Media Statement by Dr. Ong Kian Ming, Deputy Minister of International Trade and Industry (MITI) on the 30th of July, 2019
In part 1 of my media statement, I explained the importance of the E&E industry to the larger Malaysian economy and how this sector has evolved over time. In Part 2 of my statement, I will highlight some of the key challenges and opportunities for this sector in Malaysia in the context of global trade and economic uncertainties.
- Capturing new and higher value-added investments from existing players
An investment by a new company worth RM100m, especially if it is a well-known global brand, can generate more publicity in Malaysia compared to a re-investment by an existing player worth RM1 billion. In some ways, this is understandable given our larger fascination with new, bright shiny objects compared to older and duller toys, so to speak. But as the saying goes, “a bird in hand is (sometimes) worth two in the bush” meaning to say that we should not forget the importance of existing players while we aggressively pursue new investments.
Many of the existing players in the E&E industry in Malaysia are well-known multinational companies (MNCs) with operations in many countries. And these companies can choose between various locations, including Malaysia, for their future expansion plans. The attractiveness of tax and other related incentives would be one the factors influencing global HQ investment location decisions. The challenge here is for the respective management teams in Malaysia to make a pitch to their global HQs for these new investments in competition with their colleagues from other countries. The pushback from the Malaysian authorities which the local teams are facing is to show that their investments involve higher value-added products and processes deserving of new incentives.Continue reading “Turning Point for the Electrical and Electronics (E&E) Industry in Malaysia? Part 2”