Q1 2014 Approved Investments in the Manufacturing Sector Surpass Q1 2013 Record

Eighty Five Per Cent of Jobs Created Are High Skilled Employment

Malaysia successfully attracted a higher level of approved investments in the manufacturing sector in the first quarter (Q1) 2014 compared with the corresponding period of 2013. The country recorded RM17.1 billion of investments, an increase of 52.7% as compared with RM11.2 billion in the same period of 2013, reflecting its competitiveness as a location of choice for high value added manufacturing activities in the region.
The manufacturing projects approved during the period are expected to generate about 18,677 job opportunities with major proportion of employment being in highly skilled occupations. It is encouraging to note that the composition of employment in the Managerial, Technical, Supervisory and Skilled Manpower (MTSS) category for the manufacturing sector has increased to 85.2% in the first quarter of 2014, from 81.4% in 2013, contributed by demand for higher skilled manpower.

Existing manufacturing companies continue to reinvest, consolidate, expand and diversify into higher value added products and activities to increase competitiveness of their operations in the country. Malaysia recorded significant investments in the expansion/diversification projects amounting to RM11.9 billion or 69.6% of total investments approved in the sector for the first three months of 2013. Investments in new manufacturing projects amounted to RM5.2 billion (30.4%).

In Q1 this year, foreign investments in approved manufacturing projects rose by 45.5% to RM13.1 billion from RM9.0 billion in the same period last year.The increase reflects the high level of business confidence in the country among foreign investors. The leading source of foreign investments during the period was Japan with investments totalling RM5.9 billion, followed by Germany with investments of RM4.0 billion and Singapore (RM1.2 billion). Other notable foreign investments came from South Africa (RM0.7 billion) and Taiwan (RM0.5 billion). These five economies jointly accounted for 93.1% of total foreign investments approved. Domestic investments contributed RM4.0 billion or 23.4% of total investments approved.

Sarawak registered the highest level of investments of RM7.3 billion in the manufacturing sector from January to March 2013, recording a 143% increase in investments, compared with RM3.0 billion over the corresponding period in 2013.

The other top ten leading states in terms of value of investments were Kedah (RM4.0 billion), Selangor (RM2.0 billion), Johor (RM1.3 billion), Penang (RM0.8 billion), Sabah (RM0.5 billion), Perak (RM0.5 billion), Negeri Sembilan (RM0.3 billion), Pahang (RM0.2 billion) and Terengganu (RM0.1 billion).

Manufacturing projects approved in Q1 2014 were concentrated in the chemical and chemical products, E&E, basic metal products, food manufacturing and transport equipment industries. These five industries accounted for RM14.3 billion or 83.6% of the total investments approved for the period.

For the period of January to March 2014, a total of 98 projects were approved in the manufacturing related services sector with investments of RM3.6 billion. A total of 54 new regional establishments which include Operational Headquarters (OHQs), International Procurement Centres (IPCs), Treasury Management Centres (TMCs), Representative Offices (Res) and Regional Offices (ROs) were approved with investments of RM0.9 billion.

For other support services activities such as integrated logistics services, integrated marketing support services, integrated central utility facilities, cold chain facilities for food products, renewable energy/energy efficiency and research and development (R & D), a total of 44 projects with investments of RM2.7 billion were approved with tax incentives.