GEORGE TOWN – Penang will look into why it is no longer one of the country’s top five investment destinations for manufacturing.
According to the Malaysian Investment Development Authority (Mida), in terms of attracting the most investments in the sector, the island city did not make it into the upper tier of the list in the first quarter of this year (Q1 2021).
It is believed that this is the first time that Penang has fallen out of the top five in more than five years, despite its free industrial zones being part of the global supply chain.
Datuk Seri Lee Kah Choon, who is special investment adviser to the Penang chief minister, said while state agency Invest Penang is concerned, it should not panic as the inflow of investments is, at times, fluid due to many factors.
“We are concerned and we will check if complacency has crept in. There is a need to review the situation of how we are positioning ourselves in terms of luring investments.”
This is also a cue for the state to improve its competitiveness, said Lee.
Penang finished sixth after Kedah, Sabah, Selangor, Melaka and Johor, with some RM1 billion in approved investments for 40 projects.
In terms of recipients of approved investments in the manufacturing sector, Mida reported that Kedah was the top recipient with RM42.4 billion, followed by Sabah (RM4.3 billion), Selangor (RM4.0 billion), Melaka (RM3.4 billion) and Johor (RM1.7 billion).
Collectively, these states contributed 95.1%, or RM55.8 billion, to total approved investments in the country, funding 165 projects.
These investments are set to create 19,273 jobs, making up 72.2% of total employment in the manufacturing sector.
Lee said one consolation is that the number of projects Penang has attracted – 40 – is admirable, but more work needs to be done in terms of recapturing the state’s mojo as the top investment destination in the country.
In the first half of last year, Penang attracted the highest foreign direct investments (FDI) in the country in the manufacturing sector, with inflows totalling RM8.42 billion.
Meanwhile, Lee extended his congratulations to the states that achieved higher investment inflows.
On whether the Covid-19 pandemic is a factor in Penang’s performance, Lee said that he doubts it, but the country could do with subscribing to best practices to contain the health crisis.
According to the International Trade and Industry, Malaysia approved a total of RM80.6 billion worth of investments in Q1 2021, a surge of 95.6% from the same period last year (RM41.2 billion).
The investments both foreign and domestic were for the manufacturing, services, and primary sectors, as the country looks to move on from the paralysing effects of Covid-19.
Mida revealed that the investments involved 993 projects and are expected to generate 32,557 jobs across the country.
Total approved FDI in the manufacturing, services and primary sectors increased by 383.4% to RM54.9 billion for the period of January-March 2021 from RM11.4 billion in the same quarter last year.
The top five countries proposing to invest in Malaysia were Singapore (RM43.1 billion), the Netherlands (RM5.0 billion), South Korea (RM4.3 billion), Chinese Taipei (RM0.5 billion) and Hong Kong (RM0.3 billion). – The Vibes, June 11, 2021
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