Image credit: Aristocracy
KUALA LUMPUR: Malaysia is on the right trajectory to secure more high-quality and capital-intensive projects, with the service sector to be a key growth driver for the economy.
Malaysian Investment Development Authority (MIDA) deputy chief executive officer of investment promotion and facilitation Sivasuriyamoorthy Sundara Raja said with regards to the key growth driver for the first half of this year, the services sector would still continue to be the largest contributor of investment approved.
"I believe based on the trend, the services sector will still continue to lead. I will say maybe around 60 per cent to 70 per cent of investments will come from this sector," he told reporters at the memorandum of understanding (MoU) signing ceremony with A.P. Moller-Maersk (Maersk) today.
MIDA entered into a MoU with Maersk to promote investments in Malaysia as well as contributing to the growth and development of the supply chain sector in the economy.
Raja said the MoU with Maersk would bring in more targeted global investments into Malaysia through strategic and value-added engagement approaches to multinational companies.
"By leveraging Maersk's capabilities in integrated logistics, we can transform Malaysia into a regional logistics hub in Asia Pacific, further boosting infrastructure development and free trade," he said.
Raja said the local logistics industry had grown rapidly in recent years amid the Covid-19 pandemic and it was expected to reach US$55 billion by 2026 at a compounded annual growth rate of over 4.0 per cent.
This growth is reflected by Malaysia's external trade rebound in the second quarter 2020 which drove the demand for logistics services to pre-pandemic levels.
"MIDA RECENTLY facilitated Maersk's International Integrated Logistics Services (IILS) Status application. This status is only granted to logistics companies that are capable of offering, as a single entity, regional or global integrated and seamless door-to-door logistics services, along the value chain.
"With the IILS status, Maersk will now be issued the Freight Forwarding Agent/Customs Agent licenCe by the Royal Malaysian Customs Department and can undertake freight forwarding activity by itself," he said.
With the MoU, both parties will work together to attract high-tech and high impact investments in sectors including automotive, electrical and electronics (E&E), machinery and equipment, medical devices, aerospace, renewable energy and consumer technology.
They will build a mutually beneficial ecosystem in focus markets to maximise foreign direct investment (FDI) opportunities into Malaysia.
Maersk Thailand, Malaysia and Singapore managing director Rupesh Jain said Maersk was constantly growing its logistics footprints globally to support its customers.
The company expects its cooperation with MIDA will help position Malaysia as an attractive investment destination for potential investors.
"With the ambition to provide truly integrated logistics to our customers, this collaboration with MIDA allows us to leverage our strengths and combine with Malaysia's geographical advantage to mount solutions in the region," he said.
Maersk currently has seven warehouses throughout Peninsular Malaysia for their consolidation and fulfillment activities with a capacity of up to 68,000 square metres, employing more than 300 staff in 12 locations throughout Malaysia.
More locations and capacity are expected to be added in the near future.
Source: https://www.nst.com.my/business/2022/08/826566/malaysia-right-path-win-more-capital-intensive-projects-mida