Mida says projects have capacity to create 91,500 jobs
KUALA LUMPUR: Malaysia’s approved investments in the manufacturing, services and primary sectors fell to RM113.5bil in January to September of 2017 due to a higher base effect last year and subdued property market.
The Malaysian Investment Development Authority (Mida) said yesterday that these investments involved 3,886 projects and would have a capacity to create 91,500 jobs.
Local sources accounted for three-quarters of the approved investments at 73.5% and the rest were foreign sources.
Mida said the approved investments over the nine-month period fell by 26.5% from RM154.3bil a year ago, due to the quantum of recorded in the services sector, which fell by 37.6%.
“This was in line with the subdued property market that is expected to persist until the end of the year.
“The manufacturing sector too declined 15.5% partly due to the higher base reported previously as a result of approvals associated with lumpy projects (Pengerang and Rapid project in Johor),” it said. A second reason was the softening global foreign direct investments trend for the sector, as highlighted by UNCTAD’s World Investment Report 2017.
Nonetheless, Malaysia’s strategy of positioning local companies as the primary driver of growth is paying off with
Malaysian companies took the lead in the main sectors, namely manufacturing, services and primary.
The higher composition of approved domestic investments was in line with the government’s drive to ensure sustainable future economic growth. Under the Economic Transformation Programme, domestic investments are targeted to account for 73% of total investments by 2020.
Commenting on the services sector, Mida said there were RM69.2bil worth of investments from 3,386 projects creating 57,884 jobs. Up to 81.2%, or RM56.2bil, were domestically sourced. The remaining 18.8%, or RM13bil, were from foreign sources.
The bulk of the investments in the services sector were from real estate at RM28.4bil, followed by ICT (RM7.9bil), distributive trade (RM7.2bil), financial services (RM6.6bil) and utilities (RM6.5bil).
Commenting on the Principal Hub (PH) scheme, since its July 2017 completion, Mida has approved six PH projects worth RM1.5bil in the third quarter of 2017.
“The agency is currently in the process of evaluating several PH projects and Mida foresees that more sizeable investments could be approved soon,” it said.
Mida said 464 manufacturing projects worth RM35bil were approved in January-September of 2017, of which about a third was oil and gas-related and has the capacity to create more than 32,700 jobs.
Most of the investments were in petroleum products including petrochemicals (RM12.4bil), electronics and electrical (E&E) (RM8.8bil), chemicals & chemical products (RM2.7bil), non-metallic minerals as well as scientific & measuring equipment (RM2bil). These make up 81.1% of total approved investments for this sector.
Domestic investments accounted for nearly 60% of the total investment approved for the sector while the balance was foreign-based.
Among the domestic companies that continue to embark on new or expansion and diversification projects are Petronas Floating LNG, Salutica Allied Solutions, Inari Technology, Sime Darby Biodiesel, Omni Oil Technologies, Saiyakaya and Kibaru Innovation.
Switzerland, the Netherlands, Singapore, Hong Kong and Germany accounted for 63.4% of total foreign investments approved in the manufacturing sector for this period.
Notably, 70.4% of foreign investments in the manufacturing sector involved expansion or diversification by renowned existing investors such as TF-AMD Micro-Electronics, Longi, Osram, and ASE Electronics Malaysia.
Meanwhile, Sarawak is the highest recipient of RM10.5bil worth approved investments, Penang in second spot at RM9.9bil, Johor (RM3.7bil), Melaka (RM3.2bil) and Selangor (RM3bil).
Collectively, these states attracted 86.6%, or RM30.3bil, of the total approved investments, creating some 26,000 jobs.
The primary sector surged 390.5% to RM9.3bil in approved investments, with domestic-based ones accounting for nearly two-thirds, at RM6.4bil, and foreign, RM2.9bil. The mining sub-sector led with approved investments of RM8.6bil in 21 projects, followed by the plantation and commodities sub-sector with investments of RM612.5mil while the agriculture sub-sector made up the rest.