2017 M A L AYSIA IN VESTM EN T PER FO R M A NCE R EP O RT FORGING FORWARD 1
2017: YEAR OF MANY CHALLENGES … In Malaysia’s Context On the Global Front According to UNCTAD, Global FDI flows Managing foreign workers fell by 16% in 2017 to an estimated US$1.52 trillion (earlier forecast was Malaysian companies’ readiness in US$1.81 trillion in WIR2017). adopting Industry 4.0 Commodity prices and global economic Future-ready human capital activities remain subdued Competition in attracting quality Evolving US economic policies on global investments trade Elevated geopolitical risks further amplified economic challenges 2 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
RECENT FOREIGN INVESTMENTS IN MALAYSIA … • 28 Feb 2017 – PETRONAS and Saudi Aramco signed a Share Purchase Agreement (SPA), allowing Saudi Aramco’s equity participation in PETRONAS’ Refinery & Petrochemical Integrated Development (RAPID) project in Johor • 28 Feb 2018 – YAB Prime Minister announced that the partnership has been finalised and the committed amount USD7 billion will be invested by end of March Among the few world-scale Greenfield projects involving partnership between two professionally run National Oil Companies 3 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
RECENT FOREIGN INVESTMENTS IN MALAYSIA … Cont’d 26 Feb 2018 – Peugeot bought 56% stake in Naza’s plant in Gurun, Kedah to establish its ASEAN Hub - Peugeot models set to be produced in 2018 and Citroen models to be produced in 2019 - NAZA aims to export 20,000 cars from Gurun in the next 3 years 23 Feb 2018 – SK Group to establish a Regional Head Office in Malaysia covering ASEAN, India and the Middle East for a blue ocean shift - creative collaboration in key areas such as ICT & 5G, Oil & Gas, Green Technology as well as urban development - development of Blue Ocean Smart Cities in Malaysia, starting with Cyberjaya 4 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
COMPANIES MAKING MALAYSIA AS THEIR BUSINESS HUB Global Operations Regional Parts Global Center of Hub / Principal Hub Distribution Centre Excellence (2005) (2011) (2004) International Since 1988 Procurement BMW began its operation in Malaysia Total investment Centre (IPC) Extension of IPC of over RM30 with only assembly facilities and sales 2005 2013 billion and 1988 showrooms (36 in 2015) employment of Only focused on 500 people manufacturing and (100% Malaysian; Expanded into Regional Parts test activities 40% knowledge – 2006 Distribution Centre (RDC) operations to workers) 2011 support 23 countries. Ranked among Global Centre of Excellence for Intravenous the Top-10 of BMW Distribution Centres Global Operations Access (CoE IVA) 2022 Hub globally. B. Braun Medical Industries Penang was • IC testing Principal Hub Intellectual Property Initially established in To expand this • R&D for • recognised as the Global Center of PTP with a warehouse facility to 65,000 semiconductors Management Excellence for Intravenous Access (CoE size of 15,000 sq. m. sq. m. R&D and Innovation • Procurement • IVA) products, which comprises • Advanced 2004 2025 Automotive production and R&D functions. Technology Centre (production of automotive sensors The Penang-based CoE is the very first 2017 on chips) CoE established outside Europe. Moved to Senai with capacity of 45,000 Regions served: USA, Europe & sq. m APAC Center of Excellence for Intravenous Access Products (CoE IVA) 5 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
COMPANIES MAKING MALAYSIA AS THEIR BUSINESS HUB Regional ASEAN Headquarters Global Procurement Distribution (2015) Hub (2017) Centre (2017) Honeywell has been in operation for 33 years in Malaysia and it began its presence Ikea has made a strategic decision to here through manufacturing and sales & establish its Regional Distribution and 1912 services operations (6 entities) Supply Chain Centre for ASEAN in Malaysia. Nestle Group began its operation in Malaysia To set up Honeywell Group’s 2017 1st Global Procurement The Centre, which will adopt the structure Establishment of Centre in Malaysia to support and technology of IKEA’s biggest Regional 100 countries worldwide. Nestrade’s Asian 2018 Distribution Centre in Germany, will also be Procurement Hub. among the top 10 largest Regional Today, Nestle’s only Distribution Centres of IKEA globally. Global Procurement Hub apart from 2016 Centre will serve 12 retail stores Switzerland and Establishment of Honeywell’s ASEAN in the region Headquarters (under the Principal Hub Panama. scheme):- 5,900 employees RM907 million (within 5 years) 400 staff members, including 50 regional • 90% Malaysian leaders and experts. • Business development of Aerospace, Oil & Operates 8 production facilities Gas, Building Technologies and Safety & Productivity segments Procures raw materials for 100 countries T otal investment of RM2 billion 1,500 employees 6 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
COMPANIES MAKING MALAYSIA AS THEIR BUSINESS HUB Global Operational Asia Regional Oil & Gas Headquarters Hub (2016) Began operations as a Technical Training Centre to support related 2001 companies in Asia. McDermott has 100 years experience in the Oil & Gas industry. It Moved its Asia Regional Oil & Gas Hub from Singapore to Malaysia. This Asia Regional Oil & Gas Hub 2006 serves 7 countries by managing:- Set up a Shared Service Centre (Finance & Accounting) for Asia. Central project oversight Supply chain coordination Has evolved into a Global Operational Headquarters (GOHQ) which supports over 100 countries worldwide by Engineering Centre of Excellence managing:- 400 regional positions and engineers Data Hosting Centre Technical support 12,400 employees worldwide Strategic market development Customer Solutions Integration & Innovation Experience Centre (Trains 300 students yearly) 7 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
FDI INFLOWS 8 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
GLOBAL FDI INFLOWS USD Billion Global FDI 3,000 flows fell 16% in 2017, 2,500 reaching an 1,870 1,810 1,774 2,000 estimated 1,591 1,593 1,443 1,324 1,520 1,494 1,384 US$1.52 1,500 1,190 trillion. 1,000 According to UNCTAD, the 500 drop is due to weak - economic growth and major global policy risk Source: UNCTAD Global Investment Trends Monitor, 22 January 2018 9 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
MALAYSIA’S FDI INFLOWS In 2017, Malaysia’s FDI inflows dropped by 17% amid drop of 16% in global FDI 10 10 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
MALAYSIA FDI STOCK Singapore ranked 1 st followed by Japan FDI Stock in 2017 and Hong Kong in terms of FDI Stock totalled RM 565 billion Ranking Country RM Million Singapore 116,343.55 1 Japan 71,608.62 2 RM billion Hong Kong, SAR 50,380.68 3 The Netherlands 40,731.77 4 United States of 33,407.23 5 America Switzerland 29,951.76 6 2010 2011 2012 2013 2014 2015 2016 2017 As at end Germany 24,775.19 7 RM billion 313 366 406 446 475 501 547 565 Virgin Islands 22,065.48 FDI Stock by Sector 8 (British) United Kingdom 19,409.53 9 RM billion Bermuda 15,499.62 Manufacturing, RM231.9 10 China, People's Finance & Insurance, RM120.2 14,623.63 11 Republic of Information & Communication, RM 44.1 Others, RM168.8 Source: DOSM 11 11 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
MALAYSIA DIRECT INVESTMENT ABROAD (DIA) STOCK DIA Stock by Sector DIA Stock in 2017 RM billion totalled RM 523billion Finance and Insurance, RM181.2 Mining & Quarrying RM82.6 Information & Communication, RM 47.5 Others, RM211.7 RM billion DIA Stock by Country Rank RM 93.7 bil Singapore 1 Indonesia RM 45.8 bil 2 2010 2011 2012 2013 2014 2015 2016 2017 As at end RM 383.5 bil Others RM billion 299 338 368 421 473 584 566 523 Source: DOSM 12 12 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
GROSS FIXED CAPITAL FORMATION (GFCF) – PRIVATE INVESTMENTS 2017 RM234.8 billion In 2017, private investments registered a growth of 11.1% exceeding 2016 RM211.3 billion the targeted 9.4% growth p.a. of private investments GFCF Private Investment by Year set under the 11MP*. RM Billion 162.8 183.9 198.6 211.3 234.8 • 2013 • 2014 • 2015 • 2016 • 2017 * 11MP private investments target = RM291 billion p.a. Source: DOSM 13 13 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
TOTAL APPROVED INVESTMENTS IN 2017 14 14 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
INVESTMENTS BY SECTOR The Services sector continued to lead with investments of RM121 bil, followed by Manufacturing and Primary sectors Manufacturing RM63.7 bil (32.3%) 2016: RM58.5 bil RM197.1 Primary Billion RM12.4 bil (6.3%) 2016: RM8.2 bil Services RM121.0 bil (61.4%) 2016: RM146.2 bil Source: MIDA 15 15 MALAY LAYSI SIA A INVES ESTMEN ENT PERFORMANCE E REPO PORT 2017
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