O&G industry to remain bullish this year

KUALA LUMPUR: The oil and gas (O&G) industry is expected to remain bullish and sustainable this year and moving forward, despite oil prices fluctuating between US$55 and US$75 per barrel recently.

Serba Dinamik Holdings Bhd group managing director and group chief executive Datuk Dr Mohd Abdul Karim Abdullah said that despite many economists’ and industry experts’ opinion that the industry would undergo a volatile year for 2019, it would manage to sustain due to some internal factors and industry development.

“Way back about five years ago, everybody realised that all the O&G players had gone through a rationalisation process. They looked into the (production) costing, to derive or produce per barrel of oil. With this rationalisation, we more or less came to the conclusion that they reduced the cost of production per barrel.

“My guess is also based on the fact that all these asset owners are undergoing the latest approach of producing the oil, with a lot of them embracing Industry Revolution 4.0 technology, and that helps in terms of improving the efficiency thus increasing the productivity,” he said in a panel session at the 2019 Malaysia Economic and Strategic Outlook Forum here yesterday.

Group chief operating officer of Macrokiosk Datuk Henry Goh said that the e-commerce industry is also showing a positive growth trend this year, with so many untapped opportunities waiting to be explored.

“In 2018, the e-commerce industry in Malaysia was about US$3.1 billion (worth) or about 1.0 percent of the country’s gross domestic product (GDP). Basically this year, it is projected to grow to about US$3.9 billion, which is more than 20 percent over what was projected previously. – Bernama

“I think e-commerce is going to grow strongly this year and is going to be the next future trend in that area. There are a lot of untapped opportunities in this industry where there are a lot more services that we can provide to the consumers,” he added.

SME Association national president Datuk Micheal Kang said small and medium enterprises (SMEs) were still facing a lot of problems, with policies or direction for SMEs still unknown, especially with the transition to the new government in May last year.

“For the period of 2018, since the new government transition until today, most of the SMEs were facing problems including the increased cost of doing business.

“The new government should have a transition policy to assist SMEs to overcome their problems. For the past four years, SME growth has been very marginal.

“By 2020, we need to meet the 41 per cent contribution towards the GDP but we only hit 37.1 percent for 2017 and yearly we only grow at 0.3 percent,” he added.

He said at the current growth rate, it is impossible for the SMEs to hit the 41 per cent contribution to GDP in the next two years.

On the information and communications technology (ICT) sector, the National ICT Association of Malaysia (Pikom) urged the government to implement initiatives to further accelerate talent development as well as attract talents into the country.

Chairman Ganesh Kumar Bangah said talent is the number one cost factor in the sector and a significant contributor to the sector’s growth.

“If you have enough talent in this industry, this industry will grow because the overall market is growing but if we don’t have enough talent, we are going to lose out to neighbouring countries,” he said.

He said Malaysia should also capitalise on the establishment of the Digital Free Trade Zone (DFTZ) which has put the country on the forefront to benefit from the region’s digital economy, which is forecast to grow to US$240 billion by 2025.

He added that Malaysia should learn from the Multimedia Super Corridor, an initiative that should put the country ahead of other nations in the region in the digital economy but never reached its full potential, and avoid making the same mistake with the DFTZ.

On the tourism sector, the Malaysian Association of Tour and Travel Agents called for a review of the legislation regarding the sector.

Honorary secretary general Nigel Wong said the legislation for the tourism sector is deemed to be very outdated, remaining unchanged since the early 1980s.

“Unless those legislations are modernised and the regulations relaxed to a greater extent, the tourism sector could lose out competitively to our ASEAN neighbours,” he said.- Bernama