Trade and Investment Mission to Republic of Korea (ROK) and Japan 31 March – 6 April 2021 Secured RM8.9 billion Committed Investments

INTRODUCTION

YB Dato’ Seri Mohamed Azmin Ali, Senior Minister, Minister of International Trade and Industry (MITI) led the Trade and Investment Mission (TIM) to the Republic of Korea (ROK) and Japan from 31 March – 6 April 2021. The TIM involved bilateral meetings with YBMK’s counterparts and one-on-one meetings with potential investors. MIDA’s participation in the TIM was led by Mr. Arham Abdul Rahman, Chief Executive Officer (CEO) of MIDA.

In ROK, a bilateral meeting with H.E. Minister Yoo Myung-Hee Minister of Trade, Industry and Energy (MOTIE) was held to enhance bilateral economic, trade and investment ties between both countries. Being the seventh largest trading partner, Malaysia will continue to work closely with ROK to further strengthen and reinforce this significant trade relationship.

In Japan, three bilateral meetings with Dr. Hiroto Izumi, Special Advisor to the Prime Minister of Japan; Mr. Kajiyama Hiroshi, Minister of Trade, Economy and Industry (METI); and Mr. Nishimura Yasutoshi, Japan’s Minister for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) were held respectively to discuss on enhancing bilateral economic, trade and investment ties between both countries.

COMMITTED INVESTMENTS IN 2021

The TIM to ROK and Japan has successfully secured RM8.9 billion in committed investment for 2021. SK Nexilis Co., Ltd., a subsidiary of SK Group from ROK had recently announced its RM2.3 billion investment into Malaysia to establish a thin copper foil manufacturing plant in Sabah. The expected investment has since been revised to RM4.24 billion. The project is in line with the Government’s intention to develop a complete ecosystem of high-tech industries, especially in the automotive and telecommunication sectors. The manufacturing plant in Kota Kinabalu will be powered utilising 100 per cent renewable energy. This marks the first of such operations for SK Nexilis outside ROK. SK Nexilis is a global leader in thin-tech innovation for copper foil manufacturing controlling 16 per cent of the world market share for electric vehicle (EV) battery. This company adds to the growing presence of high value-added companies in Malaysia, contributing to the country becoming a major hub for state-of-the-art thin copper foil production. As the company’s operations leverage on inhouse technology, this is expected to boost Malaysia’s talent network and capabilities.

LG Chem Ltd., a Global Top 10 chemical company, is interested in contributing to the development of the petrochemical cluster in Malaysia. The company has a competitive global business portfolio which includes Petrochemicals, Energy Solutions, Advanced Materials and Life Sciences. LG Chem, an affiliate of LG Group (the 4th largest group in Korea), is the first ROK company to partner with Petronas and will be the company’s first foreign platform outside Northeast Asia to produce nitrile-butadiene rubber (NBR) latex in the Pengerang Integrated Petroleum Complex (PIPC) with a potential investment of RM600 million. This strategic partnership with Petronas Chemicals Group will target the growing nitrile glove market and further strengthen the country’s position as the largest exporter of gloves globally. The establishment of LG Chem will also complement the development of the petrochemical cluster in Pengerang, Johor and increase utilisation of feedstock from PETRONAS. Operations are expected to commence in March 2023.

SPC Group is planning to make Malaysia a regional distribution hub for their halal dough with an estimated investment value of RM91.2 million to cater for the ASEAN market.

The Group is a large conglomerate producing food and confectionery products in ROK and also one of the oldest brands in the confectionery and bakery industry in ROK with market-leading franchise brands such as Paris Baguette (bakery), Shake and Shack (bakery) and Baskin Robbins Korea (donuts and ice-cream). They are eager to work with Malaysian companies to bring the Paris Baguette franchise into the local market. Today, SPC Group is a leading company in the food industry in Korea with an advanced Research and Development (R&D) Centre, with 6,000 locations globally and plans to increase the group’s outlets worldwide to 20,000 by 2030.

Another notable project is ILJIN Materials Co. Ltd. which established its first overseas factory for the manufacturing of Next Generation electric foil (Elecfoil) for Electric Vehicles (EV) in 2018 at the Samajaya Free Industrial Zone, Sarawak. ILJIN will be undertaking an expansion project on 16 hectares of land adjacent to the existing facility with additional investment of RM2.2 billion. The expansion, expected to materialise in 2025, will boost production to 40,000 tonnes of Elecfoil annually.

Elecfoil is a thin copper foil with a thickness of less than 10 micrometers for secondary batteries and printed circuit boards (PCB). Every 500 tonnes of Elecfoil can produce 15,000 EVs. This provides a great opportunity for ILJIN to capitalise on the European market as the biggest market for EV in the world by utilising their operations powered by local talents in Malaysia.

From Japan, Nippon Electric Glass Co., Ltd. (NEG) will invest at least RM1 billion for their new production of E-glass fibre. NEG is a leading glass manufacture for flat panel displays, controlling 20 percent market share in the world’s production of glass for liquid crystal displays (LCD). The new E-glass fibre will be used for the production of automotive parts and component in wind turbine blades for wind power generation. The new project is set to begin operations in 2022, using an improved manufacturing process by capitalising on Artificial Intelligence (AI) and other futuristic technologies.

ON THE RIGHT TRACK TO ATTRACT QUALITY INVESTMENTS

ROK and Japan remain among the major investor countries in Malaysia. MIDA continues to welcome high quality FDI from around the world, including ROK and Japan. These investments assume an important role in the development of Malaysia due to its multiplier impact on the economy and will continue to do so in the post-pandemic era.

Through policy reviews and targeted approaches, the Government will ensure that Malaysia remains the preferred investment location with a favourable environment for quality investments in Asia.

Source: MIDA e-Newsletter April 2021