Malaysia Chemical and Petrochemical Market Insights, 2025

Malaysia Chemical and Petrochemical Market Outlook 2025

• The Malaysia chemical and petrochemical market stood at 124,116.4 tons in 2020
• It is projected to expand at a CAGR of 4.2% from 2021 to 2025
• The Malaysia chemical and petrochemical market is expected to reach the output of 150,375.8 tons by the end of 2025

Analysts’ Viewpoint on Malaysia Chemical and Petrochemical Market Scenario

“Companies in the Malaysia chemical and petrochemical market are investigating possible new acquisitions to boost slumping profits post coronavirus period. The market is undergoing a significant change with the growing demand for diesel in construction equipment. Although diesel contributes for high economic growth of Malaysia’s energy mix, it is associated with greenhouse gas (GHG) emissions that affect the environment. Hence, chemical and petrochemical companies should diversify production in biofuels, natural gas, and electricity whilst end users gradually shift to cleaner energy solutions in the upcoming years. Apart from balancing production of diesel and biofuels, manufacturers should leverage revenue opportunities in increasing commercial and industrial activities in Malaysia.”

Robust Petrochemical Infrastructure of Malaysia Benefitting Market Stakeholders

The rich oil & gas reserves of Malaysia are translating into revenue opportunities for market stakeholders. Large reserves of crude oil and condensates are gaining the attention of stakeholders in the Malaysia chemical and petrochemical market.

Companies are investing in the set-up of new refinery facilities that would produce a range of refined petroleum products. They are harnessing oil & gas reserves and entering into smart partnerships with large petroleum companies to expand their revenue streams.

An increasing number of domestic and foreign companies are unlocking growth opportunities in the Malaysia chemical and petrochemical market. They are upgrading their manufacturing plant capacities to increase availability of chemical and petrochemical products.

Companies Redesign Workflow to Generate Revenue Streams amid Coronavirus Pandemic

The coronavirus pandemic has adversely affected business activities in the Malaysia chemical and petrochemical market. It was estimated by the United Nations Conference on Trade and Development (UNCTAD) that the pandemic would cause foreign direct investment (FDI) in Malaysia to shrink by 5% to 15% in 2020, due to the obvious contraction in the manufacturing sector and staggered rise in factory operations.

In order to revive market growth, stakeholders are preparing and embracing opportunities during the pandemic by focusing on positive or limited negative impact industries.

Companies in the Malaysia chemical and petrochemical market are taking steps to redesign their workflow processes at manufacturing plants to tide over challenges of the pandemic.

Biofuels and Natural Gas Potential Threat to Gasoline Sales

Alternatives such as biofuels, natural gas, and electric energy are anticipated to reduce the demand for petroleum fuels such as gasoline in the long term. Moreover, fuels such as CNG are more cost efficient than gasoline, and the former can be bought in Malaysia for almost half the price. Nevertheless, manufacturers are tapping revenue opportunities in national and international transportation activities to boost the sales of gasoline apart from diversifying production in biofuels and natural gas.

While manufacturers are being future-ready by diversifying the production of biofuels, they are currently capitalizing on Malaysia’s high import capacity. Malaysia is presently on the list of China’s most important gasoline importers.

Multiple Income Sources Created via Product Variation and Smart Partnerships

Apart from petroleum products, manufacturers are boosting the production of gasoline and diesel products. Companies are building their product portfolio by rapidly innovating in olefins, polymers, and fertilizers, among others.

Companies in the Malaysia chemical and petrochemical market are entering into partnerships to build nitrile butadiene latex manufacturing plants. The high demand for nitrile gloves is generating value-grab opportunities for market stakeholders. Thus, manufacturers are tapping into high growth sectors such as personal care, construction, and healthcare to generate additional income sources.

Can Palm Oil Aid in Sustainable Development of Petrochemical Industry of Malaysia?

Palm oil holds promising potential as a feasible bio-based feedstock that can be used in the production of 1,3-PDO (1,3-propanediol) and bio-lubricants. Since palm oil is abundantly available in Malaysia, manufacturers can use it for the development of sustainable business in bio-based chemicals. As such, there is a need for relevant government policies to support sustainable business practices.

Since vegetable oils are linked to setbacks such as process complexity and unrecyclable catalysts, manufacturers in the Malaysia chemical and petrochemical market are increasing research in palm oil for the production of bio-lubricants.

Moreover, stakeholders are increasing their focus on sustainable agronomic and manufacturing practices for the cultivation and processing of palm oil.

Malaysia Chemical and Petrochemical Market: Overview

• Industrialization and urbanization are the primary factors of climate change and performance growth. Malaysia is a rapidly developing economy, as it relies on capital-intensive and export-oriented industries that are funded by foreign capital and supported by various incentives. Therefore, rapid industrialization and urbanization in Malaysia are likely to boost the chemical and petrochemical market in the country during the forecast period.
• According to Transparency Market Research’s latest research report on the chemical and petrochemical market for the forecast period, 2021 to 2025, rise in usage of chemical and petrochemicals in automotive is a key factor expected to boost the chemical and petrochemical market in Malaysia during the forecast period

Extensive Usage of Chemicals and Petrochemicals in Various Industries: Key Driver of Malaysia Chemical and Petrochemical Market

• Malaysia’s economy is the third largest in Southeast Asia (after Indonesia and Thailand) and 35th in the world
• The chemical industry is an important contributor to the economy of Malaysia, with petrochemicals and oleochemicals being the main products in the sector
• Country's imports and exports are dominated by chemicals (5% and 7%), fuels (16% of imports and 22% of exports), rubber and plastics (7% and 5%), and vegetable by-products, primarily palm oil, (8 % and 3%)
• The chemical component of various everyday products include paints, plastics, building materials, and auto parts. Methanol is also a clean source of energy that is used in trucks, power cars, buses, boats, fuels cells, boilers, and kitchens. Hence, demand for chemical and petrochemical products is high in the industries in Malaysia.
• For instance, the Government of Malaysia purposes to position the country as the main gas and oil hub in Asia Pacific over the next few years. The target for this decade is an annual growth of 5%, an increase of about US$ 35 Bn of Gross National Income (GNI).
• Additionally, there are thousands of chemicals used in various industries, some used to make consumer products, others used to produce energy, and some even used in the production of other industrial chemicals
• Demand for chemical and petrochemicals in various industries has been increasing in Malaysia, owing to rise in need for petroleum in the country
• Thus, significant demand for chemical and petrochemicals in the automotive, construction, and healthcare industries is driving the market

Refining Product Segment Dominates Malaysia Chemical and Petrochemical Market

• Based on product type, the refining product segment dominated the chemical and petrochemical market in Malaysia in 2020. This can be primarily ascribed to increase in demand for the production of oil & gas, petroleum products, and chemicals.
• The chemical product segment is likely to expand at a steady pace during the forecast period
• The coal and coal chemical segments are anticipated to expand significantly during the forecast period, as these are used in various applications, including industries such as pharmaceuticals and food & beverages

Malaysia Chemical and Petrochemical Market: Competition Landscape

• Detailed profiles of providers of chemical and petrochemicals have been included in the report to evaluate their financials, key product offerings, recent developments, and strategies
• Key players operating in the chemical and petrochemical market in Malaysia are
  • Petronas
  • ConocoPhillips
  • Malaysia Hengyuan International Ltd.
  • Kemaman Bitumen Company
  • Vito
  • Pengerang Energy
  • Petron
  • San Miguel
  • BASF Malaysia
  • Eastman Malaysia
  • Suka Chemicals
  • Mapei Malaysia, etc.

Malaysia Chemical and Petrochemical Market: Major Players

• Major providers of chemical and petrochemicals, such as Chemours Company Petronas, ConocoPhillips, and BASF Malaysia, are focusing on research & development, mergers, joint venture, collaborations, and product innovation strategies
• In the report on the chemical and petrochemical market in Malaysia, we have discussed individual strategies, followed by company profiles of providers of chemicals and Petrochemicals
• The ‘Competition Landscape’ section has been included in the report to provide readers with a dashboard view and company market share analysis of key players operating in the chemical and petrochemical market in Malaysia

Malaysia Chemical and Petrochemical Market Snapshot

Malaysia Chemical and Petrochemical Market – Segmentation

TMR’s research study assesses the chemical and petrochemical market in Malaysia, in terms of product, as the segment includes refining products, chemical products, and coal & coal chemical products. This report presents extensive market dynamics and trends associated with different segments of the market, and how they are influencing the growth prospects of the chemical and petrochemical market in Malaysia.