Malaysia-Spain trading ties on solid ground, expected to grow stronger in 2021

KUALA LUMPUR: Trading relations between Spain and Malaysia have been on solid ground and is expected to continue on the upward trend post-COVID-19, said Economic and Commercial Counsellor at the Embassy of Spain in Malaysia, Ines Perez-Durantez.

She said in 2020, the bilateral trade had recorded a strong growth although some exchanges were affected by the global COVID-19 pandemic.

"Certainly, in 2020, exchanges went down along with the border closure and disruptions in the supply chains. But even that year, some chapters registered growing figures, such as the exports of Spanish pharmaceutical products to Malaysia, which accounted for 8.1 per cent of total exports and increased by 4.5 per cent in 2020. Likewise, Malaysia's exports of rubber and rubber products increased by 175 per cent (24 per cent of total Malaysian exports to Spain in that period).

"We expect the upward trend in the trade relations to resume in 2021," she said in an email interview with Bernama.

Perez-Durantez said it was also important to note that even in such a difficult year as 2020, Spain imported EUR118 million (RM568 million) worth of palm oil and EUR147 million (RM707 million) worth of biodiesel from Malaysia, where both the total accounts for 22 per cent of Spanish imports from Malaysia.

According to the Spanish Foreign Trade Statistics (ESTACOM), Spanish exports to Malaysia in 2020 was valued at EUR318.1 million (RM1.53 billion), while Malaysia's exports to Spain stood at EUR1.2 billion (RM5.77 billion).

Perez-Durantez added that Malaysia's export to Spain has been increasing steadily by double digits before 2020.

In 2018, Malaysia's export to Spain was EUR906.5 million (RM4.36 billion) - an increase of 21 percent from the previous year [EUR752.1 million (RM3.6 billion) in 2017]. In 2019, it was EUR1.18 billion (RM5.7 million).

Exports from Spain to Malaysia, meanwhile, totaled EUR545.5 million (RM2.62 billion) in 2018, which increased by 11 per cent to EUR606 million (RM2.9 billion) in 2019.

"Malaysia and Spain maintain excellent long-standing relations, which we want to deepen in the years to come. We have been building up a solid economic relationship in the last decades with an increasing number of Spanish companies in this country.

"The complementarities and common interests between our two countries are a well-grounded base for a profound relationship, and in this regard, Malaysia outstand as the recipient of Spanish investment in the ASEAN region," Perez-Durantez said.

She said in 2019, Spain recorded a flow of EUR298 million (RM1.43 billion) of foreign direct investment (FDI) into Malaysia, with the manufacturing of iron and steel products, trade, and chemical industry as the main sectors.

In term of stocks, the average FDI in the period from 2015 to 2018 was EUR850 million (RM4.08 billion), in diversified areas, with iron and steel products followed by electrical material and equipment as the leading sectors. (EUR1 = RM4.81)

"Hopefully we will continue to see this number growing. I strongly believe that both Malaysia and Spain would greatly benefit from a more intense relationship," she said.

Perez-Durantez said the number of Spanish companies engaged in Malaysia has been growing in the last few years

Currently, there are around 50 Spanish companies based in Malaysia while more than 2,700 companies have traded with Malaysia in 2020.

Among the prominent Spanish companies and brands operating in Malaysia are Bahru Stainless factory, Johnson Suisse, Dunlopillo Holdings, INDRA, Tecnicas Reunidas, Melia, Repsol, and Llao Llao.

She added that Spanish investment in Malaysia covers many more sectors, including SOLARPACK in renewable energy, Ormazabal in electrical networks, and GRIFOLS, which is world largest producer of blood plasma-based product, established in Malaysia since 1998.

She also noted that the Bahru Stainless factory in Johor is the leading Spanish investment in Malaysia and it is still, since 2008, the major single investment of any multinational company in the state of Johor.

-- BERNAMA