ADDRESSING WEAKNESSES: An laboratory assistant from the Halal Science Centre of Chulalongkorn University is conducting lab test on samples here, recently. The 2013 Budget tabled by Prime Minister Datuk Seri Najib Tun Razak can address one of the major weaknesses among Asean companies – investment in research and development. — Bernama photo
BANGKOK: The 2013 Budget tabled by Prime Minister Datuk Seri Najib Tun Razak can address one of the major weaknesses among Asean companies – investment in research and development (R&D), said a local automotive parts investor.
President and chief executive, Aapico Hitech Public Company Limited Yeap Swee Chuan said the incentives would encourage companies to invest more in R&D.
“At the moment, Asean companies invested very little in R&D compared with their European and Japanese counterparts as they (Asean companies) rather reinvest their asset in machineries,” he told Bernama.
The Budget, among others, allows company that undertakes the commercialisation of R&D findings to get income tax exemption of 100 per cent on the statutory income for a period of 10 years.
It also provides incentive for such companies to get a tax deduction equivalent to the total investment made in R&D findings.
Yeap believed the two incentives could accelerate motivation among companies to spend more on R&D as it would result in higher profit margins and lesser tax.
“It is really good news. I think investors in Thailand can expand their investment in Malaysia with such attractive incentives,” he said.
Aapico, with a paid-up capital of about RM26.8 million, recorded sales of about RM1.5 billion in automobile component sales annually from its 28-hectare plant in Ayutthaya.
The plant designs, produces, installs and assembles jigs, dies and original equipment manufacturer auto parts which include floor parts, cross members, pillars, brackets, clips, brakes, engines parts and fuel tanks.
The auto parts produced are for use in Toyota, Honda, Ford, General Motors, Isuzu, Mazda, Mitsubishi, Nissan and Suzuki models with 50 per cent of the auto parts production for use in Thailand and the rest for export to 100 countries.
However, Yeap cautioned that R&D did not involve budget alone as technology know-how and skills were important components too.
“With all the incentives and encouragement given by the Budget, it will be much easier to do business in Malaysia nowadays,” he said.
Another Thai businessman, Man Petchvanichsakul, said the Budget could further accelerate the building up of the Asean Economic Community as it could provide a conducive environment for enhancing further intra-Asean investment and trade.
He believed more Thais could invest in Malaysia and share their expertise especially in the agriculture and tourism sectors. — Bernama