Foreign investment soars to 4-year high

Updated : 16-02-2006
Media : The Edge
Story By : Tamimi Omar
via www.biznewsdb.com
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The government approved RM31 billion in investments in the manufacturing sector in 2005, with RM17.90 billion from foreign companies, especially from the US, according to the Malaysian Industrial Development Authority (MIDA).

The RM17.90 billion in foreign investments was a 36.6% increase from RM13.1 billion in 2004, which was the highest since 2001. The US was the biggest investor, pouring in RM5.2 billion, which was nearly three-fold from RM1.06 billion in 2004.

Investments approved in 2005 were the highest since 1996, except for 2000 when investments totalled RM33.6 billion.

International Trade and Industry Minister, Datuk Seri Rafidah Aziz said at a media briefing on Feb 16 that based on past experiences, she expected to continue to receive such investments.

¡§In the Second Industrial Master Plan (IMP2), we targeted RM25 billion total investment per year in manufacturing. By July last year we had exceeded that target. I expect that positive trend to continue,¡¨ Rafidah said.

She was speaking to reporters during the annual media conference on performance of the manufacturing and related services in Kuala Lumpur.

According to the MIDA report, 562 projects valued at RM31 billion were approved in 2005. Of that, 57.7% were foreign investments totalled RM17.9 billion.

MIDA stated that after the US, the second largest investor was Japan, which had proposed to invest RM3.7 billion, Singapore (RM2.9 billion), the Netherlands (RM1.7 billion) and South Korea (RM673.6 million).

¡§These five countries together accounted for 77.5 per cent of total foreign investments in approved projects,¡¨ it said.

By region, Asia accounted for the highest amount of investments with RM8.6 billion, followed by North America (RM5.2 billion) and Europe (RM3.2 billion).

Of the 1,026 projects approved, 572 or 56% were new projects with investments of RM13.8 billion, accounting for 44.5% of total investments.

Investments in new projects in 2005 were electric and electronics (RM2.7 billion), basic metal products (RM2.2 billion), scientific and measuring equipment such as contact lenses, cameras and medical devices (RM1.3 billion), transport equipment (RM1.1 billion) and chemicals and chemical products (RM954.5 million).

MIDA also signed a memorandum of understanding (MoU) with Mizuho Corporate Bank Ltd and Mizuho Bank Ltd to increase investments from Japan to Malaysia.

¡§The MoU aims to leverage on Mizuho¡¦s extensive client network in Japan as well as Malaysia¡¦s excellent investment climate to woo cross-border investment,¡¨ MIDA director general Datuk R. Karunakaran.

The Mizuho Financial group has assets over US$1 trillion (RM3.72 trillion).