THE STAR, TUESDAY 1 DECEMBER 2015

special

INVEST MALAYSIA
Vision for a
vibrant future

THE STAR, TUESDAY 1 DECEMBER 2015

2 invest malaysia

On track with
clear goals
By THERESA BELLE
ANY Malaysian born in and after
1992 would not be familiar with
living in a low-income economy as
that was the year the country
transitioned to middle-income
status.
They would also have been
brought up with, at the very least,
a vague understanding of Vision
2020 the Malaysian ideal
introduced under former Prime
Minister Tun Mahathir Mohamad
that put forth the idea of becoming
a self-sufficient, industrialised,
high-income nation by 2020.
In terms of numbers, this meant
an eightfold leap from the gross
domestic product (GDP) of
RM115bil in 1990 a grand target
of RM920bil (in terms of 1990s
ringgit) GDP in 30 years.
Now, with just five years left till
this looming deadline, where do
we stand?
Invest Malaysia takes a look at
the countrys investment
performance, targets, growth
sectors and several other factors
that will play a part in propelling
the nation to high-income,
first-world status.

Investment trajectory
Despite current economic
uncertainty due to a number of
factors, the Malaysian Investment
Development Authority (Mida)
reports a GDP growth of 4.7% in
the third quarter of 2015.
The countrys economy is
expected to chart a steady growth
path of 4% to 5%, positioning it to
reach an average of RM162bil in
annual private investments
estimated for the period of the 10th
Malaysia Plan, which will end this
year.
Statistics from January to
September show this amount stood
at RM159.4bil 8.4% higher than
the RM147bil recorded in the same
period last year.
Along with this, the country has
seen a rise of more than 5.8% in
net foreign direct investments
(FDI).
In the article Simple online
insurance published in
Money & You on Nov 8,
Toi See Jong was mistakenly
quoted and referred to as
the chief executive officer of
Tokio Marine Malaysia. The
quote should be by chief
executive officer of Tokio
Marine Insurans (Malaysia)
Berhad Yen Saw.

According to chief executive

director of Mida Datuk Azman
Mahmud, this promising
improvement comes despite
reduced FDI flows worldwide,
which shows that Malaysia is
attracting a higher share of net
global FDI.
The statistics reaffirm the
confidence of both foreign and
domestic investors in the
Governments Economic
Transformation Programme (ETP).
It is also a testament to Malaysias
structural economic fundamentals,
which underscore the resilience of
the countrys economy, he says.

Plans for change

The 11th Malaysia Plan (11MP)
charts the final stage (2016 to 2020)
in the countrys bid for highincome nation status. Mida reports
indicate a big leap in productivity
will propel economic growth in
terms of 5% to 6% GDP growth
annually.
At this stage, the workforce is
expected to raise gross national
income (GNI) per capita to
RM55,695 in 2020. According to
World Bank data, GNI per capita
was US$10,760 (RM45,365) last
year.
Some plans formulated under
11MP in view of Vision 2020 are:
Achieving productivity
potential to ensure sustainable and
inclusive growth
Promoting investments to
spearhead economic growth
Increasing exports to improve
trade balance
Enhancing fiscal flexibility to

Primary
RM2.3bil
(2%)

Manufacturing
RM49.5bil
(43.6%)

ensure sustainable fiscal positions

Then of course there is the
expansive national blueprint that
sets the tone for economic
development and growth of
Malaysia the ETP, which covers
12 National Key Economic Areas
(sectors that significantly
contribute to GNI) and six Strategic
Reform Initiatives to enhance
competitiveness on a global stage.
Based on their report in May,
ANZ Research, which has
considerable experience in
modern Malaysian finance and a
stake in AmBank Group,
economists note that structural
reforms undertaken via the multiyear ETP can help the nation
break free of the middle income
trap and elevate the country to
high-income status.
The report also shed positive
light on lower oil prices, saying
removal of fuel subsidies together
with the introduction of the Good
and Services Tax should free up
fiscal space of around 2% of GDP,
which could be made available for
infrastructure spending.
Large-scale projects in the
pipeline include the Pengerang
Integrated Complex, Kuala
Lumpur-Singapore High Speed Rail
and transportation projects in
Greater Kuala Lumpur, which
include rail transport network and
highway upgrades.
For example, the RM900mil
Jalan Tun Razak Traffic Dispersal
Project is a public-private
partnership announced under
Budget 2016 to ease congestion
within the bustling capital city
itself.

Total: RM113.5bil

Services
RM61.7bil
(54.4%)

Total approved
investments in
various
economic
sectors from
January to June
2015.

Focus on growth

Azman reveals that Mida has

developed an ecosystem approach
to strengthen investments in
manufacturing and services
sectors.
In line with 11MP, Mida will
focus on broadening the economic
base by venturing into knowledgeintensive and complex economic
activities.
These will serve to generate
higher-paying jobs, improve
overall efficiency and capacity
through increased productivity
and innovation, and introduce new
sources of growth, he says.
The East Coast Economic Region,
Northern Corridor Economic
Region, Iskandar Malaysia, Sabah
Development Corridor, Sarawak
Corridor of Renewable Energy, and
the Malaysia Vision Valley are
economic corridors created to zero
in on and better develop regions in
the country.
The Government promotes
investments throughout Malaysia
and not in specific states or areas,
but the decision to invest in a
particular corridor depends on the
preference of the investor

according to viability of the

project, Azman explains.
Introduction of a new tax
exemption incentive for Less
Developed Areas under Budget
2015 further sought to ensure
balanced and inclusive regional
growth across the country.
This is to encourage investors to
set up projects in less developed
locations to generate employment
opportunities in rural areas, thus
addressing socio-economic
inequalities and promoting
advancement for all.
These efforts are in tandem
with Midas ecosystem approach,
which ensures a sustainable
development of industries and
business lifecycles, says Azman.
Such measures mitigate
investment risks and enhance
Malaysias position as a
competitive business hub.

> SEE PAGE 4

Regional
advancement
THE Asean Community 2015
(AC15) was recently announced
under Malaysias chairmanship
when leaders of South-East
Asian nations came together
during the 27th Asean Summit
in Kuala Lumpur.
AC15 will be officially
launched on December 31,
marking the birth of a threepillar ideal that seeks to deepen
regional integration.
The pillars are the Asean
Political and Security
Community, Asean Economic
Community and Asean SocioCultural Community.
While this does not guarantee
unlimited flow of goods,
services and capital in the
region anytime soon, steps have
certainly been made and will
continue to be set in that
direction.
Prime Minister Datuk Seri
Najib Razak was hopeful in his
claim that AC15 would not only
further integrate into the global
economy and security structure,
but also become a region rich

with opportunity.
The AC15 plan will be carried
out for the next 10 years, with
leaders setting the 2025 target
to allow sufficient time and
space for significant progress.
Following this, the regions
economic growth is expected to
grow to a gross domestic
product (GDP) of RM18.39
trillion by 2020.
According to International
Trade and Industry Deputy
Minister Datuk Lee Chee Leong,
Asean is currently the worlds
seventh largest economy with
an estimated combined GDP
of RM10.12 trillion (US$2.4
trillion at current exchange
rate).
Najib certainly has high
expectations for the
advancement of the regional
coalition, which may not display
the wholeness of the European
Union just yet, but could open
more doors on Malaysias Vision
2020 journey while also
bringing the region to greater
heights.

THE STAR, TUESDAY 1 DECEMBER 2015

ADVERTORIAL

ECER: YOUR EASTERN

INVESTMENT GATEWAY

he East Coast Economic Region

(ECER) of Malaysia is steadily
positioning itself as the ideal
investment destination for investors
who are keen to take advantage
of the Regions dynamic growth,
distinctiveness and competitive
advantages.
ECER spans the states of Kelantan,
Terengganu, Pahang and the district of
Mersing in Johor, covering more than
half of Peninsular Malaysias land area,
with a total population of 4.2 million.
Economic growth in ECER is driven by
five main economic clusters, namely,
manufacturing, tourism, oil, gas and
petrochemicals, agribusiness, as well as
human capital and entrepreneurship
development.
Blessed with rich natural resources
such as abundant land, minerals,
centuries old tropical rainforests,
scenic beaches and islands, ECER is
strategically located facing the South
China Sea, thus allowing investors
direct access to the burgeoning
markets of the Association of South
East Asian Nations (ASEAN) and the
Asia Pacific, with a total population of
about four billion and combined Gross
Domestic Product of US$17 trillion
(RM72 trillion).
The Federal Government has
entrusted the East Coast Economic
Region Development Council (ECERDC)
with the responsibility of executing
and implementing the ECER Master
Plan, in its bid to accelerate ECERs
transformation into a developed region
by year 2020.
ECERDC plays a lead role in setting
the directions, policies and strategies
for the socio-economic development
of ECER by promoting and facilitating
investments in collaboration with State
Governments and Federal agencies
such as the Malaysian Investment
Development Authority (MIDA) and
the Ministry of International Trade
and Industry, as well as undertaking

The ECER Special Economic

Zone (ECER SEZ) acts as the
catalyst of economic growth
in the Region.

infrastructure and human capital

development projects in the Region.
ECERDC also acts as a One-Stop
centre to facilitate investors needs
and requirements in establishing their
operations in ECER.

Your Ideal Investment

gateway

Since its inception in 2007 until

November this year, ECER has
attracted domestic and foreign
private investments totalling RM84bil,
representing 76% of ECERs RM110bil
investment target by 2020. These
investments are expected to generate
92,313 new job opportunities for the
rakyat.
Economic growth in ECER Malaysia
is mainly spurred by the ECER
Special Economic Zone (ECER SEZ), a
concentration of high impact projects
within the 25 km by 140 km strip
extending from Kertih, Terengganu in
the north, down to Pekan, Pahang in
the south.
Since 2007, ECER SEZ has attracted
RM39.83bil in investments with key
projects such as the Kuantan Port
expansion, Malaysia-China Kuantan
Industrial Park (MCKIP), Kuantan
Integrated Biopark (KIBP), Kertih
Biopolymer Park (KBP), Pahang
Technology Park (PTP) and Pekan
Automotive Park (PAP).
ECER SEZ is home to MCKIP, the
first industrial park jointly developed
by Malaysia and China, and the first to
be accorded the National Industrial
Park status in Malaysia. MCKIP and its
sister park, the China-Malaysia Qinzhou
Industrial Park (CMQIP), have been
identified as Iconic Projects for Bilateral
Investment Cooperation to accelerate
the development of industrial clusters
in both countries and enable quicker
access to ASEAN markets and beyond.
One of the key infrastructure
components in the development of

MCKIP is the
expansion of
Kuantan Port,
which will emerge
as the Regions
logistics and trading
hub once completed in
2017. Leveraging on the close
proximity between ECER and
Southern China, Kuantan Port provides
the quickest and most direct route
between Malaysia and the ports in
Southern China.
The twin parks and Kuantan Port
are the key components of Chinas 21st
Century Maritime Silk Road and the
One Belt, One Road initiatives, which
aim to seamlessly connect Asia, Africa
and Europe.

Enhancing your business

competitiveness
By establishing or expanding their
operations in ECER, investors can take
advantage of the relatively lower costs
of doing business in the region, as
well as easy access to the Regions rich
natural resources. ECER also offers
a highly attractive package of both
fiscal and non-fiscal incentives that are
among the best in the country, said
ECERDC CEO, Datuk Seri Jebasingam
Issace John.
The incentives offered to qualified
investors include 100% income tax
exemption for 10 years or 100%
investment tax allowance on qualifying
capital expenditure incurred for five
years, customised incentives, import
duty and sales tax exemption for raw
materials, parts and components,
plants, machinery and equipment, and
stamp duty exemption on transfer
or lease of land or building used for
development.
To meet the needs of investors,
ECERDC undertakes various human
capital development programmes as
part of its capacity-building strategy.
The ECER Talent Enhancement
Programme (ETEP) is an industrial
training progamme to ensure that
there is adequate talent in technical,
vocational, engineering and nonengineering fields. Investors are
encouraged to participate in ETEP to
build their own industry-specific skills
and talent.

By 2017, the Kuantan Port will be able to

accommodate Cape-sized bulk carriers
and Post-Panamax container vessels of
up to 200,000 deadweight tonnage and its
throughput will be doubled to 52 million
freight-weight tonnes.

10

reasons
to invest
in ECER

Strong support from Federal

and State Governments with
pro-business and liberal
investment policies
Strong resource endownment
- crude oil, natural gas, tin,
timber, palm oil, rubber, iron
ore and others.
Advantageous geographical
orientation - Eastern Gateway
of Malaysia to Asia-Pacific.
Availability of land to set up
diverse range of business
facilities.
Good accessibility and
connection by highways,
airports, seaports and
railway.

Competitive wage rates.

Multilingual and trained
workforce speaking two or
three languages, including
English and Mandarin.
Large and established foreign
business community in all
business sectors.
Market-oriented economy,
exporter of resource-based
and manufacturing products.
ECERDC, together with
MIDA and MITI to facilitate
incentives application for
approval.

THE STAR, TUESDAY 1 DECEMBER 2015

4 invest malaysia

Port grows to meet demand

KUANTAN Port has long played an
important role in the development
of peninsular Malaysias east coast.
It serves as a critical platform in
the total logistics chain, being the
only commercial port in the east
coast and important gateway to
global sea connections.
With our strategic location, we
serve a niche market, says Datuk
Ir Khasbullah A. Kadir, Kuantan
Ports chief operating officer,
adding that Kuantan Port has been
aggressively promoting the
industrial area to potential
customers knowing the volume of
cargo generated would benefit the
port in the long run.
Kuantan Port Consortium Sdn
Bhd (KPC) recently signed a new
privatisation agreement with the
Government, giving the former a
30-year port concession.
Privatisation has benefited the
port in the long run; increased
efficiency and a competitiveminded environment have driven
Kuantan Port to more competent
day-to-day operations.

Many investment dollars are going

into upgrading and modernising
Kuantan Ports infrastructure.

Datuk Ir Khasbullah
A. Kadir

Attracting more
investment

Looking to the future

Kuantan Port has been
successful, especially in the late
1990s, developing in terms of cargo
throughput and berthing facilities.
Currently, it has a total of 22
berths, up from the initial nine.
This has elevated the overall cargo
handling capacity to 26 million
freight weight tonnes (fwt). At close
to full capacity, the port handled 23
million fwt in the 2015 financial
year.
Now, upgrading plans are
underway in the form of the New
Deep Water Terminal (NDWT),
which will be completed in part in
2017.
We still need to keep moving to
meet the demands of our
customers. We are anticipating
bigger and bigger operations so we
have to modify our facilities to
accommodate this.
The next and best step for us

> FROM PAGE 2

In keeping with the
Governments goal to grow more
local investments, 70% of the
RM77.5bil worth of investments in
manufacturing and related
services sectors came from
domestic sources.
Speaking at the World Capital
Markets Symposium in September,
Prime Minister and Finance
Minister Datuk Seri Najib Razak
said that Malaysia has successfully
rebalanced its economy as an
export intensive model, and that
growth is now largely driven by
the private sector led by domestic
demand.
Despite lingering perceptions
of Malaysia being reliant on
mining, principally in oil and gas
and commodities, our economy
has in fact been significantly
diversified to the extent that the
services, manufacturing and
construction sectors now account
for more than two-thirds of the

KPC was awarded the ISO

9001:2008 in 2011 for the handling
of liquid bulk cargo in Kuantan
Port.
The operations performance
standard was established by
Kuantan Port Authority as the
regulatory agency and is there
to assure customers that KPC
provides high levels of service,
says Ir Khasbullah.
He adds that the standards
set by the Department of
Environment (DOE) are among
the most stringent but may also
be the most important.
DOE guidelines call for strict
quality standards for ambient
air quality and air pollution as
well as operations that are in
line with the maintenance and
prospering of local marine life and
fisheries.

was to create a deepwater port.

This will also attract more potential
customers, says Ir Khasbullah.
KPC has invested about
RM600mil into upgrading and
modernising Kuantan Ports
infrastructure so that it can meet
the cargo growth it is experiencing.
According to Ir Khasbullah, this
development is imperative as the
current port will reach its
maximum capacity in the near
future.
The NDWT will fulfil the
demands of bigger ships up to
150,000 deadweight tonnes in
tandem with ship evolution.
With the capacity to
accommodate bigger ships,
Kuantan Port will be able to
become a regional transhipment
hub in line with our vision to be a
major bulk cargo and container

Kuantan Port aims to accommodate bigger ships in the hope of becoming a

regional transhipment hub.

port, says Ir Khasbullah.

The ports volume will double to
about 52 million fwt per year once
the NDWT is in operation, he
reveals.

Quality always

Kuantan Ports current

positioning as a trade and logistics
hub is being further boosted by the
development of Phase II of the
Malaysia-China Kuantan Industrial
Park (MCKIP 2).
Consisting of 270ha of industrial
and commercial land adjacent
to Kuantan Port, MCKIP 2s
development aim is to promote
key business areas.
These areas include steel,
oil, electrical products and
electronics, and car component
manufacturing.
The combined expansion of
Kuantan Port and the industrial
park is expected to create a
dynamic and competitive
environment that will allow the
local economy to move up the
value chain, says Ir Khasbullah.
This will eventually lead to
further development of Kuantan
and establish it as a vibrant port
city.

Kuantan Port adheres to

strict standards in its everyday
operations and in its current
upgrading works.

n For more information, visit

www.kuantanport.com.my

status by 2020 is still possible

with continued investment in
infrastructure and in research
and development to spur
homegrown innovation and
increase incomes.
Combined with higher-quality
education, IMF says these efforts
can help raise labour productivity,

support higher sustainable growth

and foster a more inclusive society.
At this point, Malaysians
continue to harbour hopes of
progress not only in terms of
economy and infrastructure, but
also in education, harmonious
coexistence and overall standard of
life.

Diversifying actions
economy, he said.
Mida reports that the
manufacturing sector has shown
best growth in the first half of this
year, driven by petroleum
industries and non-oil sectors.
On the other hand, the
slowdown in services sector is
attributed to lower real estate
investments, which have dropped
24% from last year.

What does this mean?

Most of the negative perception
cast on the countrys progress is the
result of what has been a
challenging year to Malaysian
social, political and economic
climates.
While bigwigs claim investments
are very much on track because of
unwavering investor confidence,
economists have warned that

market sentiment can turn

bearish.
What Malaysia has is a
mountain of potential and
promising figures mired in a
climate of instability.
Where it goes from here
depends on the resolution of
pressing socio-economic issues, the
effective implementation and
completion of proposed billionringgit plans and projects, and of
course, the state of the global
economy.
As the year Malaysia has been
waiting for draws near, ANZ
Research economists also warn
against the easing of reforms by
commenting that while the finish
line is in sight, the final lap is not
going to be easy.
Nevertheless, the International
Monetary Fund (IMF) is confident
that achieving high-income

Manufacturing
Focus on 3+2 catalytic
subsectors:
Chemicals
Electrical and electronics
Machinery and equipment
High growth potential
industries:
Medical devices
Aerospace

Services
Islamic finance
Information and communications
technology
Oil and gas services
Private healthcare
Private higher education
Ecotourism
Halal industry
Professional services

The subsectors for manufacturing and services sectors targeted by Malaysian

Investment Development Authority for the near future.

THE STAR, TUESDAY 1 DECEMBER 2015

THE STAR, TUESDAY 1 DECEMBER 2015

6 invest malaysia

ECER exceeds targets this year

THE Governments balanced
emphasis on capital economy and
people economy in accelerating the
socio-economic transformation of
the East Coast Economic Region
(ECER) has already shown positive
results.
This is reflected in the surge
of investments and the stronger
pool of human capital and
entrepreneurs in the region.

Successful investments
In its effort to accelerate the
transformation of ECER, the
Government has allocated RM6bil
under the 9th Malaysia Plan (9MP)
and the 10th Malaysia Plan (10MP)
for the implementation of various
high-impact projects in the region
through the East Coast Economic
Region Development Council
(ECERDC).
All 67 projects and programmes
under the 9MP have been
completed, while 26 projects and
programmes under the 10MP have
been completed.
Another 20 projects under the
10MP are in various stages of
implementation.
The Governments investment
has certainly paid off. As at
November 2015, ECER has
attracted private investments
totalling RM84bil, representing
a return of 14 times on
Governments investment.
The private investments
accounted for 76% of ECERs

Although there
were many
challenges in
bringing in
investments
into ECER in the
early part of
2015, ECERDC
continued to
intensify its efforts
to attract more
investments to
the region through
collaborations with
the respective state
governments as
well as government
agencies.
Datuk Seri Jebasingam Issace John

RM110bil investment target by

2020 and are expected to generate
92,313 jobs for the people.
Sectorial-wise, the
manufacturing cluster is the
biggest contributor with RM46.3bil.
This is followed by the tourism
cluster (RM14.1bil), bio-economy
(RM7.4bil), and oil, gas and

1. Approved allocation
(government investment)

3.4%

9th
Malaysia
Plan

13.8%
67.6%

Total

8.46bil
1.73bil
826bil
509mil
420mil
253mil
212mil
96mil
10mil
12.5bil

Private investments in ECER for 2015 (January to November 2015).

petrochemicals (RM5.2bil).

The right balance

Although there were many
challenges in bringing investments
into ECER in the early part of this
year, ECERDC continued to
intensify its efforts to attract more
investments to the region.
This was achieved through
collaborations with the respective
state governments as well as
government agencies such as
the Malaysian Investment
Development Authority and the
Ministry of International Trade
and Industry, says ECERDC chief
executive officer Datuk Seri

Jebasingam Issace John.

As a result, there has been a
significant increase in investments
in the third and fourth quarters of
this year. For this year alone, ECER
has attracted RM12.5bil worth of
investments, thus exceeding our
RM12bil investment target for
2015, he says.
More importantly, emphasis was
given to ensure a balanced
distribution of investments in both
urban and rural areas.
ECERDC has also given more
emphasis to attracting investments
in ECERs seven Key Development
Areas (KDA) as well as ECER
industrial parks this year.
Industrial parks in ECER

continue to attract investors with

their strategic and competitive
advantages. These include:
l Malaysia-China Kuantan
Industrial Park
l Pekan Automotive Park
l Kertih Biopolymer Park
l Kuantan Integrated Biopark
l Gambang Halal Industries Park
l Pasir Mas Halal Park
Cumulatively, they have
attracted RM19.54bil in
investments to date, which will
create 22,377 new jobs.

n For more information, e-mail

secretariat@ecerdc.com.my or
visit www.ecerdc.com.my

3. Achievements

Kota Baru
Bachok
Tok Bali

Terengganu
Kuala
Terengganu

Gua Musang

46
projects

Public
investment
RM6bil

Besut

Kelantan

Kuala
Berang

Node 5 :
Gua Musang Kuala Lipis KDA

Node 3 : KTCC - Kenyir Dungun Triangle

Kertih

Pahang
Raub

RM4.6bil

Private
investment
RM84bil

Dungun

Kuala Lipis

Bentong

Bandar Tun
Abdul Razak

RM6bil

Gambang

Node 1 : ECER Special Economic

Zone (ECER SEZ)

Kuantan
Pekan

Bandar
Muadzam
Shah

Mersing

Node 6 :
Bentong - Raub KDA
ECER: Public and private investments
(2007-November 2015).

Investment
(RM)

Manufacturing
Bioeconomy
Services
Oil and gas
Agriculture
Tourism
Construction
Education
Logistics

6.6%%

Jeli

26 projects
completed

Total

Sector

Node 2 : Cross-border
development

All projects
completed

20 projects
at various
stages

0.8%
0.1%

2. Implementation of projects and programmes

RM1.4bil

10th
Malaysia
Plan

1.7%

4.1%

Tumpat
Rantau Panjang
Bukit Bunga

67
projects

2%

Node 4 :
Mersing Rompin KDA
Pulau
Tioman

Endau

Ratio of public investment

to private investment
1:14

Rompin
Mersing

Node 7 :
DARA - Jengka KDA

92,313
jobs

THE STAR, TUESDAY 1 DECEMBER 2015

THE Economic Transformation

Programme contains several
progressive reform goals fit for an
aspiring first-world nation. Under
the human capital development
Strategic Reform Initiative (SRI), for
example, one of the workplace
transformation measures is to
leverage on womens talents a
large talent and skill pool
previously left largely untapped for
years.
Workforce upskilling and
modernisation of labour laws are
also main goals that are being
pursued under this SRI, but
nurturing and retaining talent
seems to be one of the more
challenging aspects of building
solid human capital.

invest malaysia 7

Human capital an asset

new job positions, skills shortages
are evident and there are a
number of areas where TalentCorp
can consider improving its
offering.
This report came with a set of
suggestions on improving said
offerings, which Johan and team
welcomed with a promise to strive
for greater efficiency in meeting
Malaysias talent needs.
Under the ETP, employment is
expected to reach 15.3 million by
2020.

Exodus of talent
According to an article published
on news portal The Malaysian
Insider, TalentCorp chief executive
officer Johan Mahmood Merican
said in May that the messy political
situation has led many to believe
that the economy is taking a big
hit, causing several foreigneducated Malaysians to opt for jobs
overseas.
It is no secret that for some time
now the brain drain has been one
of the main impediments the
Government is facing in developing
a first-world nation. Johan says
almost one in 10 tertiary-educated
Malaysians leave to work abroad.
Popular countries for migration

By this time, 1.5 million new jobs

should be created Malaysia needs
to retain as many brilliant minds
as possible if it is to successfully
shift from a labour-intensive to
knowledge- and innovation-based
economy.
Whether or not TalentCorps
growing efforts will suffice
remains to be seen, as more and
more graduating Malaysians
consider looking beyond the
country or even region for better
opportunities and quality of life.

Making strides
include Singapore, Australia and
the United Kingdom.
Back in 2011, a World Bank
survey reported the estimate to be
closer to two in 10 citizens working
abroad, and TalentCorp responded
by introducing the Returning
Expert Programme (REP) with a tax
incentive for Malaysians who come
back to work in the country.
Johan said they are also working
on upgrading the salary scale
alongside developing a more
attractive climate for young
professionals, but many believe
retaining the talent pool is an effort
that will take time, structural
reformation and a serious review

of the education system as a whole.

Playing the cards right

More recently in June, the World
Bank released Improving the
Effectiveness of TalentCorps
Initiatives, a report confirming that
the REP and Residence Pass-Talent
(a similar programme for
expatriates) are effective in
attracting and retaining talent with
skills that the country needs.
World Banks lead economist
Truman G. Packard added, though,
that despite the fact that
Malaysias workforce is
increasingly well-equipped to fill

Here are some milestones that

have been reached in the quest
for optimising human capital
under the Economic
Transformation Programme:
The participation of
Malaysian women in the
workforce has risen to
53.4% in the first quarter of
last year from 49.2% in
2012.
Recognition of Prior
Learning, an assesment
which allows upskilled
employees to demand a
higher salary according to
their expertise, saw the

participation of 17,470
employees as at December
last year.
The Minimum Wages Order
2012 was fully enforced by
the Peninsular Malaysia,
Sabah and Sarawak
Departments of Labour in
January last year. As at
December last year, 98.9%
of employers in peninsular
Malaysia, 98.7% in Sarawak
and 97.2% in Sabah had
implemented minimum
wages.

Source: etp.pemandu.gov.my

THE STAR, TUESDAY 1 DECEMBER 2015

8 invest malaysia

The growing halal industry is supported

by biotechnology research in scientific
and halal laboratories and consecutive
development of imperative findings.

Malaysia as
global halal hub
MALAYSIA has always welcomed
investments into its halal-related
manufacturing sectors. The Halal
Industry Development Corporation
(HDC), established in 2006 by the
Government, spearheads the
overall development of the halal
industry by coordinating
collaborations and support from
other government agencies.
HDC works with other ministries
and agencies within the halal
ecosystem to drive the
development of the countrys halal
industry and position Malaysia as
the most attractive place in the
region to invest where halalrelated manufacturing is
concerned.
In 2008, HDC developed a
structured implementation plan of
its initiatives to further develop the
industry.
This strategic roadmap the
Halal Industry Master Plan (HIMP)
is currently in Phase 2 of its
development.
Phase 2, which started in 2011
and ends this year, is focused on
establishing Malaysia as the
preferred location for halal-related
businesses, says Datuk Seri Jamil
Bidin, HDCs chief executive officer.
In fact, HDCs eventual aim is to
develop Malaysia into a global
halal hub. In establishing HDC,
Prime Minister Datuk Seri Najib
Razak says that realising the large
potential of the halal business and
the countrys continuous unique
position and strength, Malaysia is
positioned to become a global halal
hub.

Halal parks
Halal parks provide tenants with
collective benefits. What is
basically a community of
manufacturing and service
businesses located in the same
area, the halal parks provide
enhanced environmental,
economic and social performance
through collaboration in managing
issues related to halal products and
resources.
Ultimately, the halal parks will
improve the economic
performance of participating
companies and ensure that there is

customers or encouraging small

and medium enterprises (SMEs) to
relocate their operations to the
halal parks and developing the
capabilities of SMEs.

Success on the horizon

Datuk Seri Jamal says the halal

parks will improve the
economic performance of
participating companies.

no element of doubt as to the halal

integrity of the products
manufactured in the halal park,
explains Jamil.
The halal parks will include the
green design of park infrastructure
(including energy efficiency) and
provide companies cleaner
production processes, pollution
prevention capabilities, good access
to raw materials and ingredients,
intercompany linkages,
consolidated services from public
agencies and linkages for
marketing.
There are 22 halal parks in
Malaysia. Out of this, 14 have been
awarded Halmas status.
Halmas is an accreditation
awarded to halal park operators
who have successfully met the
requirements of the Halal Park
Development Guidelines.
Jamil explains that it is also a
mark of excellence for parks that
have noteworthy qualities and
produce halal products with the
highest integrity as well as quality
and safety standards.
The halal parks tend to have
different offerings depending on
various factors.
For example, some parks offer
land for sale while others offer
light industry units for rental and
some offer both.
Park developers and operators
also adopt different strategies in
developing and promoting the
parks.
This may involve focusing on
foreign investors and large local
companies as their target

To date, there are more than 100

investors operating within the
halal parks with an investment
value of more than RM9.4bil
altogether.
These investments have been
able to generate jobs for more than
5,000 workers so far.
The development of halal parks
is accelerating and Malaysias first
biotech-halal park is currently
being developed in Johor.
A joint venture between
UMLand and Johor Biotechnology
& Biodiversity Corporation
(J-Biotech), the 350-acre (141.6ha)
piece of industrial land will be a
Halmas-designated halal park.
The J-Biotech Park project
involves developing a regional
marketing and clearing house,
integrated packaging, warehousing
and logistic capabilities, a scientific
and halal laboratory, and
international-standard incubator
facilities, among others.
The J-Biotech Park project is
expected to generate a gross
development value of RM1.2bil
over the next five to seven years.
UMLand has stated that
UMLand hopes the park will
be the first integrated halal park
with international standards in
Malaysia that will also attract
SMEs and investors.
HDCs support will be crucial in
making this venture a success.
HDC will provide input on
investors requirements so that the
right services and facilities are
provided within the halal park.
Based on the plan that has been
formulated, HDC is confident that
the J-Biotech Park can be
showcased to the world as a true
halal park, differentiating it from
other industrial parks, says Jamil.
The development of Halmasdesignated halal parks is one of the
key components in realising the
vision of Malaysia being a global
halal hub, says Jamil.

The Halmas
advantage
THE Halmas accreditation does
not only mark halal parks that
have outstanding production
and quality standards. With
the Halmas status, industry
players and logistic services
providers will be able to enjoy
various incentives.
These incentives have been
designed to give existing and
would-be halal industry
players a leg up.
Incentives for halal industry
players:
l The incentives for a halal
industry manufacturer
operating within a designated
halal park is 100% tax
exemption for a period of 10
years based on qualifying
capital expenditure or income
tax exemption on export sales
for a period of 5 years.
l Exemption on import duty
and sales tax on raw materials
used for the development and
production of halal promoted
products.
l Double deduction on
expenses incurred in obtaining
international quality standards
such as HACCP, GMP, Codex
Alimentarius (Food and
Agriculture Organization of the
United Nations and World
Health Organization food
standard guidelines), sanitation
standard operating procedures
and regulations on compliance
on export markets such as food
and traceability from farm to
fork.
Incentives for halal park
operators:
l Full income tax exemption
for a period of 10 years or
100% income tax exemption on
capital expenditure for a
period of five years
l Exemption from import

duty and sales tax on

equipment, components and
machinery used directly in the
cold room operations in
accordance to prevailing
policies
Incentives for halal logistics
operators:
l Full income tax exemption
for a period of five years or
100% income tax exemption on
capital expenditure for a
period of five years
l Exemption on import duty
and sales tax on equipment,
components and machinery
used directly in cold room
operations in accordance to
prevailing policies
To qualify for Halmas,
applicants must meet the
following criteria:
l Involvement in the halal
industry: food, non-food
products and services
l A workforce consisting of
a sizable number of knowledge
workers and subject matter
experts in the halal industry
l At least two halal
compliance officers who are
constantly involved in the
processing of halal food,
products and services
l Companies involved in
the slaughtering of animals
must be in possession of the
halal Malaysia and halal
Slaughterman Certification
l Provide technology
transfer and/or contribute
towards the development
of the Halal industry
l Dedicated location and
formulation of a separate legal
entity
l Premises located within
the designated Halmasaccredited halal parks

Halal industry entrepreneurs and facility operators stand to not

only receive widely recognised quality accreditation from Halmas,
but also enjoy a host of business incentives.