The government, via the Malaysian Investment Development Authority (MIDA), remains focused on attracting high-quality investments from foreign and domestic companies into Malaysia through various investment strategies and policy initiatives amid the Covid-19 pandemic.
MIDA chief executive officer (CEO) Arham Abdul Rahman said the continued aggressive strategy to attract high-level investments from both foreign and domestic investors is exhibiting promising results, with Malaysia recording a total of RM80.6 billion worth of approved investments in the manufacturing, services and primary sectors in the first quarter of 2021 (January-March), a surge of 95.6% from the same period last year.
“These approved investments involved 993 projects and are expected to generate 32,557 job opportunities. Malaysia remains a competitive investment location for foreign investors despite the multiple headwinds on the global front,” he told Bernama in an exclusive interview recently.
He said total approved foreign direct investment (FDI) in the manufacturing, services and primary sectors increased by 383.4% to RM54.9 billion for the period of January-March 2021 from RM11.4 billion in the same quarter last year.
“It is observed that the significant FDI projects are mainly in the export-oriented and high-technology sectors, such as electrical and electronics (E&E) and medical devices, as well as capital-intensive sectors like basic metal products and chemical products.
“Most of the foreign or multinational corporations (MNCs) in Malaysia are involved in the high-technology sectors, such as microelectronics, mechatronics, advanced materials, biomaterials, medical components, metal components, and aerospace composite and chemical products,” he said.
Arham said these MNCs play a significant role as the nation’s transformation agents for the manufacturing- and manufacturing-related services industry.
He added that the government continuously supports the local supply chain and vendors to grow their business and serve the MNCs.
In efforts to upgrade the domestic ecosystem of industries that support the major foreign projects here, he said the government had introduced an Intervention Fund and Smart Automation Grant (SAG).
This assists local vendors in the supply chain of the MNCs to automate and digitalise their manufacturing and business processes for higher efficiency.
As for FDI interest in the services sector, he said the Principal Hub (PH) scheme is the most preferred business activity for foreign investors, supported by government tax incentives since 2015.
“Malaysia seeks to become the preferred choice of location for headquarters in the Asia-Pacific region, challenging other regional competing countries. The country is also gaining attention as the heart of the digital hub in ASEAN, with the recent launch of the MyDIGITAL initiative under the Malaysia Digital Economy Blueprint,” he said.
Moving forward, Arham said the Cabinet on April 12, 2021 approved a new investment agenda, building upon the National Investment Aspirations (NIAs) and Malaysia’s unique value proposition to investors.
As seen in the announcement of approved projects in the first quarter of 2021, he said many foreign investors confidently reflect their long-term investments in Malaysia.
“One notable project is a new manufacturing project by SK Nexilis from South Korea, a copper foil producer for electric vehicle (EV) battery manufacturing. The proposed facility in Malaysia will fully implement the RE100 initiative to commit to 100% renewable electricity.
“The company’s presence will attract more investors to complete Malaysia’s EV battery manufacturing supply chain, turning the country into a high-precision and high-quality copper foil hub for niche applications,” he said.
In the domestic landscape, Arham said local players such as Amerix Metal Machining Technology also seized the opportunity to expand and diversify their operations in 2020, further enhancing Malaysia’s supporting industry network capabilities.
It is observed that Malaysia’s trade performance maintained its upward trend in May 2021, with trade expanding by 48.7% to RM170.88 billion compared with May 2020, while exports surged by 47.3% to RM92.31 billion, the ninth consecutive month of year-on-year (y-o-y) expansion since September 2020.
Arham said the strong expansion in exports and imports was a welcoming sign that Malaysia’s economic recovery was gaining speed.
“The government has also set out on a decisive mission to mitigate the pandemic’s health, economic and social impacts. Since March 2020, many initiatives have been launched in the line-up of stimulus measures revolving around the 6R Strategy (Resolve, Resilient, Restart, Recovery, Revitalise and Reform).
“Stimulus packages of PRIHATIN, PRIHATIN SME+, PENJANA, KITA PRIHATIN, PERMAI, PEMERKASA and PEMERKASA+ with a total value of RM380 billion are rolled out to assist in mitigating the impact of Covid-19, spurring economic growth and promoting quality investments,” he said.
The recent PEMULIH package also allocated RM150 billion to weather the challenges faced in the current pandemic wave, he added.
Through the upcoming New Industrial Master Plan 2021-2030 (IMP) and the 12th Malaysia Plan (12MP), Arham reiterated that the government will continue formulating key new strategies to further enhance Malaysia’s industrial competitiveness and strategic directions in the national development agenda.
“MIDA keeps scouting, attracting and facilitating high-technology, knowledge-based and capital-intensive investments that generate multiplier effects on the nation’s economy. Being able to provide high-value job opportunities has always been MIDA’s strategic intention, particularly towards the Industry 4.0 era.
“The industrial landscape demands an increasing need for a combination of technical know-how, critical thinking, problem-solving capabilities as well as the right leadership skills,” he said.
- The Edge Markets