Overhauled defence policies to benefit local industry, says Mohamed Khaled

KUALA LUMPUR: The Defence Ministry will no longer allow original equipment manufacturers (OEMs) to carry out maintenance, repair and overhaul (MRO) work on defence assets once their warranty periods expire, under major policy reforms unveiled on Wednesday (Jan 21).

Defence Minister Datuk Seri Mohamed Khaled Nordin said all post-warranty MRO activities must instead be undertaken by local companies.

“There will be no involvement of OEMs in MRO activities, except during the warranty period,” he said.

The move is among the most significant changes introduced under the newly launched National Defence Industry Policy (DIPN), which aims to ensure that defence capabilities and spending directly strengthen the domestic defence industry.

Mohamed Khaled also announced a minimum local content requirement of 30% for all defence procurements.

“For every defence procurement, the local content requirement will be clearly stipulated, with a minimum threshold of 30%,” he said in his speech at the DIPN launch on Wednesday (Jan 21).

The DIPN was launched by Prime Minister Datuk Seri Anwar Ibrahim at the Malaysia International Trade and Exhibition Centre.

Mohamed Khaled cautioned that local firms awarded MRO contracts must demonstrate continuous innovation and improvements, including efforts to increase local content and reduce costs.

He stressed that failure to meet these requirements could result in contracts being terminated, even if the companies involved are local.

“If they fail to meet these requirements, we will not hesitate to terminate their MRO contracts. Our priority is the national interest,” he said.

Any terminated contracts, he added, would be re-tendered to allow other capable local firms to participate.

The procurement reforms are expected to reshape Malaysia’s defence acquisition landscape, promote competition among local companies, and accelerate the development of a more resilient national defence industry.