KUALA LUMPUR: Some RM30bil worth of investments into Malaysia’s manufacturing sector will be approved by the end of this year, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

“We are targeting to achieve this throughout the second half of this year. We are still seeing a steady flow of foreign direct investment (FDI) into the sector, which should be finalised and approved by the end of the year,” he told reporters on the sidelines of the Affin Hwang Capital Conference Series 2016, which was held here on Thursday.

In his keynote speech, Mustapa noted that FDI into the country had steadily grown over the years, underscoring the robustness of the country’s economy.

Between 2011 and 2015, net FDI averaged RM35.8bil. Last year, the country recorded an all-time high FDI of RM43.44bil as more corporations began setting up regional hubs in the country.

As at the first quarter of this year, RM37.4bil worth of investments had been approved.

Similarly, total investments, driven mainly by the private sector, had accelerated at a compounded rate of 8.3% per annum over the past five years, Mustapa pointed out.

“Malaysia’s growth remains sustainable while our fiscal deficit targets are being met year after year.

“We are also no longer dependent on oil earnings, as they now make up only 14% of total Government revenue,” he said.

Commenting on the recent round of layoffs by multinational corporations operating in Malaysia, Mustapa said that the country’s unemployment rate remained low at 3.2%.

“However, we are aware that the job market has become more challenging. Some retrenchments are necessary for companies that are undertaking a serious restructuring or due to new technological developments.

“It is not necessarily a consequence of what is happening with the global economy,” he said.

Mustapa added that over the next two years, some 160,000 new jobs will be created in the manufacturing sector alone thanks to new FDI, which will more than offset the expected 15,000 jobs to be lost from retrenchments.
Among the latest major investments made this year include UMW Holdings Bhd and Rolls-Royce’s RM830mil investment to manufacture and assemble aeroengine fan cases, Osram Opto Semiconductors’ RM4.76bil investment to create the largest light-emitting diode chip-production site in the world, and Abu Dhabi’s LuLu Group, which is putting up RM885mil to set up 10 hypermarkets in Malaysia over the next five years.

Meanwhile, Mustapa reiterated that the Government remains committed to supporting Proton Holdings Bhd’s turnaround programme, which had been under question recently due to rumours of a stake purchase by a foreign investor.

“They have already officially disclosed that rumours of a 100% stake sale are untrue. Nonetheless, the Government will not interfere in Proton’s business affairs.

“We trust that the management knows what is best for the company,” he said.