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Malaysia Continues to Attract Business Interest

Foreign Investments in the Manufacturing, Services and Primary Sectors Increase by 97.2% between January – June 2019

Malaysia continues to sustain its investment growth momentum in the first half of 2019 (1H2019) despite the challenging global economic landscape and intense competition, with total investments of RM92.0 billion recorded in the services, manufacturing and primary sectors. These investments were from 2,554 projects and will potentially create 59,542 employment opportunities in the country.

During this period, foreign investments in these sectors increased by 97.2% to RM49.5 billion from RM25.1 billion recorded in the first half of 2018. This illustrates Malaysia's competitive and comparative advantages in attracting investments amid mounting global market uncertainties and trade war tensions. Domestic investments approved in 1H2019 amounted to RM42.5 billion, contributing 46.2% to the total investments.

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The services sector accounted for the largest share of the total with approved investments of RM55.0 billion or 59.8%. A notable services project approved in 1H2019 is the large scale solar (LSS) expansion project to be undertaken by TNB Bukit Selambau Solar in Bukit Selambau, Kedah. The LSS project with a capacity of 30 MWAC will provide renewable energy (RE) totaling 1,700MW by the year 2025. 

This is in line with the Government’s target of achieving 20 percent of the country’s electricity to be generated from renewable sources by 2030. 

The favorable investment growth for the 1H2019 was driven by the robust performance of the manufacturing sector that soared by 74.2% to RM33.1 billion compared to RM19.0 billion in 1H2018.. The approved manufacturing projects will create 30,449 job opportunities, the largest potential employer in the economy.

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The potential jobs created include 1,829 electrical and electronics engineers, 896 mechanical engineers and 211 chemical engineers. In addition, the projects will also require about 2,886 skilled craftsmen such as plant maintenance supervisors, tools and die, makers, machinists, IT personnel, quality controllers, electricians and welders.

Major of the investments in the manufacturing sector were from foreign sources, accounting 75.8% or RM25.1 billion, and the remaining 24.2% or RM8.0 billion were from domestic investments. The top foreign sources were from the United States of America (USA) with investments of RM11.7 billion, followed by China (RM4.8 billion), Singapore (RM3.1 billion), Japan (RM2.1 billion) and the British Virgin Islands (RM1.4 billion). These five countries jointly accounted for 92.0% of total foreign investments approved in the manufacturing sector for this period.

The expansion project of Longi Technology (Kuching) from China is among the notable high technology projects approved during the period January to June 2019. The company is expanding its capacity to produce monocrystalline solar cell to meet demand in overseas markets. Other approved projects include a new project from Advance Energy Industries and expansion projects by On Semiconductors and Plexus Manufacturing. These three companies are from the USA.

Malaysia has consistently pursued more capital intensive projects moving away from labour-intensive projects to high-skilled and technologically advanced projects that support the sustainable development agenda of the nation. The capital intensity, measured by capital investment per employee (CIPE) ratio of projects approved within the sector increased to RM1,088,715 in January to June 2019 from RM837,862 in the same period last year.

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By value of investments, Pulau Pinang (RM9.2 billion), Kedah (RM7.7 billion), Selangor (RM6.0 billion), Johor (RM4.0 billion) and Perak (RM1.7 billion) accounted for 86.4% of the total approved investments in the manufacturing sector.

Meanwhile, the primary sector contributed RM3.9 billion or 4.2% to the total approved investments in the first half of 2019. The mining subsector continued to lead with approved investments of RM3.6 billion, followed by plantation and commodities with RM257.3 million and agriculture with RM48.6 million. These investments are expected to create 443 job opportunities.

Malaysia’s 1H2019 investment performance is a testament of the Governments commitment to remain pro-business with prudent and pragmatic policies to ensure a conducive environment for businesses to thrive. Coupled with strategic promotions to welcome quality investments that will contribute to enhancing the country’s technological capabilities, develop the local supply chain and increase the country’s export revenue, the Government is continually investing in human capital, technology and infrastructure and focusing on sharpening the country's competitive edge.

Last Updated : Friday 20th September 2019