Inflation in May 2026 was managed at 2.0 per cent, and trade performance saw an 18.3 per cent increase from January to May 2026, reaching nearly RM1.5 trillion.

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How do raw material costs compare for Malaysian plastics manufacturers versus competitors?

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