The nation’s first energy efficient vehicle (EEV) and electric vehicle (EV) manufacturing plant is set to be built in the HICOM Pegoh Industrial Park here with an investment value exceeding RM100 million.

Melaka Chief Minister Datuk Seri Ab Rauf Yusoh said the plant that would be developed by EP Manufacturing Bhd (EPMB) is expected to produce up to 30,000 EEVs and EVs annually for the first phase after the completion of the plant at the end of next year.

He said that around 1,000 new job opportunities in the automotive sector would be created for the people of Melaka, particularly those residing in the Pegoh area, thus, boosting the state’s economic growth while helping to reduce carbon dioxide emissions in the future.

“This is not only a significant milestone for EPMB but also a meaningful indicator for the state government because we are highly committed to developing impactful and high-tech investment projects like this EEV and EV plant,” he said.

He told this to reporters after inaugurating the groundbreaking ceremony of the EPMB’s new vehicle plant development, which was also attended by EPMB group chief executive officer Ahmad Razlan Mohamed.

Ab Rauf said this effort is in line with the state government’s direction to always be open to attract more new investments to Melaka through investor-friendly and business-friendly policies.

Additionally, Ab Rauf said EPMB is suggested to collaborate with 23 technical and vocational education and training (TVET) institutions in the state to produce skilled and semi-skilled labour for the plant’s workforce needs.

He said the collaboration with these TVET institutions could also further strengthen research and development in the automotive sector in the state and the country.

Meanwhile, in his speech, Ahmad Razlan said the development of the plant on an area of approximately 17 hectares is the initial step for EPMB to drive the country’s EEV and EV industry in the future.

He added that the construction of the plant involved four phases with the first phase expected to be operational next year.

Source: Bernama

Ab Rauf: Malaysia’s first EEV, EV manufacturing plant to be built in Melaka

LONGi Malaysia held a ground-breaking ceremony on Friday for its new RM1.3 billion Samalaju plant, situated on a 125-acre (50.59-hectare) site.

The Malaysian Investment Development Authority (Mida) said in a statement that the ceremony was officiated by Deputy Premier of Sarawak Datuk Amar Awang Tengah Ali Hasan, who is also the state’s minister for international trade and investment.

Mida chief executive officer Datuk Arham Abdul Rahman said the substantial investment in the new Samalaju plant further underscores Malaysia’s position as a prime hub for comprehensive solar ecosystem manufacturing.

“It is also a testament to the company’s confidence in the capabilities of our local talent, including highly skilled engineers and technicians.

“We are hopeful that LONGi’s pioneering efforts will serve as a shining example for the entire industry, inspiring others to follow suit, and contribute to our collective growth and success,” he said in the same statement.

The project is the first solar manufacturing factory in the Bintulu Samalaju Industrial Park (SIP). The Bintulu monocrystalline ingot manufacturing project covers an area of 125 acres, with a forecast investment of RM1.3 billion.

LONGi said the SIP was chosen due to its proximity to its raw materials supplier and deep-sea port, as well as for its affordable and sizeable industrial land.

“It will have a capacity of 6GW or equivalent to producing 13,000 metric tons per annum. Production is expected to begin at the plant in the first quarter of 2024.

“The new project will hire 1,213 new employees, of which at least 90% are to be filled by locals, and 20% will cater for positions in science, technology and engineering,” it said.

Source: Bernama

LONGi Malaysia breaks ground for new RM1.3b Bintulu Samalaju plant

The emergence of a well-managed and well-planned industrial park with emphasis on environmental, social and governance (ESG) attributes and technology adoption will attract high-value investment, said Knight Frank Malaysia executive director Allan Sim at the Selangor Industrial Park Expo (SPARK) 2023 held at the Kuala Lumpur Convention Centre on Thursday. 

SPARK 2023 was held in concurrent with the three-day Selangor Industrial Business Summit 2023 exhibition. 

Presenting Knight Frank Malaysia’s white key paper titled “ESG by Design: Selangor’s Path To Sustainable Industrial Real Estate”, Sim said: “With the launch of Selangor’s Managed Industrial Park (MIP) standard, coupled with green features certification and ESG adoption, MIP developments are expected to attract high-value investment.”

“[With] Malaysia as a preferred location for investors, developments with ESG-ready infrastructure will result in capital savings in the long term, with compliance with ESG standards. Growth in ESG demand is expected to drive more MIP developments in the country, forming a self-sustaining ecosystem, as well as creating synergy and healthy integration with the immediate and wider environment,” Sim explained.  

Following the presentation, a fireside chat session, moderated by Knight Frank Malaysia executive director Sasitheran Subramaniam, featured Sime Darby Property Bhd group managing director Datuk Azmir Merican, Area Management Sdn Bhd executive chairman Datuk George Stewart LaBrooy, and NCT Alliance Bhd director Sae-Yap Atthakovit as the panellists. 

During the session, Azmir pointed out that it is important for industrial developers to understand what customers want to attract, and learn what they want to build a good industrial park.

Meanwhile, LaBrooy pointed out that while bigger companies are more aware of reducing their carbon footprint, raising awareness of the importance of ESG compliance among small and medium enterprises (SMEs) is pertinent. 

“There’s a huge agenda waiting for us to make sure that SMEs are in green buildings, complying with the ESG principles, and to have a good [carbon footprint] score,” said LaBrooy.

“If you’re supplying to a very big multinational corporation, [such as] Nestlé or Intel, [but] you don’t have a good ESG score, they won’t buy from you…so, there is a need in the industry to make sure that we educate our SMEs to get on this [ESG] journey quickly,” he explained. 

Zooming into the Integrated Development Region in South Selangor (IDRISS), Atthakovit shared that the location and incentives given by the state government provide an opportunity to establish one’s presence there. He added that various incentives by the government will attract more MIP developments to the region. 

IDRISS is a post-pandemic initiative to stimulate the state’s economic growth through integrated investment development by private developers involving various sectors. 

Source: The Edge Malaysia

Managed industrial parks will attract high-value investment amid ESG trends, says Knight Frank Malaysia

Finland’s Peikko Group Corporation, a leading global supplier of concrete connections and composite structures, has opened its newest factory, marking an exciting chapter for the Asia-Pacific region.

Peikko Asia Pacific vice-president Michal Horak said the €10 million (RM50 million) facility has about 3,000 square metres of space and is equipped with cutting-edge machinery and production lines, enabling the company to provide more precise and professional services to its clients.

The new facility at Tebrau Industrial Estate 2, Johor Bahru, is ideally positioned to cater to the dynamic requirements of Malaysia, Singapore, Australia and other Southeast Asian markets, he added.

Horak said the opening of a new production facility is a logical step forward, as Peikko has had a sales and technical support team in Singapore for some years already, and Johor is strategically an excellent choice of location when increasing its operations in Malaysia and the broader Asia Pacific region in the coming years.

“The Malaysia factory plays a vital role in meeting demands for Southeast Asia. The factory’s presence allows us to better address local customer needs, reducing delivery times and enhancing customer satisfaction.

“This is crucial for the Southeast Asian market, which is a rapidly growing region in need of swift and reliable solutions,“ Horak told a press conference on Wednesday here.

He added that the location enables quick delivery of their products to customers in the Malaysian and Singaporean markets.

“In an area of 3,000 square metres, we are able to manufacture various products from ribbed steel bars, wire ropes and steel plates, with a combination of various technologies,“ he said.

Horak shared that with a strong history of delivering innovative solutions, such as precast and cast-in-situ connections, Deltabeam slim floor structures and lifting systems, Peikko Malaysia will now be able to provide its clients with precise and professional services, even faster delivery times, and improved accessibility to our cutting-edge solutions.

Meanwhile, Peikko Group Corporation chief CEO Topi Paananen said Peikko Malaysia eagerly embarks on this new chapter and is committed to serving its customers while making substantial contributions to Malaysia’s vibrant construction landscape and beyond.

He said the group will explore additional investment opportunities in Malaysia within the next two to three years, depending on the business demands of the Johor Bahru facility and the needs in the Asia-Pacific customers.

Besides that, Peikko Malaysia will create employment opportunities in the region and collaborate closely with local suppliers, contractors, and consultants to support the development of the construction sector in the region.

He reckoned the factory will also strengthen collaboration and services with customers as they can work closely with clients to meet their specific requirements and provide customised solutions while laying a solid foundation for their growth in the Southeast Asian market.

“Regarding the trends in precast construction and sustainable construction in the Asia Pacific region, it’s evident that the Southeast Asia area is undergoing rapid development.

“Precast construction technology plays a crucial role in improving efficiency and quality especially with sustainable construction has become a global trend,“ said Paananen.

As the factory supports precast construction and continuously drives innovation in sustainable construction, Peikko believes that by combining these two factors, it will achieve sustainable growth in the Southeast Asian market while delivering advanced construction solutions to the region.

Source: Bernama

Finland’s Peikko Group opens €10m factory in Johor Bahru

The exceptional growth in investments for the manufacturing sector in Selangor this year can be attributed to implementing and enforcing the First Selangor Plan 2021-2025 (RS-1), according to Knight Frank Malaysia.

In the first half of this year, it recorded RM14.75 billion in investment for the manufacturing sector, higher than the RM5.13 billion achieved over the same period last year.

Knight Frank executive director of research and consultancy Amy Wong said the forward-thinking initiative has attracted more investment opportunities and provided a future-proof infrastructure for potential investors.

“With RS-1 in place, Selangor is poised to become a magnet for industrial development, offering a conducive environment for businesses to thrive,” she said in a statement today.

Under the plan launched last year, the state government identified nine high-impact focus industries which will propel and strengthen Selangor’s economic development — ports and logistics, digital economy, aerospace, electrical and electronics, mechanical and engineering, halal, automotive, life sciences, tourism, and agrotechnology.

“The efforts to strengthen the nine focus sectors will be driven by four key strategies — facilitating economic recovery post-Covid-19, strengthening strategic core industries, catalysing the development of new and emerging sectors and enhancing the state’s competitiveness,” Wong said.

She added this would be supported by a variety of projects, programmes, and initiatives, which would be developed based on the current issues and challenges faced.

Knight Frank has a strong presence in Malaysia offering high-quality professional advice and solutions across a comprehensive portfolio of property services.

Source: Bernama

RS-1 boosts Selangor investments this year: Knight Frank

Analysts are positive on DRB-Hicom Bhd’s growth momentum following its 50%-owned Proton Holdings Bhd’s bullish outlook.

Hong Leong Investment Bank (HLIB) Research said Proton’s sales target of 310,000 units in 2030 as well as 500,000 units in 2035 are expected to seal its top sales position in Malaysia and place itself among the top three in Asean.

“We expect Proton to launch one new model per annum for the next six years, with a total investment of RM6bil, including allocation for product development, production efficiency and capacity expansion,” it said in a report.

HLIB Research added that Proton is embarking on the next generation vehicle CASE technologies (C – Connected services; A – Autonomous vehicles; S – Shared mobility; E – Electrification).

Additionally, Proton’s electric vehicle (EV) implementation is on track, with plans to begin its “smart EV distribution” from the fourth quarter of this year and across the Asean region with a planned new model launch as early as 2025.

“Proton is also collaborating with Gentari for EV development, mobility and ecosystem of new energy. It will leverage Geely’s knowledge and technology to develop its own EV range,” HLIB Research said.

Furthermore, the research house noted that Proton is expected to achieve its fifth consecutive yearly sales growth this year, as the first eight month sales stood at 116,800 units.

HLIB Research said that for 2023, it previously guided a sales target of 150,000 units, indicating a growth of 6.1% year-on-year (y-o-y).

This will be supported by strong demand for existing models as well as the newly launched X90 and upcoming S70 C-segment sedan model by year-end.

“Note that Proton managed to turn around to a profit of RM74mil in financial year 2021 (FY21) and continued to record a stronger profit of RM200mil in FY22,” it said.

HLIB Research reiterated its “buy” call on DRB-Hicom with an unchanged target price of RM2.

“We remain positive on DRB-Hicom’s outlook on strong automotive sales growth potential, leveraging on the attractive model line-up from Proton.

“DRB-Hicom will also benefit from the increasing demand for Honda and Mitsubishi vehicles,” it noted.

The research house said since Proton’s restructuring exercise in 2017, the carmaker has improved the quality of its products to now below 700 points based on the Global Customer Product Audit.

This was a substantial improvement from the 6,388 points in 2018 despite the increase in Proton car sales.

“We expect continuous improvement in product quality and cost efficiency as Proton consolidates its production to Tanjung Malim from Shah Alam by 2026, with investments into better equipped production plants,” it said.

Besides enhancing product quality, the new management has also committed to improving its customer service.

“Management has embarked on the transformation of dealership networks, including increasing 3S-4S centres, refresh outlook and digitalisation, dealership coaching and training, working capital support, dealership business plan, complaint management as well as collaborations with dealerships,” it said.

Source: The Star

DRB-Hicom set to ride on Proton’s growth

A Chinese solar cell encapsulant film manufacturer is investing RM2bil to build a factory in Tasek Industrial Park here.

Perak Mentri Besar Datuk Seri Saarani Mohamad said the factory is expected to start operations by the first quarter of 2024.

“The factory is capable of producing 85 million sq m solar cell encapsulants to cover about 10GW demand.

“The investment will be in a few phases and expected to reach production capacity of 300 million sq m encapsulants to cover about 30GW demand,” he said in a statement on Wednesday (Oct 18).

“About 300 employment opportunities are expected to be created once the factory is completed and running at full capacity,” he added.

Saarani said this after witnessing the memorandum of understanding signing ceremony between Zhejiang Sinopont Technology Co Ltd (Sinopont) and Perak Investment Management Centre (InvestPerak) to reinforce cooperation between both parties at Sinopont’s headquarters in Hangzhou, China.

Saarani is currently on an investment promotion mission in China from Oct 15 to 21. He said the RM2bil investment was testament to the strong confidence of foreign investors in Perak.

“The state government will provide a ‘fast-track’ approval process through InvestPerak to make the state a conducive place for investors.

“The state will continuously strengthen the good relationship with both the Investment, Trade and Industry Ministry and Malaysian Investment Development Authority to promote Perak as the preferred investment destination in Malaysia,” he said.

InvestPerak chief executive officer Mohamad Hashim Abdul Ghani said Perak is strategically located at the midpoint between Penang and Selangor, two industry powerhouses in Malaysia.

“This will put Perak as a favourable location for companies that produce products or provide services for multinational corporations in both states because by operating in Perak, they can easily secure both markets,” he said.

Source: NST

Chinese manufacturer investing RM2bil to build factory in Ipoh

Proton Holdings Bhd’s electric vehicle (EV) initiative remains firmly on track with the initial phase of introducing “smart” EV distribution within Malaysia in the fourth quarter of 2023, and throughout Asean.

Proton is leveraging onto Geely’s knowledge and technology to develop its own EV range, with the new Proton EV model to be launched as early as 2025.

“Proton is also collaborating with Gentari for EV development, mobility, and the ecosystem of new energy,” Hong Leong Investment Bank Bhd (HLIB) Research said in a note. 

For 2023, the company previously set a sales target of 150,000 units, indicating a growth of 6.1 per cent YoY, supported by strong demand for existing models as well as the newly launched X90 (May 2023) and the upcoming S70 C-segment sedan model by year-end. 

“Note that Proton managed to turn a profit of RM74 million in the financial year 2021 (FY21) and continued to record a stronger profit of RM200 million in FY22,” it added.

Additionally, Proton has set a sales target of 310,000 units in 2030 and 500,000 units in 2035. 

HLIB Research said if these targets are achieved, Proton would secure the top sales position in Malaysia and be in the top three in Asean. 

“We expect Proton to launch one new model per year for the next six years, with a total investment of RM6 billion, including allocations for product development, production efficiency, and capacity expansion. 

“Proton is also venturing into the next generation of vehicle CASE technologies,” it added. 

Since the restructuring exercise in 2017, Proton has significantly improved its product quality to below 700 points, a substantial improvement from 6,388 points in 2018, despite the increase in Proton car sales. 

“Overall productivity and cost-efficiency ratios have also improved significantly over the years.

“We expect continuous improvement in product quality and cost efficiency as Proton consolidates its production in Tanjung Malim from Shah Alam by 2026 with investments in better-equipped production plants,” it said.

Source: NST

Proton Holdings to introduce “smart” EV distribution in Malaysia in fourth quarter of 2023

EP Manufacturing Bhd has signed an initial agreement with Great Wall Motor Sales Malaysia Sdn Bhd to locally assemble GWM vehicles.

EP Manufacturing sealed a Memorandum of Understanding on the prospects through wholly-owned unit Peps-JV (Melaka) Sdn Bhd. 

In a filing to Bursa Malaysia, EP Manufacturing said GWM has the intention and planning to anchor its Asean hub and sell the right-hand drive (RHD) model products in Malaysia.  

 “Peps-JV shall be responsible for the assembly and manufacturing vehicles under the brand of GWM. 

“Peos-JV has been granted with a manufacturing licence by the Ministry of Investment, Trade and Industry of Malaysia which permits for the assemble of the products,” it said. 

The MoU will run for a year. 

“The MoU will allow the parties to leverage on each other’s strengths and expertise for collaborative development of GWM’s brand RHD internal combustion engine vehicle and electric vehicles to meet the market needs in Malaysia. 

“This will potentially create an additional revenue stream for EP Manufacturing Group and make a favourable contribution to the group’s future expansion,” it said.

Source: NST

EP Manufacturing in initial pact to assemble GWM vehicles

Japan-based Koa Corporation is investing an additional RM1 billion in Melaka for the Phase 2 development of its chip, microchip and electronics plant.

Chief Minister Datuk Seri Ab Rauf Yusoh said its unit Koa Denko (M) Sdn Bhd’s new factory on 8.37 hectares of land in the Ayer Keroh Eco Park, when fully completed in 2025, would offer an estimated 950 job opportunities.

“This will increase to 1,820 job opportunities in 2028. Koa Denko has also targeted to produce 8.2 billion chip resistors a month by the end of 2028.

“The company’s products are usually used in the automotive, industrial equipment and telecommunications industries and distributed to renowned global manufacturers,” he told reporters after officiating Koa Denko’s ground-breaking ceremony here on Tuesday.

The event was also attended by the company’s managing director Seiji Ozawa and Malaysian Investment Development Authority (Mida) chief executive officer Datuk Arham Abdul Rahman.

Ab Rauf said Koa Denko is also collaborating with several technical and vocational education and training (TVET) institutions in the state to create more skilled and trained workers, and provide job opportunities for the graduates.

Meanwhile, the chief minister said the state government is in the process of taking over 2,023.4 hectares of land for a new industrial area in Melaka’s northern corridor.

He said this is part of efforts to make Melaka an investment destination of choice as well as stimulating the state’s economy.

“We are also requesting Invest Melaka Bhd to facilitate all matters relating to investments and give the necessary support.

“As of October 2023, Melaka has achieved a very commendable level of investment, and the amount will be announced once the official report is received from Mida,” he added.

Source: Bernama

Japan’s Koa Corp invests additional RM1b to expand operations in Melaka

Budget 2024’s allocation of RM200 million to catalyse the New Industrial Master Plan (NIMP) 2030 will boost industrial transformation, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

The government recently announced an allocation of up to 10 per cent from the future investments under the NIMP 2030 as a catalyst to accelerate the NIMP mission with a 2024 startup fund amounting to RM200 million.

Tengku Zafrul said the allocation will be channelled through two funds, namely the NIMP 2030 Industrial Development Fund (NIDF) and NIMP 2030 Strategic Co-Investment Fund (NIMP 2030 CoSIF).

“We are going to break it down to the two funds in the forms of grants and matching grants, and in terms of support for financing. But more importantly, we also want to ensure we attract the right kinds of investments,” he said during the BFM’s Breakfast Grille interview this morning.

The NIMP 2030 was launched on Sept 1, 2023, to provide national strategic direction for industrial development policies in Malaysia.

It sets six goals, namely to increase economic complexity, create high value job opportunities, extend domestic linkages, develop new and existing clusters, improve inclusivity, and enhance environmental, social, and governance (ESG) practices.

The industrial plan suggests integrating value chains, particularly between the machinery and equipment (M&E) sector and the medical device sector, as well as between the chemical and pharmaceutical sectors.

On pharmaceuticals, one of the priority sectors targeted, Tengku Zafrul said Malaysia plays a major role in the pharmaceuticals sector, including medical devices.

“We are talking about the whole ecosystem. Many of the world leaders in pharmaceuticals, including medical devices, are here in Malaysia, including Penang and Johor.

“So, it’s a major contribution to the gross domestic product as well as exports. In fact, about 80 per cent of the nation’s exports are from the manufacturing sector,” he said.

On electric vehicles (EVs), the government will introduce the Electric Motorcycle Usage Incentive Scheme for those with an annual income of RM120,000 and below, with a rebate of up to RM2,400 per buyer under the scheme to encourage the use of electric motorcycles.

The government also plans to extend individual income tax relief up to RM2,500 for EV charging facility expenses for four years and tax deductions for EV rental costs for another two years.

“I think we need to democratise EVs, in the sense that now it is more focused in the higher income bracket group. This is where the right EV policy has to come into play.

“But, also importantly, is the positive spillover it has on the economy, Malaysian companies and household incomes,” said Tengku Zafrul.

Source: Bernama

Tengku Zafrul: Budget 2024’s RM200m allocation for NIMP 2030 to boost industrial transformation

T Industrial Park in Pontian, Johor has seen three out of its nine-phase development taken up, thanks to a RM800 million investment from US-based appliances supplier Alton Industry Ltd Group.

The company has earmarked an initial RM800 million investment to set up its Alton Intelligent Super Factory there.

In a statement issued by T Industrial Park, the company said Alton took up a 45.2 acres site in its first phase, and 109.4 acres from its second phase and 245.0 acres from its third phase.

The factory will be its principal overseas manufacturing base, and support the development, production and sale of aerodynamic and cleaning equipment, automotive parts, garden pneumatic tools, intelligent robots and more.

Alton also expects to establish a satellite research and development building in Malaysia, towards developing advanced technologies and expertise in the region.

“T Industrial Park is one of the largest industrial zones in Johor. Its strong take-up is a testament to the group’s unique development DNA with an emphasis on facilities, connectivity and more. We welcome partners such as Alton Industry , and look forward to similar collaborations in the future,” T Industrial Park Sdn Bhd managing director Karen Lee said.

T Industrial Park is close to Port of Tanjung Pelepas and Sungai Pulai bridge and mature land and sea transport logistics.

Source: NST

Three phases of T Industrial Park taken up thanks to US-based Alton’s investment

LONGi Green Energy Technology Co Ltd, China’s largest listed solar panel manufacturer, is investing RM1.8 billion to build its Serendah Module Plant in Selangor, which is also its Asia-Pacific headquarters.

The factory spanning 140 acres will manufacture photovoltaic products. It is scheduled to be completed by March 2024 and is expected to create 2,200 employment opportunities in Malaysia.

The Chinese company provided three reasons for choosing to invest in Malaysia. First is that Malaysia offers access to talent because the population speaks different languages – including Malay, English and Chinese; second is the availability of natural resources, particularly hydro resources; and third is the support provided by Malaysian government policies.

At the launch ceremony yesterday, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, whose speech was read out by the ministry’s deputy secretary-general (management and investment) Datuk Bahria Mohd Tamil, said Malaysia is steadfast in its mission to establish the country as a dominant global nexus for trade and industry.

He added: “We endeavour to nurture an environment that champions innovation, prioritises sustainable growth, and celebrates technological prowess.”

Tengku Zafrul highlighted the global photovoltaic market’s potential, with estimates pointing to a 29% annual growth rate.

“With LONGi’s projected output of 8.8GW upon the completion of both plant phases, our nation’s global standing in the realm of clean and sustainable energy is set for monumental growth,” he said.

In addition, Tengku Zafrul said, Malaysia’s ambitious goals, such as achieving a 20% renewable energy capacity mix by 2025 and the commitment to large-scale solar projects as outlined in the Malaysian National Energy Policy 2022-2040 is in line with LONGi’s vision and objectives.

“With the guidance of the Malaysia Renewable Energy Roadmap and the inauguration of the state-of-the-art solar module technology in Serendah, our direction is clear,” he added.

According to LONGi’s official website, it is developing solutions for large-scale power plants, catering to various industries and households.

Ultimately, LONGi aims to provide “Green Power + Green Hydrogen” solutions, contributing to the global effort for zero-carbon development. This vision underlines their commitment to sustainable and eco-friendly practices in the energy sector.

Source: The Sun Daily

China solar panel maker LONGi invests RM1.8b to build plant in Serendah

The announcement of a new high-tech industrial area in Kerian, north of Perak in Budget 2024 is expected to attract developers, and have spillover impacts on the area.

Maybank Investment Bank Bhd said it will continue to favour developers involved in industrial park projects as demand and sale of such properties have gained momentum since April 2022, especially after the reopening of international borders.

“We anticipate this strong sales momentum to continue into 2024, driven by increased investment diversion from China due to the ongoing US-China trade war.

“Elsewhere, our investment thesis for property stocks with exposure to Iskandar Malaysia and Penang island remains, ahead of announcements relating to the Johor-Singapore Special Economic Zone in end-Oct/Nov 2023, and the final alignment of the Penang LRT by early-2024,” the bank said in a note today.

Maybank, however, said there were no other details in the Budget 2024 speech, and it is unclear who will spearhead this development initiative and the specific investments that this new area intends to attract.
The bank maintained its neutral call on the sector.

Separately, RHB expressed the same sentiment on the new project in Kerian, north of Perak, saying that this initiative should encourage the growth of the housing market in the vicinity.

“Eco World Development and Tambun Indah are the developers that have projects in the south of Seberang Perai. Over the next year to two, we expect some developers to explore land banking opportunities in the surrounding areas,” it added.

RHB noted that Budget 2024 incentives have a positive spillover on the property sector, with some new policies and incentives to be introduced to achieve more high-impact investments.

“Property sales in the remainder of 2023 and going into 2024 will be driven by pent-up demand post-pandemic, positive spillover from the increasing demand for industrial properties, and infrastructure developments which include the Rapid Transit System, and potentially Mass Rapid Transit 3 and high-speed rail,” it said.

RHB maintained its overweight call on the sector.

Meanwhile, MIDF has maintained its positive call on the property sector. It expects property demand to continue to recover amid the expectation that the overnight policy rate to remain unchanged for the rest of this year.

“The improving property overhang in Malaysia further bodes well for the sector’s near-term outlook,” MIDF said in a note today.

Source: Bernama

Budget 2024 focus on Perak’s high-tech industrial area will boost sector – Analysts

The government’s New Industrial Master Plan 2030 (NIMP) to increase manufacturing value adds positively to Malaysian industrial demand.

According to UBS, growth in foreign direct investment (FDI) and domestic direct investment (DDI), as well as industrial property values transacted, has historically been faster than growth in value add (2.0 to 5.0 percent per year).

“Hence, to get to the government’s goal of 6.5 per cent per annum improvement in value added between 2021 and 2030, we think this will imply up to a 10 per cent compounded annual growth rate (CAGR) in FDI/DDI and, consequently, industrial transaction values,” it said.

The strong inbound direct investments are expected to entail significant industrial land requirements in the setup of manufacturing and logistics capabilities.

UBS said mature industrial parks near Senai are seeing strong interest from both multinational companies (MNCs) and Small and medium-sized enterprises (SMEs). 

“For Johor, industrial parks are not distinguished by a particular sector concentration but are better categorised by light, medium, or heavy industries. Hence, such parks can fill up quickly. Overall, we think industrial lands that are connected to transport hubs (particularly near Senai, Pasir Gudang Port in Johor’s north and east) are becoming scarcer. This is based on our comparison of the built-up area versus existing land zoning.

“We think developers’ subsequent landbanking push to industrial is unlikely to result in oversupply. The key is developers sizing up the demand potential effectively,” it said.

UBS said that for now, recent industrial landbank transactions that it observes are in the ‘hundreds of acres’, as opposed to ‘thousands of acres’ seen within residential townships, as in the past.

It said that, to some extent, prime industrial lands are already constrained by their remaining undeveloped size.

“While it would be an opportune moment for agricultural landowners to extract value from their lands, our conversations with key landowners in Johor (Johor Corporation) suggest that prime industrial lands near connectivity nodes will likely be kept. This will mitigate the supply profile,” it said in a note.

UBS said that, in terms of timing, direct investments (including industrial properties) are likely to be frontloaded into the earlier years of the NIMP (2024–2026).

It believes that the size of the addressable market could approach a significant RM23 billion to RM49 billion per annum, a record high.

“This assumes the government’s targets are met. If we assumed a modest 3.0 per cent CAGR on value-added growth and a twofold increase in direct investment (6.0 per cent), the floor for industrial transactions could be a minimum of RM13 billion to RM15 billion per annum, still sizeable. This growing pie would spell abundant opportunities for developers to capture market share,” it noted.

The National Energy Transition Roadmap (NETR) push towards renewable energy is also land-intensive, particularly from solar farms, which need to be located on industrial zoned lands.

“There is an announced plan to create up to 1 GW of hybrid solar capacity. We estimate that this would translate to a minimum of 2,000 acres of industrial land required, conservatively speaking. This assumes a large-scale ‘efficient’ rooftop solar setup.

“If we assume stand-alone solar farms, that brings demand for industrial land to a high of 5,000 acres. While the need is big in theory, there are certain hurdles that the developers face in participating meaningfully.

“We list down payback considerations between different industrial and solar projects. Developers’ current business model of building to sell industrial properties would appear to be the most cash-generative. Although operating solar farms has a similar payback period (on upfront costs) to leasing industrial properties, high maintenance costs and lower perceived capital appreciation pose longer-term investment uncertainties at the moment.

“This is why solar farms are only a small fraction of developers’ industrial townships. Should the former issue of higher maintenance costs be resolved (by working groups such as Sime Darby Property), this could then unlock a meaningful expansion of the addressable market for industrial land,” it said.

Source: NST

The New Industrial Master Plan 2030 will drive industrial demand in Malaysia

The Perak government is looking for another suitable location for a new high-technology industrial park in the northwestern region, which could be as large as 405 hectares (ha), or 10 times what the state had allocated prior to the 2024 Budget.

Parit Buntar or Bagan Serai could be the new location as there are already some small industrial areas there.

Menteri Besar Datuk Seri Saarani Mohamad said that prior to the tabling of the 2024 Budget, the state government had identified a 40-ha plot of land for the industrial park development in Kerian

“However, following this announcement (2024 Budget), I see that it requires at least 1,000 acres (405ha) of land. So, we have to look again,” he said after attending the National Sports Day at the Sultan Azlan Shah roundabout on Saturday.

Saarani said that the specific location for the development of this industrial area will be announced following discussions with the relevant parties.

“We do not want to reveal anything now, as there could be various implications. For example, when we announced a commercial project in the automotive high-tech valley in Tanjung Malim, suddenly the price of land there rose sharply,” he said.

Saarani said that the park’s land must not be too expensive, and the cost of any reclamation process must be considered.

He also revealed that the chosen location must be close to Penang Port and the airport.

The new high-tech park will complement the industrial park in Seberang Perai as well as the Kulim high-tech park, he added.

Kerian lies next to the southern district of mainland Penang, with the main towns of Parit Buntar and Nibong Tebal within a 10-minute drive from each other.

There are two bridges leading to Penang Island; the second bridge is closer to Kerian and also to the airport.

RHB Investment Bank expressed optimism about the new industrial park, saying that it will stimulate the local housing market.

“Eco World Development Group Bhd and Tambun Indah Land Bhd are the developers that have projects in the south of Seberang Perai. Over the next year or two, we expect some developers to explore land banking opportunities in the surrounding areas.

“Based on our checks, we understand that there are already some small industrial areas in Parit Buntar,” the firm said. 

Prime Minister Datuk Seri Anwar Ibrahim, who is also Finance Minister, said when tabling the 2024 Budget in the Dewan Rakyat on Friday that the government will create a bigger ecosystem for electrical and electronics (E&E) companies in the northern region by opening a high-tech industrial area in Kerian. 

According to the Ministry of Investment, Trade, and Industry (Miti), the opening of the high-technology industrial area in Kerian will further empower the E&E industry. 

Its minister Datuk Seri Tengku Zafrul Abdul Aziz said that the opening of this area will complete the E&E cluster in the northern region and encourage investors to expand their production facilities to new locations nearby. 

He said that the new industrial park will attract more investors to the country’s E&E sector.

According to Maybank Investment Bank Bhd (Maybank IB), the opening of the Kerian industrial park will attract developers and have a positive impact on the area. 

The investment bank believes it will favour existing industrial park developers because demand and sales of such properties have increased since international borders reopened in April 2022.

“We anticipate this strong sales momentum to continue into 2024, driven by increased investment diversion from China due to the ongoing US-China trade war,” it said in a note today. 

Source: NST

Saarani: Perak seeks 400ha site for its new high-tech industrial park