Malaysia recorded a total of RM92 billion in approved investments in the services, manufacturing and primary sectors for the first half of 2019 (H1 2019), up 7.6 per cent from RM85.5 billion in the same period last year. A joint statement from the Malaysian Investment Development Authority (MIDA) and the Ministry of International Trade Industry (MITI) said out of the total approved investments, RM49.5 billion were foreign investments while the remaining RM42.5 billion were domestic investments. “Foreign investments in the manufacturing, services and primary sectors approved in H1 2019 surged 97.2 per cent to RM49.5 billion from RM25.1 billion recorded in H1 2018.”

“Despite the challenging global economic landscape and more intense competition, Malaysia continued to sustain its investment growth momentum in the first half of 2019 (1H2019),” said Datuk Darell Leiking, Minister of International Trade and Industry (MITI). Malaysia recorded a total of RM92.0 billion of approved investments in the services, manufacturing and primary sectors for 1H2019, a modest increase of 7.6% compared with RM85.5 billion for the same period last year. These investments involved 2,554 projects and will create 59,542 employment opportunities in the country.

The services sector accounted for the largest share of the total with investments amounted to RM55.0 billion or 59.8%, followed by the manufacturing sector with RM33.1 billion (36.0%) and primary sector with RM3.9 billion (4.2%).
“In 1H2019, foreign investments in the manufacturing, services and primary sectors increased by 97.2% to RM49.5 billion from RM25.1 billion recorded in the first half of 2018. Domestic investments approved in 1H2019 amounted to RM42.5 billion, contributing 46.2% to the total. This illustrates Malaysia competitive and comparative advantages in attracting investments amid mounting global market uncertainties and trade war tensions,” said YB Datuk Darell.

Services Sector
A total of 2,150 services projects were approved in 1H2019. These projects are expected to create more than 28,650 job opportunities. The real estate sub-sector remains as the largest contributor with RM18.5 billion despite a decline of 35.1% from 1H2018. However, the global establishment, distributive trade, utilities and the hotel and tourism sub-sectors have all recorded increases during the period, accounting for 54.4% of total approved investments in the services sector. The distributive sub-sector, in particular, recorded a significant rise of 277.8% to RM10.2 billion from RM2.7 billion in 1H2018 for the period of January to June 2019.

Domestic investments made up the larger portion, recording RM32.6 billion or 59.3% of the total approved investments for the sector during this period while the remainder, RM22.4 billion were from foreign sources.

A notable services project approved in 1H2019 is the large scale solar (LSS) expansion project to be undertaken by TNB Bukit Selambau Solarin Bukit Selambau, Kedah. The LSS project with a capacity of 30 MWAC will provide renewable energy (RE) totalling 1,700MW by the year 2025. This is in line with the Government’s target of achieving 20 per cent of the country’s electricity to be generated from renewable sources by 2030.

Manufacturing Sector
The positive investment growth of 1H2019 was driven by the robust performance of the manufacturing sector that soared by 74.2% compared to 1H2018. Malaysia’s manufacturing sector recorded approved investments of RM33.1 billion from 366 manufacturing projects for the first half of 2019 as compared to RM19.0 billion from 288 manufacturing projects in the same period last year. Majority of the investments, 75.8% or RM25.1 billion were from foreign investments and the remaining 24.2% or RM8 billion were from domestic sources.

The approved manufacturing projects will create 30,449 job opportunities the largest potential employer in the economy. The jobs created include 1,829 electrical and electronics engineers, 896 mechanical engineers and 211 chemical engineers. In addition, the projects will also require about 2,886 skilled craftsmen such as plant maintenance supervisors, tools and die makers, machinists, IT personnel, quality controllers, electricians and welders.

The top foreign sources were from the United States of America (USA) with investments of RM11.7 billion, followed by China (RM4.8 billion), Singapore (RM3.1 billion), Japan (RM2.1 billion) and the British Virgin Islands (RM1.4 billion). These five countries jointly accounted for 92.0% of total foreign investments approved in the manufacturing sector for this period.

“The expansion project of Longi Technology (Kuching) from China is amongst the notable high technology project approved from January to June 2019. The company is expanding its capacity to produce monocrystalline solar cell to meet demand in overseas markets. Other approved projects include a new project from Advance Energy Industries and expansion projects by On Semiconductors and Plexus Manufacturing. These three companies are from the USA,” added the MITI Minister.

“Malaysia has vast potentials to collaborate with foreign companies and benefit through the transfer of technologies and expertise that cut across many industries. The Ministry of International Trade and Industry (MITI) through MIDA continues to encourage local sourcing by foreign companies.
We want to see more local companies to be part of the global value chain,” said YB MITI Minister.

As the Government is drafting the 12th Malaysian Plan, the contribution of the catalytic and high growth subsectors namely electrical & electronics, chemical & chemical products, machinery & equipment, medical devices and aerospace emphasised under the 11th Malaysia Plan Mid-Term Review cannot be denied. In 1H2019, these sectors contributed RM19.1 billion or 57.7% of total approved investments in the manufacturing sector through 131 approved project. Once implemented, these projects will potentially create 16,732 job opportunities and further energise the development of the overall manufacturing sector.

Malaysia has consistently pursued more capital intensive projects: moving away from labour-intensive projects to high-skilled and technologically advanced projects that support the sustainable development agenda of the nation. The capital intensity, measured by capital investment per employee (CIPE) ratio of projects approved within the sector increased toRM1,088,715in January to June 2019 from RM837,862in the same period last year.

By value of investments, Pulau Pinang (RM9.2 billion), Kedah (RM7.7 billion), Selangor (RM6.0 billion), Johor (RM4.0 billion) and Perak (RM1.7 billion) accounted for 86.4% of the total approved investments in the manufacturing sector.

Primary Sector
The primary sector contributed RM3.9 billion or 4.2% to the total approved projects in the first half of 2019. The mining subsector continued to lead with approved investments of RM3.6 billion, followed by plantation and commodities with RM257.3 million and agriculture with RM48.6 million. These investments are expected to create 443 job opportunities.
The agriculture sector illustrated a modest growth of 25.6% to RM48.6 million during 1H2019 from RM38.7 million during 1H2018 driven by approved investments in crops-related agriculture project.

“Malaysia is striving to keep the nation’s deficit, inflation and unemployment low while putting in place policies that are pro-business. The Government is investing in human capital, technology and infrastructure and focusing on sharpening the countries competitive edge. Coupled with strategic promotions to welcome quality investments that will contribute to enhancing the country’s technological capabilities, develop the local supply chain and increase the country’s export revenue, Malaysia’s 1H2019 investment performance is the testament of the Government’s commitment to remain pro-business with prudent and pragmatic policies to ensure a conducive environment for businesses to thrive,” said YB Datuk Darell Leiking.

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