MIDA CEO Exclusive: FDI increased Three Fold From 1Q20 to 1Q21

Despite the pandemic, foreign direct investments (FDI) in Malaysia have increased by more than threefold, from RM11.4 billion in January-March 2020 to RM54.9 billion in January-March 2021, constituting 68.1 percent of total investments, while domestic investments totalled RM25.7 billion, a senior spokesperson from the Malaysia Investment Development Authority (MIDA) said.

CEO of MIDA, Encik Arham Abdul Rahman, who spoke exclusively with BusinessToday says that despite the recent increase of FDI to neighbouring countries, foreign direct investments accounted for 88.9 percent or RM52.3 billion of the total approved investments in the manufacturing sector, while the remaining 11.1 percent, or RM6.5 billion, were from domestic sources.

He said that Malaysia recorded a total of RM80.6 billion worth of approved investments in the manufacturing, services and primary sectors in the first quarter of 2021. Approved investments involved a total of 993 projects and are expected to generate 32,557 job opportunities.

He added that significant FDI projects are mainly in the export-oriented and high technology sectors such as the E&E and medical devices as well as capital intensive sectors like basic metal products and chemical products. 

Most of the foreign and multinational companies in Malaysia involved in high technology sectors are leading adopters of Industry 4.0 technology. Sectors such as microelectronics, mechatronics, advanced materials, biomaterials, medical components, metal components, aerospace composites and chemical products are facing intense competition to remain visible in the global supply chain industry, driving their digital transformation. 

Among notable companies that have recently chosen to invest in Malaysia for their high technology and high knowledge-driven activities include: 

  • Smith+Nephew from United Kingdom (UK) that will produce high-tech medical device products including knee and hip implants 
  • LAM Research, a US global Fortune 500 supplier of innovative wafer fabrication equipment and services to the semiconductor industry, chose Malaysia to expand by establishing its advanced technology production facility
  • LEM, a Switzerland-based electrical measurement company, recently set up their new production plant in Malaysia to meet growing demands from its customers in the industrial and automotive sectors 
  • UCT (Ultra Clean Holdings Inc), a US-based Fortune 500 company, a leading developer and supplier of critical subsystems, ultra-high purity cleaning and analytical services, will be setting up their operations primarily for the semiconductor industry
  • SK Nexilis, a Korean company has established a thin copper foil manufacturing plant for the electric vehicle battery 
  • Dexcom, a US company and leader in continuous glucose monitoring systems, will be producing their niche offerings in Malaysia
  • MusicTribe, a US-based multinational leader for professional audio products and musical instruments, is leveraging Malaysia to set up an Industry 4.0-driven, fully robotised manufacturing facility

While MIDA is working to attract potential investments in high tech and advanced manufacturing projects and emerging industries, in alignment with the National Vaccine Development Roadmap, they are in the process of engaging with potential yet undisclosed vaccine companies to grow investments for  Malaysian homegrown manufacturing of vaccines.

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