Minister Counsellor Nina Hvid Talvela – Food, Agriculture and Fisheries

Malaysia 1

Commercial

knowledge

Political Access Global

network

Counseling

Who are we – how can we help?

Global Growth

• Help companies – not least SMEs – to start up and grow on export markets

Global Public Affairs

• Help companies understand and deal with risk, corruption, public/private stakeholders, and CSR on export markets

Innovation

• Help companies get from idea to product drawing upon capital and expertise from world leading innovative clusters

Invest in Denmark

• Attract foreign companies to leading Danish clusters

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4 business Areas

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250 advisors,

including 120 sector specialists

in 60+ markets

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Regionally linked

The Trade Council

Regional departments

Local business service

Entrepreneurs and companies

Food, agriculture

ICT

Furniture, design,

fashion and textiles

Health

Energy and

environment

Construction and

architecture

Strong sector competencies

Customers in every industry

Energy and environment; 22,0%

Food and agriculture; 10,0%

Furniture, design, and fashion; 12%

Health; 11% ICT; 11%

Machinery industry; 6%

Public insitutions; 2%

Service; 10%

Outsourcing; 3%

Transport and logistics; 2%

Construction; 9%

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Distribution of services

Market Intelligence/ Market Access

47%

Incubator 1%

Other commercial consulting

18%

Recruitment 2%

Joint export promotion campaigns

16%

Publications 2%

Global Public Affairs 7%

Innovation services 4%

PR activities 3%

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Services

Get off to a good start

First steps on the market

Retention and

development of the market

Challenges on the market

Export

preparation

Export start Outsourcing Counselling Innovation

Get off to a good start

Trade

barriers

Technical

export advice

Counselling

First steps on the market

Joint export

promotion

campaigns

Export start Establishment Global public

affairs

Recruitment Market

analysis

Vitus Finance

Retention and development of the market

Joint export

promotion

campaigns

Establishment Global public

affairs

Recruitment Market

analysis

Finance

CSR

Partner search

Challenges on the market

Global public

affairs Debt

collection

CSR Anti corruption

!

Trade barriers Technical

export advice

Export Promotion Packages

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Vitus Export start Strategic

Alliance Market Visit

Global public

affairs

Export Start Package

• Promotion of your company on other markets

– Flexible and individual consultancy for your company

• Supporting your International growth potential from advisors living in

the export markets.

• Market and competitor analysis

• Dustributor and partner searches

• Advice on establishing a company in the foreign market

• Marketing and contact to governmental bodies

• Hourly rate 935 kr (2014)

• 35% support to 50 or 100 hours for SME’s

– SME: <100 Employees, <150 mio kr in turnover 15

Market Visit

• Share the costs and enjoy economies of scale

• Get the opportunity to visit the export market together with other

companies; and get introduced to relevant partners and government

institutions.

3 criteria:

1. Minimum 4 participating companies, maximum 10.

2. Min. 4 companies should be SME’s according to EU Standards

– <250 employees, turnover <375 mio kr

3. Each company pays for 25 hours - 935kr (2014)

– 50% is subsidized for SME’s

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Strategic Alliance

• Economies of Scale, knowledgesharing and brand value

• Small and medium sized companies can support the span and

competencies of large enterprises – while getting introduced to export

markets at the same time

Criteria

1. The products must be a part of a solution (systemeksport)

2. The opportunity has to be identified prior to the engagement in the alliance

3. One of the companies has to be responsible and lead the alliance

• 50% subsidies for 100 hours of 935kr (2014)

– Minimum 3 companies with a Danish registration (CVR)

– 50% of the companies must be SME’s (<100 employees, annual turnover <150

mio kr) 17

Vitus

• Elite programme – for the companies who wants to grow at the most

efficient way Internationally

• Solid preparation and execution of a tailormade strategy – from idea

to the first order

• Assigned advisor is resident in the chosen export market

• Criteria

– SME (<100 employees, annual turover <150 mio kr)

– Subsidies for 65% on all 265 timer + 2 free workshops

– New programme every 6 months with 10 new companies

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Global Public Affairs

• Use diplomatic core competencies to support your business, market

access and promotion.

– Knowledge and access to decision makers and government

institutions to identify and influence relevant local decision

makers.

• Promote your products and services or host high-level meetings at

the Ambassador’s residence.

• Criteria

– Must be a Danish company

• Costs:

– Either through promotion packages or on an hourly rate of 935kr. In the case of

other expenditures for food, drinks, etc, this will have to be covered as well 19

Malaysia - Your shortcut to South East Asia

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South East Asia

• High growth of 5-8% in the region

• 610 mill residents in the region – joint GDP of 2.3 trillion USD

• Easier market access to 11 ASEAN countries

• GDP pr capita is increasing, especially in:

– Singapore, Brunei, Malaysia, Thailand og Indonesien

• Demand for foerign products and higher quality is increasing

• In 2013 the Danish export reached 8,8 bill = 1,4% of the total Danish

export

• Machinery and parts hereof was the most exported product category

in 2012

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Danish Food, Agriculture and Fisheries Export to SEA

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General import 270.74

Agrotechnology 56.43

Aquaculture 5.63

Ingredients 28.36

Dairy 23.25

Biproducts 1.81

Fish 20.67

Live Animals 1.93

Meat 2.12

mio. USD

Gross Import to SEA from DKGenerel import

Agrotek

Akvakultur

Ingredienser

Mejeri

Biprodukter

Fisk

Levende dyr

Kød

Countries included: Malaysia, Indonesia, Thailand, Vietnam, Cambodia

Data: UN Comtrade, year: 2012

Malaysia – The gate to SEA • Population: 30 million

• Capital: Kuala Lumpur

• Area: 330,000 km2 (Approx. 7 times bigger than DK))

• Ethnicity: Malay 67%, Chinese 25%, Indians 7%, others 1%

• Religion: Islam 61% (official), Buddhisme 20%, Protestants 9%, Hinduisme 6.5%

and Confucianisme/Taoisme1.5%, others 2%

• Language: Bahasa Malaysia (official), English, Mandarin, Tamil

• Life expectancy: 73 years (men), 77 year (women)

• ASEAN: Chairman of ASEAN in 2015

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Key Numbers

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Malaysia Denmark

GDP (US$ mia) 313 (35) 331 (34)

GDP per Capita (US$) USD 10.500 USD 59.200

GDP growth 4.7% (real rate) 0.1%

GDP Annual Growth (real rate) 6.4% 0

Unemployment (%) 3.1% 6%

Workforce 14.3 mio 2.8 mio

Inflation rate (CPI) 3.2% 0.80%

Credit rating A-, stable (S&P)

A3, positive (Moody’s)

A-, negative (Fitch)

AAA, stable (S&P)

AAA, stable (Moody’s)

AAA, stable (Fitch)

Competition rating 20 13

Balance of Payments Surplus of 3860 MYR

Million

Surplus of 7395.50 DKK

Million

Trade Agreements • ASEAN

- 600 millioner consumers in market potential

- Joint GDP of 2,2 trillioner in 2011

- 0 tariffs for 99% of all godds

- ASEAN Economic Community and Single market in 2015

• Regional and bilateraleFTA’s

• FTA’er under negotiation

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Economic Transformation Programme

• Target: To become a high-income country by 2020

• 12 key sectors (NKEA), which spans on 149 projekter.

• Financing: 92% has to be financed by the private sector, espcially FDI.

• ETP will set the guidelines for what initiatives and sectors that the local

government supports and promotes

• Many of these sectors will be excluded from the 6% GST, when this is

implemented in 2015

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Examples of products exempted from 6% GST

• Live animals

• Meat and certain intestines from animals

• Live fish

• Fish products, frocen, chilled or fresh

• Seafood and mussels, both fresh, chilled, dried, conserved

• Birds’ eggs

• Potatoes and a large number of other vegetables, both fresh and processed.

• Coffee, tea, and spices, certain forms for flour, sugar, malt.

• Pasta, bread, bakery and certain oil-products (margarine)

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EPP’s wihtin Food, Agriculture and Fisheries

Within agriculture, there are 17 EPP’s of interest, the below mentioned are especially

interesting for DFA:

• Cattle Integration in Oil Palm Estates (EPP5)

• Expansion of Cattle in Feedlots (EPP12)

• Dairy Clusters (EPP13)

• Seed Industry Development (EPP14)

• Overseas Acquisition/Joint Venture of Cattle Farms (EPP16)

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Consumer Trends

• Larger household spendings

– Focus on quality and diversity in the products

• Focus on Western products and trends

– Groceries and food trends are inspired by Western traditions and

this increases the demand for these products

• Lifestyle changes

– Bigger market for prepared products

– Healthy and nutritous products are in higher demand

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Growth rates and potential

30 Countries included: Malaysia, Indonesia, Thailand, Vietnam, Cambodia

Time period: 2009-2013, * Vietnam: 2009-2012, Indonesien: 2010-2013

Gross-import MY SEA

General import 13% 15%

Agrotechnology 0% 3%

Aquaculture 17% 13%

Ingredients 22% 15%

Dairy 24% 24%

Biproducts 19% 43%

Fish 11% 3%

Live Animals 8% 13%

Meat 17% 43%

Annual Growth Rate (CAGR)

Agrotechnology

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• Water purifying, filtering and wrapping machinery

• Agricultural machinery

• Dairy machinery

• Machinery for slaughterhouses

• Machinery for food productions

• HS 2007 - Primarily: HS 8432xx-8438xx, both included

Live Animals

• Cattle

• Pigs

• Chicken

• Lamb/Sheep

• Goats

• All live animals in HS 01xxxx category are included

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Halal QUICK FACTS – Market barrier or potential?

• Fastest growing market worldwide

• Worldwide market value of US$ 2.3trillion

• Demand for halal products within:

– Processed foods (convenience) – ready meals, drinks, fast food,

preserves, chilled products, sauces, bakery, sweets etc

– Food ingredients and additives

– Dairy

– Animal products – beef and poultry

– Animal bi-products

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Halal

• Approx. 65% of the population are Muslims

– Willingness to pay a premium for these products

– Not only Muslims buys Halal products

– Malaysia aspires to be the leading Halal-hub in 2020 in ASEAN

– Non-animal bi-products

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Halal - certification • What products require Halal certification?

– Products of animal origin - Yes

– Other than animal origin – No, but it is an advantage

– Haram products – No, since they can never be Halal

• Costs (approximately):

– Products of animal origin: 5000MYR per inspection on-site and

5000MYR for each official (4 from MY and Europe).

– Other products; 5000MYR per inspection (1-2 officials – only

from Europe).

– Combined visits – save money!

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Import barriers

• Different across sectors, in general a liberal system

• Average import tax for agricultural products: 2,9%

• Toll quota for certain products – primary products and electronic

articles

• Live animals requires: Import license

– SPS barriers are present, primarily for pigs and chickens

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Swine Production in Malaysia

• A land of minefields, but the large Chinese population along with

export opportunities enables the industry

• Government Policy: Create ‘pig farming areas’

• Pig farms in Malaysia

– Biggest is 2.000 acre in Sarawak – a centralised farming area

– Brood stock is imported from Europe

– Fully integrated complex covering the entire value-chain and is

designed for zero waste discharge

• Current Production: 1,8 million

– Average size: 2,500 head, with about 150 sows.

• 80% of population in Peninsular Malaysia

•

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Agricultural Machinery

• Top 5 partner countries: China – 25%, US – 13%, Germany – 9%,

Japan – 9%, Korea – 7%

• DKK: 1% (6,15 mio USD in 2013)

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Food processing equipment 501.16

Tractors and other agro machinery 29.19

Agro production 85.63

Water management 156.23

Dairy 13.50

Data: Comtrade mio USD

Primarily HS8432xx-8439xx

Gross imports to MY in 2013

Why Malaysia? Recap

• Political agenda to develop relevant sectors, and economic

programs to support this

• Well developed economy

• Optimal geographic position for expansion to rest of SEA

• No/few language barriers

• Political stability and ASEAN top 6

• Increased demand for high quality products throughout all of Food

and Agricultural product range

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Thank You … and let’s talk soon!

Minister Counsellor Nina Hvid Talvela

nintal@um.dk +60 12 652 2659

Head of Commercial Dept Joakim Larsen

joalar@um.dk +60 12 688 0744

Commercial Trainee Signe F. de Tengnagel

sigten@um.dk +60 11 3932 4424

• www.malaysia.um.dk

• Facebook: EmbassyofDenmarkinMalaysia

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Embassy of Denmark in Malaysia 22nd Floor, Sunway Tower 86 Jalan Ampang 50450 Kuala Lumpur +60 3 2032 2001

eksportrådet.dk

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