FINANCIAL INCENTIVE FOR PURCHASE OF MACHINERY (FIPM)

Malaysian Timber Council is expanding its assistance initiative by introducing MTC’s financial incentive programme for the purchase of machinery. This programme is to encourage local timber manufacturers in Peninsular Malaysia, particularly Small and Medium Enterprises (SMEs), to adopt the latest technology in mechanisation/automation.

1. INCENTIVE

Partial reimbursement of the machine price and freight charges for the purchase of machinery every three (3) years.

2. REIMBURSEMENT RATE

Non-Bumiputera company:

10% of the machine price and freight charges, limited to a maximum of RM50,000 every three (3) years per company/group of companies.

Bumiputera company:          

15% of the machine price and freight charges, limited to a maximum of RM50,000 every three (3) years per company/group of companies

2.1 Revised Reimbursement Rate (Covid-19 Pandemic)

MTC is increasing the reimbursement rate and coverage for MTC’s FIPM to further support the growth of our local timber industry during the Covid-19 pandemic as follows:

(A) SMEs

(B) Non-SMEs

• FIPM is extended to non-SMEs in 2020. Details are as follows:

3. COMPANIES’ ELIGIBILITY

• The timber company must fall within the definition of Small and Medium Enterprises (SME) as per the National SME Development Council’s definition.
• A member of any of the six (6) timber associations:Must be based in Peninsular Malaysia, installed with wood-based manufacturing facilities, in operation for at least three (3) years and is financially stable;
  • Malaysian Wood Industries Association (MWIA);
  • The Timber Exporters’ Association of Malaysia (TEAM);
  • The Malaysian Panel-Products Manufacturers’ Association (MPMA);
  • Malaysian Wood Moulding and Joinery Council (MWMJC);
  • Malaysian Furniture Council (MFC); and
  • Persatuan Pengusaha Kayu-Kayan & Perabot Bumiputra Malaysia (PEKA) [Association of Malaysian Bumiputra Timber & Furniture Entrepreneurs].
• Must be involved in sawmilling or production of value-added wood-based products;
• Must be a majority Malaysian-owned company (i.e. with at least 51% of Malaysian shareholding);
• Eligible companies are not confined only to manufacturing for export;
• Companies with 50% or more common controlling shareholders may apply and the combined reimbursable amount is limited to a maximum of RM50,000 every three (3) years;
• For a group of companies under common shareholders that are using/sharing the same site/facility, only one company may apply; and
• Company that has received other grant or subsidy for the procurement of the said machine from other government or government-linked agencies is not eligible for this financial incentive programme.

4. MACHINERY PURCHASED

• The machinery must be dedicated for sawmilling or value-added timber processing;
• The machine is used directly in the manufacturing processes at the factory;
• The machine is purchased to upgrade the existing process. The company must be able to demonstrate that the machinery purchased enhances productivity such as reducing man hours, reducing number of workers and increasing the volume of output;
• Only new machines are eligible for the financial incentive; and
• Both imported and locally fabricated machines purchased are eligible for the financial incentive.

5. APPLICATION

• Completed Application Form shall be submitted to MTC via FIPM Portal, together with supporting documents, after the purchase has been confirmed, but not less than 30 calendar days before the installation of machine.
• Certified true copies of documents (hardcopy) to be sent to MTC include:Approval for application is subject to a due diligence audit (i.e. 1^st DDA) to be carried out by MTC prior to the installation of the machine.
  • Form 24 as per the Companies Act 1965 or Section 78 as per the Companies Act 2016;
  • Form 49 as per the Companies Act 1965 or Section 58 as per the Companies Act 2016;
  • Latest Form of Annual Return;
  • Purchase order/contract,
  • Brochure with photos of new machine and technical specifications of machine(s);
  • Manufacturing process flow chart explaining major processes, and the relevant position of the purchased machine at the factory;
  • Latest 3 years audited accounts; and
  • Latest 3 months bank statements.
• A Conditional Approval Letter will be issued and sent to the Applying Company if they satisfy MTC’s criteria as per the FIPM Guidelines after the 1^st DDA.
• The new machine must be installed and commissioned within eight (8) months from the date of the Conditional Approval Letter issued by MTC.

Note: Any request for extension is required to be made at least two (2) months prior to the deadline (subject to MTC’s approval). The Application will be rejected if the machine is still not installed and commissioned within 12 months from the date of the Conditional Approval Letter issued by MTC.

6. REIMBURSEMENT

• Submission for reimbursement must reach MTC within three (3) months after commissioning of machine purchased.
• Certified true copies of documents (hardcopy) to be submitted for the reimbursement include:

A. Purchase from local machine suppliers

• Supplier’s invoice
• Delivery order
• Invoices for transportation charges
• Payment receipt issued by supplier
• Letter of commissioning to show that the machine has been installed in the factory and used at least for one (1) month after installation/commissioning
• Data (e.g. “before and after” results) to show that the machine enhances production efficiency such as reducing man hours and number of workers as well as increasing the volume of output

B. Purchase from oversea suppliers

• Supplier’s invoice
• Delivery order
• Packing list
• Bill of Lading
• Customs Declaration Form (K1)
• Invoices for ocean freight and port handling charges
• Letter of commissioning to show that the machine has been installed in the factory and used at least for one month after installation/commissioning
• Data (e.g. “before and after” results) to show that the machine enhances production efficiency such as reducing man hours and number of workers as well as increasing the output volume

• An applicant must allow a follow up due diligence (i.e. 2^nd DDA) to be carried out by MTC after the submission of reimbursement.

Note: Machine has been installedin the factory and used at least for one (1) month after installation/commissioning.

• Should the need arise, MTC may go with a machine expert for the due diligence audit.
• Late submission for reimbursement after the aforementioned three (3) months period will not be considered by MTC.
• Approval for reimbursement is at the sole discretion of MTC.
• The financial incentive provided is on a first-come, first-served basis, until the budget allocation is fully utilised.

For further enquiries and information, please contact:

1. Ms. Ong Lay Lee, ext. 602, email: ong@mtc.com.my

2. Ms. Wong Mei Kuan, ext. 604, email: mkwong@mtc.com.my