A MONTHLY SUPPLEMENT OF RAKAN SARAWAK BULLETIN

(People, events, activities and programmes which make for a total quality-managed Sarawak Civil Service)

ISSN 1394-5726

 
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MADE IN MALAYSIA 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.


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