“The disruptive and radical changes due to digital evolution have affected the way businesses are conducted. The closure of many other labour intensive industries, be it in E&E or in automotive, is not unexpected. Such industries, in many ways, have lost its comparative and competitive advantages.
We note that last year has been a busy year for merger & acquisition (M&A) activities. Global M&A volume last year surpassed USD5 trillion, breaking the record-setting volume of USD4.6 trillion in 2007 according to data by Dealogic, a research firm that tracks Wall Street M&A activities. The biggest deals have been in healthcare, technology and energy,” said the Minister.
Some examples of companies that have undertaken M&A activities were Broadcom by Avago (USD37 billion), EMC by Dell (USD67 billion), Altera by Intel (USD17 billion), SanDisk by WD (USD19 billion), AMD by Nantong (USD 371 million), Freescale by NXP (USD11.8 billion) and St. Jude by Abbott (USD25 billion). This has impacted some multinational companies in the E&E and medical devices industries in Malaysia, whereby most of them have a presence in Penang. These companies are looking at ways and means to use Malaysia to make further investments in the country. As such, this will provide more business opportunities for local companies. We must position ourselves to make Malaysia more attractive to receive these additional investments.
Malaysia continues to be a preferred location for investments as reflected by the performance of our approved investments in the manufacturing, services and primary sectors in the first quarter of 2016. Malaysia recorded a total of 1,271 projects with investments of RM37.3 billion. These investments will create 39,990 job opportunities. Approved investments last year provided 180,240 new job opportunities. Year-on-year, FDI increase to RM12.8 billion in Q1 2016 from RM10.0 billion in the corresponding period of 2015. Domestic investments led with RM24.5 billion or 65.7% of total approved investments in Q1 2016.
Some of these companies recently made announcements of the advance stages of their project. Among them include Haemonetics, Osram Opto Semiconductor, UMW Rolls Royce, Infineon, X-Fab Sarawak, Oncogen Pharma, Honeywell, Schmidt + Clemens (S+C), Abbott, Boston Scientific, KLS Martin, JCY Group, HP and Coca-Cola. These companies will create more than 6,000 employment opportunities for Malaysians and are expected to generate RM4.1 billion of exports annually.
Taking cognisant of the global economic scenario, Penang for example, continues to be among the top five recipients of approved investments in the manufacturing sector for 2015. Last year, Penang saw a total of RM6.72 billion approved investments from 107 manufacturing projects, which will create 18,730 job opportunities," said Dato' Sri Mustapa.
The MITI Minister pointed out that despite the closures of some manufacturing companies in Penang, the State continues to attract investments in various industries. For the first quarter of this year, Penang attracted approved investments of RM 1.34 billion in 27 manufacturing projects. There are 34 projects more in the pipeline with investments of RM1.67 billion. These projects are in the Electronics & Electrical, Medical Devices, Machinery & Equipment, Chemical & Chemical Products sectors,” he added.
The Minister shared two examples of Malaysian companies that continue to expand their business in the country i.e. RC Precision Engineering, and Mi Equipment.
"RC Precision Engineering, a homegrown Malaysian company, was established in 1993 as a Machine Parts Fabricator and Equipment service provider. RC has advanced into Contract Manufacturing building OEM equipment. The company also specialises in commissioning jobs for German customer in setting up high end machine in Germany and China. In 2015, the company has 168 employees and has increased to 250 employees in 1st half of 2016. RC is expected to further invest RM8.5 million for its project this year. This will bring along an additional 80 jobs for Malaysians.
Mi Equipment, another local champion which specialises in Wafer Level Chip Scale Package (WLCSP) continues to show its confidence in Malaysia’s investment landscape. The company has further plans to invest RM65 million for its expansion project. This company, with its many years of experience in the development and implementation of innovative automated assembly solutions, offers quality employment opportunities for Malaysians. More than 80% of their employees are in high income and high skilled positions. This additional investment will create more than 100 job opportunities for Malaysians,” the Minister elaborated.
Earlier today, the Minister visited the facility of SAM Precision (M) Sdn. Bhd. The company is an arm of SAM Engineering & Equipment (SAM Malaysia) a subsidiary of Singapore Aerospace Manufacturing (SAM) Pte Ltd. "It is notable that the SAM Group continues to find Malaysia as its profitable investment destination. With the positive outlook of the aerospace industry, capability of Malaysia’s local supporting companies and the availability of talent pool for precision machining, SAM Malaysia has announced that it will be spending more than RM100 million over the next two years for expansion.
This includes the diversification project of SAM Precision to manufacture thrust reverser machined parts for the aerospace industry, the first of its kind in Malaysia. Currently, SAM Precision manufactures precision tools for the electronics industry. The diversification project will create an additional 133 quality job opportunities for Malaysians," he said.
Prior to the media conference, Dato' Sri Mustapa had a dialogue with some industry players in Penang, organised by the Malaysian Investment Development Authority (MIDA). Also present was Datuk Phang Ah Tong, Deputy Chief Executive Officer of MIDA. Among the companies present at the session were Mi Equipment, SAM Precision, AVX/TPC, Plexus, Motorola, TF AMD, RC Precision, Ambu, Nationgate, Kobay Technology, and Inari Technology.
Dato' Sri Mustapa described the session as extremely timely in addressing the challenges faced by the business community in Penang and providing feedback to the Government on the formulation and implementation of its policies to ensure Malaysia's economy maintains its growth trajectory. "I welcome the sincere and constructive views that were voiced out by the private sector at this session. We take note of the challenges raised by these companies. I can assure you that they are given serious consideration in MITI/ MIDA. As much as we aim to increase the number of investments, our priority is to ensure that these figures get translated to real economic benefits for Malaysian companies and workers, particularly in terms of business and jobs opportunities," the minister said.
For more information, please contact:
En. Ahmad Tajudin Omar
Tel.: 03-2267 3627