Malaysia
Overview: The numbers are almost too good to be believed. Following a brief recession during the global financial crisis, Malaysia's economy has bounced back, and staggeringly so. Malaysia has posted healthy (some commentators have even described it as "robust") growth numbers of 5.6 percent in 2012 and 4.7 percent in 2013. The International Monetary Fund (IMF) expects Malaysia's 2014 gross domestic product (GDP) expansion rate to be 5.2 percent. Some estimates say that number will be even higher. This ebook will profile this burgeoning economy and the many sectors that make it one of the most exciting investment destinations in the world. You may be surprised by the numbers, but by the end of this ebook, you won't be surprised by Malaysia's people.
2
Page
Malaysia
Malaysia
A Model of consistency
Malaysia has recently enjoyed some of the fastest and most consistent economic growth in Asia, with average annual expansion averaging five to six percent over the past ten years.
The country is considered a middle-income nation with a strong foundation for sustained future growth--almost 30 percent of the Malay population are under 15 years of age, more than 40 percent are 25 to 54, and nearly 8 percent are older than 55.
Malaysia's economy is highly diversified: Palm oil, tin, petroleum, copper, iron ore and other commodities have all played important roles in Malaysia's recent economic success. 50 percent of gross domestic product (GDP) comes from the services sector, with 40 percent from industry and 10 percent from agriculture.
Malaysia also owns substantial oil and gas reserves following the discovery of offshore crude oil and natural gas in the 1970s. Today, Malaysia subsidises gasoline for domestic consumers and is a net exporter of crude oil.
Malaysian lawmakers have eased restrictions on foreign investors wanting to buy into the country's financial sector. Limits on the stakes foreign owners can hold in Malaysian insurance and investment banks have been relaxed. Foreign investors have subsequently increased their holdings in these sectors from 49 to 70 percent.
Malaysia has been divided into five economic growth corridors. Each features its own business
centre that, depending on the location of the corridor, covers different sectors.
These economic corridors aim to bridge development imbalances throughout the country and have been driving the country's economic growth forward through a series of public-private partnerships (PPP).
3
Page
3
Overview
4
Investment
Climate
6
Interview with
YBhg. Datu Hj. Mohidin b.
Hj. Ishak,
General Manager, Bintulu Development Authority (BDA)
5
Why invest in
Malaysia?
13
Who's Who
8
Inside Focus: Malaysia
Source: Official Portal of Public Private Partnership Unit.
PPP was introduced as policy by the Malaysian Government to encourage the collaboration of the public and private sector thus creating the "Malaysian Company". The embodiment of the "Malaysian Company" is through policy. Both parties are co-dependant on each other. The private sector would provide the commercial and economic enterprise while the public sector the implementation on major policies, assist in directing and providing support in a consultancy service to ensure the success of the business.
PPP - Public-Private Partnership
Source: Official Investment Gateway Malaysia Economic Corridors web portal
The Malaysian Government has established 5 economic growth corridors in Malaysia to enforce development through free trade and business incentives. These growth corridors have been implemented to strategically promote the growth of investment in these regions.The growth corridors are as follows.
1. Iskandar Malaysia in Southern Johor (IRDA)
2.Northern Corridor Economic Growth Region (NCER)
3. East Coast Economic Region (ECER)
4. Sabah Development Corridor (SDC)
5. Sarawak Corridor of Renewable Energy (SCORE)
Five economic growth corridors
(read more)
Malaysia
*Source: CIA World Factbook, Ease of Doing Business Index, BBC News: Country Profiles, Economy Watch: Malaysia, Malaysian Investment Development Authority: Invest in Malaysia, Malaysian Education: Malaysian Centre of Educational Excellence
Official Country Name
Head of Government
Major Cities
Main Languages
Population
Area (km²)
Main Religions
Currency
Main Economic Sectors
GDP per Capita
Main Imports
Main Exports
Federation of Malaysia
Tuanku Abdul Halim (Head of State), Najib Abdul Razak (Prime Minister)
Kuala Lumpur (Capital)
Malay (official), English, Chinese, Tamil, Telugu, Malayalam
30,073,353
329,847
Islam, Buddhism, Taoism, Hinduism, Christianity, Sikhism
Ringgit
Manufacturing, Mining, Agriculture
$17,500 (USD)
China, Singapore, Japan, United States, Thailand, Indonesia, South Korea; Commodities: electronics, machinery, petroleum products, plastics, vehicles, iron and steel products, chemicals
Singapore, China, Japan, United States, Thailand, Hong Kong, India, Australia; Commodities: semiconductors and electronic equipment, palm oil, petroleum and liquefied natural gas, wood and wood products, palm oil, rubber, textiles, chemicals, solar panels
*Source: CIA World Factbook, Ease of Doing Business Index, BBC News: Country Profiles, Economy Watch: Malaysia, Malaysian Investment Development Authority: Invest in Malaysia, Malaysian Education: Malaysian Centre of Educational Excellence
Imports
Exports
4
Page
Malaysia
Malaysia is quickly gaining a reputation as one of the world's most competitive destinations for the MICE (meetings, incentives, conferences, exhibitions) industry. The Malaysian state of Sarawak is particularly developing into a national leader in this arena. Business heads in Sarawak are now saying that Sarawak is the most successful area to hold conventions in Malaysia outside of Kuala Lumpur. Hopes are high that the meetings industry can spur on continued growth in Malaysia as the nation enters Association of South East Asian Nations (ASEAN) in the coming months.
Property development, especially in real estate, is perhaps the single largest indicator of Malaysia's robust economic success in face of bleak financial times around the world. Large scale projects--such as outlet malls and townships--are sprouting up all across Malaysia. The New York Times even wrote recently that "the Malaysian real estate market has been on fire since about 2011, with prices increasing roughly 30 to 35 percent through 2013." In this ebook, one local developer tells Voices of Leaders that his business is currently planning projects all over the central state of Pahang. Malaysian developments have become so attractive that many foreigners, particularly British citizens, are purchasing second homes all along the peninsula.
The oil, gas and energy (OGE) sector is perhaps the most crucial of all the industries that comprise the Malaysian economy. OGE contributes some 20 percent to the country's already robust national economy. It employs some best and brightest minds Malaysia has to offer. It is seen as a key piece in Malaysia's ongoing transformation into a high-income nation. It is, in short, what is turning Malaysia into one of the most important economic players in South East Asia.
Malaysia's textile and clothing industry is also now in full bloom. Following nearly half a decade of strong government support, exports from the sector are set to double to $7.5 billion annually by 2020. There has been continued support of public policies that bring high tech and value-added products into the textiles industry. As a result, Malaysian textiles companies are now boasting impressive client lists. Voices of Leaders spoke with one business that is helping to produce apparel for, among others, Nike, Oshkosh, Fila, Disney and Umbro.
Meetings Industry
Property Development
Oil and Gas
Textiles
5
Page
(read more)
(read more)
(read more)
Malaysian State on the Island of Borneo. Situated Northwest of the Island.
Is divided into 11 divisions. Has a population of approximately 2.4 million People.
SARAWAK
ASEAN united in 1967 by the founding fathers: Malaysia, Indonesia, Thailand, Singapore and Philippines. This organisation now comprises of 10 member countries from the South East Asia region. The have united to promote economic, social and cultural growth within the region through joint ventures or collaborations. The members are as follows:
Association of South East Asian Nations (ASEAN)
Source : www.asean.org
Brunei Darussalam
Cambodia
Indonesia
Lao PDR
Malaysia
Myanmar
The Philippines
Singapore
Thailand
Vietnam
Talking about Malaysia as a whole, the contribution othe country in the ASEAN region is really relevant as we are taking the chairmanship position in 2015. Sarawak has contributed almost 10 percent to Malaysia's overall real gross domestic product, becoming one of the richest states in Malaysia. Hence, Sarawak's economy has achieved a steady annual growth rate of between 4.5 to 5 percent over the last few years, generating stronger domestic demand, economic activities of on-going projects in the Sarawak Corridor of Renewable Energy (SCORE) and projects under the 10th Malaysia Plan.
offshore gas to be processed and have value-added services onshore. Crude oil has also attracted big multinational companies such as Petronas and Shell.
Besides the oil and gas, we also have, downstream of this, a palm oil industrial cluster that we are trying to develop at Kiduron. Also, biodiesel is playing an important role. There is significant investment to develop downstream in palm oil, diesel and other products relevant to the agribusiness sector.
On the other hand, Bintulu has to capitalized on its vast population, offering opportunities in the services sector--for example, medical services and education.
What are you doing to attract investors to come to Bintulu and which agencies are facilitating this initiative?
Datu Hj. Mohidin: In Malaysia we have a few agencies that are attracting investors into Malaysia such as the Malaysian Industrial Development Authority (MIDA) under the Ministry of Trade and Industry. This agency has the role of attracting the industrial development and they are in charge of manufacturing licenses and key incentives. MIDA is the government's principal agency for the promotion of the manufacturing and services sectors in Malaysia. Furthermore, MIDA assists companies which intend to invest in these fields, as well as facilitates the implementation of their projects. The wide range of services provided by MIDA include providing information on the opportunities for investments, as well as facilitating companies which are looking for joint venture partners.
As I commented on already, our aim is to foster an investment climate in Bintulu that can attract investors for the long term. Furthermore, foreign companies could bring talent and know-how into Bintulu. This will serve us tremendously.
Malaysia
YBhg. Datu Hj. Mohidin b. Hj. Ishak,
General Manager, Bintulu Development Authority (BDA)
Can you please tell us about the Bintulu Development Authority and the role this agency plays in the area?
Datu Hj. Mohidin: BDA is responsible for facilitating the industrial tertiary sector of the econom[ic] and social development in Bintulu town and Bintulu division. We also manage residential, trade and commerce industry and provide facilities and amenities for the well-being of the people in Bintulu. And another of our objectives is to promote and increase productivity of industry and encourage more efficient utilization of natural resources.
At the same time, the Malaysian Investment Development Authority (MIDA), is currently in charge of bringing investors into the region and then we, the Bintulu Development Authority, are the ones who meet the investors here at the location and assist them in developing their projects.
How would you describe the impact that Sarawak has on Malaysia as a whole?
Datu Hj. Mohidin: Malaysia, in terms of trading, has played a major role in the region if you compare it to other developing nations.
Quote: "We have many opportunities for investment and further development in the oil and gas sector. Bintulu has huge reserves of natural gas and oil offshore and we are in the centre of the liquefied natural gas processing."
What have been some of the major milestones that BDA has achieved since the last decade?
Datu Hj. Mohidin: Bintulu Development Authority has been developing the Bintulu area for the last 36 years and the industrial development in Bintulu has been quite massive, so I think that we have been successful.
In the last four years, we have developed Samalaju Industrial Park from the jungle to what it is today. It is an area well developed for industrial use where you can find plants for Tokoyuma, Press Metal and other relevant companies.
6
Page
Malaysia
We are assisting the state government to develop the Samalaju Industrial Park. The Samalaju Industrial Park is part of the SCORE and is one of the important areas within this corridor located about 62 km from Bintulu. This area is focused on intensive energy industries. Previously it was under our coordination but now is under the Regional Corridor Development Authority (RECODA). It is a reality that Samalaju Industrial Park is attracting a lot of investment. In addition, we have been developing the industrial area of Kidurong which is about 10 km from Bintulu. The Kidurong area is focusing on the oil and gas sector.
Some other projects that we have here are the Malaysia Liquefied Natural Gas Plant (MLNG) from Petronas, as we have gas fields located between 125 km and 275 km offshore Bintulu.
Other big multinationals such as Shell have also set up their operations here, as well as the ASEAN Bintulu Fertilizer plant.
What would you say are the current business opportunities existing in Bintulu, which areas are better place to attract foreign direct investment?
Datu Hj. Mohidin: We have many opportunities for investment and further development in the oil and gas sector. Bintulu has huge reserves of natural gas and oil offshore and we are in the centre of the liquefied natural gas processing. We are also developing the
Interview with (cont.)
"I am confident that with the Sarawak Corridor of Renewable Energy (SCORE), progress will be even greater, taking Bintulu to new heights and making it known internationally."
7
Page
Datu Hj. Mohidin b. Hj. Ishak, General Manager, Bintulu Development Authority.
YBhg. Datu Hj. Mohidin b. Hj. Ishak, General Manager,
Bintulu Development Authority (BDA)
What is the message of confidence that you would like to send to those investors interested in making the move into Bintulu?
Datu Hj. Mohidin: Our vision is to become a fully developed state by 2020. It is just a matter of time before we will achieve it. The demand exists and the private sector is being awarded by it. The natural resources and the infrastructure existing here, coupled with a vibrant young population, will guarantee any foreign company or investors will consider Bintulu as the preferred state of choice for long-term investment.
This agency was assembled by the Malaysian Government in 1967. Their main responsibilities are to aid and counsel companies looking to invest within the manufacturing and service industry in Malaysia. This agency also assists with industrial growth on a global scale. The uniqueness of MIDA is that they offer expert advice and assistance from Government agencies. These include the following: Department of Labour, Immigration Department, Royal Malaysian Customs, Department of Environment, Tenaga Nasional Berhad and Telekom Malaysia Berhad to name but a few.
Malaysian Investment Development Authority (MIDA)
SCORE is the second largest of the five corridors. SCORE was developed in 2009 to help balance the economic growth in the rural areas of Malaysia. The plenitude of natural resources that are available within this corridor allows SCORE to supply clean and safe renewable energy sources at viable prices.
Some of the natural resources that can be found in this corridor are as follows:
1.2 billion oil reserves
8 million hectares of Forest
5 million hectares of arable and peat land for agricultural purposes.
80 million tonnes of Silica sand.
Over 22 million tonnes of Kaolin or China Clay (which has a fundamental use in the Cosmetic industry, ceramics and now used for combat area medical equipment.)
Sarawak Corridor of Renewable Energy (SCORE)
Source www.recoda.com.my
RECODA is the agency appointed to oversee and manage SCORE. The chairman of the RECODA is the Chief Minister of Sarawak. All the board members of RECODA are from federal and state agencies for the allowance of avoidance of Government procedural red tape and quick decision making that may hinder the growth of a project. RECODA has two functions:
To bolster SCORE´s presence in order to forge and inspire new and existing markets.
To acquire ambitious investment goals outlined by the State.
Regional Corridor Development Authority (RECODA)
Source www.recoda.com.my
A wealth of
opportunities
Southeast Asia's largest economy has a new government with global ambitions
Malaysia
Inside Focus
Situated on Borneo, the third largest island in the world, the Malaysian state of Sarawak, blessed with the world's oldest tropical rain forests and home to state-of-the-art convention facilities, is fast emerging as a world-class MICE (meetings, incentives, conferences, exhibitions) location, further adding to the country's growing reputation in the international business community as the perfect conference destination.
"The story of Sarawak's rise to become the most successful convention destination outside of Kuala Lumpur shows the impact the meetings industry can have on a developing state," says Dato' Sri Dr. Muhammad Leo Michael Toyad
8
Page
Malaysia
Inside Focus (cont.)
Abdullah, chairman of the Sarawak Convention Bureau (SCB).
Set up in 2006, SCB has maintained an 80% success rate in bidding for conferences, having supported 277 conventions' bids, says Dato' Sri Dr. Toyad Abdullah, adding that Sarawak recently won the right to host the International Congress and Convention Association (ICCA) conference in 2016, a first for Malaysia, further positioning the country as one of the world's most competitive MICE destinations.
"Malaysia is strategically located, and its probusiness environment will further enhance its role as ASEAN's investment gateway. It has
skilled, low-cost labor and is a place where you can drive your business through technology," says Dato' Eddie Choon Yee Seiong, executive chairman and group managing director of leading jeweler Poh Kong, whose more than 100 outlets throughout Malaysia reflect the country's robust economic growth.
The central state of Pahang, on the east coast of the Malaysian peninsula, is also making the most of its advantages to help drive growth. It has a long coastline, rain forest and highland areas with mountain resorts, making it an increasingly attractive location for a second home for many British citizens.
At the forefront in providing housing needs in the state is Pasdec Holdings Bhd., which has established a reputation for the dependability and quality of its products and services.
"This year, we will focus on developing new townships in Kuantan at Bandar Putra in Tanjung Lumpur, Bandar Damansara Kuantan and Bandar Baru Gebeng. We are also building residential and commercial properties in Chendor, Balok in Kuantan, Rompin and Raub," says Pasdec's CEO and president Dato' Mohd Khairuddin Hj. Abdul Manan. Most of his customers are looking to leave Kuala Lumpur, which is just a 40-minute flight away, he says. "They love the peace and quiet, with the good options for their children's education. Our company is building new infrastructure, and we're engaged in joint ventures to design, build, operate and maintain a highend data center in Pahang to develop the area and take advantage of its potential."
"We see ourselves as a partner of choice for foreign investors, adding value to projects: Our primary objective is to meet our customers' stringent expectations, with the emphasis on quality products, accurate logistics, timely delivery, quality certification, cost competitiveness and responsiveness to changing requirements."
9
Page
Khairil Aznin Bin Mohamed Khan,
Managing Director and Chief Executive Officer
A DYNAMIC OIL SECTOR
A dynamic oil, gas and energy (OGE) sector, being a national key economic area, is crucial to Malaysia's transformation into a highincome nation. Contributing about 20% to the nation's gross domestic product, OGE is a pillar of the Malaysian economy.
Inside Focus (cont.)
Malaysia
10
Page
Inside Focus (cont.)
Malaysia
Another leading specialist meeting the needs of the oil industry is Oilfield Technical Inspection Sdn. Bhd. (OTI). Managed by a team of professionals who have been in the inspection business (both onshore and offshore) in the energy sector for the past 16 years, OTI provides expertise and equipment in thirdparty engineering inspection, nondestructive testing, quality assurance and control, and certification services. The company has worked on more than 200 projects worldwide, from Russia to Nigeria.
"The first thing is to be technically competent and to achieve everything we promise our customers," says OTI's managing director, Zamrin Mohamed Daud, adding: "OTI provides control and flexibility to our customers and we put our heart into every project. We are proud to provide local knowledge and expertise, combined with the international technology. The key is to exceed the expectations of our customers and of our staff."
TEXTILES: WEARING WELL
Malaysia's textile and clothing exports are set to double to an annual value of $7.5 billion by 2020. This reflects the strong upward trend over the last four years driven by government plans that focus on high tech and higher-addedvalue products, in line with policies for the rest of the Malaysian economy.
"Malaysia is strategically located, and its pro-business environment will further enhance its role as ASEAN's investment gateway. It has skilled, low-cost labor and is a place where you can drive your business through technology."
11
Page
Dato' Eddie Choon Yee Seiong, Executive Chairman and Group Managing Director, Poh Kong
As a result, Malaysia is emerging as a cost-efficient regional base with worldclass infrastructure. The country also has a wide pool of skilled professionals and technical experts, says Khairil Aznin Bin Mohamed Khan, managing director and CEO of Kumpulan Agresif Sdn. Bhd. This fast-growing supplier and distributor of flow-handling products, piping and structural materials and specialty piping is involved in providing services and products to suit individual requirements of the oil and gas, petrochemical and marine industries.
"We see ourselves as a partner of choice for foreign investors, adding value to projects: Our primary objective is to meet our customers' stringent expectations, with the emphasis on quality products, accurate logistics, timely delivery, quality certification, cost competitiveness and responsiveness to changing requirements," says Khan, adding that Kumpulan's primary target market is Malaysia, although it's expanding throughout the region. "We already collaborate with one U.K. company and are open to any partner to keep improving our market and offer our services overseas," he says.
Malaysia
Inside Focus (cont.)
A forerunner within this burgeoning sector is the Prolexus Group, making its mark across the world in apparel manufacturing, retailing and outdoor advertising. Founded in 1976, the company has been traded on the Kuala Lumpur Stock Exchange since 1993, establishing itself through its three manufacturing plants as one of the most reputable garment manufacturers for internationally renowned brands.
"The world apparel industry is a multibilliondollar business, and the Prolexus Group is well positioned to offer its customers a competitive advantage," says Prolexus Berhad's executive chairman Ahmad Mustapha Ghazali, adding, "Our growing client list includes established names such as Nike, Oshkosh, Armour, ASICS, Gear for Sports, Champion, Fila, KRU, Disney, Umbro, Saks Inc. and Parisian. We have markets all over the world. Given our experience and resources, we are confident of increasing our presence and look forward to expanding into emerging markets."
12
Page
Malaysia
Dato' Sri Muhammad Leo Michael Toyad Abdullah currently serves as the Chairman of the Sarawak Convention Bureau. A Malaysian politician, he is also a Member of the Parliament of Malaysia for the Mukah constituency in Sarawak, which represents the Parti Pesaka Bumiputera Bersatu (PBB) in the ruling Barisan Nasional coalition. Toyad was first elected to Parliament in the 1982 election. Since then he held numerous posts in the Malaysian government. During this time he has been Malaysia's Deputy Minister for Foreign Affairs and, after the 2004 election, he joined the full Ministry of Prime Minister Abdullah Badawi as Minister for Tourism.
Dato' Mohd Khairuddin Hj Abdul Manan, a Malaysian, aged 55, was appointed as Chief Executive Officer/President of Pasdec Holdings Berhad on 11 March 2009. He holds a B.A (Hons) in Strategic Environmental Planning Studies from Liverpool John Moores University, England. Dato' Mohd Khairuddin started his career as a Forecaster/Demographer at Binafon Sdn. Bhd. after graduating in 1982 and went on to gain experience and in depth knowledge in the property development and construction industry while serving Rimman International Sdn. Bhd., Housecoff Sdn. Bhd. and Panji Timor Sdn. Bhd. as Project Manager and General Manager. He ventured into his own property development and construction business in 1992 and has undertaken projects in Seremban, Klang Valley, Pahang and Kedah prior to joining Pasdec Holdings Berhad. Among the notable projects undertaken by Dato' Mohd Khairuddin are the Terminal One and Light Industrial Park in Seremban, Water Treatment Plant in Habu, Cameron Highland and Langkawi Hospital in Kuah, Langkawi.
Ahmad Mustapha Ghazali, a Malaysian aged 63, was appointed to the Board of Prolexus Berhad on 6 September 1993 and was appointed to the post of Chairman of the Board on 1 October 2002 and was redesignated as Executive Chairman on 25 January 2010. He is a Fellow of the Chartered Association of Certified Accountants (UK), an associate member of the Institute of Chartered Accountants in England and Wales and a member of both the Malaysian Institute of Accountants and the Malaysian Association of Certified Public Accountants. He has an MBA from the University of Leicester, England. He was previously attached to an international accounting firm as a partner and has more than 30 years of experience in statutory audit, financial reporting and corporate finance.
Dato' Sri Dr. Muhammad Leo Michael Toyad Abdullah
Chairman/Sarawak Convention Bureau
Dato' Mohd Khairuddin Hj Abdul Manan
Chief Executive Officer/Pasdec
Ahmad Mustapha Ghazali
Executive Chairman / Prolexus Berhad
13
Page
"Our company is building new infrastructure, and we're engaged in join ventures to design, build, operate and maintain a high-end data center in Pahang to develop the area and take advantage of its potential."
" Dato' Mohd Khairuddin Hj. Abdul Manan, Chief Executive Officer and President, Pasdec
"The story of Sarawak's rise to become the most successful convention destination outside of Kuala Lumpur shows the impact the meetings industry can have on a developing state."
Dato' Sri Dr. Muhammad Leo Michael Toyad Abdullah,
Chairman, Sarawak Convention Bureau (SCB)
PBB is a right wing political party in Malaysia and the largest political party in Sarawak with stronghold in the rural regions.
Parti Pesaka Bumiputera Bersatu (PBB)
Malaysia
Malaysia
"The world apparel industry is a multi-billion dollar business, and the Prolexus Group is well postioned to offer its customers a competitive advantage."
"We are proud to provide local knowledge and expertise, combined with the international technology. The key is to exceed the expectations of our customers and of our staff."
"I am confident that with the Sarawak Corridor of Renewable Energy (SCORE), progress will be even greater, taking Bintulu to new heights and making it known internationally."
"Our company is building new infrastructure, and we're engaged in join ventures to design, build, operate and maintain a high-end data center in Pahang to develop the area and take advantage of its potential."
15
Page
14
Page
Datu Hj. Mohidin b. Hj. Ishak, General Manager,
Bintulu Development Authority
Dato' Mohd Khairuddin Hj. Abdul Manan,
Chief Executive Officer and President, Pasdec
Zamrin Mohamid Daud,
Managing Director, OTI
Ahmad Mustapha Ghazali, Executive Chairman,
Prolexus Berhad
