InvestPenang is confident of attracting RM5 billion worth of manufacturing investments this year despite the state recording some RM1.1 billion of manufacturing investment for the first quarter this year (1Q21).
Penang chief minister’s special investment advisor Datuk Seri Lee Kah Choon said InvestPenang is in discussions with a few interested investors and hopes to clinch them to invest in the state this year.
“We are expanding our supply chain, we have products that are electronically based and evolving into medical devices, machinery and equipment, we are evolving in all sorts of directions instead of remaining focused only on electrical and electronics (E&E).
“This will allow the state to continue to expand its manufacturing sector and attract more investments into the state,” he told reporters at a virtual briefing last Friday.
Penang recorded manufacturing investments of RM14.1 billion in 2020 and a record-high RM16.9 billion investments in 2019.
Lee said 2021 is a year of consolidation for the manufacturing industry and usually what happens after one to two years of investment growth.
“The consolidation stage this year will likely extend up to the first half of 2022 (1H22) before investment growth picks up in 2H22.
“There is going to be a lot of pent-up demand due to the pandemic as there are slowdowns in the rollout of new technologies in 5G and artificial intelligence,” he added.
Once the effects of the Covid-19 pandemic on the global economy is reversed and borders are opened, he believes the investment community will be busy again.
Citing figures from Malaysian Investment Development Authority, the RM1.1 billion in approved manufacturing investments in the state in 1Q21 (1Q20: RM7.1 billion) were derived from 40 projects.
Some 52% of the investments or RM567 million came from domestic direct investments, while the remaining 48% (RM516 million) were foreign direct investments.
Penang clocked up RM84.9 billion of exports in 1Q21 (+22% year-on-year), making it the top contributor of the country’s exports with a 30% share.
The state generated RM28.2 billion of trade surplus during the same period, representing 48% of Malaysia’s total.
While ensuring smooth implementation of the National Covid-19 Immunisation Programme remains the utmost priority for the state government, formulating forward-looking strategies in driving industry’s post-pandemic growth is equally critical.
Penang has garnered multiple strategic projects in the past two years. The state consistently ensures the approved projects be fully implemented and commence operations within the stipulated time frame.
These strategic investments are expected to create supply chain localisation opportunities for homegrown companies and is part of the state government’s efforts to elevate small and medium enterprise development.
In addition, strategic investors could potentially attract their existing relevant supply chains to explore Penang as a viable investment location.
The state government remains focused on further entrenching its position in the upstream activities and global value chain, such as in integrated circuit design and advanced semiconductor and frontend equipment manufacturing, while strengthening the ecosystem of the promoted industries, namely E&E products, machinery and equipment, and medical devices.
“Simultaneously, we are committed to propelling the global business services activities in Penang that are well-positioned to unlock greater potential.
“To ensure Penang remains competitive in the global arena, the state government is implementing multi-pronged approaches to deepen and widen the talent pool in Penang which include massive drives to attract talent, addressing the supply and demand gap in TVET (technical and vocational education and training) talent and collaborating with institutions of higher learning on talent attraction,” he said.
The state government also collaborates with the industry players on internship programmes, positioning Penang as the preferred workplace for fresh graduates nationwide.
Source: https://themalaysianreserve.com/2021/06/21/penang-eyes-rm5b-manufacturing-investments/