Speaking at the inauguration ceremony officiated by the Yang di-Pertuan Besar Negeri Sembilan, Tuanku Muhriz Ibni Almarhum Tuanku Munawir, Safran Chairman and Chief Executive Officer, Jean-Paul Herteman said “We are proud to inaugurate this new plant, the first of its type in Asia, which will support our business growth in the region. Malaysia is one of the world’s most promising aviation hubs, and by expanding our operations here we are consolidating our strong market position in the Asia-Pacific.”

He also thanked the Malaysian government, the State of Negeri Sembilan and the Malaysian Investment Development Authority (MIDA) for their support towards the project.

The new plant will complement the two existing carbon disk facilities in France and another in the United States and will meet the needs in this region, where the aircraft fleet is recording strong growth.

The plant covering 10,000 square meters (108,000 sq ft) would focus on the production of carbon brakes for commercial airplanes, particularly the Boeing 737 and Airbus A320 families of single-aisle jets. Expected to be fully operational in 2017, the plant would produce some 10,000 brakes for the global market and by 2018, the plant is expected to create some 150 jobs, Herteman said.

Currently, Safran supplies carbon brakes for over 2,000 airplanes in Asia and has provided equipment to more than 6,000 commercial airplanes globally.

The new facility will boost Safran’s presence in Malaysia, together with facilities operated by two other Safran companies, Morpho in the security sector and Turbomeca in helicopter engines.

Meanwhile, Negeri Sembilan Menteri Besar Datuk Mohamad Hasan, said the state has the required facilities and resources to attract investors and make the state a preferred site for investments.

Also present at the event were the two sons of the Yang di-Pertuan Besar Negeri Sembilan, Tunku Besar Seri Menanti Tunku Ali Redhauddin Ibni Tuanku Muhriz and Tunku Zain Al-bidin ibni Tuanku Muhriz and the French Ambassador to Malaysia, Christophe Penot.

Source: NST Business Times 16 Jan 2015 and Safran website

“For the first nine months of 2014, Melaka attracted RM4.4 billion worth of investments in the manufacturing sector, whereby 59.1% (RM2.6 billion) was from domestic sources, and 40.9% (RM1.8 billion) from foreign sources.

“A majority of the investments approved were for transport equipment, electronics and electrical products, paper, printing and publishing, textile and textile products,” he added.

He was speaking at the one-day seminar, titled, “Grow With Us”, in Malacca on Tuesday.

The seminar is part of the outreach programmes of Mida and the Malaysian Investment Development Finance Bhd (MIDF).

The seminars serve as a platform to encourage interactions between the private sector and government to explore, evaluate and execute swiftly the opportunities available in the country.

Rajendran also said most Malaysian companies are now capable of meeting the stringent demands of original equipment manufacturers (OEMs).

“Local players are further encouraged to utilise the facilities provided by the federal government and agencies, including the various financial assistance available with the MIDF, to upgrade their services, capabilities and production quality to meet the requirements of high value-added and advanced technologies,” he added.

In a statement by Mida, Rajendran said the organisation, working with the MIDF, will continuously organise seminars to enhance the domestic investment landscape.

As of December 2014, Mida had approved RM631.8 million from the Domestic Investment Strategic Fund grant for 148 projects with investments of RM6.3 billion.

A total of 11 companies located in Malacca received grant approvals of RM42.9 million and were involved in the aerospace, automotive, electronics and electrical, machinery and equipment and pharmaceutical industries.

“We have about RM65 billion worth of projects in the pipeline this year, if these all materialise then we will be able to exceed our forecast,” he commented.

Mustapa added that the RM65 billion figure still did not provide a complete picture, as there may be additional oil and gas and agriculture sector investments that the ministry via the Malaysian Investment Development Authority (MIDA) is not aware of.

The country’s total investments last year reached a new high of RM235.9 billion, up 8% from RM219.4 billion in 2013, according to the Malaysia Investment Performance Report 2014 released today.

Of the total investments approved, RM171.3 billion or 72.6% were domestic direct investments (DDI), while RM64.6 billion or 27.4% were foreign direct investments (FDI).

Mustapa noted that FDI inflows into Malaysia declined 8% in tandem with global FDI inflows last year.

Global FDI inflows dropped to US$1.26 trillion after reaching US$1.36 trillion in 2013, while inflows into Malaysia decreased to RM35.1 billion in 2014 compared to RM38.2 billion the previous year.

Realised private investments, however, reached a record of RM181.5 billion, up 13.1% from RM160.5 billion previously. This puts yearly gross fixed capital formation (GFCF) above the RM148 billion average annual target at 10.9% growth set under the 10th Malaysia Plan, Mustapa noted. Annual GFCF has consistently registered double-digit growth since 2010.

In 2014, the services sector contributed 63.4% or RM149.6 billion of approved total investments. This was spread out over 5,059 projects and is expected to create 98, 540 jobs.

In terms of yearly growth however, Mustapa noted that the services sector has somewhat plateaued, rising only 1.3% from RM147.7 billion investments in 2013.

As in previous years, the real estate sub-sector continued to dominate services investments, accounting for RM88.5 billion or 59.2%, whilst utilities attracted RM9 billion or 6% of investments and distributive trade at RM8.7 billion at 5.8% of investments.

“If you go to parts of Pahang, Terengganu, Kelantan and Sabah for example, it remains a big challenge to persuade foreign and domestic investors to locate their services in the lesser developed parts of Malaysia.

“So this locational incentive will hopefully be able to provide a boost (to investments),” he said after briefing investors on the Malaysia Investment Performance Report 2014.

This year, the ministry via the Malaysian Investment Development Authority (MIDA) will prioritise four incentives, including the new locational incentive.

The others are the Principal Hub incentive, 200% capital allowance on automation expenditure, and five year tax exemption to manage, maintain and upgrade industrial estates.

“Principal Hub is aimed at attracting major companies to turn Malaysia into a regional and global base, and these hubs would normally create lots of spin-offs, not only in terms of quality and opportunities, but also for the local economy,” Mustapa remarked.

The report revealed that of the total RM71.9 billion of approved manufacturing investments last year, Johor contributed RM21.2 billion or 29.44% alone (largely due to RM14.8 billion of Petronas investments into the Pengerang Integrated Petroleum Complex), followed by RM9.6 billion in Sarawak, and RM8.1 billion in Penang.

Investments in the services sector which totalled RM149.6 billion, meanwhile, were predominantly located in Kuala Lumpur and Selangor, MIDA said.

The agency highlighted several investments into rural Malaysia, such as the Genting Integrated Biorefinery Complex located in the Lahad Datu, Sabah palm oil industry cluster.

This downstream manufacturing complex worth RM1.4 billion will utilise palm oil as feedstock to produce renewable olefin, specialty chemicals, and other high-value derivatives.

Malaysian-owned aircraft parts producer Admanco Sdn Bhd, meanwhile plans to invest RM340.1 million within seven years to in its proposed plants in the Ayer Keroh industrial estate in Malacca and the Green Asia Aerospace Technology Park in Sri Iskandar, Perak.

“Apart from this, there are more (new investments) in the pipeline. So far, six companies have put forward their commitment in creating up to 3,000 jobs in Medini,” Zulfiqar said.

He hopes these new investments would accelerate the development of an exciting eco-system towards the creation of a world-class business services destination.

Present were Malaysian Investment Development Authority chief executive officer Azman Mahmud and Iskandar Regional Development Authority chief executive officer Ismail Ibrahim.

Homegrown Goldbury is establishing a global information technology (IT) automotive hub in Medini and would focus on the implementation and support of SAP solutions developed by software company, SAP SE, among automotive industry players.

As for Brandt International, it will set up BPO and knowledge process outsourcing (KPO) that will offer higher value business process managed services, primarily in the areas of new digital and creative service, resource management and IT, among others.

Vision Technology Consulting, on the other hand, will develop a near shore development centre that will provide Oracle technology implementation, Oracle-related outsourcing services, and enterprise mobility solutions.

i2M Ventures, is a wholly owned subsidiary of Khazanah Nasional Bhd, which has been tasked to develop strategic investment promotion initiatives for business services/shared services and outsourcing (SSO) in Iskandar Malaysia.

Meanwhile, Azman, in his speech earlier said the SSO industry is gaining rapid momentum and showing an excellent track record.

“As of December 2014, the industry attracted over 340 foreign and multinational companies to set up regional and global SSO centres in Malaysia, employing 82,000 people and contributing 16% to the national gross domestic product,” he said.

“The AAC has target direct gross national income (GNI) contribution of RM1.1 billion and RM1.16 billion in investments, leading to the creation of 3,368 highly skilled jobs by 2020.

“Several institutions have embarked on aerospace-related training activities to provide direct support to the industry, by supplying the desired trained and skilled workers.

“They include UniKL, University Putra Malaysia, University Science Malaysia, the International Islamic University and University of Technology Malaysia, which conduct related courses at diploma and degree levels, ” he added.Azman told reporters this at a MIDA forum on the aerospace industry, in conjunction with the Langkawi International Maritime and Aerospace Exhibition (LIMA’15), here today.

He said at present, Malaysia produced skilled workers for the region with over 300 graduate engineers annually and over 2,000 para-professionals.

He said there are 56 education and training providers involved in the aerospace sector.

“These
training and education providers need to improve their bachelor’s degree programmes
by aligning with the latest technology and industry trends and facilitate
bridging programmes to fast track employment.

“For para-professionals, there is a serious supply shortage in the aerostructure manufacturing sub-sector which requires further investment by the training and education providers,” Azman added.

He said while MIDA is able to identify the demand in advance, it is important to create a platform to share with the supply side, relevant agencies and institutions.

MIDA is the government’s principal agency for the promotion of the manufacturing and services sectors in the country.

Sumber: Bernama

Launched by International Trade and Industry Minister Datuk Seri Mustapa Mohamed at the Semicon Southeast Asia 2015 microelectronics exhibition at the Spice Arena in Bayan Lepas, Penang, this is the first IAC to take off under Budget 2015.

“This isn’t our first time working with TalentCorp [but it’s been] mostly on an ad hoc basis. What we are doing now is creating a strong marriage, a structured approach, to address human capital challenges and fill the gaps in the E&E sector,” said Mustapa.

While noting the existence of other collaborative initiatives to address the needs of the E&E sector — such as Crest launched in 2012 — Mustapa hopes the IAC can be another example of how close collaboration between industries and universities can result in university curriculum enrichment to enhance graduate employability.

Such collaborations will include short courses, electives, final-year projects, adjunct lecturers and sabbaticals in the industry. They are expected to commence this year.

“There’s been a lot of industry engagement with respect to [university] curriculum development. The feedback we get is that Malaysia is strong in hardware, like machines and automation, but when it comes to software, there are a few gaps to be filled,” said Mustapa. “The priority is to further improve soft infrastructure, and this is where collaboration between the industry and academia is very important.”

The IAC partnership follows the launch of Malaysia’s National Higher Education Blueprint 2015-2025 in early April, and is in line to equip Malaysian graduates with skills for high-income career paths. At the moment, an estimated 53,000 Malaysian graduates remain unemployed after six months of graduating.

This collaboration also comes at a crucial time. A World Bank report finds that 62% of Malaysian firms face difficulty finding talent with the right skills, while 48% of companies identify a lack of talent as a constraint for future growth.

“This [partnership] is about producing the right supply of graduates, and the most sustainable talent supply is our local pool of universities,” said Johan Mahmood Merican, chief executive officer of TalentCorp.

“This ensures that we have industry-ready-quality graduates for the growth of the sector — for all the priority clusters of the electronics sector.”

The IAC initiative will be introduced to other priority industries besides the E&E sector. These include machinery and equipment or advanced engineering, medical devices, oil and gas, transport — including automotive, aviation and maritime, chemical and petrochemical, health care and communications, content and infrastructure.

The E&E sector is one of Malaysia’s 12 National Key Economic Areas. In 2013, Mida estimated it accounted for 32.8% of Malaysia’s exports and 27.2% of total employment. Almost half of Malaysia’s manufactured exports in 2014 — RM231.2 billion — were E&E exports.

On a separate note, Mustapa added that the event is the first Semicon microelectronics exhibition held outside Singapore.

“This is a success for Malaysia. We’re a major player in testing and packaging, 20% of the world’s market. The organisation of the event in Penang shows confidence in Malaysia as far as testing and packaging are concerned … in promoting not only E&E but also manufacturing.”

This article first appeared in The Edge Financial Daily, on April 23, 2015.

Author: Emily Chow

Source: The Edge Financial Daily

There are many companies involved in off-shoring activities and services.

These companies have deployed their business worldwide.

As these changes occur, Malaysian Investment Development Authority (MIDA) believes in stepping up its game by keeping abreast with the developments in the business landscape.

To this end, MIDA is fine tuning and innovating its policies and incentives to promote the manufacturing and services sectors in Malaysia.

The Principal Hub incentive is one of the latest measures by MIDA to enhance the business environment.

According to MIDA’s CEO, Datuk Azman Mahmud, MIDA is responsive towards global business changes and incentives are reviewed to ensure Malaysia’s competitive advantages are sustained in attracting investments.

The Principal Hub incentive, effectively implemented on May 1, replaces the existing International Procurement Centres (IPC), Regional Distribution Centres (RDC) and Operational Headquarters (OHQ) incentive schemes.

“It (the Principal Hub incentive) is a hybrid of all these (IPC, RDC and OHQ),” explains Azman.

The establishment of this incentive scheme complements the increasing trend of global off-shoring activities by encouraging foreign companies to leverage on Malaysia’s competitive position in Asean and the Asia Pacific.

“It complements the manufacturing sector because once you produce the goods, there are a lot of other things (that can be done and needs to be done).

The whole ecosystem needs to be in place in Malaysia, not only for managing the supply chain in Malaysia but in the region.

“It is also in-line with the objectives of Malaysia’s Economic Transformation Plan to encourage manufacturing activities to move up the value chain and undertake more value added activities in the services sector,” he adds.

MIDA is looking at encouraging Malaysian-owned and incorporated businesses to provide services related to the function of the headquarters and expertise to overseas companies.

It will also boost the growth of the services sector and position Malaysia as part of the integrated global supply chain in sectors where Malaysia has the comparative edge.

Aside from that, Malaysia offers a cost competitive location for investors intending to set up offshore operations for services and manufacturing activities, including in the areas of resource-based industries, high-technology industries, knowledge-based and advanced technology industries for regional and international markets.

For this scheme, the agency is targeting multinational companies (MNCs) and large local companies (manufacturing and services companies) that have regional or global presence and networking.

They are also looking at MNCs which have a manufacturing base in Malaysia or Asean that intend to move-up the value chain into services activities and with supply chain connectivity within the region.

Azman points out that through the incentive, there are a number of economic gains that can be achieved, such as high value job creation, transfer of knowledge and skill, making Malaysia the regional operation and trading hub, an increase in business spending and even high utilisation of the country as a logistics hub.

“If we do not create a conducive environment for multinational companies and Malaysian-companies to take advantage of the economic growth and business opportunities in various countries, then we will be left behind.

“We have to be innovative in our policies and strategies to attract investments so that Malaysia will be strongly integrated into the region as well as other (markets),” says Azman.

This is where the Principal Hub incentive scheme will play a big role.

It allows MNCs and local companies to enjoy the benefits of customs duty exemptions in free industrial zones, licensed manufacturing warehouses, and free commercial zones.

Aside from that, companies can take advantage of relaxed equity ownership guidelines and MNCs can hire expatriates based on their business requirements.

Form a tax perspective, Principal Hub companies are placed in a 3-tier tax scheme based on their level value of creation.

Under this scheme, they pay tax rates of 0% up to 10% over a 5-year period that may be extended.

However, these are all subjected to the number of skilled jobs created and annual business spending of the company.

Each tier differs in terms of the number of countries served. As a company moves from Tier-3 to Tier-1, it must serve an increasing number of countries, from three countries up to five. And this is excluding Malaysia.

Aside from some of the above, in order for companies to qualify for this scheme, it must possess a paid-up capital of more than RM2.5 million and for companies that involve in trade in goods activities minimum annual sales of RM300 million is required throughout the incentive period.

The companies must carry out at least three qualifying services, of which one of the services must be in the strategic services cluster.

Strategic services include brand management, corporate finance advisory services, IP management and strategic business planning and corporate development.

For those who are interested in the incentive, further details can be found on MIDA’s website under the link for forms and guidelines on the new incentives under 2015 budget.

All applications received by MIDA from Maya 1, 2015 until April 30, 2018 are eligible to be considered for the Principal Hub incentive.

Source : The Edge Malaysia

The Malaysian Investment Development Authority (MIDA), a unit under International Trade and Industry Ministry, projects rapid growth and good prospects for the country’s biomass industry next year.

Minister Datuk Seri Mustapa Mohamed said biomass was an important sector and Malaysia needed to harness its potentials.

“We (Malaysia) are looking for some new growth strategies, as currently we have information technology, biotechnology and electrical and electronics sectors which have done well,” he told reporters at the Biomass Conference 2015 here yesterday.

He said Malaysia’s biomass ecosystem now was quite simple where biomass items were converted to oil palm pellets which were sold to South Korea and China.

Mustapa said the biggest opportunities were in Sarawak, Johor and Pahang which had big palm plantations, which could be relied on for good and regular supply of raw materials.

He said the country needed to move up and produce bio-ethanol, citing Brazil which converted sugarcane waste to ethanol for fuel.

Investments in biomass industry in Malaysia continue to be encouraging and as of 2014, MIDA approved a total of 12 biomass projects with investments of RM82.9mil compared with 11 projects with investments of RM54.6mil in 2013.

Domestic investments amounted to RM71.1mil while foreign investments totalled RM11.8mil.

Approved biomass projects were for utilisation of empty fruit bunches and palm oil mill effluents to produce organic fertiliser, oil palm pellet, peeled palm lumber and fibre.

Significant opportunities now exist in downstream activities, which generate higher value-added products in the palm biomass sub-sector.

Other promoted growth areas in the palm oil sector are in oleochemical-based products and nutritional food and ingredients, as well as research and developments activities which involve high levels of technology.

Source : Bernama

“We are also hoping that domestic investors would continue to invest because we need both elements to accelerate the growth of the country,” he told reporters on the sidelines at the opening of Arla Foods Asia regional office today.

On whether the cabinet reshuffle would give impact investors’ confidence, he said, political scenario is not a major factor for investors to set up their businesses locally.

“Investors come to this country to do business and they are looking for a long-term prospects and politics is not a concern,” he said.

On the weakening ringgit, he said, foreign investors are looking into using Malaysian inputs to reduce costs and they have started to realise and recognise that local supply chain is good.

“Therefore, the impact is minimal as they are leveraging on domestic supply chain and technology. This is good for the country,” Amirsham said.

Meanwhile, head of Arla business activities in Asia, Jesper Colding, said the set-up of the regional office would assist the company access the Asian region market.

“The Malaysian market is relatively small at the moment. However, it has certain advantages, such as safe and friendly environment to develop the business.

“Cost-wise, this country is still attractive compared to Beijing, Shanghai, or Singapore,” he said, adding that the Arla’s main markets in Asia are China, Indonesia, the Philippines, and Bangladesh.

On its future plan, Colding said, in the first phase, the company would concentrate on the export opportunities as well as liaising with its partners, which already have manufacturing facilities locally.

“These partners may have production facility that we can tap into by using our raw materials. However, it is still in the planning stage,” he added.

The organic dairy products producer currently offers cheese-based products in the local market and is keen to bring in its whole range liquid dairy products into the domestic market soon.

Source : Bernama

HR PIB is a component for the production of fuel and lubricant additives, such as fuel detergents or dispersants for engine oils.

BPC managing director Dr Stefan Beckmann told StarBiz that the new plants’ investment could be to the tune of billions of ringgit based on earlier projects of similar scale.

He is confident that the chemical would be in demand in Asia due to increasingly higher standards for industry and the environment.

“Increasing environmental and regulatory standards will require higher performing engine oil and fuel, especially in the growth region Asia. HR PIB is an essential raw material to help industry players to fulfil such standards.

“The new plant will support the respective industry segments to achieve their objectives for sustainability,” Beckmann said.

In April last year, the company broke ground on its new integrated aroma ingredients complex, which would house facilities to produce citral, citronellol and L-menthol. With an investment amount of around RM1.5bil, the aroma ingredients produced would be used as flavours and fragrances for the food and beverage, fabric, homecare and personal care industries.

Recently, construction started on a 2-EHAcid plant with a total annual capacity of 30,000 tonnes. This plant is expected to be commissioned towards the end of next year.

Malaysian Investment Development Authority (Mida) chief executive officer Datuk Azman Mahmud said the investment would have tremendous impact not only on Pahang, but also other parts of Malaysia because it would provide potential business opportunities to supporting industries.

“This project is expected to create export revenue of RM300mil to the country as 100% of HR PIB will be for the export market,” he said.

Mida approved the establishment of the HR PIB plant in March.

BPC operates an integrated petrochemical complex located in Gebeng. Petronas Chemicals has a 40% stake in BPC, with the remainder held by BASF.

“The range of chemicals produced by BPC meets the growing demand in various industries including that of plastic, adhesives, lacquers, dyestuff, automobile and industrial coatings, paper, diapers, water treatment, textile and leather,” Beckmann said.

Source : StarBiz

He said Johor drew the highest total approved investments in the manufacturing activities nationwide at RM21.1bil in 2014, overtaking Penang and Sarawak.

Khaled said the figure was a gigantic improvement from RM14.4bil received by the state in 2013.

Of the total RM27bil, RM25bil investments were from the domestic investors while the balance RM2bil were from foreign companies, he said.

“This indicates that Johor is no longer the sleeping giant it used to be. The state will soon be the leading investment hub in the region,” Khaled said this after opening the US$130mil Lotte Ube Synthetic Rubber Sdn Bhd plant in the Tanjung Langsat industrial park here yesterday.

The plant, the country’s first polybutadiene rubber (BR) facility, is a joint venture between Lotte Chemical Corp (40% stake), Ube Industries Ltd (40%), Lotte Chemical Titan (M) Sdn Bhd (10%) and Mitsubishi Corp (10%). It is capable of producing 50,000 tonnes of BR yearly.

Khaled said Johor would continue to adopt proactive measures to attract investors and transform the state as the leading investment hub in the region.

“We have established the Johor State Investment Centre (JSIC) to improve the overall business and this will further enhance the mutual beneficial relationship shared by the state and the businesses, “he said.

Khaled JSIC would work closely with the Iskandar Regional Development Authority and the Malaysia Investment Development Authority (Mida) to incubate a cohesive business-friendly climate in Johor.

He said Johor needed more dedicated industrial parks to cater for capital-intensive and high-technology investors worldwide.

Meanwhile, Mida chief executive officer Datuk Azman Mahmud said Johor boasted the right ecosystem to become one of the leading regional manufacturing hubs.

He said the state’s close proximity to Singapore was an added advantage to attract manufacturers from all over the world to set up operations in Iskandar Malaysia.

Source : Star Biz

“They will bring new technologies and products so that business will be as usual. It’s normal to have upswing and downswing when it comes to currencies.

“That’s why, we must look at other fundamentals such as good infrastructure, connectivity and a strong supply chain,” he told a press conference after the opening of Sin Kwang Plastic Sdn Bhd’s production facility in Senai here yesterday. Azman was asked whether there was any investment withdrawal from foreign companies due to the sliding ringgit.

Armed with dynamic ecosystem and fundamentals as well as positive investment environment, he said Malaysia still has valuable propositions to offer foreign investors.

He cited the opening of Sin Kwang Plastic’s new production facility as a testimony as it reflected the company’s confidence in longterm investment in the country.

Built on a 2.02ha site, the new production facility of Sin Kwang Plastic is dedicated for Dyson, a British company noted for its innovative technology embedded in vacuum cleaners, hand dryers, bladeless fans and heaters. Sin Kwang Plastic is a wholly-owned subsidiary of SKP Resources Bhd.

Source : Star Biz & Bernama