Contribution and Expectation of Japanese companies in Malaysia toward Industrial Development
The Japanese Chamber of Trade & Industry, Malaysia
Chairman of Trade and Investment Committee
Masakuni Nakayama 6th November, 2018 About JACTIM
⚫ Established in 1983 ⚫ Endorsed as the first foreign chamber of commerce by Tun Dr. Mahathir as 4th Prime Minister
Center of the first low : YAB Tun Dr. Mahathir(4th Prime Minister) On the left of Tun: The late Tan Sri Datuk Dr. Suzuki(2nd President of JACTIM) 1 Number of Japanese Companies
No. of Japanese Companies Ratio of Companies by Industry In Malaysia ＜Manufacturing＞ Electrical & Electronic 34.8% Petroleum & Chemical
Steel & Nonferrous Metal
Transportation Machinery & Parts
Machinery
Wood & Wooden Products
Food & Beverages
No. of Textile & Textile Products Manufact Japanese Non- Manuract Other Manufacturing uring Companies 50.6% uring 1,376 49.4% 0.0% 10.0% 20.0% 30.0% 40.0% （As of Oct 2018） ＜Non-Manufacturing＞ Foregin Trade & Commerce 20.8% Manufacturer Rep/Service Construction & Engineering Transportation & Warehousing Restrants Finance & Insurance Travel Agents Agriculeture & Forestry Other Non-Manufacturing
0.0% 20.0% 40.0% 2 (Source)JETRO Business potential in MALAYSIA
Attractive Aspects as Friendly Country [Reliable Domestic Situation] ⚫ Stable politics, Parliamentary Democracy ⚫ Friendly and Positive Feeling toward Japan ⚫ Safety/Security, Minimal Natural Disasters, Gentle Climate
[Understanding of Industry and Investment] ⚫ “Industry-Friendly” policy by the New Government ⚫ Educational exchange (e.g. MJIIT(Malaysia-Japan International Institute of Technology), OJT by Japanese companies)
[Window to the World] ⚫ English proficiency ⚫ multi-ethnic group ⚫ FTA network ⚫ Well developed domestic infrastructure (Connect to China, India, Middle East, ASEAN)
New Government was born on May 9th 3 Japan’s Strength
Strength High value-added industrial structure
Technologies Providing high value-added products
Skilled-labors Digital
Lean-Manufacturing Understanding of Factory Floor
4 Be organized comfortable “home”
⚫ Our recommendation is to follow the cycle of investment which consists of 4 steps.
New Investors WELCOME TRANSFORMATION Step of attracting the investment Step of creating a virtuous circle of enhancing the level of invested business • Clear and transparent incentives while attracting the new related investment • Prompt & simple procedures • Clear guideline for service sector Trans • Cultivate HR capable of R&D Welcome • Flexible issuance of EP & PVP • Enhance Industry 4.0 formation • Mitigation of Regulations of FDI • Develop a rule for merger & division • Sufficient number of HR • Encourage Green Technology
Thinking priority strategically Reinforce with industrial players ment REINFORCEMENT Hospitality Step of extending the invested business HOSPITALITY Step of stabilizing the incoming investment • Encourage & Support reinvestment • Support to set up the Regional Hub • Reasonable TP(Transfer Pricing) audit • Enhancing human capital development • Prompt GST refund & Work Ethics • Withholding Tax Treatment • Effective utilization of Foreign Workers • Clear new SST rules 5 Frequent meetings with “Industry-Friendly” Government
Right : YAB Tun Dr. Mahathir(7th Prime Minister) Meeting with YB Tuan Lim Guan Eng (Minister of Finance) Left : Mr. Imizu(10th President of JACTIM)
6 Continuous population bonus of MALAYSIA
⚫ The average annual rate of population growth in Malaysia is 1.5% (2010 - 2016) ⚫ The population is expected to reach a peak between 2065 and 2070 ⚫ Population distribution by age in 2017: 24.1% for 0 - 14 years old, 69.7% for 15 - 64, 6.2% for over 65 years old ⚫ The top 20% of the total population are the affluent households with annual household incomes exceeding US $ 48,000.
Estimated population in Malaysia (～2100) 50,000 ※Medium Variant 40,000
(thousands) 30,000 40,778 42,418 20,000 39,862 30,331 36,107 42,325
population 10,000
0 Total 20101 2 20203 4 20305 6 20407 8 20509 10 206011 12 207013 14 208015 16 209017 18 210019 (year) （Source）United Nation World Population Prospects, the 2015 Revision https://esa.un.org/unpd/wpp/Graphs/DemographicProfiles/ 7 Contact to US
●Malaysian Investment Development Authority：MIDA
●Multimedia Development Corporation：MDEC TEL 1-800-88-8338 (within Malaysia) 60-3-8315-3000 (International) EMAIL [email protected] 8 Appendix
9 Activities of JACTIM (after the change of Government)
Meetings with New Government: Discussion for Meeting with YB Tuan M. Kulasegaran, Minister of Human Resources (MOHR) (June 21) JACTIM Courtesy Call on YAB Tun Dr. Mahathir bin Mohamad, the 7th Prime Minister of Malaysia (July 5) Town Hall Session by Institute of Labor Market Information and Analysis (ILMIA) (July 10) National Human Resources Consultative Council (NHRCC) Coordination Meeting for Working Group 1:Employments and Human Resource Development (July 12) Meeting with NWCC on Minimum Wage Review (July 17) SST related Meeting with Royal Custom Malaysia (July 19) SST related Meeting with YBhg Datuk Seri Dr. Ismail Hj. Bakar, Secretary General of Treasury（MOF) (July 23) Follow-up meeting with Prime Minister’s Secretary (August 2） Round Table Discussion on Improving Good Governance and Integrity in Malaysia (August 3） Networking Session with Chambers of Commerce, Business and Industry Associations by YB Datuk Ignatius Darell Leiking, Minister of International Trade and Industry (MITI) (August 13) National Human Resources Consultative Council (NHRCC) Coordination Meeting for Working Group 2:Labor and Human Resource (August 13) Discussion on SST Implementation Chaired by YB Tuan Lim Guan Eng, Minister of Finance (MOF) (August 19） MOF Focus Group Meeting : ・Ensuring sustainable development (September 3） ・Attracting Investment and Boosting Trade (September 6) ・Improving Research & Development, and Commercialization & Innovation Activities (September 7） Meeting with YBhg Dato’ Azman Mahmud, CEO of Malaysian Investment Development Authority(MIDA) (September 6） Meeting with YBhg Datuk Isham Ishak, Secretary General of Ministry of International Trade and Industry(MITI) (September 19） Meeting with YB Tuan Lim Guan Eng, Minister of Finance (MOF) (October 2） Follow-up meeting with MOF (October 4） Follow-up meeting with Bank Negara Malaysia(BNM) (October 5）
Meetings with Other Associations after New Government is formed: Meeting with The American Malaysian Chamber of Commerce (AMCHAM) (June 7） MEF chaired Industry Group Meeting to Discuss National Minimum Wages（June 12） Meeting with SME Association on Foreign Worker Outsourcing Company, Minimum Wage and other Labor Issues (June 19） FMM Chaired Preparatory Discussion for Meeting with Minister of Human Resources（June 19） FMM Chaired Joint Industry Discussion on Minimum Wage and Rehiring Programme（July 6） Meeting with the Japan Graduates’ Association of Malaysia (JAGAM) (August 28） ACCCIM Chaired Industry Meeting on impact of suspension of Recruitment of Bangladeshi Foreign Workers through the Foreign Workers Management System (September 12） MEF chaired Joint Meeting of Industry Association to discuss Proposal for Employer to pay RM10,000 Levy to extend employment of skilled foreign worker beyond 10 years (September 28) 10 Business trips to Japan of Malaysian Cabinet Ministers
June： YAB Tun Dr. Mahathir bin Mohamad(Prime Minister of Malaysia) July： YAB Dato' Seri Dr. Wan Azizah binti Wan Ismail(Deputy Prime Minister cum Minister of Women, Family & Community Development) August： YAB Tun Dr. Mahathir bin Mohamad(Prime Minister of Malaysia) YB Dr. Maszlee bin Malik(Minister of Education) YB Datuk Seri Mohd Redzuan bin Md Yusof(Minister of Entrepreneur Development) YB Tuan Anthony Loke Siew Fook(Minister of Transport) September： YB Tuan Gobind Singh Deo(Minister of Communications and Multimedia) YB Datuk Mohamaddin bin Ketapi(Minister of Tourism, Arts and Culture) October： YB Tuan Haji Mohamad bin Sabu(Minister of Defence) YB Datuk Ignatius Darell Leiking(Minister of International Trade and Industry) YB Tuan Baru Bian(Minister of Works) November： YAB Tun Dr. Mahathir bin Mohamad(Prime Minister of Malaysia) YB Dato' Seri Mohamed Azmin bin Ali(Minister of Economic Affairs) YB Dr. Maszlee bin Malik(Minister of Education) YB Dato' Saifuddin bin Abdullah(Minister of Foreign Affairs) YB Datuk Ignatius Darell Leiking(Minister of International Trade and Industry) 11 Attractive Aspects of Malaysia for Investment
English Proficiency of Workforce/General Public 73.4
Friendly and Positive Feelings toward Japan 55.4
Minimal Natural Disasters 52.7
Safety/Security 47.8
Infrastructure Quality 46.7
Good Living Environment 46.7
Political Stability 30.4
Labor cost, Personnel Expenses 26.6
Availability of Inexpensive Energy Resources 15.2
Gateway to Islamic Nations/Markets 14.7
Investment Incentive Policy by Government 13.6
Quality of Workers 13.0
Consumer Market 13.0 n=184, Multiple Responses Allowed
Clusters of Parts and Components Industry 9.8
Good FTA Network 7.1 （%） 0.0 20.0 40.0 60.0 80.0 Sources: Questionnaire Survey for Japanese Companies in Malaysia in the Year 2018 conducted by JACTIM/JETRO 12