HONG KONG — Malaysian manufacturers want Hong Kong and mainland Chinese technology firms to establish operations in Malaysia rather than merely market solutions remotely, as businesses race to adopt automation and smart manufacturing technologies.
Federation of Malaysian Manufacturers (FMM) President Jacob Lee Chor Kok said recent collaborations with the Hong Kong Productivity Council (HKPC) have generated interest among Malaysian companies seeking to modernise production processes, but he believes the current approach remains too slow.
Following the signing of a memorandum of understanding between FMM and HKPC, delegations of engineers and technology specialists visited several Malaysian factories to assess opportunities for automation and process improvements.
"They visited six or seven factories, looked at the production lines and came back with proposals and solutions. But personally, I think the process is too slow and too costly," Lee told Malaysian media on the sidelines of a Hong Kong summit.
Instead, he wants Hong Kong technology providers to establish a more permanent presence in Malaysia through local operations, partnerships or joint ventures.
"To scale up the collaboration, I would like to see Hong Kong technology companies and solution providers either set up operations in Malaysia or collaborate with local partners.
"That would speed up the rollout of Industry 4.0, smart manufacturing and digital adoption," he said.
The discussions span a broad range of sectors, including semiconductors, food manufacturing and metal fabrication, reflecting growing demand among Malaysian firms for technologies that can improve productivity while remaining affordable.
Cost remains a key factor.
Lee said Chinese manufacturers have dramatically lowered the price of industrial equipment over the past three decades, making automation increasingly accessible to small and medium-sized enterprises (SMEs).
He cited laser-cutting machines as an example.
More than 30 years ago, similar equipment could cost several million ringgit, while comparable machines today are available for less than RM100,000.
"It may not be exactly equivalent technology, but it is good enough for many SMEs and can do the job," Lee said.
The affordability stems from Chinese manufacturers' ability to tailor machinery to specific business requirements rather than building oversized systems designed for larger industrial users, he said.
"Sometimes the equipment offered by traditional suppliers is too large for SMEs. Chinese manufacturers can build machines that fit the scale of an SME and at a price they can afford," he said.
That has created what Lee described as a "love-hate relationship" for Malaysia's technology ecosystem.
Local technology providers face intense competition from lower-cost Chinese rivals, putting pressure on pricing and margins. Yet manufacturers benefit from access to affordable solutions that allow them to automate operations and improve competitiveness.
"The competition is severe for local solution providers," he said. "But many local companies can benefit from affordable technologies. That is crucial."
The push comes as Malaysia seeks to strengthen its position in regional supply chains and encourage greater adoption of advanced manufacturing technologies, particularly among SMEs that form the backbone of the country's industrial sector.
For policymakers, the challenge is balancing the influx of foreign technology with the development of domestic capabilities -ensuring that industrial upgrading translates into long-term gains for local suppliers, engineers and technology firms.