25 Malaysia Petrochemical Industry Statistics, Trends & Analysis

The petrochemical industry in Malaysia is one of the nation’s leading industries. Over the course of a single generation, the industry has moved from being a major exporter of petrochemical products to becoming a major exporter. Because of the growth the industry has seen and the increase in product variety that has been developed, investors have been attracted to the industry for more than a decade. The Malaysia petrochemical industry now includes globally recognized names like Dow Chemical, ExxonMobil, and BASF.

Interesting Malaysia Petrochemical Industry Statistics

#1. Malaysia currently holds the 24th known largest reserves of crude oil in the world today. It is also home to the 14th largest reserves of natural gas, with an estimated capacity of 88 trillion cubic feet. (Federation of Malaysian Manufacturers)

#2. The Malaysia petrochemical industry owns the world’s largest production facility for liquefied natural gas, with a total of 23 million metric tons of capacity per year available in a single location. (Federation of Malaysian Manufacturers)

#3. Methane capacities, which include LPG, ethane, propane, butane, and condensate, make up the majority of the petrochemical industry. The total estimated capacity in Malaysia is 20.4 million, supported by just two companies. (Federation of Malaysian Manufacturers)

#4. There is an estimated capacity of naphtha within the industry of 2.4 million mtpa. Ethylene capacities are estimated to be 1.63 million mtpa, while propylene capacities are 854,000 mtpa. (Federation of Malaysian Manufacturers)

#5. The petrochemical industry in Malaysia saw the highest levels of investments approved for the 2016 fiscal year. In total, more than $3.9 billion in investments was approved. (CPMA India)

#6. A total of $6.3 billion in projects were approved for the Malaysia petrochemical industry in 2016, covering 20 projects. This represented a 33% decline in the approved investments from the year before. (CPMA India)

#7. 50% of the projects approved for FY2016 in Malaysia involved new project development. (CPMA India)

#8. Malaysia is believed to have reserves of crude oil and condensates that total 5.9 billion barrels. That equates to a production reserve of just over 661,000 barrels per day. (Suruhanjaya Tenaga Energy Commission)

#9. The average annual growth rate per year for the petrochemical industry, from 1990-2015, followed the trends in GDP. The primary energy supply grew by 5.9%, while the GDP grew by 5.7%. Energy consumption grew at a slightly smaller rate, at 5.6%. (Suruhanjaya Tenaga Energy Commission)

#10. Since 1990, coal and coke energy has grown by 10.8%. In comparison, natural gas has grown by 7.3%. Petroleum products, crude oil, and other petrochemicals grew at just 3.6%. (Suruhanjaya Tenaga Energy Commission)

#11. Residential and commercial energy use has grown in Malaysia by 6.4% annually since 1990. Non-energy use, however, increased by over 8% annually over the same period. (Suruhanjaya Tenaga Energy Commission)

#12. With the increases seen in domestic energy consumption since 2005, the petrochemical industry has become a net-energy importer. That means the firms involved with the petrochemical industry are more vulnerable to supply disruptions, political volatility, and higher feedstock prices on the regional level. (KPMG)

#13. In 2012, Malaysia found the 4th largest number of hydrocarbons in the world, putting the industry into the top ten of producers for the first time with deepwater and EOR investments. (KPMG)

#14. Another 3 mtpa of new petrochemical capacity is expected to come online in 2018, which would include a refinery that offers a processing capacity of 300k b/d. (KPMG)

#15. Ethylene capacity in Malaysia is forecast to nearly double by 2020. Propylene capacity is expected to rise from under 1,200 metric tons to about 1,700 metric tons. (CPMA India)

#16. Since 1980, approved investments in the petrochemical sector have topped RM207.6 billion. (Malaysian Investment Development Authority)

#17. A single plot of 20,000 acres is being established in Pengerang, Johor for a new petrochemical complex. The facility is espected to be operational by 2019 at a total development cost of $27 billion. (Malaysian Investment Development Authority)

#18. There are about 1,300 plastic companies that are currently in operation today in conjunction with the petrochemical industry. (Malaysian Investment Development Authority)

#19. Average wages help to make the petrochemical industry competitive on the global station. The average wage of a mechanical engineer, for example, is under $800. (AHK Malaysia)

#20. There are currently 29 petrochemical plants that are operational throughout the country. These plants product 39 different types of petrochemical products. (AHK Malaysia)

#21. According to 2012 data, the last year verifiable data has been released, Malaysia was able to access about 2 billion square feet of natural gas and 730,000 barrels of crude oil per day. (AHK Malaysia)

#22. Domestic demand for lubricants from the industry is about 300,000 metric tons per year. 70% of this demand is met by three brands: Shell, BP, and Petronas. (AHK Malaysia)

#23. 37% of the investments that come into the petrochemical industry in any given year come from foreign investment sources. The United States is the largest investor into this sector, followed by the UK, Taiwan, Germany, and Japan. (AHK Malaysia)

#24. In total, the overall production of the petrochemical industry is estimated to be about 13 million metric tons each year. The total capacity of the industry, however, is estimated to be above 30 million metric tons per year. (AHK Malaysia)

#25. Corporate tax rates in Malaysia have fallen to 25%, which, when combined with tax incentives for the industry, has encouraged growth as well. Yet, at the same time, upstream petroleum operations are still subject to a 38% petroleum income tax. (AHK Malaysia)

Malaysia Petrochemical Industry Trends and Analysis

Since 2010, the Malaysia petrochemical industry has been on the road to recovery. Production levels have increased because export demands have surged. At the same time, however, pricing for the commodities offered by the industry have fallen dramatically, which has affected the overall profitability of the industry.

With falling product prices, production levels have been limited. This has caused the industry to become less competitive with China’s move to expand into the petrochemical arena. China will continue to be the largest export market for the time being, but unless the industry in Malaysia adapts to changing export conditions, that may not always be true.

China could improve domestic use of petrochemical products and reduce their need to import. That would have a detrimental effect on the local industry.

There is the potential to create a better market synergy through the creation of a bigger market share, both domestic and foreign. If investments in these areas focus on innovation and competitiveness, then the Malaysia petrochemical industry looks to have an exciting future ahead of it.