malaysian industrial development authority mr. n. sangaran director machinery and engineering...

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Malaysian Industrial Development Authority

MR. N. SANGARANMR. N. SANGARANDIRECTORDIRECTOR

MACHINERY AND ENGINEERING SUPPORTING INDUSTRIES DIVISION MACHINERY AND ENGINEERING SUPPORTING INDUSTRIES DIVISION MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY (MIDA)MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY (MIDA)

INVESTMENT OPPORTUNITIES INVESTMENT OPPORTUNITIES IN THE MACHINERY AND IN THE MACHINERY AND

ENGINEERING SUPPORTING ENGINEERING SUPPORTING INDUSTRIESINDUSTRIES


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• Established in 1967 under Act of Parliament, 1965

• The principal Malaysian Government agency responsible for the promotion and coordination of industrial development and services sector in the country

• First point of contact for investors who intend to set up projects in the manufacturing and services sector in Malaysia

• On 27 March 2004, the Government mandated MIDA to promote investments in the services sector.

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MIDAMIDA

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• Foreign Direct Investment• Domestic Investment• Cross Border Investment

PROMOTION

• Planning for Industrial Development

• Recommend policies and strategies on industrial promotion and development

• Formulation of strategies, programmes and initiatives for international economic cooperation

RESEARCH & PLANNING• Manufacturing licenses • Tax incentives including for R&D,

Hotel & Tourism, Training & Manufacturing related services

• Expatriate posts • Duty exemption • RDC, IPC and R&D status

EVALUATION

• Assist companies in the implementation and operation of their projects

• Facilitate exchange & co-ordination among institutions engaged in or connected with industrial development

• Advisory Services

FOLLOW-UP/MONITORING

• Business matching through • Enterprise Connect• Manufacturing Services

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MIDA’S GLOBAL NETWORKMIDA’S GLOBAL NETWORK

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Boston

New YorkChicago

San JoseLos Angeles

London

Paris

Stockholm

Cologne

MilanSeoul

ShanghaiOsaka

Tokyo

Taipei

Sydney

MALAYSIA

GuangzhouDubai

Mumbai

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MIDA’S NEW OVERSEAS OFFICES

1. DALIAN 2. BANGKOK 3. JAKARTA 4. HO CHI MINH CITY

5. JOHANNESBURG 6. HOUSTON

7 . MUNICH

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Malaysian Economy First Quarter 2008

Malaysia is the 19th, largest trading nation in the world

Source: Central Bank of Malaysia/Malaysia Department of Statistic 07/08

• GDP Growth 7.1 %• Per Capita Income EUR 5,242 (2007)• Inflation 2.6%• Unemployment 3.6% • Trade Surplus EUR 6.6 billion• International Reserves EUR 97.6 billion (31 July 08)• Manufactured Exports to Total Exports 69.3 %

1 USD = 0.78 EUR

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MALAYSIA’S GROSS DOMESTIC PRODUCT MALAYSIA’S GROSS DOMESTIC PRODUCT FIRST QUARTER 2008 FIRST QUARTER 2008

Total GDP : EUR 31.4 billionConstruction

2.9 %

Agriculture7.3 %

Mining8.5 %

Manufacturing30.1 %

Services54.0 %

1 USD = 0.78 EUR

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PERFORMANCE

Of the Manufacturing & Services Sector

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YearNo. of

ProjectsNo. of

Employment

Proposed Investment (EUR billion)

Domestic Foreign Total

2006 1,077 88,952 5.47 4.30 9.77

2007 949 97,673 5.26 6.63 11.89

Jan – Aug 2008

562 65,372 2.75 7.78 10.53

TOTAL 2,588 251,997 13.48 18.71 32.19

Total Approved Manufacturing Projects (2006 – Aug 2008)

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Country No of ProjectsTotal Investments

(EUR billion)

Australia 12 2.7

USA 18 1.3

Spain 1 0.9

Germany 11 0.7

Japan 41 0.6

TOP FIVE FOREIGN INVESTMENTS IN MALAYSIA JANUARY – AUG 2008

Note: Italy: No. Of Projects: 2

Total Investment: Euro 14.1million



Projects in Operation With Italy Participation by Industry,Projects in Operation With Italy Participation by Industry, As at 2007As at 2007

Source: MIDA

IndustryNo of

ProjectsTotal Investments

(EUR billion)

Rubber Products 11 87.7

Machinery & Equipment 8 37.7

Wood & Wood Products 2 22.9

Electronics & Electrical Products 6 8.7

Chemical & Chemical Products 2 6.2

Total 29 163.2



MALAYSIA’S COMPETITIVENESS RANKINGS

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• 19th MOST COMPETITIVE ECONOMY IN THE WORLD World Competitiveness Yearbook 2008, IMD

• 14th PREFERRED DESTINATION FOR FDI – UNCTAD 2007

• TOP 3 ATTRACTIVE LOCATION FOR OFFSHORING & OUTSOURCING SERVICESA.T. Kearney’s- Annual Global Services Location Index (In 2005, 2006 and 2007)

• 13th RANK GLOBALLY FOR CAPITAL ACCESSMilken Institute, USA- Capital Access Index (CAI) 2007

• 5th CHEAPEST CITY IN THE WORLD FOR RENT OF PRIME OFFICE SPACE & 11th CHEAPEST FOR PRIME INDUSTRIAL SPACEKing Sturge, UK- Global Industrial And Office Rents Survey 2007



Strategies, Policies & Strategies, Policies & Incentives for theIncentives for theManufacturing SectorManufacturing Sector




THEME

Malaysia – Towards

Global Competitiveness



High technology, capital High technology, capital intensive & knowledge driven intensive & knowledge driven industries:industries:

• Biotechnology• Advanced electronics• Optics and photonics• Wireless technology• Display technology (TFT, LCD, Plasma & parts)• Petrochemical• Pharmaceutical• Medical devices• ICT

Industries manufacturingIndustries manufacturingintermediate goods: intermediate goods:

• Machinery & equipment• Components & parts• Moulds and dies

Resourced-based industries:Resourced-based industries:

• Food ( Halal Hub )• Value-added products from oil palm biomass (particle board, MDF board, animal feed)

Upgrading of other sectors in Upgrading of other sectors in particular factory automationparticular factory automation

Current Focus on the Manufacturing Sector



TARGETED SERVICES (IMP3)

• Business and professional services• Logistics• ICT services• Distributive trade• Education and training• Construction• Health• Tourism



100% foreign equity ownership is allowed, irrespective of the level of exports • Guidelines on Repatriation of ProfitsGuidelines on Repatriation of ProfitsNo restriction is imposed on the repatriation of

profits for foreign companies investing in Malaysia

• Equity GuidelinesEquity Guidelines

Special project officers in MIDA to ‘hand-hold’and assist Investors in obtaining all necessaryapprovals until they are operational

• Government’s Delivery SystemGovernment’s Delivery System

Liberal Investment PolicyLiberal Investment Policy

• Liberal Approval for ExpatriatesLiberal Approval for Expatriates •Key post – permanent

•Time post – 5 to 10 years



INVESTMENT INCENTIVESINVESTMENT INCENTIVES

Pioneer Status Investment Tax Allowance Reinvestment Allowance Incentives for High – Technology Industries Incentives for R & D Incentives for Industrial Training Incentives for Strategic Projects Incentives for Manufacturing Related Services:-

OHQ IPC RDC

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Incentives for the Manufacturing Sector

Pioneer Status (PS) Income tax exemption, ranging from 70% to 100%

of statutory income for a period of 5 to 10 years.

Investment Tax Allowance (ITA) ITA of 60% to 100% on qualifying capital expenditure

incurred for a period of 5 to 10 years.

Reinvestment Allowance (RA) RA of 60% on qualifying capital expenditure



Import Duty and Sales Tax Exemptions• Raw Materials/Components• Machinery and Equipment

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MACHINERY AND EQUIPMENT SECTOR




Year No. Potential

employment

Local Investment

(EUR € Million)

Foreign Investme

nt(EUR € Million)

Total Investmen

t(EUR € Million)

2002 43 2,363 25.3 35.2 60.52006 102 4,129 129.9 139.8 269.72007 98 4,437 115.1 242 357.1

Approved Projects in M&E Industry



Year Sub-Sectors

2005 EUR €billion

2006 EUR €billion

2007 EUR €billion

2008

Jan-Aug

EUR €billion

Power generating M & E

1.9 1.9 2.2 1.4

M & E for Specific Industries

2.3 2.3 2.7 1.8

Metal Working

M & E0.7 0.9 0.8 0.6

General Industrial M & E and Parts

2.7 2.8 3.3 2.3

TOTAL 7.6 7.9 9.0 6.1

IMPORTS – MACHINERY & EQUIPMENT

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EXPORTS – MACHINERY & EQUIPMENT Year Sub-Sectors

2005 EUR €billion

2006 EUR €billion

2007 EUR €billion

2008

Jan-Aug

EUR €billion

Power generating M & E

0.7 0.7 0.6 0.4

M & E for Specific Industries

0.9 1.1 1.2 0.8

Metal Working

M & E0.2 0.3 0.3 0.2

General Industrial M & E and Parts

1.9 2.1 2.5 1.8

TOTAL 3.7 4.2 4.6 3.2



1. Assembly & test equipment for electronic industry2. Factory automation equipment3. Natural rubber/latex/palm oil processing machinery and equipment4. Filling/wrapping/strapping machine5. Concrete mixers & asphalt batching plants6. Cranes, lifts & elevators7. Refrigeration plants/cold room equipment 8. Power/hydraulic presses & shearing & bending machines9. Plant/packaged air-conditioners & cooling towers10. Welding machine11. Pressure vessels & industrial boilers12. Blowers & fans13. Vibratory road rollers, C-frame for tractors, buckets & arms for

excavators, hydraulic cylinders, bushes & pins14. Dehumidifiers & compressors15. Production equipment for oil and gas industry

MAJOR MACHINERY & EQUIPMENT MANUFACTURED IN MALAYSIA



DEVELOPMENT OBJECTIVES AND STRATEGIES FOR THE M & E INDUSTRY OF MALAYSIA

To Promote Malaysia as :

1) The regional production hub for the high technology and specialized machinery and equipment

2) The main distribution centre in the region for all types of

machinery and equipment

3) The centre for maintenance related services, refurbishment, reconditioning and upgrading of high technology and specialized machinery and equipment

Note : To provide total solution for machinery, automation and engineering services



MALAYSIA’S COMPETITIVE EDGE

Standard M&E for Niche Market

&

Specialised & Custom Made M&E

Lower cost compared to industrialised countries

High Technology

High quality

High skilled & knowledge workforce

R&D capabilities

Engineering design

capabilities



1. Machine tools

2. Plastic injection machines

3. Plastic extrusion machines

4. Material handling equipment

5. Robotics and factory automation equipment

6. Specialised/process machinery or equipment for specific industry

7. Packaging machinery

8. Parts and components of the above machines and equipment

TARGETED MACHINERY & EQUIPMENT



Pioneer Status with tax exemption of 100% of statutory income for a period of 10 years ;

OR

Investment Tax Allowance of 100% of qualifying capital expenditure incurred within 5 years which can be offset against 100% of statutory income annually until fully utilised

SPECIAL INCENTIVES FOR TARGETED MACHINERY & EQUIPMENT



MACHINE TOOLS Metal Cutting Machineries

•Machining Centers

•Milling Machines

•Lathe machines

•Grinding Machines

•EDM (Die sinking/wire cut)

Metalworking/shaping Machineries

•Press brakes

•Guillotines

•Hydraulics & power presses

•Turret punches

•Forging machines Imports were mainly from Japan, Taiwan, Singapore, Germany, USA, Switzerland.

Emphasis is on high technology, NC and CNC machines.

Leading companies in operation are Aida, Hydra-Link, Li Chin (S.E.A), Sunfluid Engineering, Technology Park Malaysia.

Years ImportsEUR € million

ExportsEUR € million

2005 401.6 78.6

2006 390.1 62.5

2007 347.3 56.8



PLASTIC INJECTION MACHINES

Targeted machines used for precision plastic injection moulding of plastic products, parts and components.

Imports were mainly from Japan, Taiwan, Germany, China, Singapore

Although one company has recently been given approval, currently there are no manufacturers of plastic injection machines in Malaysia

Years ImportsEUR € million


2005 70.6 5.0

2006 64.3 4.8

2007 70.2 7.3



PLASTIC EXTRUSION MACHINES

Targeted machines used for precision plastic extrusion products, parts and components.

Imports were mainly from Germany, Taiwan, Japan, Italy, Korea, USA.

Currently there are 3 manufacturers of plastic extrusion machinery in Malaysia

Years Imports EUR € million

Exports EUR € million

2005 154.1 112.5

2006 124.0 94.8

2007 30.7 0.81



M&E in this category include those involved in the movement, handling, storage and retrieval of materials such as most types of cranes, conveyance equipment, auto storage/retrieval systems and material handling equipment for manufacturing processes.

Currently there are about 20 manufacturers of material handling equipment in Malaysia

Leading companies in this industry are Favelle Favco (a top ten world leading manufacturer of tower cranes), Impsa, Exellift, MHE-Demag & Cheng Hua Engineering.


Exports EUR € million

2005 36.3 62.6

2006 46.0 86.9

2007 106 80.7

MATERIAL HANDLING EQUIPMENT



PACKAGING MACHINERY

Targeted M&E in this category include bottling machinery, food and confectionary packing machinery, wrapping and shrink wrapping machines, sorting and grading machines, filling and sealing machinery

Currently there are about 5 manufacturers of various packaging

machinery in Malaysia.

Imports were mainly from Germany, Italy, Japan, USA, Taiwan



2005 154.1 112.5

2006 124.0 94.8

2007 131 93



SPECIALISED/PROCESS MACHINERY OR EQUIPMENT FOR SPECIFIC INDUSTRY

Targeted M&E in this category are machinery and equipment specifically designed for use in any particular industry or process.

Industries targeted include food and beverage, woodworking, pulp and paper, agricultural, automotive, medical, biotechnology, oil and

gas processing, petrochemical, pharmaceutical, printing.

Very high priority category M&E for investment promotion

(EUR € million)

Categories 2005 2006 2007

Wood working • Import• Export

544.9

66.2

525.1

93.8

465.8

98.2

Agricultural• Import• Export

55.7

22.5

61.1

34.1

62.7

36.7

Oil and gas• Import• Export

194.0

254.1

179.8

510.7

144.9

85.9



Automation Equipment Industry in Malaysia

There are more than 200 companies operating within automation equipment cluster in Malaysia manufacturing automation equipment, parts, component & modules and providing related services.

Malaysia’s capabilities in this industry is increasingly being recognised globally where Malaysia is the leading manufacturer of automation equipment for the E&E industry in the South East Asian region.

Major local companies such as Genetec, Vitrox, Kobay Technology, Pentamaster and Upeca.



Automation Equipment Industry in Malaysia

Types of automation equipment produced are for the :PCB InspectionSemiconductor ProcessingHard Disk Drive Industry

Apart from developing new automation process for the above, Malaysian companies have also invested into the production of automation equipment for other industries such as :MedicalAutomotive



Penang Automation Cluster (PAC) PAC is a Penang-based automation cluster, which

comes under the umbrella of investPenang with members more than 60 companies.

A collaborative platform to leverage on members core competencies in automation to jointly develop high technology products for the global market.

FMM-Automation Tehnology Group (FMM-ATIG) FMM-ATIG is a group under the Federation of

Malaysian Manufacturers to further promote and enhance the development of the automation equipment industry in Malaysia with members more than 50 companies.



COMPANY COUNTRY PRODUCTCamozzi Malaysia S.B. Italy Pneumatic Actuators

Penaga Dresser Sdn. Bhd.

Italy Control valve, actuator, level transmitter & parts thereof and gas metering skid.

Nicotra Fans & Blowers Mfg (M) S. B.

Italy Industrial fans and parts thereof

Turato Asia S.B. Italy Industrial wire mesh filters.

LaFortezza Asia S.B. Italy Checkout counter system

MSE-ATB S.B Italy Columns/pressure vessels

Daldoss Elevetronic Asia S.B.

Italy Parts/components for elevators

MAJOR ITALIAN COMPANIES IN OPERATIONS IN MALAYSIA IN MACHINERY & ENGINEERING



COMPANY COUNTRY PRODUCT

Sillner Industries (M) Sdn. Bhd.

Austria Integrated processing system for backend processing & parts

Watt Euro-Drive (M) S.B.

Austria Gear motors parts thereof

Va Tech Sat S. B. Austria Gear motors parts thereof

Fico Asia S.B. Netherlands Automatic moulding system equipment and automatic trim and form equipment

MAJOR FOREIGN COMPANIES INOPERATIONS IN MALAYSIA




Bosch Rexroth S.B. Germany Hydraulic pumping units, Hydraulic cylinders,

SKF Bearing Industries (Malaysia) S. B.

Germany Ball and roller bearings

Richter Hi-Tech S.B. Germany Condom dipping machines

Winkler Wachtel (SEA) S.B.

Germany M & E for food industry

MHE Dematic (M) S.B. Germany Overhead Travelling cranes




Leuco (Malaysia) S.B. Germany Cutting tools

Aesculap Surgical Instruments S.B.

Germany Screws for instruments

HPMT Industries S.B. Germany High speed steel & tungsten carbide tools

Henkel (Malaysia) S.B. Germany Solder wires

Schaefer System International S.B.

Germany Steel storage system & shelving

Asia Pacific Engravers (M) S.B.

Germany Rotor-gravure printing cylinders




Doeka Asia S.B. Germany Condom dipping, testing, packaging machines, & surgical glove wrapping machines

Fastron S.B. Germany Automatic machines & parts thereof for E&E industry

Hauni Malaysia S.B. Germany Cigarette making machines

Richter Hi-Tech S.B. Germany Condom dipping, testing machines, machine, condom bust pressure machine& etc

Rohwedder Asia Pacific

Germany Automated mfg system & test fixture mfg system




Uni Mentor S.B. Germany Testing & packing machines for condoms & machinery for speaker production lines.

Lenser Asia S.B. Germany Filter elements & whirl pool tubs with fittings

Lenze S.E.A. S.B. Germany Gear boxes, geared motors

Esselte Meto (M) S.B. Germany Price marking tools & labels

Trox (Malaysia) S.B. Germany Air distribution equipment, terminal units, fire dampers & volume control dampers, sound attenuators




Taylor-Wharton Gas Equipment S.B

USA Portable cryogenic cylinders

Fisher-Rosemount MFfg (M) S.B.

USA Electro pneumatic instruments, process control valves

Emerson Process Mgnt Valve Automat. (M) S.B

USA Rack & pinion actuator

Carrier International S.B

USA Industrial air cond

Mattel Tools S.B USA Moulds, dies and accessories.

Micro Component Technology S.B

USA High precision tools, moulds, dies, jigs, machine parts




Knowles Electronics (M) S.B.

USA Metal stamping parts

BL Specialities Malaysia S.B

USA Metal stamped part & sub assembled parts

Oryx Advanced Materials S.B

USA Sputtering targets materials & bonding

Dover Engineering S.B USA Elevators & parts thereof

Tyco Flow Control (Malaysia) S.B

USA Industrial & water works valves, industrial fittings & couplings

Entegris (Malaysia) S.B USA Moulds & parts thereof




Crest Ultrasonics (M) S.B. USA Ultrasonic cleaning equipment, automated material handling equipment

The GSI Asia Group S.B. USA Poultry systems

ICAT Semicon System S.B USA Automation machinery for semiconductor ind.




Brooks Andell S.B. UK Conveyor chains, gearboxes & gear components

Citec Denco S.B UK Industrial Air conditioners.

Dynacast (Melaka) S.B. (Malaysia) S.B.

UK Die casting products

AWA Technologies (Malaysia) S.B.

UK Cyclonic separation system for waste water

Rotork Actuation S. B. UK Heavy duty valve actuator parts and components




James Howden (Malaysia) S.B.

UK Industrial fans, pre-heaters

Trumeter (Malaysia) S.B. UK Electronic measuring equipment/Devices & PCB Assemblies

Howard Alat Pertanian S.B.

UK Fertilizer distributors parts & attachments

Nu Aire Fan Manufacturing S.B.

UK Ventilation equipment




Aida Manufacturing (M) S.B.

Japan Crank Presses

A- Foss Zeno (Malaysia) S.B.

Japan Moulds, tools & dies, precision powder metallurgy dies.

Tateyama Auto Machine Co. (M) S.B.

Japan Factory automation machines & equip.

NEC Machinery (M) S.B. Japan Machinery for the

Semiconductor Ind.

Advantest Engineering (M) S.B.

Japan IC test systems and peripherals




Sidel Industry (Malaysia) S.B.

France Blow moulding machines

Ismeca (M) S.B. Switzerland Machinery for the

Semiconductor Ind.



MALAYSIA’S ENGINEERING

SUPPORTING INDUSTRY




POSITION OF THE ENGINEERING SUPPORTING INDUSTRY SECTOR

Significant role in the economy’s structural transformation to a fully industrialized nation by year 2020

Complements the machinery and equipment manufacturing industry by supplying parts, components and services

Gearing towards meeting global outsourcing requirements in terms of technology, quality and on-time delivery

The engineering supporting companies are gearing towards becoming total solution providers or pooling their resources to offer integrated services

Companies are specializing more and more towards low

volume, high mix, high value-added parts, modules and components.



MALAYSIAN TOTAL SOLUTION PROVIDERS

Among Malaysian Total Solution Providers are :- Alpha Master Sdn. Bhd. Atasmi Precision Machinist Sdn. Bhd. UWC Holdings Sdn. Bhd. Lypometal Sdn. Bhd. Kobay Technology Sdn. Bhd. Kein Hing International Bhd.

These companies are capable of providing total solutions to the advanced requirements of high value-added and high technology industries such as the high end E&E, automotive, medical equipment and devices, machinery manufacturing, scientific & laboratory equipment and aerospace industries.



SOURCING CAPABILITIES IN MALAYSIA

• Suppliers show overall good quality of execution

• And strong willingness to deliver

• Able to supply the high volume, low mix demand for the electrical & electronics, telecommunications and automotive industries.

• Capabilities to supply low volume, high mix niche products for the medical, machinery & equipment, oil & gas and aerospace industry

• MIDA offers very favourable environment with both financial incentives and operational support

> STRENGTHS



AFTA AFTA A Potential MarketA Potential Market



Integrated domestic ASEAN market of more than 567 million people with total GDP of EUR 830 billion.

Benefits of locating in Malaysia

AFTAAFTA

ASEAN FTA : 2010

All tariffs in ASEAN eliminated

ASEAN

- Economic Community : 2015

- Allow free flow of goods, services and

investments, labour and freer flow of capital

1 USD = 0.78 EUR



• Political & Economic Stability

• Pro-business Government

• Liberal Investment Policies

• Transparent Policies

• Policy of Welcome

• Well Developed Infrastructure

• Harmonious Industrial Relations

• Trainable & Educated Labour Force

• Quality of Life

• Good Track Record

Why Malaysia ?Why Malaysia ?



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malaysian industrial development authority mr. n. sangaran director machinery and engineering...

Documents

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eur slide

malaysian economy

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munich slide

income eur

international reserves

trade surplus eur