Home Business Malaysia Records Outstanding RM177.8 Billion Approved Investments in Jan-Sept 2021

Malaysia Records Outstanding RM177.8 Billion Approved Investments in Jan-Sept 2021

The manufacturing sector accounted for the largest share of the total investments for the  period, amounting to RM103.9 billion.

by Gopalakrishnan Nair
Malaysia Records Outstanding RM177.8 billion Approved Investments

Malaysia has attracted a total of RM177.8 billion approved investments in the manufacturing, services and primary sectors, involving 3,037  projects in January to September 2021.

This represents an outstanding 51.5 per cent  increase compared to the same period last year and is expected to generate 79,899 jobs in the country. 

YB. Dato’ Seri Mohamed Azmin Ali, Senior Minister and Minister of International Trade and Industry shared that “The country’s stellar performance is indeed a testament to investors’ strong confidence in Malaysia as a preferred investment hub, particularly our conducive business ecosystem in providing high-skilled talents and having strong readiness in advanced technology. This, in turn, further bolsters our role as a prominent site in global companies’ manufacturing networks, enhancing Malaysia’s position as a pioneering, renowned investment destination in the region.”

The manufacturing sector accounted for the largest share of the total investments for the  period, amounting to RM103.9 billion (58.4%), followed by the services sector with RM57.8 billion (32.5%) and the primary sector with RM16.1 billion (9.1%).

Foreign direct investments (FDI) accounted for nearly 60 per cent of approved  investments, valued at RM106.1 billion. Singapore, China, Austria, Japan and the  Netherlands were the top five (5) foreign investment sources contributing to nearly 85.3 per  cent or RM90.6 billion of the total approved FDI in the country.

While FDI lead the approved investments in the manufacturing sector investments from  local companies dominated in the services and primary sectors. Domestic direct investments (DDI) totaled RM71.7 billion or 40.3 per cent of the total approved investments. 

Five states – Kedah, Sarawak, W.P. Kuala Lumpur, Selangor and Pahang contributed RM134.8 billion (75.8%) to the total approved investments in various sectors.

Manufacturing Sector 

A total of 522 manufacturing projects worth RM103.9 billion were approved in the period of  January to September 2021, compared to RM64.8 billion in the same period last year,  which translates to more than 60 per cent increase.  

FDI drove the strong performance of the manufacturing sector during the period soaring by 133.5 per cent compared to the same period in 2020, accounting for 88.3 per cent or RM91.7 billion of the approved investments within the sector. The remaining RM12.2  billion (11.7%) approved investments in the sector were from domestic sources.

In terms of top-performing industries in January to September 2021, the electrical and electronics (E&E) (RM64.3 billion), fabricated metal products (RM14.0 billion), rubber  products (RM5.4 billion), basic metal products (RM5.2 billion), food manufacturing (RM4.6  billion), chemicals and chemical products (RM4.1 billion), scientific and measuring  equipment (RM2.1 billion) and transport equipment (RM980.8 million) made up 96.8 per cent of total approved investments for the manufacturing sector. 

The Senior Minister highlighted Malaysia is focusing on pursuing more high quality, capital-intensive projects and those that support the sustainable development agenda of  the nation. “Supporting our nation’s Shared Prosperity Vision (SPV) 2030 and our Twelfth  Malaysia Plan (RMK12), we have been securing new investments that align well  Malaysia’s National Investment Aspirations (NIA) and Environmental, Social and  Governance (ESG) principles. This is reflected by the increasing number of capital intensive projects approved by MIDA in January to September 2021,” he added.

The capital investment per employee (CIPE) ratio of the projects approved during the  period increased to RM1,736,420 from RM1,276,071 compared to the same period last  year.

From these approved investments, the workforce required include 2,923 managerial  positions and 10,207 technical professionals such as engineers in the field of E&E,  mechanical, chemical and other disciplines, reflecting the higher value chain transition of  the manufacturing sector. The approved manufacturing projects will also require 7,907 

skilled craftsmen such as plant maintenance supervisors, tools and die makers,  machinists, IT personnel, quality controllers, electricians and welders.

Notable projects approved during the period include AT&S, an Austrian company and  global leader of high-end printed circuit boards (PCB) and integrated circuit (IC) substrates  that has chosen Malaysia for its first production plant in the region. The company’s RM8.5  billion investment in Kulim, Kedah looks to tap into the country for its manufacturing  operation and R&D activities. This will further boost Malaysia’s domestic E&E ecosystem,  creating high-tech jobs for Malaysians and opportunities for local vendors.

Nexperia Malaysia, a wholly owned subsidiary of Nexperia BV (Netherlands) which is  among the leading players in the high-volume production of essential semiconductors and  components that are utilised in a variety of electronic designs, will also be expanding its  operations in Negeri Sembilan by investing in building, equipment and automation. This  will provide potential job opportunity of 700 skilled workers over time to man and maintain  automated production lines, underscoring Malaysia’s local talent capability and mature E&E supply chain that supports companies’ long-term growth. 

Japan-based Taiyo Yuden also announced an investment of RM680 million for the  expansion of its multilayer ceramic capacitors production in Kuching, Sarawak. This is to  meet the growing demands of their clients in ASEAN.

Services Sector 

The first nine months of 2021 saw the approval of 2,473 services projects with approved  investments of RM57.8 billion. These projects are expected to create 19,731 jobs once  implemented.

Domestic investments dominated those approved within the sector, making up RM46.9  billion or 81.1 per cent, while the remainder RM10.9 billion are from foreign sources. 

The real estate sub-sector remained the largest contributor with RM20.1 billion; whereby  global establishments, financial services, hotel and tourism as well as transport services have also recorded increases during the period.

Notably, the approved investments for global establishments saw a significant jump in  approved investment from the corresponding period last year with RM9.2 billion. A total of  83 projects proposing to make Malaysia their regional or global operations hubs were  approved during the period of January to September 2021. These activities, which are  expected to create new jobs for 3,760 knowledge-based or highly technical skilled  workers, will also position Malaysia on course for greater integration into the global supply  chain.

Primary Sector 

The primary sector contributed RM16.1 billion or 9.1 per cent to the total approved  investments in January to September 2021, a 827 per cent jump from the corresponding  period last year.  

The mining subsector dominated with approved investments of RM16.0 billion, followed  by plantation and commodities with RM84.8 million and agriculture at RM11.5 million.  These investments are expected to create 304 jobs in the country. 

Investments from domestic sources made up the bulk of the approvals with a total amount  of RM12.6 billion or 78.3 per cent, while foreign investments contributed RM3.5 billion or  21.7 per cent.

Looking towards 2022, the Government has  lined-up strategic and focused trade and investment missions targeted to capture  investments in high technology, innovation and research-driven industries that will  complement the Malaysian industrial ecosystem. 

This will build upon the 523 projects with proposed investments of RM37.2 billion in the  manufacturing and services sectors that are within MIDA’s pipeline as of 10 December  2021.

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