Plan to make Malaysia supply chain regional hub

SHAH ALAM: Malaysia seeks to be the regional hub to improve trade supply chains by 2020, of which solutions can be found via education and research.

Malaysia Institute for Supply Chain Innovation chairman Tan Sri Dr Zulkefli A. Hassan said Southeast Asia (SEA) is uniquely positioned to benefit from the global shift in economic power from the west to east.

"However for the region to realise its full potential, a top priority must be given to the development of world-class supply chain facilities and expertise.

"Presently inconsistent quality and availability of logistics and transportation infrastructure is impending the flow of goods in the region, thereby adding significant cost to overall operations," Zulkefli said here in his opening address at the Global Supply Chain summit.

Launched in March 2011, Malaysia Institute for Supply Chain is an privately-owned institute of higher learning which received US$48 million (RM144.48 million) from the government to be located in Bukit Jelutong, Selangor, with the support of the Higher Education Ministry, Universiti Teknologi MARA and Bank Negara Malaysia.

Zulkefli said to compete effectively in regional and global markets, SEA must invest heavily in supply chain education and research to become a serious competitor in world markets by improving trade efficiency and enhance logistic systems covering sea, air, rail, land and other modes of transportation.

He said Asean has huge potential as it is home to 600 million people with a gross domestic product of US$1.5 trillion (RM4.65 trillion) a year.

They generate US$1.7 trillion (RM5.27 trillion) worth of trade annually which is expected to rise to 6 per cent over the next few years.

According to research firm Frost & Sullivan, the logistics revenue would increase 11.5 per cent to RM121 billion in 2011 compared with RM108.5 billion in 2010.

This is growing at a compounded annual growth rate of 12.6 per cent which is expected to reach RM196.5 billion in 2015.

The founding of Malaysia Institute for Supply Chain Innovation is one of the key initiatives identified under the Tenth Malaysia Plan and the Third Industrial Master Plan.

Zulkefli said the institute is expected to open its doors for its first batch of local and international students by September 2012 and aims to enroll 200,000 students by 2020.