Malaysia continues to be among the top global investment destinations for foreign investors and a hub for business growth, as evidenced by the recently released approved investment figures for the first nine months of 2022.
From January to September 2022, Malaysia attracted a total of RM193.7 billion worth of approved investments in the services, manufacturing, and primary sectors involving 2,786 projects. This is a 2.5% increase from the RM188.9 billion of investments approved in the same period last year.
Foreign direct investments (FDI) remained the major contributor, at 67.5% or RM130.7 billion, a 15% increase from FDI approved in the same period last year. Meanwhile, domestic direct investments (DDI) contributed 32.5% or RM63 billion to total approved investments in January to September 2022.
Services Sector Takes the Lead
The services sector accounted for the largest share of the total approved investments during January to September 2022, amounting to RM113.3 billion across 2,167 projects. This is a significant increase from the RM70.4 billion investments approved for the services sector in the same period of last year. These approved investments in the services sector are expected to generate 39,772 new jobs.
FDI made up the most significant portion of the approved investments in the services sector, accounting for RM69 billion or 60.9%, while the remaining RM44.3 billion were from DDI.
Notably, six sub-sectors illustrated significant upward trajectory in approved investments, particularly information and communications, which skyrocketed 1,101.1%. Other services sub-sectors that performed well were: education services (up 175%), utilities (increased 15.5%), distributive trade (rose 9.7%), and financial services (up 3.2%).
Key projects approved in the services sector include data centre projects by Bridge Data Centres Malaysia III Sdn. Bhd., ByteDance System Sdn. Bhd., and YTL Power International Berhad. Such digital infrastructure projects are expected to propel Malaysia’s growth towards becoming a full-fledged digital-first economy.
Another key investor in the services sector is Mamee Double Decker Distribution (M) Sdn. Bhd. (Mamee). This homegrown investor set up its Regional Headquarter Hub to manage supply chain activities across Mamee’s manufacturing facilities in the region and consolidate distribution of products to countries globally.
Manufacturing Sector Remains Competitive
Malaysia continued to attract high-quality investments in the manufacturing sector from January to September 2022, reflecting the country’s competitiveness as a preferred location for investment in the region. The manufacturing sector accounted for RM64.9 billion (33.5%) of total approved investments, spread across various economic sub-sectors.
Of the total approved manufacturing investments in the first nine months of 2022, FDI amounted to RM50.2 billion (77.3%), while DDI contributed the remaining RM14.7 billion (22.7%).
These approved manufacturing investments are expected to create 58,141 job opportunities, of which 2,631 (4.5%) will be managerial positions, while 6,277 (10.8%) will be professional/technical and supervisory roles. The demand for these roles reflects how Malaysia’s manufacturing sector is progressing on its higher value chain transition. The approved manufacturing projects will also require 12,040 (20.7%) skilled employees.
Notable projects approved in the manufacturing sector in the period of January to September 2022 include Samsung SDI Energy Malaysia Sdn. Bhd. which marked a new milestone when it opened a Phase Two electric vehicle (EV) battery cell manufacturing facility in Malaysia.
TF-AMD Microelectronics Sdn. Bhd. also announced plans to expand its manufacturing facility in Penang with the construction of a second site at Batu Kawan Industrial Park. Separately, Ferrotec Holdings Corporation, a global supplier of materials, components, and precision system solutions, announced the establishment of a new manufacturing facility at Kulim Hi-Tech Park, Kedah to undertake electromechanical assembly and advanced material fabrication for semiconductor equipment.
Primary Sector Dominated by FDI
The approved primary sector investments came in at RM15.5 billion approved investments in the first nine months of 2022, up from RM14.7 billion approved investments in the same period of last year.
FDI dominated the primary sector with investments valued at RM11.5 billion, while the remaining RM4 billion was contributed by domestic sources.
As the premier investment promotion agency of the Malaysian Government, the Malaysian Investment Development Authority (MIDA) is eager to help businesses succeed and make Malaysia the ideal place for them to reach their full potential.
In collaboration with the Ministry of International Trade and Industry (MITI), MIDA is actively working to attract investments in targeted industries from all over the globe to upgrade Malaysia’s industrial ecosystem and enhance its trade landscape. These initiatives include providing the necessary business facilitation and value networking services to foreign, local, and start-up companies to ensure they can optimise operations in this dynamic market and hub for growth.