Total approved investments for Jan-Sept 2016 registers 3.7% lower due to global economic slowdown

Kuala Lumpur, 13 December 2016 – Malaysia recorded a total of RM150.8 billion worth of investments in the manufacturing, services and primary sectors for the first nine months of 2016. This was 3.7% lower than the RM156.6 billion approved in the same period last year. These investments involved 3,784 projects and will create 117,550 employment opportunities.

Domestic investments of RM112.8 billion accounted for 74.8% of investments, with foreign investments making up the rest. The services sector attracted the largest portion of approved investments, contributing 71.9% or RM108.4 billion, followed by the manufacturing sector with investments of RM40.7 billion or 27.0%, and the primary sector with approved investments of RM1.7 billion or 1.1%.

Services Sector

For the period of January to September 2016, the value of investments in the services sector increased by 26.2% from the corresponding period last year. However the total number of projects approved declined by 3.9% to 3,203 compared with 3,334 projects in Jan-Sept 2015.

The approved services projects in the first nine months of 2016 are expected to create 69,660 job opportunities, of which more than 95% were in distributive trade, MSC status, hotel & tourism, education and global establishments.

Real estate led the services sector with investments of RM57.5 billion in 528 projects. Domestic sources made up 98% of these investments. In financial services, there was a significant increase of 104.7% of approved investments compared with same period last year.

Investments in global establishments registered RM7.2 billion in 171 projects. Within this sub-sector, the Principal Hubs with investments of RM6.9 billion contributed the largest portion. These include Sharp and Daikin – notable companies in the consumer electronics sector.

Daikin’s principal hub will involve R&D activities such as calibration, pressurised, psychometric and sound tests. This will improve Daikin Malaysia’s technology know-how and product quality. With this establishment, Daikin Malaysia will be the hub to manage the procurement and distribution activities in Malaysia, as well as Thailand and China. 78% of its employees will be getting a salary of more than RM5,000. Sharp Electronic is expected to spend an average of RM3.5 million annually in local ancillary services. This will benefit local service providers including those in the logistics, banking and financial sectors. This establishment will create 28 additional job opportunities for Malaysians. Of which, 93% will be in the managerial/ supervisory and technical category.

Manufacturing Sector

For the first nine months of 2016, approved investments in the manufacturing sector dropped by 39% from the corresponding period last year. This is due to the two lumpy projects approved last year, i.e. PETRONAS Refinery and Petrochemical Corporation (PRPC)’s project in Johor and LNG9’s project in Sarawak. Without these two lumpy projects, the performance of the manufacturing sector actually shows an overall increase of 25.6% from RM32.4 billion in January - September 2015.

The total investments approved in the manufacturing sector were mainly in petroleum products including petrochemicals (RM9.4 billion), electronics and electrical (E&E) products (RM7.3 billion), natural gas (RM3.7 billion), food manufacturing (RM3.3 billion), transport equipment (RM3.0 billion), basic metal products (RM3.0 billion), chemicals and chemical products (RM2.7 billion), non-metallic minerals (RM1.7 billion) and machinery & equipment (RM1.3 billion). These make up 87% of total approved investments for this sector.

While the value of approved domestic investments dropped by 57.8% to RM21.3 billion, foreign investments in the manufacturing sector registered an increase of 12.9% to RM19.4 billion during this period. The leading sources of foreign investments for the first nine months of 2016 were the Netherlands, China, UK, Singapore and Japan. These five countries jointly accounted for 57% of total foreign investments approved in the manufacturing sector for this period. Notably, 58.8% of foreign investments in the manufacturing sector were expansion or diversification projects such as Fibertex Personal Care (Denmark), Biocon (India) and Rikevita (Japan).

“For example, Fibertex Personal Care, a Danish nonwoven giant manufacturer will be expanding its operations in Negeri Sembilan. Its RM250 million expansion project will not only provide jobs but also potential business opportunities to supporting industries. India’s Biocon, which set up its integrated insulin manufacturing and R&D facility here – the largest in Asia, will be expanding further to produce rh-insulin and insulin analogs for the local market and then for export markets. Rikevita, the first overseas plant of Japan’s Riken Vitamin established in Malaysia since 1991, has also continued to expand its production capacity in the country,” highlighted Dato’ Sri Mustapa.

The Minister also added that the manufacturing projects approved will create 47,510 job opportunities. The jobs created include 2,100 electrical and electronics engineers, 1,570 mechanical engineers and 400 chemical engineers. In addition, the approved manufacturing projects will also require about 8,510 skilled craftsmen such as plant maintenance supervisors, tools and die makers, machinists, IT personnel, quality controllers, electricians and welders.

Primary Sector

In January – September 2016, the primary sector attracted investments worth RM1.7 billion. This sector comprises three main sub-sectors namely agriculture, mining, and plantation and commodities. Investments by foreign sources totalled RM0.7 billion while domestic investments contributed RM1.0 billion.

The mining sub-sector took the lead with approved investments of RM1.4 billion in 15 projects, followed by the plantation and commodities sub-sector with investments of RM302 million, and the agriculture sub-sector making up the rest of approved investments.

Conclusion

“Despite the challenging global environment, we anticipate that the overall investment performance for the whole of 2016 to be sustained. Investment performance for 2017 will reflect the optimism of investors who continue to find Malaysia as a strategic location for their investments. I participated in the trade and investment missions led by the Prime Minister to Germany, China and Japan. In all these countries, we received very positive indication from the business communities there to invest in a wide range of manufacturing and services projects in Malaysia. In fact, the recent visit by YAB Dato’ Sri Najib to China was very successful with the signing of 14 agreements worth RM144 billion in various areas such as tourism, infrastructure, manufacturing and R&D,” said YB Minister.

“While Malaysia also seeks greater market access through bilateral and multilateral trade agreements, we continue to place emphasis on protecting the interest of our economy and the well-being of our people. We continue our efforts in developing the industrial ecosystems in the country and encourage domestic players to move up the value chain. To thrive in today’s challenging and fast-paced business climate, we must stay ahead of the game, and continue to expand and diversify our trade with the world,” the Minister concluded.


DOWNLOAD STATISTICS :

APPROVED PRIVATE INVESTMENTS IN VARIOUS ECONOMIC SECTORS, JANUARY-SEPTEMBER 2016/JANUARY-SEPTEMBER 2015/2015

Table 1

DOMESTIC AND FOREIGN INVESTMENTS IN PROJECTS APPROVED BY VARIOUS ECONOMIC SECTORS, JANUARY-SEPTEMBER 2016/JANUARY-SEPTEMBER 2015/2015

Table 2

APPROVED MANUFACTURING PROJECTS BY INDUSTRY

Table 3

APPROVED PRIVATE INVESTMENTS IN VARIOUS SERVICES SECTOR

Table 4 

 

Posted on : 14 December 2016
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Last Updated : Friday 24th March 2017