FMM PRESS RELEASE: FMM Meets Minister of Economy to Advance RMK-13 Delivery and Strengthen Manufacturing Competitiveness

ii. Labour market reform through the Multi-Tier Levy Mechanism (MTLM) and Industry-led TVET - FMM reiterated its long-standing support for MTLM as a market-based productivity tool, proposing levy reviews no more frequently than once every three years, the removal of quotas, and a structured plough-back of levy proceeds into the proposed National TVET Apprenticeship Fund and a National Automation and Industry 4.0 Fund. FMM emphasised that TVET is central to Malaysia’s industrial transformation as manufacturing shifts towards higher value-added, automation-driven and technology-intensive activities, and that an industry-led TVET ecosystem, championed through the Government–Industry TVET Coordination (GITC) platform, is essential to ensure skills relevance, strong employment outcomes and effective SME upgrading.

iii. Accelerating smart manufacturing, AI adoption and SME digitalisation - FMM highlighted strong industry interest in automation and digitalisation, particularly among SMEs, but noted constraints such as limited internal expertise and fragmented advisory support. FMM reaffirmed its collaboration with SIRIM to onboard at least 3,000 companies in adopting smart manufacturing practices under NIMP 2030.

iv. Strengthening industry-driven R&D and talent development - FMM underscored the need to deepen applied R&D, improve commercialisation outcomes and build homegrown technological capabilities through stronger university–industry collaboration, shared testing and prototyping facilities, and more practical R&D support for SMEs.

v. Building resilient local supply chains and vendor capability – FMM emphasised the need to reduce high import dependence in machinery, components, chemicals and precision parts through targeted import substitution, incentives for local firms, support for anchor companies, and structured technology transfer via joint ventures and licensing. FMM also called for further strengthening of the MIDA–FMM Industrial Linkage Programme and a more structured national vendor development approach to address capacity, quality and delivery constraints, supported by funding for product development and certification. In addition, FMM highlighted food import substitution as a critical near-term opportunity, proposing smart farming and integrated agro-food hubs nationwide to strengthen agro-food value-chain linkages, enhance food security and support value creation under RMK-13.

vi. Infrastructure-led growth and regional industrial development, including Perak - FMM highlighted that infrastructure investment is a key driver of economic growth and private-sector investment. Strategic initiatives such as the expansion of KLIA and enhanced connectivity to Perak can strengthen Malaysia’s attractiveness for manufacturing, logistics and regional supply chains, delivering significant multiplier effects to the economy. FMM also proposed enhancing the Inland Cargo Terminal (ICT) in Perak to improve logistics efficiency, reduce lead times and support greater industrial activity, positioning Perak as an additional manufacturing growth node under RMK-13.

vii. Supporting ESG transition and global market access - Recognising ESG compliance as an increasingly important market-access requirement, FMM reiterated its proposal for a dedicated RM2 billion ESG Transition Fund to support audits, reporting, decarbonisation and compliance, particularly for exporters and SMEs.

viii. Reducing regulatory burden through effective ILTIZAM Act implementation - FMM welcomed the Government Service Efficiency Commitment Act 2025 (ILTIZAM Act) and recommended strengthening its effectiveness through mandatory Regulatory Impact Assessments, structured stakeholder consultation and consistent implementation across federal, state and local authorities, supported by a stronger monitoring role for PEMUDAH and the reactivation of PEMUDAH at the state level.