MBWA
MALAYSIA BOTTLED WATER MANUFACTURERS ASSOCIATION (NEW)
PRESIDENT MESSAGE
Looking ahead in the 2024, on behalf of the committee I would like to wish share some of our concerns in our industry:
- Bottled water Malaysia volume is expected grows by 7% – 9% YTY; giving reason more travel activities being observed and more events being organized throughout the year. We need to alert on the inflation rate in the country; which heavily affected by geo-political and geo social economic around us. This will drive changes in BNM interest strategy and consumer spending habits to be more cautious. In 2023, there is increase in licensed AMB but not in AMS. There are 2 new import licenses.
- PET resin: given the context currently, geo political instability at middle east, Africa, South East China, and slow growth in demand in Asia Pacific, price PET will forecast remain steady. USD900/MT – USD970/MT is expected within the range. Of course, not to neglect the different in exchange rate. Ringgit remains soft until the US Federal review their rate in the second half of the year. Feed stock remain high, export demand slow. We are expecting the local resin supplier Recron and MPI will submit another review of anti-dumping on imported resin into Malaysia. MBWA will collect data later to prepare for it.
- rPET : the challenge remains on low collection rate in Malaysia (around 16%). Yet, EPR policy will kick start some where in this year. I urge members to get ready for the change. I’m delighted to see more brand in the market to apply 100% rPET in their bottle. (water and CSD). Supply remains competitive, and MBWA has participated in drafting newly ECO labeling and hopefully such certification may help to boost the usage of rPET in coming year.
- Labor issue: foreign workers door remains closed at the moment, shortage of skilled workers among industry is a continuous challenge to all. Even some has diverted into automation, yet skilled workers to maintain the automation machinery still lacking. It is fair and wise for members to continue to strive for local talent in long run. Progressive wages system to replace the minimum wages still unseen the effectiveness. Nevertheless, such move will hope to resolve some of the skilled worker’s issue.
- Water tariff: huge increases for most of the states on respective water tariff; some from Feb 2024 some from mid-year. The challenge is once the door been opened, I can see more increases may happen in the long run. A general RM0.22/m3 increase may serve as a start for many to come. This will a direct challenge to our members who are doing AMB.
- 8% Service tax: Which will take effect from March 2024, even currently logistic or transportation been excluded in the increases, yet some area still not clear. It will invite collateral damages in the industry, even not directly but indirectly. As usual, when some ‘grey’ area in implementation will cause spin water.
- Food safety and bottled water regulation: BKKM has conducted a survey on annual renewal license for AMB and AMS. From the respond by BKKM, was very poor and many not reply to them. As such, they will regard as all agreed and they have submitted for AGC for review before go to minister level. Many still not sure on the self-regulatory on labeling requirement. As for now, the submission of label is an option, but all label must register onto the Forsim web side.
I take this opportunity to wish everyone who celebrate Lunar Chinese New Year a Prosperous, Healthy and Happy Dragon year 2024.
恭贺大家甲辰龙年万事如意, 吉祥安康. 恭喜发财 !!
KK LAM
6th Feb 2024