Here’s a headline that doesn’t get to be seen very often in 2020, while the COvid-19 pandemic has wreaked havoc in the global economy and trade, looks like Malaysia is still a key destination for foreign investment in the manufacturing sector. Its interesting to note that MIDA has just reported that the country has received higher investment compared to 2019 in the nine months completed.
According to the agency under MITI, a total of 740 projects worth RM65.3 billion were approved compared with RM56.0 billion in 669 projects in 2019, representing an increase of 16.6 per cent in capital investments.
These newly approved investments are expected to create 51,172 jobs for the country, including 1,040 electrical and electronic engineers, 963 mechanical engineers and 331 chemical engineers. In addition, the approved manufacturing projects will also require about 5,499 skilled craftsmen such as plant maintenance supervisors, tools and die makers, machinists, IT personnel, quality controllers, electricians and welders.
The total investments approved in the manufacturing sector were mainly in the petroleum products including petrochemicals (RM15.0 billion), basic metal products (RM14.5 billion), electrical and electronics (RM7.7 billion), machinery and equipment (RM5.8 billion), chemicals and chemical products (RM4.5 billion), food manufacturing (RM3.0 billion), transport equipment (RM3.0 billion) as well as scientific and measuring equipment (RM2.1 billion). These industries make up 85 per cent of total approved investments for the sector.
Compared to the corresponding period last year, domestic direct investment in the manufacturing sector saw a leap of 45.5 per cent to RM25.9 billion during this period while the value of approved foreign direct investments increased by 3.2 per cent to RM39.4 billion.
The states that recorded the highest total approved investments in the manufacturing sector for the period are Sarawak, Sabah, Pulau Pinang, Selangor and Johor. These states have collectively contributed RM51.3 billion.
Meanwhile, the leading sources of FDI for the period of January to September 2020 were China, Singapore, Switzerland, the USA, Netherlands, Thailand, Japan and Republic of Korea. These eight countries jointly accounted for 91.4 per cent or RM36.0 billion of the total FDI approved in the manufacturing sector.
A recent joint study by KPMG and The Manufacturing Institute in the USA entitled “Cost of Manufacturing Operations around the Globe” ranked Malaysia fourth among seventeen economies in an assessment comparing the economy’s competitiveness as a manufacturing hub. Evaluating a total of 23 cost factors that impact the cost of doing business (CoDB), the study validates Malaysia’s aspirations to become a global supply chain hub in the region.
Naturally the achieving was not a overnight process but intensive efforts of MIDA, the government agency has been taking steps to increase the ease of doing business for investors in the country. Despite the on-going international border closures and strict governmental standard operating procedures (SOPs) in place worldwide, MIDA laboured on providing advice and support to potential investors, through its established footprint.
Notable projects approved in the manufacturing sector for the first nine months of 2020 include LEM (Switzerland), Dexcom and Ultra Clean (USA) as well as Nippon Electric Glass (Malaysia) Sdn. Bhd. (NEGM). NEGM is to increase its production capacity of glass tubing for pharmaceutical use by approximately 1,000 tons per month at its Shah Alam, Selangor facility. To date, NEG has invested more than RM6 billion in Malaysia on various products. Its latest RM200 million investment project reinforces Malaysia’s reputation as a sustainable and profitable investment destination for companies looking to do business in ASEAN and beyond.