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INVEST MALAYSIA
On the map
to success
2 invest malaysia
By THERESA BELLE
IN his meeting with 34 industry
captains in Tokyo last month,
Prime Minister Datuk Seri Najib
Razak reported that 2014 was a
record-breaking year for
investments in Malaysia.
The total of RM181.5bil marked a
13.1% increase from 2013s
RM160.5bil, surpassing the
projected RM148bil target, which is
an average annual growth target
of 10.9% set under the 10th
Malaysia Plan.
This year, Malaysia is projected
to sustain a growth of 4.5% to 5.5%
in view of a forecasted 3.5% global
economic growth.
The 11th Malaysia Plan, which
outlines national strategies for
economic growth from 2016 till
2020, projects an increased gross
national income by 7.9% per
annum driven by private
consumption and investment.
This plan, along with the New
Economic Model, supports the
Economic Transformation
Programme (ETP), which is the
Malaysian Governments initiative
to develop the country into a highincome economy by 2020.
Twelve National Key Economic
Areas (NKEAs) with high-income
potential have been identified for
further development.
The Malaysian Investment
Development Agency (MIDA) was
entrusted to ensure these sectors
including oil, gas and energy,
education, electrical and
electronics, financial services, palm
oil and related products, and
tourism experience significant
growth.
Accordingly, MIDA has initiated
four new tax incentives under the
Malaysian 2015 Budget to promote
balanced growth while exploring
new fields and upgrading
manufacturing methods and
facilities.
MIDA works closely with the
Federal Government in promoting
the manufacturing and services
sectors in the country, assisting
potential investing companies and
facilitating their project
implementations.
With steady investments into key industries, Malaysia is well on track to meeting its goals of developing a knowledge-based economy.
Promising prospects
In the first quarter of last year, a
total of 42,906 jobs were created
from the numerous projects
approved througout the country.
MIDA statistics on the same
quarter this year displayed a 12%
increase in employment
opportunities through the creation
of 48,120 jobs.
The investments received in the
months of January to March this
year were channelled into
manufacturing, services and
primary sectors. Manufacturing
investments totalled RM33.6bil,
followed by RM22.3bil in the
services sector and RM1.5bil in the
primary sector.
Bank Negara has indicated that
investment activities in
manufacturing and services sectors
are expected to remain robust.
Investment in manufacturing will
be supported by export-oriented
industries and new growth areas
such as renewable energy,
semiconductors and medical
devices, while expenditure in the
services sector will be chanelled
into higher value-added activities,
such as IT services, education and
medical tourism.
Out of the RM57.4bil investments
made in the first quarter of this
year, 73% came from domestic
sources. The percentage of foreign
direct investments are decreasing
year after year, but MIDA chief
executive officer Datuk Azman
Mahmud explains that this is in
Regional
establishments
3.15%
Others
4.50%
MSC
status
7.21%
Industry
Health
services
7.21%
Hotel and
t ourism
9.91%
Real estate
29.98%
Global
operations hubs
11.71%
Utility
21.72%
Total investments
from January to March
2015 (RM billion)
Real estate
Utility
Global operations hubs
6.5
4.8
2.6
2.2
1.6
1.6
1.2
0.7
1
Japan
Singapore
China
Republic
of Korea
United
States
European
Union
countries
invest malaysia 3
Kuantan Port is now being expanded into a deepwater port upon completion, it is expected to propel ECERs
positioning as the investment gateway to the Asean and Asia-Pacific markets, with a total population of four billion
and a combined gross domestic product of US$17 trillion.
Increasing focused
efforts
Enhancing the regions
competitive advantage is the ECER
Special Economic Zone (ECER SEZ),
a concentration of high-impact
projects within the 25km by 140km
strip extending to Pekan, Pahang
from Kertih, Terengganu.
This gem within the nucleus of
the ECER is expected to generate
80% of the regions economic
output and aims to achieve a total
investment figure of RM90bil by
2020.
Its attractive location in the
centre of South-East Asia makes it a
prime investment gateway to
Asean and Asia Pacific markets.
Comprising new townships,
international tourism sites, three
ports, two airports and a
knowledge innovation zone, ECER
SEZ is set to accelerate growth with
the support of good infrastructure
development as well as knowledgebased and capacity-building
programmes.
The expansion of Kuantan Port,
which is located in ECER SEZ, will
further enhance investment
potential in ECER, offering the
quickest and most direct route
between Malaysia and ports in
China.
The Federal Government is
channeling RM1bil into building a
new 4.7km breakwater and
upgrading external infrastructure
at the port.
On top of that, the new deep
Creating promising
climate
ECERDC has made strides in
addressing and building human
capital over the years, which is
crucial in creating a suitable
business ecosystem for existing
and emerging industries alike.
Human capital and
entrepreneurship development
programmes such as empower
ECER, entrepreneur ECER,
Agropolitan, ECER Talent
Enhancement Programme,
TERAJU@ECER and Suri@Home
have greatly benefited the local
communities.
These programmes have
contributed to the creation of more
than 9,000 entrepreneurs in the
region, 61% of whom are women.
Under the ECER Talent
Enhancement Programme, ECERDC
provides on-the-job training to
engineering graduates in
collaboration with its investors.
Last year, 164 graduates
completed the programme and
went on to clinch positions in top
companies. Given this track record
for success, ECERDC is expecting
more than 600 participants for this
years programme.
4 invest malaysia
Talent gain to
attract investors
SINCE its inception, many
Malaysians are aware of the
economic ambitions of Iskandar
Malaysia. It is becoming one of the
most exciting places to work in
Malaysia, especially in nine
economic sectors plus the oil and
gas industry.
The Iskandar Regional
Development Authority (IRDA) is
the governments statutory body
tasked to regulate and drive
stakeholders in public and private
sectors towards realising the vision
of developing Iskandar Malaysia
into a strong and sustainable
metropolis of international
standing.
It plans and facilitates the
development of Iskandar
Malaysias economic sectors.
These economic sectors are:
l Electrical and electronics
l Petrochemicals and
oleochemicals
l Food and agro processing
l Logistics and related services
l Tourism
l Health services
l Educational services
l Financial services
l ICT and creative industries
These economic sectors require
a skilled workforce to support the
industries at all levels.
To meet this need, IRDA is
building the talent pool and
cultivating the necessary skill sets
and capabilities through close
partnerships with government
agencies, private businesses and
educational institutions.
Starting with the creation of the
Human Capital Blueprint in 2008,
we have been following a focused
plan to develop talent, says Ismail
Ibrahim, IRDAs chief executive
officer.
By studying the demand and
supply of human capital for each
of the key economic sectors, we
have a good idea of the gaps that
need to be closed to support the
growth of industry.
Based on IRDAs strategic
assessment of the regions human
talent, Johor boasts a relatively
young population, with about 50%
of the states estimated three
million people between 15 and 44
years old.
According to IRDA, this young
population provides Iskandar
Malaysia a strong and vibrant
human capital base.
The government agencies that
facilitate the funding process for
human capital development in
Iskandar Malaysia include the
Johor Economic Planning Unit, the
Economic Planning Unit (EPU), the
Finance Ministry and the
Performance Management and
Delivery Unit (Pemandu).
The talent development
programmes supported by
government ministries and
agencies include the National
Talent Enhancement Programme
(NTEP) for the electrical and
electronics sector funded by
Pemandu, the Graduate
Enhancement and Training
Tourism an
engine of growth
Iskandar Regional Development Authority (IRDA) is responsible for regulating
and driving stakeholders towards realising the vision of developing Iskandar
Malaysia into a strong and sustainable metropolis.
employment opportunities or
training providers for skills
development.
The Place and Train concept
is used in the NTEP to find
placements for new graduates to
work with major participating
employers in Iskandar Malaysia by
subsidising part of their salaries for
their first year of employment.
Following the term of
employment, the companies may
take these employees as long-term
hires.
To support regional
development, IRDA also examines
the bigger picture through studies
and reports.
For instance, IRDA has embarked
on a salary and remuneration
benchmarking study for Iskandar
Malaysia.
Upon completion, the report will
provide employers in Iskandar
Malaysia a better idea of the
current salary situation, which will
enable them to offer the right
remuneration package to attract
more talent.
The talent strategy employed by
IRDA is in line with the current
investment trend and the vision to
make Malaysia a high income
nation by 2020.
IRDAs relentless work on human
capital development will pay off
handsomely as it is expected to
boost local skills, support the key
economic sectors, attract more
investors and maintain the
economic momentum.
IRDAs strategic role is clear: to
plan, facilitate and promote human
capital development programmes
organised by industries and
training providers, says Ismail.
IRDA is well suited to gauge the
demand and supply of skilled
workers and coordinate human
capital development programmes.
With Iskandar Malaysias robust
pool of potential talent, the needs
of the industry will be met.
By 2025, Iskandar Malaysia is
expected to achieve a gross
domestic product of US$93.9bil
(RM352.7bil) and support 1.43
million jobs for a population that is
expected to reach three million.
> SEE PAGE 9
6 invest malaysia
Corridors of advancement
TODAY, the Malaysian economy
has developed into an exportdriven one based on advanced
technology and knowledge-based
and capital-intensive industries.
Malaysias five economic
corridors are crucial mechanisms
for each regions growth and for
the country to achieve greater
heights in economic and social
development.
Iskandar Malaysia in the
southern region is the nations
largest single-development project.
Up north, the Northern Corridor
Economic Region (NCER)
encompasses Perlis, Kedah, Penang
and four northern districts of
Perak.
Situated on the east coast of
Malaysia, the East Coast Economic
Region (ECER) consists of Kelantan,
Terengganu, Pahang and Johors
Mersing district.
In East Malaysia are the Sarawak
Corridor of Renewable Energy
(SCORE) and Sabah Development
Corridor (SDC).
Iskandar Malaysia
Covering 2,217sq km, Iskandar
Malaysia is approximately three
times the size of neighbouring
Singapore and twice the size of
Hong Kong.
Six service-based sectors have
been identified to sustain the
regions economic growth
l Nusajaya
At 97.12sq km, Nusajaya is now
the largest property development
project in South-East Asia and a
key component of Iskandar
Malaysia. By 2025, its projected
population will reach 500,000.
Nusajaya operates as the state
government funding.
l Capital allowance to
increase automation in labourintensive industries To further
encourage the move towards
automation in manufacturing
industries, a one-off incentive is
being offered to companies that
adopt it.
High labour-intensive industries
will be entitled to a 200% capital
allowance for undertaking
automation on the first RM4mil
expenditure incurred from this
year till 2017.
l Incentive for the
establishing of principal hub
The Principal Hub Incentive
Scheme is available to all
international companies
registered in Malaysia with
significant headquarters-related
business services or activities
here.
The incentive is in the form of
tiered rates of tax reductions
based on the level of value
created, and will also spur local
employment as Malaysian-owned
businesses are able to provide
services to these companies.
With 2020 a mere five years
away, the collective efforts of state
and federal governments on the
countrys development are putting
Malaysia on track to realising
Vision 2020.
The shift in the direction of the
countrys economic focus signals
an exciting new phase for local
industries, which also matches the
education and expectations of the
younger generation as well as the
resources currently available.
8 invest malaysia
Malaysia-China Kuantan
Industrial Park (MCKIP)
This sister park of ChinaMalaysia Qinzhou Industrial Park
(CMQIP) is the first joint industrial
park development between
Malaysia and China, an industrial
giant in the east.
It was accorded the National
Industrial Park status and is
identified along with CMQIP as an
Iconic Project for Bilateral
Investment Cooperation between
both governments.
A primary investor is Alliance
Steel (M) Sdn Bhd, a subsidiary of
China conglomerate Guangxi Beibu
Iron & Steel Investment Co Ltd
(China).
The firm is investing RM4.2bil
into building a modern integrated
steel plant in MCKIP. The plant is
scheduled for completion in 2017
and is projected to produce 3.5
million tonnes of high carbon steel
and H-shaped steel annually.
Although primary infrastructure
construction works are still
ongoing, MCKIP has already
attracted RM9.7bil in investments.
Investments in MCKIP are expected
to create more than 12,000 new job
opportunities by 2020, a majority
Areas of development
Special Economic
Zone (ECER SEZ)
33.42bil
31,714
Cross-border
development
4.86bil
5,018
KTCC-Kenyir-Dungun
growth triangle
5.06bil
8,647
Mersing-Rompin KDA*
2.72bil
2,387
6.10bil
3,252
Bentong-Raub KDA
5.77bil
7,626
DARA-Jengka KDA
0.63bil
116
Others
14.48bil
14,948
Terengganu
Kuala
Terengganu
Kuala
Berang
Dungun
1
Kertih
Pahang
Raub
Bentong
Bandar Tun
Abdul Razak
Gambang
Kuantan
Pekan
Bandar
Muadzam
Shah
6
7
Mersing
*KDA key
development area
Table A.
Kuala Lipis
Total private
investments (RM)
Besut
Gua Musang
Name
Bachok
Tok Bali
Kelantan
Nodes
Kota Baru
Jeli
2
Tumpat
Rantau Panjang
Bukit Bunga
1.98%
0.22%
0.77%
3.08%
2.46%
Pulau
Tioman
7.70%
54.54%
18.47%
Endau
Rompin
Mersing
Focus
industries
4.11%
0.10%
6.57%
Manufacturing RM39,834,396,855
Tourism RM13,489,500,728
Bio-economy RM5,622,000,000
Oil, gas and petrochemicals RM4,801,944,776
Infrastructure RM3,000,000,000
Property RM2,250,000,000
Logistic RM1,800,000,000
Education RM1,445,302,792
Agriculture RM561,019,954
Construction RM162,413,493
Services RM75,814,841
The pie chart details the breakdown of investments in the ECER by industry in the
past eight years. Manufacturing remains the top sector in this development corridor
followed by tourism and bio-economy. The healthy mix of industries attracts various
investments from around the world, creating a diverse pool of possibilities.
invest malaysia 9
Great northern
opportunities
There are great opportunities
for investment into modern
industrial parks in Perak.
Datuk Ir
Muhammad
Hafni Ibrahim.
says Ismail.
Pinewood Studios chose
Iskandar Malaysia because it has
all the right elements to become
the film hub of South-East Asia,
including the countrys cultural
ethnic diversity. With a skilled
English-speaking workforce and
creative talents, the country can
provide Pinewood Studios with
everything it needs to establish its
presence in Asia.
Iskandar Malaysia also offers a
strategic location with its proximity
to both Singapore and Kuala
Lumpur, together with major
airports serving the Asia-Pacific
region.
While Malaysia has hosted
previous Hollywood films such as
Entrapment and The King and I, the
time is right for a string of
international blockbusters to put
the country back on Hollywoods
map and keep it there.
More importantly, the success of
Iskandar Malaysias creative hub
could kick-start bigger and brighter
10 invest malaysia
A bright
future ahead
l Tourism
The economic growth of ECER
depends greatly on tourism. This
economic sector covers three
segments heritage and culture,
urban and coastal tourism, and
environment and ecotourism.
l Agriculture
This sector is driven by private
sector investments, which are
aimed at nurturing sustainable
growth along the complete value
chain for crops, livestock and
fisheries.
NCIA aims to increase
productivity and competitiveness
in the region, deepen links with
other industry sectors, venture into
new areas as well as conserve and
utilise natural resources in a
sustainable way.
Northern Corridor
Economic Region
The Northern Corridor Economic
Region (NCER) is overseen by the
Northern Corridor Implementation
Authority (NCIA).
The NCER focuses on the
acceleration of economic growth
and the elevation of income level
in hope of becoming a world-class
economic region by 2025.
It has five areas of economic
focus:
l Agriculture
The agriculture sector will be
resuscitated to increase demands
in both domestic and foreign
exports.
The NCIA intends to heighten
this sectors output to bring up the
living standards of local farming
communities.
An integrated support system
has been enforced to modernise
current farming techniques
and promote it to the younger
generation.
l Manufacturing
Technology and engineeringbased activities in NCER have
transformed over the past 40 years,
enabling the region to have a large
and educated workforce, a vast
and sophisticated logistics network
to support the key economic
sectors, a thriving business culture
and the presence of large
multinational corporations.
As it moves towards Phase 2 of
its development plan, the NCER
aims to retain its lead in this sector
through its various Centres of
Excellence.
l Tourism
Recognised as one of the worlds
leading tourism hubs, Malaysias
rich heritage of natural attractions,
culture and cuisine as well as
healthcare and wellness facilities
are big draws.
The northern region contains
abundant tourist attractions,
not least its biodiversity and
eco-tourism opportunities.
The NCIA encourages investors
to explore the development of
high-quality, innovative and
sustainable tourism facilities in
the region.
Malaysias natural
attractions draw large
numbers of tourists,
making it one of the worlds
leading tourism hubs.
Sarawak Corridor of
Renewable Energy
l Logistics
NCER is located strategically
within the Indonesia-MalaysiaThailand Growth Triangle,
providing it with a great
opportunity to become a major
processing centre and entrepot.
The vibrancy of NCER has been
boosted through the wellestablished logistic ecosystem,
which acts as a key for
l Glass industries
SCORE aims to collaborate with
strategic partners to develop flat
glass (also known as float glass)
operations in Similajau.
This collaboration has the ability
to jump-start a downstream
industry for future demands in
architectural glass and doubleglazed insulating glass units.
l Steel
Due to the low energy costs and
increasing developmental needs of
developing South-East Asian
countries, SCORE has remained an
attractive location for steel
investments. The development of
this industry has also created more
job opportunities for locals.
invest malaysia 11
l Oil-based industries
The Sarawak state government
views SCORE as an ideal location
for producing renewable energy in
the form of biodiesels.
This is due to the huge area of
planted land that can sufficiently
supply alternative oil-based energy.
l Palm oil
While available oil palm
plantation land in peninsular
Malaysia and Sabah are almost
exhausted, Sarawak is still
expanding its plantation
investments.
Significant investment is still
needed to meet food security goals
and the global demand for oils.
l Livestock
Recoda aims to boost the
development of modern
smallholder livestock production
systems to bring benefit to rural
communities and meet customer
requirements for quality.
l Timber-based industries
Timber and timber products are
the fourth biggest contributor to
Sarawaks gross domestic product.
l Agriculture
Banking on
natural resources
High-value processed timber
products are still in high demand
and the SEDC is encouraging more
investments into this industry.
l Marine
Situated off the South China Sea,
Sarawak has become the busiest
international maritime trade route
in the world.
The state aspires to develop a
reputation for building, repairing
and maintaining medium-sized
l Tourism
Several areas have been
identified by the Sarawak
Tourism Board for development
purposes.
Due to Sarawaks biodiversity,
more emphasis has been put on
the conservation and preservation
of its natural environment to boost
ecotourism.
Sabah Development
Corridor
The Sabah Development
Corridor (SDC) will be the catalyst
for Sabahs economic growth until
2025.
Overseen by the Sabah Economic
Development and Investment
Authority (Sedia), the corridors
high-income service-based
economic model aims to enhance
the quality of life and boost the
l Manufacturing
This sectoral focus aims to
enhance the infrastructure and
human capital within the state to
promote high-value jobs and high
value-added downstream activities.
Sedia also encourages foreign
investments into manufacturing
to speed up the growth of the
upcoming manufacturing activities
in Sabah.
Supporting growth
As the Perak state governments
investment promotion agency,
InvestPerak complements the role
played by the Malaysian
Investment Development Authority
InvestPerak is focusing on developing several natural resource-based projects such as Vale SAs iron ore distribution hub (left) and limestone quarrying in
Kinta.
Muhammad Hafni.
The commitment shown by
InvestPerak and their counterparts
is paying off.
Based on the Malaysia
12 invest malaysia
Playing on strengths
Under the 11th Malaysia Plan,
the Federal Government strategises
to increase productivity and
foreign direct investments,
especially in higher value-added
and knowledge-intensive activities.
Invest Selangor recognises this and
has accordingly set its goals to
match those of the nation.
Annually, Selangor produces
approximately 10,000 knowledge
workers who hold at least a
diploma qualification, which
comes as no surprise given that,
the state is home to the largest
number of local and international
branch universities, colleges and
other institutions of higher
learning in Malaysia.
Better qualified graduates
contribute to intellectual growth,
which further drives a knowledgebased industry. This spells a shift
from the focus on labour-intensive
manufacturing to more capitalintensive high-end projects
incorporating the latest
technological advancements.
As Selangor is a major
contributor to the countrys GDP,
(From right) Datuk Jeffrey Ng, Madhu Sudan Nair, Jeffrey Tan, Michael Kang, Datuk Soh Thian Lai, Elizabeth Wong
Keat Ping, Datuk Teng Chang Khim, Hasan Azhari Idris, Datuk Seri Stanley Thai Kim Sim, Abdul Latif Shaari and Datuk
Andrew Goh at the launch of Selangor International Expo in May.
Building bridges
Teng also recently launched the
Selangor International Expo (SIE)
2015, which will be held from
November 26 to 28 at the Mines
Exhibition Centre.
Having identified Selangor as
one of the most advanced states in
Malaysia, this expo will bridge the
growth of Malaysias economy with
the world, he said in his
welcoming speech.
The expo will see local and
international trade members set up
booths to showcase their latest
products and services, establish
networks and link businesses, and
attract potential buyers.
It will leverage on current
innovative trade trends and
Selangors strategic location in
between two emerging Asian
economies China and India to
promote the state as a global
trading hub.
Invest Selangor also recognises
the role of SMEs in growing the
national economy and engages
them through the Selangor
Information Technology and
E-commerce Council (SITEC).