Malaysia Emerges as Strategic Hub for German Machine Tool Industry
Amidst the challenges of delivery difficulties, market lockdowns, and logistics bottlenecks faced during the pandemic, the German machine tool industry is strategically expanding its global footprint. A significant move in this direction was marked by the “Innovations in Production Technology – German Machine Tools Symposium,” held on July 10, 2024, in Kuala Lumpur. Organized by the VDW (German Machine Tool Builders’ Association), the symposium aimed to fortify the presence of German manufacturers in burgeoning markets like Malaysia.
“The Malaysian machine tool market holds a great deal of potential – more than 700 million euros. Up to now, Germany has accounted for around 8 percent of imports. There is still plenty of room for improvement here,” noted Klaus-Peter Kuhnmünch, responsible for organizing VDW’s international symposia.
Malaysia has emerged as the most critical sales market for German production technology within the ASEAN region. Mirroring China’s approach, the Malaysian government seeks to enhance domestic value addition and generate high-quality employment. Significant investments are anticipated in sectors such as aerospace, electronics, electrical engineering, and medical technology.
At the symposium, eight prominent German high-tech companies, including DMG Mori, Chiron, Grob, Hermle, Index, Open Mind Technologies, Schütte, and United Grinding, explored the Southeast Asian market. These companies engaged with 110 Malaysian trade visitors, showcasing their products and services, and participated in 48 B2B meetings.
German manufacturers are looking to establish a stronger foothold in Asia alongside their established operations in China. Malaysia offers several advantages: political stability, a growing economy, robust legal security, and excellent infrastructure. “We see the potential in Asia, and it is now important to view Malaysia as a prime location in our efforts to diversify. The Asian market is highly competitive,” stated Carl Martin Welcker, Managing Partner of Alfred H. Schütte Werkzeugmaschinenfabrik, Cologne.
Tara Meite, Deputy Managing Director of the German-Malaysian Chamber of Industry and Commerce in Kuala Lumpur, highlighted the skilled Malaysian workforce: “Malaysian industry has plenty of well-trained specialists. These can be quickly retrained and deployed to meet the needs of German companies.”
In 2023, Germany exported machinery worth 42 million euros to Malaysia, particularly for specialized applications in the automotive and aviation industries. “This applies to the automotive and aviation industries, for example,” said Oliver Prpic, Managing Director of Hermle SEA Co. Ltd, Thailand. Roland Merz, Sales Manager Asia, Chiron Group SE, Tuttlingen, added, “Malaysian customers appreciate the high precision, reliability, and special solutions offered by German machine tools. The higher price compared to Asian suppliers is by no means an obstacle here.”
VDW foresees a rising demand for machine tools in Malaysia. Kevin Chue, Business Development Manager at GPI Geopile Engineering SDN BHD, Kuala Lumpur, emphasized the value of German technology, he said, “I value German machine tools because they are very precise and flexible to use. The main focus is not on the price, but on the technology. We have a lot of experience with German machines and know that our production suffers when we use cheaper and more basic machines.”
“Having the latest production technology is decisive when it comes to modernizing, expanding capacity, and increasing the efficiency of industrial production in Malaysia. German manufacturers not only supply machines but also offer advice, financing, service, maintenance, and training,” Kuhnmünch explained. German manufacturers are committed to a long-term engagement with Malaysian customers, sharing their expertise and supporting the modernization of the Malaysian industry. “We like to train our apprentices on German machine tools. This enables them to operate almost any machine, especially German machines,” concluded Fahrul Rizan Bin A. Halim, Deputy Managing Director of the GMI – German-Malaysian Institute, Selangor, Malaysia.
