A Thin Line Between Imported and Exported Goods
'To import is to bring in,
especially foreign goods or services to a country.'
'To export is to sell or
send goods or services to another country.'
The business to be in now
is in the export business because with the pegging of the Ringgit to the US
dollars at 3.80 by the governmment, it has given Malaysia a competitive edge
in the world market.
More and more products in
the electronics and retails sectors are being assembled or manufactured in Malaysia
for the export markets, be it in parts or the whole product.
A precentage of these made-in-Malaysia
products are also sold in the local markets.
Strangely enough though,
a closer look into the import and export sector reveals that there are made-in-Malaysia
goods targeted for export being re-marketed back into Malaysia, thereby bearing
the status of imported goods - without ever going abroad.
How is that possible? It
is possible because of the Port Klang Distribution Park (PKDP) which was set
up in 1991.
PKDP is a free commercial
zone warehouse and started its first operation in 1993.
According to Encik Izani
Osman, the Human Resource/Administration Officer in PKDP, the warehouse mainly
services the Klang Valley area.
The charge for the overnight
storage at PKDP ranges from RM50-RM150 depending on the size and space taken
by the goods (e.g., 1 ton or 4 footer). Other warehouse providing such storage
space are located in Sungei Way, S. Prai and others.
The state of Johor uses
the Singapore warehouse facilities because of logistics and proximity. However,
lorries crossing into Singapore have to pay a levy of RM200 each.
The PKDP is important for
manufacturers with the Licence Manufacturer Warehouse (LWM) status.
The LMW status companies
are entitled to tax exemption on raw materials (100%), but the finished products
must follow the standard ratio of 80% for export and 20% for local comsumption
approved by MIDA.
The role of PKDP comes in
when manufacturers face products axcess usually due to inability to sell the
full 80% overseas, or when local market demand is more than exports.
At PKDP, excess goods for
export are re-imported back in via the import/ export documentation known as
K1 (import) and K2 (export).
An example, the Casio calculator
display panel and casing are produced in Malaysia. Casio A Sdn Bhd will export
out products using K2 (stored overnight in PKDP), and then Casio B Sdn Bhd will
re-import back in using Form K1.
Essentially, on paper, the
buyer and seller of the products are different. This channel also assist in
reducing shipping costs of overseas markets.
Fortunately for consumers,
the thin line separating imported and exported Made-in-Malaysia goods holds
no cause for concern with regards to product cost.
Whether the products are
for local market, or as exported goods being imported back in, the pricing remains
the same because the company involved is the same, e.g., the Casio brand. Other
known made-in-Malaysia brands include Sharp and Bonia.