UAV Drone IndustryMalaysia leverages innovation sandbox to become Southeast Asia’s drone powerhouse

November 30, 2021by helo-10

Starting from 2016, Malaysia has incubated a handful of renowned startups although the country is still in the early stages of drone development thanks to its innovation sandbox policy.

Aerodyne Group, a DT3 (drone technology, data technology, digital transformation) enterprise solutions provider was ranked number 1 over 40 remote-sensing companies across the globe by DRONEII’s 2021 Drone Operator Ranking Report. And Poladrone, received a US$4.29 million seed round led by Wavemaker Partners, the largest seed round ever raised in Malaysia. This startup transforms the conventional way farms use pesticides with a combination of drones, automation as well as analytics software.

“While homegrown company Aerodyne has recently been acknowledged as the top drone services company in the world, we want Malaysia to grow our basket of world-renowned drone-capable companies. TPM introduced Area 57 in September, which is a center of excellence (COE) for the unmanned aerial vehicle (UAV) and unmanned aircraft systems (UAS),” stated TPM CEO Dzuleira Abu Bakar in a news article written by her, posted in TPM’s website.

Major Players of UAV and UAS in Malaysia



Remote sensing


Industrial Infrastructure inspections, mapping, and image analytics

Terra Drone Technology

Mapping, soil surveying, asset tagging, and resource mapping

GeoPrecision Tech

Infrastructure inspection, deep-sea UAV and confined spaces inspection and data analysis for infrastructure and energy industry


Agriculture, construction, mapping, and surveillance


Design and manufacturing of UAV and UGV, law enforcement, geological survey, precision agriculture and crisis management

Vortex Edge

Retrieved from 2021 Taiwan UAV Industry International Summit Forum, E3Hubs’ Presentation

That’s where all the magic happens

The credit for Malaysia’s drone development is closely associated with sandbox. Not only does a sandbox confronts entrepreneurs with the reality, equip them with the necessary tools and discipline, but most importantly, Malaysia has learned from the consequences of its infrastructure deficit.

In 2017, Aerodyne was gasping for air as the group had outperformed Malaysia’s drone market. The country was lagging in frontier technology development at that time. An unsupportive environment, conventional mindset, small market, thrown together by these circumstances, the group forced to try their luck in deeper water — Australia.

To Aerodyne’s surprise, there was no player over there in terms of providing enterprise-level solutions. By taking full advantage of its product differentiation, Aerodyne helped steer the direction of digital transformation for 500 Fortune organizations. Only in three-month times, the Group received many multimillion-dollar projects in Australia. Kamarul A. Muhamed, founder and CEO of Aerodyne said that from that success, they started to build beyond Malaysia.

That might have stimulated the Malaysian government to see the potential of its drone industry, and what could have been done.

The National Technology and Innovation Sandbox (NTIS) was set up in 2020, with an aim to relax certain regulatory requirements or processes for the participants to accelerate commercialization. The project was initiated by the Ministry of Science, Technology and Innovation (MOSTI) and supported by the Malaysian Global Innovation & Creativity Centre (MaGIC), Technology Park Malaysia, Mimos Bhd., and Futurise. Funding is provided by the Malaysian Technology Development Corporation (MTDC), according to TheEdgeMarkets, a Malaysian media.

Under Budget 2022, TPM has allocated US$7.2 million (RM30 million) to be upgraded into an Industrial Revolution 4.0 International Innovation Hub (IIH). This hub will serve as a center of excellence and support the innovation ecosystem by developing new technology clusters such as drones, robotics, and autonomous vehicles.

In the drone category itself, a total of US$23.57 million (RM100 million) will be allocated to Bumiputras (Malays, the Orang Asli of Peninsular Malaysia, and various indigenous peoples of East Malaysia) in exploring the aerospace industry; a total of US$ 1.18 million (RM5 million) will be allocated to youth in developing a Drone Sports Excellence Centre under e-sports.

Up to date, there are 4 sandboxes in Malaysia, namely Felda Mempaga in Pahang, Drone and Robotic Iskandar (DRZ Iskandar) in Johor, Urban Drone Delivery in Cyberjaya, and the recently launched Area 57 at Technology Park Malaysia. Each one of them has a different role to play in the country’s drone ecosystem.

4 Sandboxes in Malaysia



Felda Mempaga (Pahang)

To develop smart agriculture, 5 selected companies (Poladrone, Aerodyne, Braintree Technologies, OFO Tech, and Nanoezinn) are currently testing various drone and robotic solutions in improving aspects such as harvesting, maintenance, and fertilization of palm oil plantations at this 25-hectare site.

DRZ Iskandar (Johor)

Building a sustainable smart city by focusing on technology such as security and surveillance, smart agriculture, delivery or logistic, autonomous vehicles, data center autonomation, and inspection at this 25-hectare site.

Urban Drone Delivery (Cyberjaya)

To develop the long-term viability of urban drone delivery service, Teleport (a venture under airasia Digital), Malaysian Global Innovation and Creativity Centre (MaGIC), and the Lead Secretariat of the National Technology and Innovation Sandbox (NTIS) collaborated and launched this sandbox.

Area 57 (Bukit Jalil)

Serving as the one-stop center for DroneTech, Area 57 offers the following services to its community, including testing and certification; services; maintenance, repair and overhaul, research and development; manufacturing; engagement with authorities and regulators; community and engagement.

Where the opportunities lie

The unmanned aerial vehicle (UAV) service is growing tremendously in Malaysia. Its applications are widely used in industries such as oil and gas (market value: approximately US$ 2.83-3.77 million per annum) and infrastructure (market value: approximately US$ 0.71-1.89 million per annum) whereas marine is a high potential untapped market. In terms of UAV hardware, the demand is always there. Most of the drones’ deployment in Malaysia are from Shenzhen DJI Sciences and Technologies. UAV software, on the other hand, is a big-ticket to Malaysia. More particularly, software designed for solar inspection jobs as the renewable energy industry is relatively new in the country.

Major applications of drones in Malaysia



Oil & Gas

Approximately 30% of Malaysia’s revenue derived from hydrocarbon

Cost pressure driving innovative approach in remote inspection

>330 offshore platforms and 7 refineries in Malaysia

Each facility typically requires visual inspection on an annual basis

Neighboring Brunei has >160 offshore platforms and appears to be a relatively untapped market


Land mapping– Sarawak mapping department has long-term plans to map the entire state in higher resolution with an area of 124,450-kilometer square.

Telco begins to use drones for site surveys, tower inspections, inventory reporting, and network assessment.

Construction progress monitoring & mapping for highways (SUKE, DASH, Pan-Borneo).

Utilities-TNB (West Malaysia) has > 11,000 kilometers of transmission lines above ground, whereas Sarawak Energy has > 900 kilometers.


Shipbuilding & ship repair generated approximately US$ 1.97 (RM 8.36 million) in revenue in 2013, delivering 250-300 vessels/year.

UAVs can assist shipbuilders, classification societies and insurers in the inspection of both new-build and existing vessels.

Visual inspection work can be done faster (at least 2 times), safer (less human intervention or presence), and cheaper due to shorter timeframe and cost avoidance.

60,000 vessels calling by ports/annum.

Source: Ministry of International Trade and Industry (MITI) Malaysia

Foreign companies are also allowed to apply for the sandbox program, which can take up more than 51% of equity.

Foreign Companies Allowed to Apply to be in NTIS


> 51% equity owned by foreign

Applicants are eligible to apply for the Sandbox Program but not entitled to the Malaysian government funding

Foreign technology allowed

Preference (weightage) is given to local technology

Joint Venture (JV) Plan or incorporation of Malaysia-owned entity, upon approval of the application.

Source: National Technology & Innovation Sandbox (NTIS). 2021 Ministry of Science, Technology, and Innovation (MOSTI)

Malaysia is competing to become Southeast Asia’s testing ground for the drone industry, according to Nikkei Asia. With strong policy incentives that support local startups, Malaysia is seen as quite promising in building a drone economy.

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