“If you go to parts of Pahang, Terengganu, Kelantan and Sabah for example, it remains a big challenge to persuade foreign and domestic investors to locate their services in the lesser developed parts of Malaysia.
“So this locational incentive will hopefully be able to provide a boost (to investments),” he said after briefing investors on the Malaysia Investment Performance Report 2014.
This year, the ministry via the Malaysian Investment Development Authority (MIDA) will prioritise four incentives, including the new locational incentive.
The others are the Principal Hub incentive, 200% capital allowance on automation expenditure, and five year tax exemption to manage, maintain and upgrade industrial estates.
“Principal Hub is aimed at attracting major companies to turn Malaysia into a regional and global base, and these hubs would normally create lots of spin-offs, not only in terms of quality and opportunities, but also for the local economy,” Mustapa remarked.
The report revealed that of the total RM71.9 billion of approved manufacturing investments last year, Johor contributed RM21.2 billion or 29.44% alone (largely due to RM14.8 billion of Petronas investments into the Pengerang Integrated Petroleum Complex), followed by RM9.6 billion in Sarawak, and RM8.1 billion in Penang.
Investments in the services sector which totalled RM149.6 billion, meanwhile, were predominantly located in Kuala Lumpur and Selangor, MIDA said.
The agency highlighted several investments into rural Malaysia, such as the Genting Integrated Biorefinery Complex located in the Lahad Datu, Sabah palm oil industry cluster.
This downstream manufacturing complex worth RM1.4 billion will utilise palm oil as feedstock to produce renewable olefin, specialty chemicals, and other high-value derivatives.
Malaysian-owned aircraft parts producer Admanco Sdn Bhd, meanwhile plans to invest RM340.1 million within seven years to in its proposed plants in the Ayer Keroh industrial estate in Malacca and the Green Asia Aerospace Technology Park in Sri Iskandar, Perak.