Corporates in Malaysia are looking to move more of their supply chains closer to home over the next 12 to 24 months, according to HSBC’s latest report “Global Supply Chains — Networks of Tomorrow”.
The report said that Malaysian corporates would base half of their supply network in Asia, as supply chains shift in response to ever-changing factors, including the entry into the Regional Comprehensive Economic Partnership (RCEP).
In a statement on Monday (June 12), HSBC Malaysia head of commercial banking Karel Doshi said corporates in Malaysia had begun to realign their supply chains to capitalise on the advantages offered by the RCEP.
“The RCEP is an opportunity for Malaysia to boost trade liberalisation and economic integration. Malaysia, as a prominent Asean economy, can take this route to further strengthen trade with RCEP partners, while domestic corporates can look forward to growing regionally.
“Additionally, Malaysia can support these supply chain changes with its natural resources, labour force and banking infrastructure,” she said in a statement.
Karel said that with economic activity in South Asia back to pre-pandemic levels, Malaysian corporates are expected to focus on increasing regional trade, expand their digital capabilities and drive sustainable initiatives.
She also said as corporates continue to make changes to their supply chains, “payment and financing terms” (46% of corporates surveyed in Malaysia), “digital integration with treasury” (25%), and “environmental, social and governance (ESG) credentials” (21%) are three of the top five factors considered when deciding on suppliers.
For the “HSBC Global Supply Chains” survey, more than 785 corporates across 14 markets were interviewed between August and October 2022.