Manufacturers increasingly embrace automation to enhance productivity and remain competitive globally. The Malaysian Investment Development Authority (MIDA) offers the Smart Automation Grant (SAG) to support and encourage this adoption. A machinery manufacturer is committed to helping ease the process of SMEs gaining their MIDA SAG grant.

This article will explore the SAG’s objectives, eligibility criteria, eligible expenditures, required documents, and more. 

What Is a Smart Automation Grant (SAG)?

SAG, a matching grant designed for service companies, enables the automation of their business processes, fostering a transition towards digitalisation. The grant is dedicated to initiating the development and implementation of projects that leverage technology to automate operations.

Objectives of MIDA Grant

The primary goals of the Automation Grant in Malaysia are:

• Support and incentivise Small and Medium Enterprises (SMEs) and Mid-Tier Companies (MTCs) in automating and digitising operations, production, and trade channels

• Enhance efficiency in the manufacturing and services sector

• Decrease reliance on low-skilled foreign workers

• Generate job opportunities in high-value-added sectors

• Improve SME competitiveness internationally

• Align with the National Policy on Industry 4.0

• Stimulate domestic investment

What Are the Eligibility Criteria for the Application for the MIDA SAG Grant?

The eligibility criteria for the application include specific requirements and qualifications that applicants need to meet. According to MIDA, here are the criteria: 

1. Registered under the Companies Act of 2016.

2. Ownership by Malaysians, constituting a minimum of 51%.

3. Holds a valid Business License.

4. Engages in either manufacturing compliant with the Industrial Co-ordination Act 1975 or services regulated by specific acts, regulations, or relevant ministries/agencies.

5. Eligibility is restricted to SMEs and MTCs.

6. Operational for a minimum of 12 months.

7. Achieves at least one of the Committed Deliverables.

Eligible Expenditures for MIDA Automation Grant

What falls under eligible expenditures are automation machines, equipment, or software directly utilised in the overall value chain of manufacturing and services activities.

Non-eligible expenditures include:

• Purchase or rental of land/building/office/vehicles/equipment

• Acquisition or rental of second-hand or refurbished automation machinery/equipment/software

• Maintenance and repair costs, including premises renovation

• Wages and employee benefits

• Legal and stamp duty fees

• Insurance

• Collateral or loans, including interest, unrelated to smart automation

• Office expenses and supplies, including general-purpose computers, peripherals, and mobile phones

• Utility expenses

• Research and development expenses

• Advertising and marketing expenses

How Long Is the Project Duration of Smart Automation Grant MIDA?

The approved project needs to be finalised within 24 months from the effective date of the grant period, commencing with MIDA’s issuance of the Acknowledgement Letter upon receiving the completed application form. Claim submissions must be made to MIDA before the grant period concludes and annually (at least every 12 months), with a maximum of two tranches.

Failure to adhere to this timeline or comply with conditions will result in the non-carryforward of claim amounts to the following year. Any extension or appeal requests will not be entertained. Unutilised grant amounts after 24 months from the grant period’s commencement will be withdrawn, and requests for an extension will not be considered. Expenditures incurred before the issuance of the Acknowledgement Letter by MIDA are not eligible.

List of Documents Needed When Applying for an Automation Grant in Malaysia

1. PENJANA SAG Application Form

2. Most recent audited Financial Statement

3. Current SSM Company Profile (e-Info) issued by the Companies Commission of Malaysia (SSM)

4. Business Licence copy issued by the Local Authority

5. Manufacturing Licence (ML) copy OR a Confirmation Letter Exempted from ML by MIDA under the Industrial Co-ordination Act 1975 (nofollow link) (For manufacturing companies)

6. License/Permit/Support letter copy from relevant ministries/agencies governing the activities (For services companies)

Steps of the Application Process for the Smart Automation Grant

The process for obtaining the Smart Automation Grant involves the following key steps:

1. Submission of Application: Companies interested in the Smart Automation Grant submit their applications to MIDA.

2. Application Evaluation: MIDA assesses the applications and extends invitations to eligible applicants for a pitching session.

3. Pitching Session: Eligible applicants present their proposals to the Smart Automation Grant Approval Committee (SAGAC) during a pitching session at MIDA.

4. Approval and Grant Agreement: The awarded company receives an approval letter and proceeds to sign a grant agreement with MIDA upon approval.

5. Purchase and Installation: The awarded company must purchase and install the designated automation machine, equipment, or software.

6. Disbursement Application: Within six months from the approval date, the awarded company applies to MIDA for the disbursement of the grant.

7. Audit Visit: MIDA conducts an audit visit to verify the implementation, and the audit findings are reported to the Committee on Coordination & Disbursement of Grants (JPPG).

8. JPPG Approval: Once JPPG approves, MIDA will disburse the grant to the awarded company. For those utilising Panel Banks, the grant is disbursed to the selected Panel Banks.

Now that you know the MIDA SAG Grant, check out ways to accelerate your business by implementing machinery installations for increased efficiency and productivity.

Conclusion

The Smart Automation Grant (SAG) offered by MIDA in Malaysia presents a valuable opportunity for manufacturers to embrace automation and enhance their competitiveness. The grant aims to accelerate the adoption of smart automation technologies among SMEs and MTCs by providing financial assistance. 

Taking advantage of the SAG program, manufacturers in Malaysia can position themselves at the forefront of advanced manufacturing and reap the benefits of increased productivity and operational efficiency.

You can reach out to us or visit our machinery shop in Selangor if you need guidance on the available grants for your business and the machinery necessary for your operations. Additionally, we offer machinery servicing, installation, and repair services. For further insights into the importance of automation, read more about smart manufacturing and Industry 4.0 in Malaysia.

Please feel free to reach out to us or visit our machinery shop in Selangor if you need guidance on available grants for your business and the machinery necessary for its operations. Additionally, we offer machinery servicing, installation, and repair services. For further insights into the importance of automation, read more about smart manufacturing and Industry 4.0 in Malaysia.