Malaysia’s Gross domestic product (GDP) is projected, by the Asian Development Bank (ADB), to grow at 4.6% in 2025, contributed by strong private consumption, lower inflation growth, favorable government policies, and recovery of global trade. This positive outlook has also been echoed by analysts from International Monetary Fund (IMF) and other international banks, who view Malaysia’s economic reforms as a main contributor to the country’s growing attractiveness for foreign direct investments into its various industries. The expansion of the country’s manufacturing sector, specifically in electronics & electric, food and beverages, automotive and construction, has created increasing demand for plastic-based products. This scenario has brought the size of the Malaysian plastics market to US$ 3.89 billion in 2024, with projection to reach US$ 4.71 billion by 2029, growing at a CAGR of 3.91%, according to a report by Mordor Intelligence. Spearheading this growth is the packaging sector, driven by dynamic demand for personal and healthcare products, pharmaceuticals, and packaged foods and beverages, as cited in the report. End-user industries pose steady demand for plastic materials As the main end-user of plastics, Malaysia’s packaging industry continues to drive plastics production in the country, with increasing demands from the food and beverages, personal care and pharmaceutical packaging sectors. Plastics meet the packaging sector’s need for safety and protection, high chemical resistance, ease of molding, mechanical strength, and recyclability. Malaysia’s annual per capita plastics consumption is notably high in Southeast Asia, at around 16.8 kg per person. With Malaysia’s adoption of the circular economy, the packaging segment has embraced the use of bioplastics as a sustainable alternative to conventional plastics. Bioplastics are increasingly used in the production of both flexible and rigid packaging, as well as other consumer and industrial products. In food and beverage applications, food-grade flexible packaging has taken a leap forward in terms of convenience, durability and ease of transport. For personal care applications, such as cosmetics and bottled products, rigid packaging has been produced from bioplastics. Malaysia’s position in the region as a manufacturing hub for electronics & electric (E&E) products has been further strengthened by the relocation of well-known semiconductor companies such as Intel and Infineon to the country. E&E exports account for around 40% of Malaysia’s total exports. As one of the major applications of plastics, the E&E sector relies on the domestic plastics industries for raw materials, parts, components, and packaging. Malaysia’s emergence as a powerhouse in semiconductor production is supported by a robust digital ecosystem and efficient supply chain. Additionally, over 500 industrial parks and special zones, along with well-built infrastructure facilities, serve as attractive incentives for semiconductor companies considering investment in the country. Two other significant end-users of plastics in Malaysia – automotive and construction – are driving growth in plastics demand. Malaysia is the third-largest vehicle producer in Southeast Asia, with an annual production of around 700,000 vehicles. E-mobility trends emphasizing fuel efficiency and lower emissions have encouraged the use of high-performance plastics materials as alternatives to metal and glass in automotive production. Similarly, the construction industry in Malaysia is experiencing growth, with increasing demand for plastics materials in the production of construction supplies and the assembly of structures. Investments into fast-growing sectors on the rise The Malaysian packaging industry benefits from investments by companies to build new facilities or expand existing ones. One notable example is Oliver Healthcare Packaging Company’s investment in building a manufacturing facility in Johor, Malaysia, aimed at expanding its operations in the Asia-Pacific region. This new facility, the company’s first plant in Malaysia and the largest in Asia, is designed to support the rapid growing pharmaceutical and medical device market by providing flexible packaging solutions. The plant is located in AME’s i-Tech Valley, an integrated industrial park in the economic zone of Iskandar Puteri, Johor, which was developed to house medical and healthcare companies. The facility features the latest printing technology and is designed for the production of pouches, medical-grade die-cut lids, high-density polyethylene (HDPE), CleanCut cards, and converted roll stock. In the semiconductor industry, Malaysia has been establishing a more prominent position in the Southeast Asian region, largely due to its strategic location, skilled labor force and favorable government policies. The country’s transformation into an E&E manufacturing hub spans the entire value chain from manufacturing to packaging. A notable example is NXP Semiconductors, a global leader in intelligent systems that has been operating in Malaysia's semiconductor landscape for over 50 years. The company aims to lead in assembly and packaging through innovations and improvements in its semiconductor assembly, test processes, and advanced packaging production. Another company, Nefab, is set to open its packaging manufacturing plant in Penang this year. Nefab specializes in sustainable packaging and logistics solutions, and has set its sight on expanding its presence in Malaysia. This new plant is part of Nefab's commitment to revolutionizing the semiconductor equipment industry with innovative and environmentally friendly packaging solutions. Nefab’s facility will also house an Engineering Design Center and an International Safe Transit Association (ISTA) certified lab, equipped with advanced packaging testing capabilities for packaging design and performance standards. This will be Nefab’s second facility in Malaysia, as it has been already operating a fully automated thermoforming production plant in the country, which manufactures thermoformed trays and cushioning applications made from recycled plastic materials. In addition, Greif, an industrial packaging product and service provider, is opening an intermediate bulk container (IBC) manufacturing facility in Malaysia. This new facility will incorporate technologies such as blow molding and cage line into the production of IBCs, which are used across various industries, including food, chemicals, and fragrances. In the automotive industry, Malaysia has overtaken Thailand as the second–largest automotive market in Southeast Asia, ranked after Indonesia. The country’s two national car brands – Proton and Perodua – have around 60% market share and compete successfully with foreign brands. Malaysia has also entered into the electric mobility sector with the introduction of its first homegrown electric vehicle (EV) model, the e.MAS 7 EV, developed by Proton Holdings Bhd. in partnership with Geely Holdings. This initiative is anticipated to boost demand for EVs and push vehicle sales. The vehicles are manufactured at the Proton factory in Perak, which is being converted into an EV hub. Perodua, or Perusahaan Otomobil Kedua Sendirian, is Malaysia’s largest carmaker, and it has recently launched its first EV prototype with roll-out expected this year. Additionally, GWM Malaysia has introduced its first locally assembled HAVAL H6 HEV, produced by its production line in Melaka, operated by Malaysian manufacturer EP Manufacturing Bhd. The plant has an initial production capacity of 10,000 units annually, with plans to expand to 30,000 units in the second phase. With the influx of investments in dynamic Malaysian industries, the country’s plastics market is set to experience greater demand as it adapts to the evolving needs for the innovative material solutions. https://www.chinaplasonline.com/CPS/press/market-news-detail/eng/5804