Malaysian manufacturers warned today that rising logistics charges could derail efforts to woo much needed foreign direct investment into the country.

"As local manufacturers struggle to improve their competitiveness and assist the country to quickly recover from the economic crisis by increasing their exports, their efforts are hindered or even negated by the rising costs of logistics in Malaysia," the Federation of Malaysian Manufacturers said in a statement.

"If this issue is not addressed quickly, it could deter foreign direct investments by way of adding to the cost of doing business in Malaysia," it warned.

It said the increases included shipping documentation fees which have been raised to RM80 (US$21.05) from RM50, and terminal handling charges which have been increased by 94 percent from RM252 ringgit per 40 foot container to RM500 ringgit.

Curbs lifted

Shipping lines have also imposed a new US$25 charge called Security Manifest Documentation Charge for export cargo arriving at US ports, it said.

At the weekend Malaysia lifted all export and equity curbs on foreign participation in manufacturing in a bid to woo investment amid stiff regional competition.

Malaysia is currently under immense pressure from other low-cost producers in the region such as China and Thailand, with approved manufacturing investment in 2002 dropping 36 percent from a year earlier to RM16.53 billion.

The Iraq war and the outbreak of Severe Acute Respiratory Syndrome in the region compounded its woes, forcing Malaysia to cut its economic forecast to 4.5 percent this year from previous estimates of 6.0-6.5 percent, and the country last month unveiled a RM7.3 billion stimulus package to boost the economy. - AFP