Malaysia’s balanced exports and imports market attractive for IAG Cargo

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Kualu Lumpur International Airport in Malaysia

Malaysia’s market was an attractive one to enter for IAG Cargo as it has a good balance of imports and exports, explains the carrier’s regional commercial manager for Asia Pacific, John Cheetham.

Speaking to Air Cargo Week (ACW) in Kuala Lumpur, he says the country has good growth potential and a thriving economy and it has a good location in South East Asia. The British Airways flight was launched a month ago, and services Kuala Lumpur International Airport daily from Heathrow Airport and returns the same day.

Cheetham says of the cargo moved out of Kuala Lumpur in the first month, 30 per cent was perishables such as fruit, 50 per cent high-tech goods like electronics and machinery, 10 per cent rubber goods, five per cent just-in-time textile garments and the remainder general cargo. As for imports they have mainly been aerospace products, machine parts, microchips, mainly high-value cargo.

“What we are seeing in Kuala Lumpur is the balance in the commodities in the area such as oil and gas, perishables, rubber and a range of commodities, which allows the airfreight market to ride a lot of peaks and troughs,” Cheetham explains.

He says Malaysia’s gross domestic product (GDP) is growing at around five to six per cent and GDP was $23,900 per capita in 2014.

In 2016, exports are forecast to grow 6.8 per cent and imports 6.9 per cent, so Cheetham sees a bright future and a good balance for cargo volumes in both directions.

Speaking at the media briefing, Malaysia’s trade ministry the Malaysia External Trade Development Corporation (MATRADE) said in 2014 the country’s trade was $443 billion, $234 billion in exports and $208 billon in imports.

MATRADE director, Mohammad Silmi Abd Rahman, tells ACW the IAG Cargo service is a boost to the country. “It is another platform for companies in Malaysia to export, particularly to Europe and North America,” Rahman says.

Rahman explains Malaysia is now transporting more high-value cargo via air, but the route will most importantly help create much needed capacity to transport perishables. “It is a relief that it has been started as it will help perishables and is very good for fresh goods such as fish, flowers and fruit.”

Imports he says will mainly be pharma, microchips, and aerospace products such as to the Airbus centre in Kuala Lumpur and Rahman adds that electronic products will also be moved both ways.

He adds a major aircraft engine manufacturer is close to announcing plans to supply high-value parts for the Airbus 330 and 350 from Malaysia, in a contract worth $264 million.