Penang surges: RM35.8 billion FDI influx marks 634% YoY growth

December 11, 2023

PENANG has reaffirmed its status as a magnet for investors, captivating both newcomers and seasoned stakeholders alike from January to September this year.

The state has recorded an astounding influx of RM35.8 billion in approved manufacturing foreign direct investments (FDI), marking an extraordinary 634% year-on-year surge.

Chief Minister Chow Kon Yeow highlighted that Penang had exemplified its leading role as a top manufacturing FDI contributor for the nation, capturing a 42% share of the nation’s manufacturing FDI for the period.

“Countries with top manufacturing FDI in Penang were the Netherlands, United States, and Singapore, which contributed to a 95% share of Penang’s approved manufacturing investments,” he said.

Chow noted that in the face of a notable -15% year-on-year dip in DDI at RM3.1 billion, the cumulative approved manufacturing investments for the initial three quarters of 2023 remain remarkable at RM38.9 billion.

“Penang proudly asserts its position as the foremost contributor among all states, commanding a substantial 39% share in Malaysia’s approved manufacturing investments for this period.

“The Malaysian Investment Development Authority (Mida) estimates that these investments, distributed across 107 projects, will generate approximately 11,121 new job opportunities in our state,” Chow highlighted.

He also zoomed in on the third-quarter figures (3Q2023) (July to September 2023), in which, Penang’s FDI accounted for RM33 billion or 95% of the state’s manufacturing investment inflow. The remaining RM 1.6 billion or 5% were DDI.

“The substantial surge in FDI unmistakably reflects the unwavering confidence that international investors have in Penang’s untapped potential and the wealth of lucrative opportunities it offers.

“Deserving equal recognition are our domestic investors, whose unwavering support has been instrumental in cultivating the thriving landscape of our industrial sector,” he told a media conference at his office in Komtar today.

Chow said Penang’s strength were primarily driven by the state’s key promoted industries, such as Electrical and Electronics (E&E), Machinery and Equipment, and Fabricated Metal Products.

He thanked the investors for demonstrating unwavering confidence in Penang.

“Your commitment and trust in our state have been instrumental in achieving these commendable results.

“I wish to extend our heartfelt thanks to Mida for the collaborative efforts and for creating a conducive environment for strategic investments.

“The partnership between Mida and InvestPenang has been fruitful, laying the foundation for Penang’s continued success,” Chow said.

Chow speaking to the media at his office.

In a related matter, Chow said the primary hurdle lies in assessing the adequacy of our infrastructure to accommodate these investments, representing the foremost challenge in Penang.

“These challenges are not novel; a couple of years ago, our focus was on overcoming obstacles related to industrial land readiness.

“Another critical concern pertains to talent. As investments pour in, the demand for skilled individuals escalates. A pressing question emerges: does our current talent pool suffice to meet these escalating needs?

“Furthermore, a significant concern is the water issue, which has been a focal point of numerous discussions.

“Equally noteworthy is the persistent challenge of traffic congestion. Over the past five years, in various dialogues with industry players and organisations, the recurring issue of traffic congestion has been consistently raised, underscoring its continued relevance and the imperative to find viable solutions,” he said.

Chow added that while Penang appreciates the investments and job opportunities, the limitations in infrastructure pose a challenge.

“The state lacks the capacity to independently address these issues, and some fall under the jurisdiction of Federal ministries.

“It is crucial for the Federal Government to comprehend the challenges faced by the state.

“Despite the announcement of numerous projects, the state’s requests are considerably more extensive. Examples include traffic systems and roads that require construction, the vital Juru-Sungai Dua bypass that deserves the attention of the Federal Government, and the ongoing wait for the next phase of the Mengkuang Dam for water supply.

“We value the partnership and hope for Federal understanding of the hurdles faced by Penang, especially concerning crucial projects that necessitate immediate attention and support,” he stressed.

InvestPenang chief executive officer Datuk Loo Lee Lian said frequently, the choice between Penang and other countries, such as Singapore, Thailand, or Vietnam, hinges on what Penang uniquely offers, particularly in the crucial E&E supply chain.

“The decisions made by investors in favour of Penang significantly impact not only the state but the entirety of Malaysia. The selection of Penang over other locations ensures the broader benefits of projects for the entire country.

“Addressing concerns about talent in Malaysia has been a substantial challenge. Questions about the nation’s blueprint for human capital development arise frequently. Additionally, challenges related to infrastructure, including the Penang International Airport (PIA) capacity, water and electricity infrastructure, and severe traffic congestion leading to substantial productivity losses, add complexity to the situation.

“In light of these challenges, we appeal to the Federal Government for assistance. Collaborative efforts are needed to bolster Malaysia’s competitiveness and ensure that the nation remains an attractive destination for investments and sustainable economic growth,” she said.

Also present were Deputy Chief Minister II Jagdeep Singh Deo, state Trade, Entrepreneurial Development, and Rural Development Committee chairman Rashidi Zinol, Penang Water Supply Corporation chief executive officer K. Pathmanathan, Penang Development Corporation (PDC) chief executive officer Datuk Aziz Bakar, and Mida Penang director Muhammad Ghaddaffi Sardar Mohamed.

Story by Christopher Tan

Pix by Muhamad Amir Irsyad Omar

Video by Darwina Mohd Daud

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