MALAYSIA PLASTIC MARKET

Malaysia Plastic Market is expected to expand at steady growth rate and is projected to grow at a CAGR of 4.1% till 2031 owing to rising demand for plastic across various end-use industries and the growing government initiatives to attract investment in the country.

Major Malaysia Plastic Market Drivers and Emerging Trends

Malaysia’s economy relies significantly on the plastic industry which supplies essential components to downstream sectors from electrical appliances to food packaging. The plastics manufacturing industry reported a turnover of USD 13.1 billion in 2023, with USD 3.4 billion generated from direct exports, with main market segments include packaging, electrical and electronics, automotive, and construction. 

The packaging sector involves a diverse array of plastic products spanning from rigid items like bottles to flexible solutions such as shrink wrap, catering to both industrial and commercial applications. The versatility of plastic packaging products is essential to sustaining critical domestic sectors such as food and beverage, chemicals, among others. Additionally, the growth forecast for the global e-commerce and food & beverage industries are set to boost the requirement for plastic packaging materials.

In addition, the plastic industry in Malaysia benefits from its strategic position as a regional hub for manufacturing electrical and electronic products, which drives advancements and opportunities within this sector which in 2023 the exports amounted to USD 121.3 billion and constitutes 40% of the country’s total export earnings. The industry depends heavily on Malaysia’s plastic industry for a range of needs including raw materials and components and is expected to experience considerable growth with the global surge in semiconductor demand driven by the advancements in 5G and artificial intelligence.

Malaysia also stands out as Southeast Asia’s third largest manufacturer for vehicle and the automotive industry’s shift towards lighter weight designs is driving increased adoption of advanced plastics in the country which replaces traditional metal and glass components. Moreover, the automotive sector is increasingly utilizing significant quantities of plastics to develop safer and more cost-effective MUV/SUV models, with a focus on integrating sustainable materials. These conditions are poised to generate optimistic prospects for new players possessing advanced technological capabilities and pioneering product solutions in the foreseeable future.

Meanwhile, the construction sector’s recovery following the covid pandemic is likely to spur a rise in requirement for plastic pipes as well as other construction materials based on polymers. With the industrialized building sector gaining traction, there is an increasing adoption of plastic manufacturing technologies for producing components in factories and assembling them at construction sites.

The country’s plastic exports are primarily directed towards major markets such as the United States, European Union, and Japan with film and sheets being the predominant export category. Malaysia’s prominence as Asia’s leading stretch film manufacturer translates into around 9% of the global output of stretch films. In addition, continuous progress in rubber tapping technology and rising demand across industries such as construction, consumer goods, packaging, and automotive have led European and Chinese manufacturers to invest significantly in Malaysia’s plastic sector. The growth is propelled by the superior properties of compounded plastics including flexibility, lightweight nature, and enhanced barrier resistance which enable the production of improved steering wheels and interior components in automotive applications. 

In Malaysia, number of plastics manufacturers are more than 1,300 and the plastic industry employs around 81,500 in 2018, contributing approximately RM 33 billion in annual production value. The expansion of local plastic processing in Malaysia is driven by a robust petrochemical sector which guarantees a steady materials supply for the plastic industry and facilitated by world-class resin manufacturing facilities.

The government in Malaysia has also implemented various programs aimed at enticing investments into the automotive industry which includes initiatives like the National Automotive Policy and fiscal incentives for advocates of eco-friendly technology, which can further propel the expansion of Malaysia plastic market. Furthermore, factors such as rising consumer income levels, supportive government initiatives, availability of skilled labor, and extensive infrastructure contribute significantly to Malaysia’s allure for major international investments. These factors are projected to foster a robust economy, bolstering customer purchasing power and positively influencing growth trends in Malaysia.

Malaysia plastics market share makes a substantial impact on the nation’s GDP, creating jobs and advancing technological capabilities. The country’s strategic geographical location and advanced infrastructure place it as a central player in the Southeast Asian market amid increasing global plastic products demand. However, fluctuations in the economy and global trade can influence the industry’s growth trajectory and stability.

While Malaysia plastic market size is promising, it encounters notable obstacles such as environmental challenges and competitive pressure from other nations. A critical challenge facing the industry is the environmental impact as effective waste management of plastic products has become imperative, spurred by increasing demands from environmental organizations and public advocacy for sustainable approaches. Companies are under pressure to innovate and integrate environmentally friendly materials and practices to mitigate the environmental effects to their plastic products. Furthermore, government regulations targeting the reduction of plastic waste and promotion of sustainability pose another significant challenge. Measures such as a ban on one-time-use plastics can impact production methods and profitability as plastic manufacturing companies must navigate these policies while ensuring compliance and maintaining competitiveness. Meanwhile, Malaysia’s plastic industry also encounters strong rivalry from nations like Vietnam and China where production costs are lower which results in competitive pricing.

Based on the product type, Polyethylene (PE) is a dominate the market,  it is widely utilized in packaging for food and retail along with fuel tanks for automobiles. The recycled PE emergence has catalyzed a transformation in the Malaysian plastics industry which leads to the development of many new applications for these sustainable materials.

Based on the end-use, the packaging sector leads the market largely because consumers are increasingly choosing pre-processed and packaged foods due to their busy schedules and reduced time for meal preparation. Electrical and electronics applications are also among the fastest growing with their growth spurred by a notable increase in consumption as a result of component miniaturization in these industries. The emergence of small-scale producers of electrical components and a dynamic manufacturing landscape in the country is anticipated to drive growth in compounding activities in these sectors.

Segments covered in the Report:

The Malaysia Plastic Market has been segmented on the basis of type and end-use industry. Based on the type, the market is segmented into polyethylene, polypropylene, polyethylene terephthalate, polyvinyl chloride, polyamide, polycarbonate, polyurethane, polystyrene, others. Based on the end-use industry, the market is segmented into packaging, automotive & transportation, infrastructure & construction, consumer goods, healthcare & pharmaceuticals, electrical & electronics, others.

Market Segmentation

Malaysia Plastic Market by Type

• • Polyethylene
  • Polypropylene
  • Polyethylene Terephthalate
  • Polyvinyl Chloride
  • Polyamide
  • Polycarbonate
  • Polyurethane
  • Polystyrene
  • Others

Malaysia Plastic Market by End-Use Industry

• • Packaging
  • Automotive & Transportation
  • Infrastructure & Construction
  • Consumer Goods
  • Healthcare & Pharmaceuticals
  • Electrical & Electronics
  • Others