Selangor is committed to investors
18 Sep 2020
Selangor remains an attractive investment destination for foreign direct investment (FDI) despite the weak economic environment.
Invest Selangor Bhd chief executive officer Datuk Hasan Azhari Idris said the prospects of FDI inflow this year would depend on how long the Covid-19 pandemic lasts and the effectiveness of policies in mitigating the economic impact.
Hasan said global FDI inflows were expected to plunge 40 per cent this year from US$1.54 trillion registered last year.
In Asia, such investments were also forecast to fall between 30 per cent and 45 per cent.
“However, despite the negative outlook, Selangor remains an attractive investment destination.
“Year to date, we have managed to secure several projects from multinational corporations (MNCs), and many are still in the pipeline,” he told the New Straits Times recently.
Hasan said the Covid-19 pandemic had dramatically impacted Selangor, causing a major disruption in FDI inflow.
However he said, Invest Selangor had taken immediate steps to sustain investors’ confidence by providing assistance through a special task force to communicate with the industry and investors.
He also said Invest Selangor had continued to facilitate, manage and provide clarification or recommendations to government agencies under the International Trade and Industry Ministry on essential manufacturers and their supply chain operations during the Movement Control Order (MCO).
“Invest Selangor has also conducted a survey on the impact of MCO on companies in the state.
The information will help provide an assessment which will be forwarded to the state government for action.”
Before the pandemic, Selangor continued to function as the engine of national economic growth, recording the biggest contribution to the country’s gross domestic product at 24.2 per cent share last year.
The state also recorded the highest number of approved investments in the country amounting to RM47.8 billion, and the highest number of approved investments in the manufacturing sector valued at RM17 billion last year.
Specifically, 315 manufacturing projects were approved last year, potentially creating 21,085 job opportunities in the state.
Hasan said Selangor is focusing on five core clusters with the highest potential in driving economic growth, in addition to quality investments that provide value-added returns for the people and the state.
The five core clusters are electrical and electronics, transport equipment, life sciences, food and beverage manufacturing, and machinery and equipment.
“According to 2019 statistics by the Malaysian Investment Development Authority (Mida), the combined investment value for the five core clusters rose substantially by 157.28 per cent last year, earning RM10.4 billion.
“The five clusters are driving the state’s economy in attracting investments from Japan, China, Singapore and the United States. The investors are also looking for a location that can offer excellent connectivity into Asean markets,” he said.
And Selangor has the qualities to become a gateway to southeast Asia as a business hub.
Hasan said the strong presence of MNCs and local corporations, such as Spirit AeroSystems, Nestle, IKEA, Panasonic, Q-Cells, KL-Kepong Oleomas, Nippon Electric Glass, Perodua, Proton, Top Glove and Hartalega, represents a true testimony of what Selangor has to offer.
On top of that, he said Invest Selangor, as the state’s investment promotion agency, will continue to provide facilities and assistance to investors operating in Selangor in these times of uncertainty.
“It is crucial for us to be able to bolster the aftercare aspect of our services to investors as an attempt to retain their presence in the state and restore their confidence.”
According to Hasan, various developments and projects are taking shape in the state, which will elevate Selangor’s position as an Asean market gateway.
For instance, IKEA’s new regional distribution and supply chain centre is being developed in Pulau Indah, near Port Klang.
It will be the world’s third-largest distribution centre for the Swedish furniture maker, and it is scheduled to open this month.
Toyota Motor Corp also made Selangor its distribution centre for Southeast Asia, while Volvo AB has made the state capital, Shah Alam, its distribution hub for East Pacific outside China.
“These are some of the indicators that manufacturers have started to move into Selangor as their gateway to this region,” said Hasan.
“With a determined state government and close collaboration among stakeholders, including technical agencies, local councils and federal agencies such as Mida, Selangor will be able to offer a safe and viable option as an investment destination not only in Malaysia, but also the Asean region,” he added.