Malaysia Records RM153.2 Billion Investments In The First Nine Months Of 2015
Malaysia attracted a total of RM153.2 billion worth of investments in the manufacturing, services and primary sectors for the first nine months of 2015, International Trade and Industry Minister Dato’ Sri Mustapa Mohamed said.
This was lower than the RM180 billion approved in the same period last year. The drop was mainly due to a big decline in the approvals for investments in the real estate sector from RM57.9 billion in the period January-September 2014 to RM 21.0 billion in the same period this year. This is consistent with the softening in the property market.
Approvals in the other sectors however, especially manufacturing, remained robust. “This indicates that investor confidence in Malaysia remains high despite the decline in global FDI inflows and the challenging global economic environment,” he said.
The investments approved were in 3,727 projects and are expected to generate 139,720 job opportunities for Malaysians. Domestic investments of RM124.9 billion accounted for 82% of investments, with foreign investments making up the rest.
The services sector accounted for the largest share of the total investments, contributing 54.0% or RM82.7 billion, followed by the manufacturing sector with investments of RM67.7 billion or 44.2%, and the primary sector with approved investments of RM2.8 billion or 1.8%.
Malaysia continues to be a competitive location for manufacturing projects. A total of 522 projects worth RM67.7 billion were approved in January-September 2015 compared with RM63.3 billion in 622 projects in the corresponding period of 2014, representing an increase of 7% in capital investments.
Dato’ Sri Mustapa noted that investors have responded positively to the Government’s initiatives towards promoting investments in capital-intensive, high-value added and high technology projects. This is reflected in the increase of the capital investment per employee (CIPE) ratio from RM970,938 in the first nine months of 2014 to RM1,349,298 during the same period of this year.
Regional Corridors attracted 43.5% of approved investments in the manufacturing sector for January-September 2015. By value of investments in projects with approved Manufacturing Licence, the Sarawak Corridor of Renewable Energy (SCORE) registered the highest level with investments of RM10.6 billion, followed by Northern Corridor Economic Region (NCER) at RM6.6 billion, Iskandar Malaysia at RM3.3 billion, Eastern Corridor Economic Region (ECER) at RM1.8 billion, and Sabah Development Corridor (SDC) at RM0.3 billion.
Investments in SCORE were largely due to an Oil & Gas project, which attracted RM10.4 billion in Bintulu, Sarawak. Investments in NCER were dominated by the RM4.2 billion investments in the electrical and electronics industry. Iskandar Malaysia continued to draw projects within food manufacturing (RM1.4 billion), chemical & chemical products (RM497.8 million), fabricated metal products (RM423.4 million) and machinery & equipment (RM206.9 million). Notably, Iskandar Malaysia’s Oil & Gas activities are concentrated in the Tanjung Langsat and Tanjung Bin areas.
The full potential of South Johor is complemented by the Pengerang area. The Pengerang Integrated Complex (PIC) project, the biggest contributor to Johor’s approved investments for the first nine months of this year, is moving on a steady course. This project is expected to meet future energy requirements and strengthen PETRONAS’ position as a key player in the Asian chemicals market as it focuses on differentiated and specialty chemicals.
ECER received 20 manufacturing projects during this period, which are expected to generate 1,280 employment opportunities, while SDC attracted a total of 8 manufacturing projects with investments of RM338.2 million during the first nine months of 2015.
Approved investments in the services sector contracted slightly in the first nine months of this year compared with the corresponding period of 2014. This was mainly due to the softening of the property market that led to the lower investments in the real estate sector, which recorded RM21.0 billion for the first 9 months of this year compared with RM57.9 billion in January-September 2014.
However, investments in majority of the key services subsectors registered increases. Among them include the MSC status approvals with an increase of 63% to RM3.8 billion in January-September this year. This was followed by utilities subsector which escalated 62% to RM10.1 billion and the health services subsector that saw an increase of 50% to RM3.3 billion. The education services registered a 26% increase to RM1.5 billion while hotel & tourism saw a rise of 7% to RM4.8 billion.
The potential employment for the approved services projects for January-September 2015 has also increased by 13.2% (88,433) compared with the potential employment opportunities for the same period last year (78,153).
For the period January-September 2015, MIDA approved 173 projects on Global Establishments proposing to make Malaysia their Global Operations Hubs, Principal Hubs, Operational Headquarters, International Procurement Centres, Regional Offices, Representative Offices and Treasury Management Centres for businesses. Investments in these projects were valued at RM7.1 billion, with significant spin-off effects on the economy. These activities are expected to create job opportunities for more than 3,700 knowledge-based or highly technical-skilled workers, as well as putting Malaysia on course for greater integration into the Global Supply Chains/Global Value Chains. Out of the total, MIDA has approved 3 Principal Hub projects with investments worth RM703.7 million since its introduction on 1 May 2015.
Investments in the primary sector decreased from RM12.2 billion to RM2.8 billion in the first nine months of 2015, attributed by lower investments in the upstream oil and gas activities and the challenge of lower global crude oil prices. Industry players in the oil and gas sector are rationalising and streamlining their operations to make their projects economically viable at the current oil price range.
Dato’ Sri Mustapa, while noting that the total investments for the first nine months of 2015 were lower than the RM180 billion during the same period last year, pointed out that Malaysia’s achievement was still commendable given the global economic environment.
“Malaysia continues to be a preferred investment destination despite falling global FDI flows. And the high rate of domestic investments demonstrates the confidence of Malaysian investors in the Government’s Economic Transformation Programme. The outlook for the full year of 2015 would still be encouraging, with approval levels in the manufacturing sector being on track. I am optimistic that the services sector, with the exception of the real estate industry, will also deliver a similar performance,” he said.