Tengku Zafrul: Malaysia remains preferred investment hub, with RM71.4b put in and almost 24,000 jobs created

KUALA LUMPUR, May 30 — Malaysia has managed to attract RM71.4 billion in approved investments for the first quarter of 2023 between January and March (Q12023), Datuk Seri Tengku Zafrul Abdul Aziz said.

The minister of investment, trader and industry said this proved the country’s value as a preferred investment destination where 1,265 projects were approved and these projects are expected to generate 23,977 new job opportunities across the manufacturing, services, and primary sectors.

“Our ability to attract RM71.4 billion in approved investments for the first quarter of 2023 underscores Malaysia's continued appeal as an investment powerhouse.

“Both foreign direct investments and domestic investments almost matched each other in value. From a domestic perspective, this clearly reflects renewed confidence in Malaysia’s growth prospects.

“All these will have positive spillover impact particularly on the SMEs (small-medium enterprises) in our domestic supply chain, and on the rakyat in terms of better-paying jobs, which will help support our economy in the face of various global challenges this year,” he said in a statement.

With this conducive investment landscape, Malaysia continues to capture more foreign direct investments (FDI) than domestic direct investments (DDI), whereby FDI contributed RM37.5 billion, representing 52.5 per cent of the total approved investments, Malaysian Investment Development Authority (Mida) said.

“Singapore took the lead with RM11.5 billion, and the British Virgin Islands was second at RM7.1 billion, followed closely by the People's Republic of China at RM6.5 billion. Hong Kong and the Republic of Korea contributed RM2.9 billion and RM2.5 billion, respectively.

“Notably, DDI accounted for RM33.9 billion, representing 47.5 per cent of the total approved investments, clearly reflecting domestic investors’ renewed confidence in Malaysia’s economic progress and prospects.

“For approved projects by state, the top five states that attracted a significant portion of the approved investments for Q12023 were the Federal Territories of Kuala Lumpur with RM21.8 billion, followed by Johor (RM10.6 billion), Selangor (RM7.4 billion), Perak (RM7.1 billion), and Sabah (RM6.3 billion),” Mida said.

According to Mida also, in Q12023, the services sector surpassed all other sectors in terms of approved investments, registering RM53.6 billion, which accounted for 75.1 per cent of the total approved investments.

This represented an impressive 226.8 per cent year-on-year growth over the previous year's figure of RM16.4 billion for Q12022.

“The RM53.6 billion represents an impressive 1,058 approved projects, expected to create 12,051 new job opportunities.

“Within the services sector, the information and communications sub-sector stood out prominently, attracting approved investments valued at RM24.9 billion, representing a substantial 46.5 per cent share.

“Second was the real estate sub-sector, securing RM15.5 billion (28.9 per cent), followed by distributive trade with RM6.7 billion (12.5 per cent), financial services with RM2.2 billion (4.1 per cent), and support services with RM1.8 billion (3.4 per cent).

Among others, projects approved within the services sector include RM2.2 billion in hyper scale data centre project by GDS IDC Services (Malaysia) Sdn Bhd and RM1.4 billion investment for the development of a smart warehouse by Seri Yakin Logistics Sdn Bhd.

“The government made good on its intention to focus on green investment, with several projects approved under green technology for renewable energy initiatives, such as those by Columbia Asia Sdn Bhd, Smiths Detection Centre Sdn Bhd, Iriichi (Malaysia) Sdn Bhd, and Tian Seng Hang Trading Company Sdn Bhd.

“These projects highlight the diverse and promising opportunities within the services sector, attracting significant investments and contributing to Malaysia's economic growth,” Mida said.

For the manufacturing sector, in Q12023, Malaysia managed to attract a substantial value of RM15.6 billion or 21.8 per cent of the total approved investments.

“This commitment was evident through the approval of 192 manufacturing projects, slated to generate over 11,900 new job opportunities.

Among others, projects approved under the manufacturing industry include an investment of RM4.2 billion to develop cutting-edge Cylindrical Li-Ion batteries for power tools and E-bikes by EVE Energy Malaysia Sdn Bhd and RM2.3 billion investment by LOTTE EM Malaysia Sdn Bhd (formerly known as IMM Technology Sdn Bhd) and Xinyi Solar (Malaysia) Sdn Bhd which contributed a significant RM1.5 billion investment to produce Photovoltaic functional glass (coated).

As for the primary sector in Malaysia, it drew investments valued at RM2.2 billion.

According to Mida the mining sub-sector saw approved investments of RM2.1 billion allocated to mining projects, underscoring our established capacity to extract and utilise valuable minerals from Malaysia's resource-rich landscape.

“Plantation and commodities garnered investments of RM65.1 million, the plantation and commodities sub-sector demonstrates ongoing efforts to enhance productivity and sustainability in agricultural practices.

“While the primary sector's contribution may be modest compared to services and manufacturing, what is key is that these investments pave the way for future growth and innovation,” Mida said.

“This robust pipeline and lead project portfolio solidify Malaysia’s reputation as an attractive and thriving investment destination, fuelled by its strategic location, robust infrastructure, skilled workforce, and supportive business policies,” Mida chief executive officer Datuk Arham Abdul Rahman said.