Malaysia and Singapore Collaborates to Build First Green Offshore Supply Vessel
Malaysia’s maritime trade experienced a significant fall in overall value, dropping 85.5% from 2020 figures down to RM 1.61 billion. The majority of the decrease stemmed from a sharp decline in maritime imports, falling 91.4% from 2020 figures to only RM 887.9 million. On the other hand, maritime exports only suffered a minor setback in comparison, dropping 11.6% to RM 722.8 million. However, Malaysian exports as a whole saw a substantial uptick with an increase of 38% up to RM 134.1 billion in July 2021.
According to the data by the Ministry of International Trade and Industry (MITI), the value of exports to the US was RM143.2 million, followed by Indonesia (RM137.6 million) and the UAE (RM121.6 million).
Maritime products had the highest value of exports to the US (RM143.2 million), followed by Indonesia (RM137.6 million) and the UAE (RM121.6 million).
This upwards trend is expected to increase steadily with the advancement of technology and rising investments.
An investment that has been gaining traction is the implementation and practice of ESG in companies. ESG is fast becoming a driving force in the industry as companies strive to implement and ensure these values are reflected in their operations. One example is the collaboration between Malaysia and Singapore to build the first green offshore supply vessel (OSV) locally in Malaysia, valuing US$25 million (RM111 million), and supplying it to the global market. The strategic partnership involves three vital local shipbuilding and ship repair (SBSR) players and an innovative green company from Singapore. On the 27th of July, a memorandum of understanding (MoU) was signed between three local SBSR players — Grade One Marine Shipyard Sdn Bhd, Muhibbah Marine Engineering Sdn Bhd and Shin Yang Shipyard Sdn Bhd — and the Singaporean company, Evolution Concepts Pte Ltd.
The MoU will see the aforementioned parties leveraging on each other’s strengths to build the first green OSV in Malaysia, whereby the local companies (Grade One Marine Shipyard, Muhibbah Marine Engineering and Shin Yang Shipyard) would provide the shipyard facilities and end-to-end vessel construction while the Singaporean company (Evolution Concepts) designs the vessel, incorporating the green technology.
Association of Marine Industries of Malaysia (Amim) president Soo Jee Main said the OSV project will begin in year 2023 with the estimated completion is in 18-24 months.
This collaboration is expected to attract more foreign investments and more collaborations in the future to hopefully create more meaningful job opportunities for Malaysians in the maritime industry. As technology advances, more sustainable solutions for the main generators will be available to complement the OSV’s battery system. With this technology, it was also said that the vessel will be fuel-saving and can reduce carbon footprint, vessel operating expenses (OPEX) and life cycle cost.
In addition to this collaborative initiative, MITI has formulated a new National Investment Policy Framework anchored in ESG that will drive efforts by investment promotion agencies to encourage, attract, retain and sustain ESG-compliant investments, both domestic and foreign. Action plans were drawn to mainstream the adoption of ESG in industries so that they were in line with Malaysia’s aim to be net zero carbon in 2050 at the earliest. Malaysia has built more than 100 OSVs up until 2021, and around 420 OSVs are operating in Malaysian waters.