SPEECH AT SEMINAR ON SELANGOR THE ECONOMIC POWERHOUSE OF MALAYSIA
& THE JAPAN SOFT LAUNCH OF SELANGOR INTERNATIONAL EXPO 2016
MONDAY, 16 MAY 2016
- Thank you Mr Chairman. First and foremost, I would like to thank all the participants for signing up for this morning’s seminar and to grace our soft launch of the Selangor International Expo.
- I am grateful to be able to share with you some thoughts about how Japan and the State of Selangor can further build upon the solid and vibrant economic investment relationship currently existing.
- In 2014, the Japan External Trade Organisation indicated that the Japanese investments to Malaysia totalled USD972 million. That, by itself, was a sizeable amount. But in 2015, Japanese investments to Malaysia rose three-fold to USD2.8 billion. Now, that is a very remarkable increase.
- This is even more significant considering that during the same period, the GDP of Japan actually fell by more than US500 billion.
- As you know, Selangor is the most economically advanced state in Malaysia, being the largest contributor to the nation’s GDP, and that sets the dynamics for even greater expansion. This is also one overarching factor why Selangor remains the first destination for foreign investments.
- As between, Japan and Selangor, there is already a good and impressive investment relationship which goes back in history to the 1960s starting with two premium brand names before other well-known household names started to set up base on Malaysian shores, and more so in Selangor.
- Nevertheless, there are still vast resources not fully tapped which the state of Selangor can offer. So, my colleagues and I are here today to tell you a bit more about why Japan can further increase investments in ASEAN and, particularly, in Malaysia.
- As you can see, our tagline is “SELANGOR, THE GATEWAY TO ASEAN”. There are many reasons why we are saying this.
- First, in accordance with the standard set by international best practices, we adopt a strict policy of transparency and accountability in approval and regulatory processes.
- This is also called the “no-nonsense approach” to business. I daresay that this resonates well with established business cultures and in this regard, Japan is one of the leading examples of that culture.
- As you would have heard from your colleagues who have operated in Malaysia, and particularly, in the State of Selangor, in the last eight years, since the new State government came into office, many Japanese companies have benefited from our transparent administration and way of doing business vis-à-vis our foreign investors.
- Secondly, we are taking several key initiatives specifically to boost the investment potential of Selangor. What are these new initiatives?
- Building on our past business relationships, we want to strengthen that further by creating new partnerships as new opportunities arise across the wide spectrum of economic activities that may be explored.
- For example, there is so much potential for collaboration between Japanese businesses and Selangor in the areas of life sciences and halal products.
- We are home to one of Malaysia’s major life sciences clusters of which there are three growth areas – medical tourism, manufacture of medical devices and pharmaceuticals.
- With our excellent infrastructure as well as strategic location, Selangor is the best state in Malaysia to promote medical tourism which is slated as one of the top growth sectors in Asia.
- For the medical devices industry, Selangor is home to the rubber glove industry recognised for its global leading brands. But we are also gradually shifting towards the manufacture of non-rubber based medical devices made from plastics, silicone and metal alloys, which are higher in value and at the same time providing cost advantage for Malaysia healthcare providers.
- As for the pharmaceutical industry, it is currently in the early stage of development. About 75% of Malaysia’s pharmaceutical market relies on imported generic and patented drugs. But with the expiry soon of patents on several major drugs, we are poised to exploit the commercial and economic opportunity in generic drug manufacturing. So, here again are vast potentials for growth and investment.
- As the biotechnology sector gains momentum to being the upcoming growth engine for Malaysia, Selangor is preparing itself early for the next wave of growth. The state already has a substantial foundation including three out of the five top research universities in the nation are located in this state.
- Selangor intends to further develop and strengthen this particular biotechnology sector through international partnerships. It is here we believe that Japan, with its advances in this field, will have much to offer.
- In terms of the latest developments in the life sciences, we set up the Selangor Bio Council just last February and we also have the Selangor Bio Bay Development. These are very interesting topics for investment potential and my colleagues will talk more about this later.
- Selangor in turn has an urbanisation level of 91.4 per cent producing a vibrant and demanding consumer society and in this regard, there is much to offer to Japanese companies for growth and expansion.
- Thirdly, in the area of halal products, Selangor’s dedicated halal hub at an area known as Pulau Indah or “Beautiful Island” in the Malay language, provides a conducive halal ecosystem for companies to produce world-class halal products for the global market.
- The core activities of Selangor Halal Hub, measuring some 283 hectares, are in palm oil derivatives, additives, industrial chemicals, cosmetics and personal care, food and beverage, pharmaceuticals, and lifestyle and services.
- Selangor is home to Nestle Malaysia’s Global Halal Centre of Excellence, which is the biggest halal producer of the Nestle Group, one of the world’s largest food producers. Out of 150 halal Nestle factories worldwide, seven are located in Malaysia.
- That alone speaks volumes about Malaysia, and especially Selangor, as the ideal halal hub. The hassle-free procedures for obtaining licensing for the setting up of halal businesses makes the Selangor Halal Hub an ideal choice for companies intending to make serious inroads into the halal industry. This is because we have a company dedicated to assisting all investors in the halal hub.
- With an estimated Muslim population of 1.8 billion globally and annual market for halal food products at more than US$600 billion, Malaysia has positioned itself as one of the serious players in the halal market.
- In this regard, it should be noted that in August 2014, we established Halal International Selangor (HIS), primarily aimed at capitalising on the market capacities and the vast growth potential in the Global Halalan Thoyyiban Industries. My colleague will be addressing the subject in greater detail. Suffice it for me to just say that we in Selangor are aiming for a leadership position in the global market, catering to all corners of the world.
- The Selangor Halal Hub is certified as a HALMAS Halal Park Operator. This means that investors establishing factories there are eligible for special tax incentives from the government.
- They include 100 per cent income tax exemption for 10 years on qualifying capital expenditure or income tax exemption on export sales for five years, and exemption from import duty and sales tax on raw materials used for the production of halal promoted products and double deduction on expenses incurred.
- As you know, we are organising the Selangor International Expo 2016 from Oct 20 to 22 back in Malaysia.
- The Expo aims to showcase potential business opportunities and partnerships in Selangor’s three dedicated clusters, namely life sciences, halal and e-commerce.
- We want to encourage many of your esteemed companies to participate in this expo, to profile all your advancements and also undertake various business matching opportunities that can lead to various investments, collaboration and partnerships.
- Finally, Selangor, as Malaysia’s leading industrialised state with advanced transportation and industrial infrastructure in terms of international airports, seaports, rail links, highways and industrial clusters, has seen its GDP grow by 6.7 per cent to RM227 billion in 2014.
- Also known as the “Golden State”, Selangor through Invest Selangor has attracted investments valued at more than RM130 billion from all over the world to invest in the state in the last 16 years.
- I just want to assure you that we will remain consistent in doing things the way we have been doing with successful Japanese companies here. There will be no sudden change of policies that will create uncertainty.
- For those that had been successful, please continue your success with us. For those that have yet to taste success with us, we welcome you with open arms.
- On that positive note, I end once again with many thanks for giving me this opportunity to explain our investment mission, the strong ties and partnerships we want to forge ahead and attracting many of you to see the various investment opportunities in the state of Selangor, the Gateway to ASEAN !
Thank you once again.