By Datuk Mustapa Mohamed…
LAST year, Malaysia’s approved investments continued on a sharp recovery trend with total approved investments in the manufacturing sector recording a value of RM56.1bil compared with RM47.2bil in 2010.
Penang, Selangor, Sarawak and Johor topped the table with RM9.1bil, RM8.7bil, RM8.5bil and RM6.6bil, respectively. Penang has consistently been among the top investment destinations over the last four decades.The island state is a manifestation of the success of Malaysia’s evolution from a primary-based to a highly industrialised economy.
The success of the transition of the Malaysian economy is due, in no small measure, to the development and industrial plans introduced by the Federal Government since Independence, especially after 1970.A major thrust of these plans was to promote the growth of private investments, both local and foreign.
These plans combined with a politically stable environment, effective policy and implementation framework, commitment to the development of infrastructure, and the provision of education and skills training, were crucial in making Malaysia a competitive investment destination.The Free Trade Zone Act 1971, which was a result of the collaborative efforts of then prime minister Tun Abdul Razak and Penang ChiefMinister Tun Dr Lim Chong Eu, and the Promotion of Investments Act 1986 were among the key policy instruments that provided a conducive framework to attract investments.
In 1965, the responsibility of promoting investments was assigned to the Federal Industrial Development Authority (Fida), forerunner of the now Malaysian Investment Development Authority (Mida).With clear directions embodied in various economic and industrial master plans, Fida, and then Mida, was able to generate investment growth at exponential rates.Compared to RM4bil in the 1980s, approved investments for Penang increased five times to RM20bil in the 1990s, and doubled again to RM40bil between 2000 and 2008.
Between 1980 and 2011, there were 3,240 projects with a total investment of RM86.9bil approved for Penang, generating 421,299 direct employment opportunities.Mida’s main responsibilities are to promote Malaysia as an attractive and competitive investment destination, to provide information on the opportunities for investments in Malaysia, target and entice potential investors, facilitate companies which are looking for joint venture partners, handhold and assist investors in obtaining all necessary approvals for projects until they are operational.
These include direct consultation and cooperation with relevant authorities at both the Federal and state levels in matters such as securing infrastructure facilities, including land, factory sites, electricity and water supplies, telecommunication, expediting approvals relating to building plans, certificates of fitness and business licences.Mida also supports existing companies in planning expansion, diversification and reinvestments.
The setting up of Mida has been instrumental in making Malaysia a premier investment destination in the region.Penang has been a major beneficiary of the nation’s aggressive drive to secure investments.The Government’s continued efforts in providing adequate and quality infrastructure have enhanced the investment attractiveness of Penang.
Since the 1970s, the Government has been expanding and upgrading Penang’s infrastructure.
The Penang Airport at Bayan Lepas was developed into an international airport by 1977, further expanded in 2000 and is now again undergoing major expansion.
The Penang Bridge was completed in 1985. Certainly, Penang would not be what it is today without the bridge.
Phase One of the North Butter-worth Container Terminal (NBCT) was completed in the early 1990s and has been further expanded since.
The North-South Highway was completed in 1994, the Butterworth-Kulim Highway opened for traffic in 1996 and Penang is connected to the east coast of peninsular Malaysia via the East-West Highway, which was opened in 1982.Perhaps the most critical investment made by the Government that continues to make Penang attractive is the setting up of Universiti Sains Malaysia (USM) in 1969 as the second university in the country.This led to the successful nurturing of a highly skilled and knowledgeable workforce.
The educated, English-speaking and trainable workforce in Penang was a key attraction to foreign direct investments (FDI) in the early days of the state’s industrialisation.Today, thanks to USM and the growing number of training institutions in Penang, the state’s workforce not only manages local operations but also runs and oversees the operations of many of the MNCs’ offshore plants.
Additionally, some MNCs’ design engineers are Penangites, who have produced a large number of quality patents.The state government responded to efforts at the Federal level with its own set of policies and strategies.Under the leadership of Chong Eu, the Penang Government introduced a master plan for the development of the state.
Mida’s Touch For Penang Industries.IN 1969, the Penang Development Corporation (PDC) was established to drive economic growth, urban renewal and development of new townships.
The main policies of the early 1970s centred around the establishment and development of free trade zones (FTZs) – the first of which was operationalised in 1972 in Bayan Lepas on the southern side of Penang island. The pioneer investors also played a major part in nurturing the skilled workforce they needed.
In 1989, the PSDC (Penang Skills Development Centre), the first industry-led skills training centre, was set up within the free industrial zones. The PSDC’s tripartite model brings together the best of industry, academia, and government, both state and Federal.
This unique model pools resources and management expertise and allows the PSDC to provide invaluable advice and guidance on the latest industrial technological progress, along with up-to-date training and educational programmes.
Since 1990, under the leadership of former Chief Minister Tan Sri Dr Koh Tsu Koon, the PSDC increased its floor space from 5,000sq ft in 1990 to 300,000sq ft by 2008 on the basis of Federal funding, donations and generated revenues.
The Malaysian Investment Development Authority’s (Mida) efforts in the early years, in collaboration with the state government, specifically the PDC, brought globally renowned corporations to Penang’s shores and changed the state’s industrial landscape.
It took quite a convincing by Mida officials to get the corporate giants of the world to give Penang a serious look. These giants have transformed the largely agrarian landscape to a hub for making the most sophisticated products.
Among the pioneering MNCs that took the risk of converting the padi fields in Bayan Lepas into high-tech industrial enclaves were industry leaders such as Intel, National Semiconductor, HP, Clarion, AMD, Bosch and Litronix.
The presence of these MNCs has also stimulated the development of local supporting industries such as Pentamaster, Globetronics and Vitrox.
With the rise of local vendors in areas such as equipment making, metal stamping, plastics injection moulding and precision engineering, more foreign companies are attracted to Penang to tap into the supply chain and ecosystem.
Industrial development has not only contributed to the socio–economic growth of the island but has also led to the development of industrial areas in Kulim and Sungai Petani.
The emergence and excellent performance of the local SMI Cluster in Penang and neighbouring industrial areas in Sungai Petani, Kulim and Kamunting constitute a major attraction for new and existing investors to come to Penang and its vicinity.
Also, Bayan Lepas was designated the first MSC Cyber City outside Cyberjaya in 2005, reflecting Penang’s stellar performance as a technological hub.
Mida continues to aggressively promote investments into Penang, both from new and existing, domestic as well as foreign investors.
However, in line with the aspiration of the Economic Transformation Programme, the targeted activities have now shifted from manufacturing and assembly activities to more integrated investments, high knowledge, value-added and high technology industries, including the services sector. This focus is now showing results. More and more companies in Penang are undertaking global corporate functions and shared services such as R&D centres, operational headquarters, supply chain, distribution and fulfilment centres and treasury management.
Many of the big names that came to Penang over the last 40 years are still around. But their operations in recent times are totally different from their original investments.
This development benefits the local workforce and local companies. The establishment of global R&D functions with new product introduction (NPI) functions within the industries in Penang has paved the way for the transfer of technology from parent companies to the local workforce. The companies, especially the MNCs, also continue to play a major role in nurturing and developing local capabilities by establishing smart partnerships with universities and other institutions of higher learning.
These companies also have assisted the higher learning institutions to develop curricula that address the industries’ skills requirements.
As more responsibilities of R&D and NPI are given to the locally incorporated MNCs, Mida has encouraged these companies to create opportunities for local vendors via technical collaboration programmes.
In the electronics sector, complementing the technology companies, local electronic manufacturing service (EMS) providers are also involved in the design, development and manufacture of industrial electronic products. These local companies have the potential to grow into major global players.
The combination of the Federal and state governments’ investments in a robust ecosystem, especially in the E&E sector, over more than four decades and the strategic foresight of the likes of Andy Grove, the co-founder of Intel Corporation, and the promotional efforts of agencies such as Mida have enabled Penang to become a major node in the global supply chain.
The solid ecosystem will enable Penang to sustain the momentum of attracting investments, both domestic and foreign.
With the launch of the Northern Corridor Economic Region blueprint, further impetus is provided for investments into the state as the blueprint anticipates greater synergistic relationship between Penang and its neighbouring states within the corridor and the rest of the nation. All these are a result of continued support from the Federal Government and Mida.
Moving forward, Mida will continue to work with the Penang Government to ensure that the state continues to be one of the preferred manufacturing hubs in the country.
Penang, Selangor, Sarawak and Johor topped the table with RM9.1bil, RM8.7bil, RM8.5bil and RM6.6bil, respectively. Penang has consistently been among the top investment destinations over the last four decades.The island state is a manifestation of the success of Malaysia’s evolution from a primary-based to a highly industrialised economy.
The success of the transition of the Malaysian economy is due, in no small measure, to the development and industrial plans introduced by the Federal Government since Independence, especially after 1970.A major thrust of these plans was to promote the growth of private investments, both local and foreign.
These plans combined with a politically stable environment, effective policy and implementation framework, commitment to the development of infrastructure, and the provision of education and skills training, were crucial in making Malaysia a competitive investment destination.The Free Trade Zone Act 1971, which was a result of the collaborative efforts of then prime minister Tun Abdul Razak and Penang ChiefMinister Tun Dr Lim Chong Eu, and the Promotion of Investments Act 1986 were among the key policy instruments that provided a conducive framework to attract investments.
In 1965, the responsibility of promoting investments was assigned to the Federal Industrial Development Authority (Fida), forerunner of the now Malaysian Investment Development Authority (Mida).With clear directions embodied in various economic and industrial master plans, Fida, and then Mida, was able to generate investment growth at exponential rates.Compared to RM4bil in the 1980s, approved investments for Penang increased five times to RM20bil in the 1990s, and doubled again to RM40bil between 2000 and 2008.
Between 1980 and 2011, there were 3,240 projects with a total investment of RM86.9bil approved for Penang, generating 421,299 direct employment opportunities.Mida’s main responsibilities are to promote Malaysia as an attractive and competitive investment destination, to provide information on the opportunities for investments in Malaysia, target and entice potential investors, facilitate companies which are looking for joint venture partners, handhold and assist investors in obtaining all necessary approvals for projects until they are operational.
These include direct consultation and cooperation with relevant authorities at both the Federal and state levels in matters such as securing infrastructure facilities, including land, factory sites, electricity and water supplies, telecommunication, expediting approvals relating to building plans, certificates of fitness and business licences.Mida also supports existing companies in planning expansion, diversification and reinvestments.
The setting up of Mida has been instrumental in making Malaysia a premier investment destination in the region.Penang has been a major beneficiary of the nation’s aggressive drive to secure investments.The Government’s continued efforts in providing adequate and quality infrastructure have enhanced the investment attractiveness of Penang.
Since the 1970s, the Government has been expanding and upgrading Penang’s infrastructure.
The Penang Airport at Bayan Lepas was developed into an international airport by 1977, further expanded in 2000 and is now again undergoing major expansion.
The Penang Bridge was completed in 1985. Certainly, Penang would not be what it is today without the bridge.
Phase One of the North Butter-worth Container Terminal (NBCT) was completed in the early 1990s and has been further expanded since.
The North-South Highway was completed in 1994, the Butterworth-Kulim Highway opened for traffic in 1996 and Penang is connected to the east coast of peninsular Malaysia via the East-West Highway, which was opened in 1982.Perhaps the most critical investment made by the Government that continues to make Penang attractive is the setting up of Universiti Sains Malaysia (USM) in 1969 as the second university in the country.This led to the successful nurturing of a highly skilled and knowledgeable workforce.
The educated, English-speaking and trainable workforce in Penang was a key attraction to foreign direct investments (FDI) in the early days of the state’s industrialisation.Today, thanks to USM and the growing number of training institutions in Penang, the state’s workforce not only manages local operations but also runs and oversees the operations of many of the MNCs’ offshore plants.
Additionally, some MNCs’ design engineers are Penangites, who have produced a large number of quality patents.The state government responded to efforts at the Federal level with its own set of policies and strategies.Under the leadership of Chong Eu, the Penang Government introduced a master plan for the development of the state.
Mida’s Touch For Penang Industries.IN 1969, the Penang Development Corporation (PDC) was established to drive economic growth, urban renewal and development of new townships.
The main policies of the early 1970s centred around the establishment and development of free trade zones (FTZs) – the first of which was operationalised in 1972 in Bayan Lepas on the southern side of Penang island. The pioneer investors also played a major part in nurturing the skilled workforce they needed.
In 1989, the PSDC (Penang Skills Development Centre), the first industry-led skills training centre, was set up within the free industrial zones. The PSDC’s tripartite model brings together the best of industry, academia, and government, both state and Federal.
This unique model pools resources and management expertise and allows the PSDC to provide invaluable advice and guidance on the latest industrial technological progress, along with up-to-date training and educational programmes.
Since 1990, under the leadership of former Chief Minister Tan Sri Dr Koh Tsu Koon, the PSDC increased its floor space from 5,000sq ft in 1990 to 300,000sq ft by 2008 on the basis of Federal funding, donations and generated revenues.
The Malaysian Investment Development Authority’s (Mida) efforts in the early years, in collaboration with the state government, specifically the PDC, brought globally renowned corporations to Penang’s shores and changed the state’s industrial landscape.
It took quite a convincing by Mida officials to get the corporate giants of the world to give Penang a serious look. These giants have transformed the largely agrarian landscape to a hub for making the most sophisticated products.
Among the pioneering MNCs that took the risk of converting the padi fields in Bayan Lepas into high-tech industrial enclaves were industry leaders such as Intel, National Semiconductor, HP, Clarion, AMD, Bosch and Litronix.
The presence of these MNCs has also stimulated the development of local supporting industries such as Pentamaster, Globetronics and Vitrox.
With the rise of local vendors in areas such as equipment making, metal stamping, plastics injection moulding and precision engineering, more foreign companies are attracted to Penang to tap into the supply chain and ecosystem.
Industrial development has not only contributed to the socio–economic growth of the island but has also led to the development of industrial areas in Kulim and Sungai Petani.
The emergence and excellent performance of the local SMI Cluster in Penang and neighbouring industrial areas in Sungai Petani, Kulim and Kamunting constitute a major attraction for new and existing investors to come to Penang and its vicinity.
Also, Bayan Lepas was designated the first MSC Cyber City outside Cyberjaya in 2005, reflecting Penang’s stellar performance as a technological hub.
Mida continues to aggressively promote investments into Penang, both from new and existing, domestic as well as foreign investors.
However, in line with the aspiration of the Economic Transformation Programme, the targeted activities have now shifted from manufacturing and assembly activities to more integrated investments, high knowledge, value-added and high technology industries, including the services sector. This focus is now showing results. More and more companies in Penang are undertaking global corporate functions and shared services such as R&D centres, operational headquarters, supply chain, distribution and fulfilment centres and treasury management.
Many of the big names that came to Penang over the last 40 years are still around. But their operations in recent times are totally different from their original investments.
This development benefits the local workforce and local companies. The establishment of global R&D functions with new product introduction (NPI) functions within the industries in Penang has paved the way for the transfer of technology from parent companies to the local workforce. The companies, especially the MNCs, also continue to play a major role in nurturing and developing local capabilities by establishing smart partnerships with universities and other institutions of higher learning.
These companies also have assisted the higher learning institutions to develop curricula that address the industries’ skills requirements.
As more responsibilities of R&D and NPI are given to the locally incorporated MNCs, Mida has encouraged these companies to create opportunities for local vendors via technical collaboration programmes.
In the electronics sector, complementing the technology companies, local electronic manufacturing service (EMS) providers are also involved in the design, development and manufacture of industrial electronic products. These local companies have the potential to grow into major global players.
The combination of the Federal and state governments’ investments in a robust ecosystem, especially in the E&E sector, over more than four decades and the strategic foresight of the likes of Andy Grove, the co-founder of Intel Corporation, and the promotional efforts of agencies such as Mida have enabled Penang to become a major node in the global supply chain.
The solid ecosystem will enable Penang to sustain the momentum of attracting investments, both domestic and foreign.
With the launch of the Northern Corridor Economic Region blueprint, further impetus is provided for investments into the state as the blueprint anticipates greater synergistic relationship between Penang and its neighbouring states within the corridor and the rest of the nation. All these are a result of continued support from the Federal Government and Mida.
Moving forward, Mida will continue to work with the Penang Government to ensure that the state continues to be one of the preferred manufacturing hubs in the country.
No announcement for today.