investment opportunities in the manufacturing & services sector

Datuk Phang Ah Tong Deputy CEO Malaysian Investment Development Authority (MIDA)

INVESTMENT OPPORTUNITIES IN

MALAYSIA IME Group: ASEAN Economic Forum Mega Trends, Opportunities, Risks & Challenges January 8, 2016 Pullman Bangsar, Malaysia

CONTENT FOCUS MALAYSIAN INVESTMENT DEVELOPMENT AUTHORITY MALAYSIAN ECONOMY & INVESTMENT PERFORMANCE INVESTMENTS TRENDS & OPPORTUNITIES

4

MITI & AGENCIES

MALAYSIA PRODUCTIVITY CORPORATION

MALAYSIA STEEL INSTITUTE

5

FUNCTIONS OF MIDA

Promotion

   

Foreign Direct Investment Domestic Investment Business matching through E-Connect Manufacturing Services

Evaluation

    

Manufacturing licenses Tax incentives Expatriate posts Duty exemption Regional Establishments (Principal Hub)

Planning

Follow-up / Monitoring

 Planning for industrial development  Recommend policies and strategies on industrial promotion and development  Formulation of strategies, programmes and initiatives for international economic cooperation  Assist companies in the implementation and operation of their projects  Facilitate exchange & co-ordination among institutions engaged in or connected with industrial development  Advisory Services 6

MIDA GLOBAL NETWORK

Stockholm London San Jose

Chicago

Boston New York

Los Angeles Houston

Paris

Frankfurt Munich

Beijing Seoul Tokyo Shanghai Milan Osaka Dubai Guangzhou Taipei Mumbai Malaysia Singapore Sydney

23 Overseas Centres

7

ADVISORY SERVICES One-Stop Agency

Services (Initial Stage) • • • • •

Briefing with MIDA HQ Meetings with State Authorities Business matching with Malaysian companies Visit to companies/suppliers Visit to potential locations

Evaluating & Granting Approval • • • •

Manufacturing License Tax Incentives Expatriate Posts Import Duty Exemptions

Based outside MIDA

Immigration Department

Telekom Malaysia Berhad

Royal Malaysian Customs

Labour Department

Project Implementation Stage • Handhold and assist investor until project is implemented

Under the National Committee on Investment (NCI) Evaluation of applications for:  Manufacturing licence  Tax incentives  Import duty exemptions on raw materials, components and machinery  Expatriate posts/work permits 8  Principal Hub

11

12

Source: UNCTAD 13

MALAYSIA’S INVESTMENT PERFORMANCE

14

KEY ECONOMIC DATA Key Economic Data 2015 2015 GDP By Industrial Origin (2014) Land Area

329,847 sq. km

Capital

Kuala Lumpur

Population

30.51 mil (2015 est.)

GDP

US$ 375 bil (2015 est.)

GDP Growth

5.2% (2015 est.)

GDP Per Capita

US$ 12,127 (2015 est.)

Unemployment rate

3% (2015 est.)

Source: IMF & Central Bank of Malaysia

Agriculture, 9.2% Mining 9%

Services 53%

Manufacturing 24.5%

Construction 4.3%

15

TOTAL INVESTMENTS APPROVED 2007 – 2015 (Jan – Sept) Investments in Malaysia reached a new record level in 2014 250

RM Billion

219.4

200 150

148.8

154.6

137 104.9

105.6

2009

2010

235.9

167.8

153.2

100 50 0 2007

2008

2011

2012

2013

2014

2015 (Jan - Sept) 16

TOTAL INVESTMENTS APPROVED IN 2014 – 2015 (Jan – Sept) 2014

2015 (Jan – Sept)

300

Approved Investment

RM239.7 billion

RM153.2 billion

Jobs Created

178,360

139,723

No of Projects Approved

5,942

3,727

RM billion

250

239.7

200 153.2

150 100 50

DomesticForeign Investment Ratio

72.6 : 27.4

81.5 : 18.5

0 2014

2015 (Jan Year Sept)

17

TOTAL INVESTMENTS APPROVED IN 2014 – 2015 (Jan – Sept)

PRIMARY SECTOR

2014

2015 (Jan – Sept)

16.0

14.4

14.0 12.0 Agriculture

10.0 RM Billion

Oil & Gas propels investments in the sector. Lower investments in the upstream oil and gas activities and the challenge of lower global crude oil prices

8.0

Plantation & Commodities Mining

6.0 4.0

2.7

2.0

72 projects

1,500 jobs

35 projects

1,111 jobs

0.0

2014

2015 (Jan Year Sept) 18


MANUFACTURING SECTOR 80 70 60 50 40 30 20 10 0

71.9

RM Billion 59.9

62.8

56.1 47.2

67.7

52.1 41.1

32.6

2007

2008

2009

2010

2011

2012

2013

2014

2015 (Jan - Sept)

IN 2014 – 2015 (Jan – Sept) 2014 : 811 PROJECTS RM 71.9 billion of investments 2015 : 522 PROJECTS (Jan – Sept) RM67.7 billion of investments

2014 : 78,340 JOBS 2015 : 50,179 JOBS (Jan – Sept)

19


SERVICES SECTOR 180 160 140 120 100 80 60 40 20 0

RM Billion

147.7

153.4

122.9

66.4

2007

82.7

70.4 50.1

2008

38.7

36.7

2009

2010

2011

2012

2013

2014

2015 (Jan - Sept)

IN 2014 – 2015 (Jan – Sept) 2014 : 5,196 PROJECTS RM 153.4 billion of investments 2015 : 3,170 PROJECTS (Jan – Sept) RM 82.7 billion of investments

2014 : 98,851 JOBS 2015 : 88,433 JOBS 20

(Jan – Sept)

20

TOTAL INVESTMENTS APPROVED (MANUFACTURING SECTOR) IN 2014 & 2015 (Jan – Sept) BY INDUSTRY Petroleum, E&E, Chemical, Basic Metal & Transport Industries contribute the lion’s share of approved investments in 2014

RM Billion

Fabricated Others Metal Machinery & Equip. Food NonMetallic Transport

Petroleum

Machinery & Equip. Others Fabricated Metal Petroleum

Chemical

7.4

2.31.63.6 16.1 2.1 Food (22.3%) 2.4 2.5 2.5 2.8 25.4 Basic Metal 3.2 3.5 Non(Jan – Sept) RM 71.9 bil. 3.6 Metallic 5.6 RM 67.7 bil. 11.2 (15.4%) E&E 5.9 9.8 Transport 3.4 10.9 10.4 Basic (15.0%)

2014

Metals

Chemicals

2015

E&E

Natural Gas 21

TOTAL INVESTMENTS APPROVED IN 2014 BY COUNTRY 70.1% of FDI came from Asian Countries while 24.5% were from EU and the USA

RM million 12000

10,869

10000 7,821

8000 6000

4,751

4,416

4000 2000

1,549

1,350

Korea, Rep.

USA

0

Japan

Singapore

China

Germany

22

TOTAL INVESTMENTS APPROVED IN 2015 (Jan – Sept ) BY COUNTRY RM billion 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 -

4.7

4.6

4.3 3.3

1.5 Japan

Hong Kong

USA

Singapore

Germany

23

REALISED INVESTMENT IN THE MANUFACTURING SECTOR AS AT 31st DECEMBER 2014 RM billion 90

26.5

80

20.4

70 60 50

10.8

40

7.8

30

18.1

20

16.0

14.1

10 0

Japan

USA

Singapore

Germany Netherlands

Taiwan

Korea,Rep.

9.5 China

6.8

5.3

United Kingdom

Hong Kong 24

REALISED INVESTMENT IN THE MANUFACTURING SECTOR AS AT 31st DECEMBER 2014 BY INDUSTRY Total

Industry Electronics & Electrical Products Basic Metal Products Petroleum Products (Inc. Petrochemicals) Chemical & Chemical Products Transport Equipment Non-Metallic Mineral Products Food Manufacturing Fabricated Metal Products Natural Gas Machinery & Equipment Paper,Printing & Publishing Wood & Wood Products Plastic Products Rubber Products Textiles & Textile Products Scientific & Measuring Equipment Furniture & Fixtures Miscellaneous Beverages & Tobacco Leather & Leather Products

Total

Domestic Investment Foreign Total Capital (RM) Investment (RM) Investment (RM)

Number

Employment

3,843 797 235 1,306 1,275 830 1,385 1,669 5 1,531 640 1,024 1,395 810 1,037 295 905 355 125 58

777,492 70,907 12,466 53,725 127,836 59,573 96,113 116,035 2,275 98,992 49,909 158,643 93,827 118,359 138,760 37,948 105,198 32,400 8,866 7,552

25.3 bil 37.7 bil 32.3 bil 19.9 bil 26.5 bil 15.1 bil 14.5 bil 9.4 bil 13.9 bil 7.9 bil 9.3 bil 9.3 bil 7.8 bil 7.9 bil 3.9 bil 2.0 bil 4.1 bil 1.5 bil 1.1 bil 170.3 mil



19,520

2,166,876

243.8 billion

337.0 million

580.825million

APPROVED INVESTMENT IN THE MANUFACTURING SECTOR BY STATES, 2014 – 2015 (Jan – Sept) RM Million 35 30

25 20 15 10 5 0

26

INVESTMENT OPPORTUNITIES

27

INVESTMENT OPPORTUNITIES IN THE MANUFACTURING & SERVICES SECTOR

High technology, capital intensive & knowledge driven industries: •

Alternative Energy Sources

•

Biotechnology

•

Advanced materials

•

Advanced electronics

•

Optics and photonics

•

Petrochemicals

•

Pharmaceuticals

•

Medical devices

•

ICT

•

Aerospace

Industries manufacturing intermediate goods: •

• •

Machinery & equipment Components & parts Moulds and dies

Resourced-based industries: • • •

Oil & Gas Food & Agro based Value-added products from natural resources

Services • • • • • • • •

Regional Establishments Shared services outsourcing Data Centre Healthcare Logistics Tourism Education Environmental Management

28

NKEAs & 11th MALAYSIA PLAN

3 Catalytic subsector + 2 High Growth area Catalytic 1. Electrical & Electronics 2. Chemicals 3. Machinery & Equipment High Growth 1. Aerospace 2. Medical Devices

29

E&E Industry

30

31

32

33

MALAYSIA AEROSPACE INDUSTRY ROADMAP

Source: National Aerospace Blueprint 1997-2015

MALAYSIA AEROSPACE INDUSTRY BLUEPRINT (2015-2030) Incentive package for the aerospace industry 2015-2030

Entry Point Projects under the Economic Transformation Program

Migration of aircraft maintenance licensing systems to EASA Part 66

Aerospace Malaysia Innovation Centre

Source: National Aerospace Blueprint 20152030

5th For Protecting Minority Investors 2014

18th Ease of Doing Business

3rd Global Offshoring Destination AT Kearney Global Services Location Index 2014

INTERNATIONAL RANKINGS 5th

14th IMD's World Competitiveness Yearbook 2015

18th WEF's Global Competitiveness Report 2015-2016

6th Baseline Profitability Index 2015

36

KEY BUSINESS TERMS ONE MUST NOT MISSED Industry 4.0

Supply Chain

Industry Cluster / Industry Ecosystem Connectivity & Convergence • Internet of Things (IoTs)

Cloud Computing

Big Data

Data Analytics

3-D Manufacturing

Automation/ Robotics

E-Mobility 37

Thank you MIDA Sentral No. 5 Jalan Stesen Sentral 5 KL Sentral 50470 Kuala Lumpur, Malaysia Tel: + 6 03 – 2267 3633 Fax: +6 03 – 2274 7970 E-mail: [email protected]

38