Does the industry believe it can fulfil the government’s expectation of being a key driver for high-value projects and jobs in the JS-SEZ?
With the regional growth in tourism, aftermarket demand and aerospace manufacturing supply chain, aided by Malaysia’s cost-competitiveness, the industry will grow significantly over the next five years and beyond.
The sector could likely double over this period as we witness increasing demand for Malaysia’s aerospace cluster.
Johor already has well-established companies operating in aero-manufacturing. As such, the SEZ will likely encourage more overseas investors to establish operations in Johor.
With Singapore home to about 100 foreign aerospace investors, the SEZ will almost certainly encourage more foreign investors to come to the region to offer opportunities to improve their cost-competitiveness and enable their market entry into the APAC region.
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What obstacles do the industry face in flourishing in the JS-SEZ?
Many Johor-based aerospace companies that subcontract work to Singapore find the ability to move products challenging.
Facilitating improved connectivity across the Causeway, which I understand is planned, will assist existing businesses and encourage further industry growth in the JS-SEZ.
Streamlining the current regulatory processes to enable the free movement of goods will also facilitate added investment.
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What must be done to help the industry be a key catalyst in the JS-SEZ?
To encourage investors, Johor must provide excellent infrastructure for housing, education, sports and other facilities.
However, the state needs to create dedicated aerospace parks. This has been successfully demonstrated in Seletar (Singapore) and, to a lesser degree, in Iskandar. Johor must provide high-quality real estate, such as purpose-built plants and facilities with a ready electricity supply and digital coverage to encourage investors.
On a positive note, Malaysia plans to offer SEZ investors a 5% corporate tax rate for 15 years.
Also, the potential collaboration on green energy is an excellent initiative since the aerospace sector is under pressure across the entire global supply chain to be net-zero by 2050, which may encourage further investment.
Policy issues must be reviewed to entice investors so that the SEZ can be promoted and ensure the seamless movement of goods and labour. Passport-free access from Johor to Singapore, perhaps with a special digital card, would help the free movement of personnel.
Finally, talent development is critical. We need to ensure that sufficient technically qualified staff enter the industry with the right skills and digital capabilities as the industry continues to advance.
