Penang’s ‘luck’ as investment draw in 2020 will likely run thin: Chow

GEORGE TOWN – Though the economy was looking up for Penang last year with RM9.12 billion in total investments – including RM8.42 billion in foreign direct investments in the first half of last year despite the Covid-19 pandemic – Chief Minister Chow Kon Yeow is not optimistic that 2021 will see similar traction.

He said the state was “lucky” as the manufacturing sector registered very good investment figures in last year, and attributed this to efforts undertaken in the past couple of years.

“I believe many of our companies are resilient and will find ways to overcome this challenge. Companies must try to find opportunities amid crises,” he said in his speech at a charity dinner organised by the Federation of Malaysian Manufacturers and OCBC Bank over the weekend.

“Today is a bigger challenge compared to yesterday. Rest assured, the state government will do its best to support industries in overcoming the pitfalls of Covid-19, and together, we will come out stronger and more resilient than ever.

“At the moment, there are at least six to eight (new) factories being built in Batu Kawan. This should spur us on despite the pandemic.”

InvestPenang director Datuk Seri Lee Kah Choon, who is also special investment officer to the chief minister, said the state will need to capitalise on a new wave of opportunities or face losing out to other countries. 

Pointing to the recent increase in Covid-19 cases, he said the pandemic will continue keeping international borders closed, grind down economic activity, periodically disrupt manufacturing production, and defer direct investments, adding that there is also the US-China trade war to consider.

Nonetheless, he believes there are opportunities for Penang to seize.

“The Covid-19 pandemic and US-China trade war have triggered a shift from prioritising cost-cutting manufacturing in favour of practices that ensure reliability, consistency and security of supply,” he said in a statement yesterday.

Given this, he said, corporations have been influenced to diversify their geographical footprint, including in locations like Penang. 

The current trade and geopolitical dynamics have also created opportunities for Penang-based firms to penetrate supply chains that were previously closed to them, as well as emerging business blocks that used to be monopolised by multinational companies. 

“Penang will continue to focus on strengthening its competitive edge to attract high-quality foreign and domestic direct investments (FDI and DDI),” said Lee.

It is already well-established as a thriving regional manufacturing hub for global companies in the electrical and electronics (E&E), automation and E&E-related equipment, and medical technology sectors. 

In addition to housing elite foreign corporations, the state boasts numerous home-grown companies that have done well on the international stage. 

“This success is attributed to the state’s robust supply chain, good infrastructure and conducive living environment. Equally important is the state’s high-quality talent pool, which is essential to further propel its advanced manufacturing and knowledge-intensive service sectors,” said Lee.

“With this in mind, to enhance Penang’s comparative and competitive advantage, the state will embark on a massive drive to grow its talent pool and increase its population of knowledge workers.

“The availability of qualified talent is a critical factor in attracting FDI and DDI, and the state’s success in attracting strategic investments translates into thousands of new, high-quality job opportunities every year. This has made Penang a talent magnet in the northern region, mitigating the ‘brain drain’ and loss of talent to other countries. 

“Nurturing the talent pool is Penang’s utmost priority this year, and the state government will endeavour to identify, nurture and develop local talent and the economy to their fullest potential.”

Penang is second nationwide in terms of receiving investments, with RM10.6 billion obtained from January to September last year and 47 projects approved. These projects are expected to create 9,137 jobs. – The Vibes, January 12, 2021