Government Initiative & Facilitation Related to O&G Downstream Activities and Renewable Energy MIDA PARIS 2019 Noorhazlina Mohamad Nor www.mida.gov.my Who We Are? The principal Malaysian Government 1st point of contact for agency responsible for the promotion investors who intend to set of investments and coordination of up projects in the industrial development and selected manufacturing and services services sectors in the country sectors in Established in 1967 under Act of Parliament, 1965.

• Foreign Direct PROMOTION EVALUATION Investment • Manufacturing Licenses • Domestic Investment • Tax Incentives • Manufacturing & • Expatriate Posts Selected Services • Duty Exemption • Principal Hub & selected services

MONITORING PLANNING • Assist companies in the implementation & operation of their • Planning for industrial development projects • Recommend policies & strategies on • Facilitate exchange & coordination industrial promotion and development among institutions engage in or • Formulation of strategies, connected with industrial programmes and initiatives for development international economic • Advisory Services cooperation

2 20 Overseas Centres • New York • Tokyo around the world • San Jose • Osaka • Chicago • Beijing • Guangzhou • Shanghai • Seoul • Mumbai • London • Singapore • Stockholm • Taiwan • Munich • Sydney • Frankfurt • Milan • Paris • Dubai KL Sentral • 28 minutes (KLIA – KL Sentral) via KLIA Express Train Headquarter • Malaysia’s largest transit hub, 12 State offices KL Sentral, is Kuala Lumpur’s integrated Kuala Lumpur rail transportation centre.

Alor Setar v Kota Bharu Address: Penang Kuala Kota Kinabalu MIDA Sentral Ipoh Terengganu No. 5 Jalan Stesen Sentral 5 Kuantan KL Sentral Selangor 50470 Kuala Lumpur Seremban Tel: 03 – 2267 3633 Melaka v Fax: 03 – 2274 7970 Bahru www.mida.gov.my Kuching 3 One Stop Center

MINISTRY OF INTERNATIONAL TRADE & INDUSTRY

MITI AGENCIES

Based inside MIDA

Immigration Customs Energy Telecommunication Labour

Based outside MIDA

Finance Construction Health Tourism Safety & Health Digital Economy Environment 4 Malaysia’s Economic Development Journey

GDP CONTRIBUTION SECTOR (%) 1970 2017 Agriculture 33.6 8.2 Mining 7.2 8.4 Construction 3.8 4.6 Manufacturing 12.8 23.0

Services 42.6 54.4 Malaysia has successfully transformed from a predominantly agriculture-based economy in the 1970s, to a more diversified economic structure.

Source : Department of Statistic Malaysia, BNM 5 Overall Investment Approved in the Economy (2008 – Q3 2018)

6 Approved Investments in the Manufacturing Sector by Major Countries (2008 – Q3 2018)

US$ Billion 16 14 Japan 12 USA 10 China 8 Singapore Korea,Rep. 6 Netherlands 4 Germany 2 Australia Hong Kong 0 Indonesia

7 A P P R O VED P R O J E CTS I N M A N U F A C T U R I N G SE C T O R BY M AJ OR E U C O U N T R I E S (DEC, 2017)

Germany continue to spearhead investment from EUcountries US$ Billion 12.3 Germany

Netherlands 7.7

United Kingdom 5

3.2 France 1.3 Spain

Ireland 0.8

0.7 Sweden

Italy 0.7

0.6 Denmark Spanish is the 5th Largest Investor from EU with 13 projects (USD1.3 Billion) Belgium 0.4

4 PROMINENT SPANISH COMPANIES

- www. mida.gov.my - INVEST IN MALAYSIA > YOUR PROFIT CENTRE IN ASIA MALAYSIA – SPAIN BILATERAL TRADE

In 2017, Malaysia was ranked as the 32nd import source for Spain.

In 2017, Malaysia’s total trade with Spain increase by 17.9% amounting to €1,06 billion.

Sourced : Matrade MALAYSIA’S EXPORT TO SPAIN

Top 5 exports to Spain in 2017 were: MALAYSIA’S IMPORTS FROM SPAIN

Top 5 imports from Spain in 2017 were: Malaysia: Regional Oil & Gas Hub

13 MALAYSIA: REGIONAL OIL & GAS HUB

2020 GNI impact: USD42.4 billion New jobs by 2020: 52,300 jobs

Stavanger Aberdeen

Houston

Supported by > 3500 Malaysian Manufacturing and Services Oil and Gas Companies

Malaysia: Regional Oil & Gas Hub INDUSTRY LANDSCAPE

Regulator Quick fact

• 5 RSCs and 104 PSCs

Operators • 2,639.59 mmstb of oil reserve

• 647 kboe/d oil production

• 61,815.55 Bscf of gas reserve

• Contractors, Sub-Contractors, Vendors, Agents, 1,353 kboe/d gas production Consultant • 332 platforms

• 9,068 km of pipeline

• > 3,500 PETRONAS license companies

Source: PETRONAS

Malaysia has the second largest O&G reserves in South East Asia. The oil, gas and energy (OGE) industry currently contributes about 20% to Malaysia’sMalaysia:GDP Regional. Oil & Gas Hub Petrochemical Industry (Inc. Petroleum Products) In Malaysia Malaysia produces about:

73.8 billion m3 of natural gas

705,000 bpd of crude oil.

7.3 million MTPA

Petronas LNG complex in Bintulu is the World‘s largest production facility at a single location of LNG with production capacity of 29.3 MTPA 16 Petrochemical Industry (Inc. Petroleum Products) In Malaysia (Cont.) OIL AND GAS OPPORTUNITIES

Terengganu • Petrochemical processing • Refinery Kelantan • Offshore supply base • Tok Bali Supply Base • Oilfield services • Centralised tankage facilities and supply base • Petronas Petroleum Technology Institute of learning and training (INSTEP) • Kemaman Supply Base Opportunities • Enhanced Oil Recovery (EOR) Kuala Lumpur & Selangor • Marginal field development • Headquarters for major O&G operators and KPI 2013 consultancy firms Johor • Fabrication and • Fabrication and manufacturing manufacturing • Refinery • Financial services centre • Supply base and storage facilities Opportunities • Integrated Petroleum Complex (PIPC) will house oil refineries, naptha crackers, petrochemical plants and LNG import terminal and regasification plant. • Planned total storage capacity of 5 million cubic metres. • 22,000 acres of industrial land available Malaysia: Regional Oil & Gas Hub OIL AND GAS OPPORTUNITIES

Sabah • Fully integrated supply base Labuan and logistics hub to cater for • Fabrication all major oil and gas • Oilfield services • Supply base concession Blocks of Sabah, Sarawak, Brunei and the Opportunities Philippines • Global Incentives • Fabrication and Sarawak For Trading (GIFT) manufacturing • Fabrication • Oilfield services • Refinery • Oil and gas terminal • Oilfield services Opportunities • PetrochemicalOBJECTIVES Processing • Sipitang Oil and Gas Opportunities IndustrialKPI Park2013 (SOGIP) offers • EnhancedOF Oil Recovery RETREAT natural gas as feedstock for • Deep water development manufacturing resins, • Marginal Field development plastics, fertilizers, • Fabrication pharmaceutical products and • Oilfield services packaging materials • Low-tax O&G trading regime • Deepwater development • Marginal field development

Malaysia: Regional Oil & Gas Hub OIL & GAS PROJECTS IN JOHOR

Kulai INVESTMENT • OFSE Manufacturing Airport Q PERFORMANCE Nusajaya • OFSE Manufacturing Senai2012- Highway Teluk Ramunia • Offshore Structure Proposed bridge link Fabrication yard to Tg Bin Singapore • MHE OBJECTIVES KPI 2013 OF RETREAT Tanjung Bin • Oil storage, • Offshore Structure • Oil storage, marine Pengerang petrochem and Fabrication yard services, steel, OFSE, • Oil storage, petrochem, maritime • MHE chemical refinery • Seaport Worldwide • Depth: 12.5 m • • Dialog-Vopak • 913 hectares • 1972 hectares • 500 acres • Depth: 18 m • Depth: 15 m • Depth: 24 m

Malaysia: Regional Oil & Gas Hub PENGERANG INTEGRATED PETROLEUM COMPLEX

Why Pengerang? Strategic location at the south-east tip of Peninsular Malaysia located on a single plot measuring about 20,000 acres.

Committed Investors

Strategic Location ▪ Access to existing major international shipping ▪ Low negative socioeconomic impact lanes. Middle East – Singapore – China ▪ Relatively unpopulated leading to minimal ▪ Proximity to an existing major trading hub; Adjacent population relocation to Singapore ▪ Safe and sheltered harbour ▪ Deep water of -24m enables VLCCs and ULCCs ▪ No breakwater required with sufficient seagoing ▪ Very few Environmentally Sensitive Areas passage for VLCCs and ULCCs (ESAs) which are easily preserved ▪ A single candidate plot in excess of 20,000 acres ▪ Availability of sufficient development land Source: Johor Petroleum Development Corporation PENGERANG INTEGRATED PETROLEUM COMPLEX

PETRONAS RAPID ▪ RM53 billion refinery and petrochemicals Total Potential ▪ RM36.3 billion associated ▪ RM170+ billion of facilities ▪ 6,242 acres investment ▪ Ready for start up early 2019 ▪ 20,000 acres of industrial area

DIALOG-VOPAK ▪ RM5-10 billion Potential Investor ▪ ▪ 500 acres reclaimed land RM27 billion ▪ ▪ Petroleum & LNG Terminals 2,000 acres ▪ ▪ LNG Regasification Plant Refinery ▪ ▪ Phase 1 operational April 2014 Petroleum Products ▪ Aromatics Products

Source: Johor Petroleum Development Corporation Malaysia: Regional Oil & Gas Hub OIL STORAGE HUB

Malaysia is set to have a total of 10 million cubic meter (cbm) of oil and gas storage by year 2020.

Pasir Gudang No. of berth = 4 Pengerang Max. draft = 13.5m No. of berth = 6 Current storage capacity = 0.23 mil m3 Max. draft = 24m 3 Product scope:- Current storage capacity = 2.8 mil m Fuel oil and gas oil Product scope:- Naphtha, gasoline, jet fuel, kerosene, Tanjung Bin gas oil, diesel, crude oil No. of berth = 5 Max. draft = 17.5m 3 Current storage capacity = 1.14 mil m Senai- Desaru Highway Product scope:- Gasoline, jet fuel, kerosene, naphtha, gasoil, diesel, fuel oil

Proposed bridge link to Tg Bin

Tanjung LangsatSingapore No. of berth = 7 Achievement Max. draft = 15m EPP 4: 10 mil m3 Current storage capacity = 0.74 mil m3 Current storage capacity: Product scope:- 4.91 mil m3 Naphtha, middle distillates, diesel, gasoline, fuel oil

Malaysia: Regional Oil & Gas Hub MACHINERY & EQUIPMENT FOR O&G

Stages/ Exploration Appraisal Production Fabrication MRO Abandonment Cycle

Pigging

Land and Sea X-mas Tree, Seismic Equipment Wellhead MNCs and local Turbo M&E Drilling, Down-Hole companies with Tools manufacturing facilities in RO Umbilical, Malaysia Flexible Topside, FPSO, Jacket Process Module Remotely Operated Pipes M&E for Services Vehicle (ROV) Valves

Downhole tools √ components √ Modules for gas processing √

Malaysia: Regional Oil & Gas Hub 25 Potential investors with PETRONAS will be able to utilise established plug and play infrastructure facilities within the PIC 1 The Hive Excess capacity in PIC after project completion Accommodation 1200 people

2 Land Land 1,295 acres of vacant land 3 3 4 Air Separation Unit

N2 - 1,300 Nm3/hr 5 4 PCP Power - 140 MW 1 Steam - 450 TPH 2 2 5 Water 3 H2O Demin 280 m /h Treated 1500 m3/h 2 6 Land Land at PDT2 6 58 acres 7 7 SPJ c 30,000 TEU containers

Open ENERGY

27 Green Technology Master Plan (GTMP)

The Green Technology Master Plan (GTMP) is the national strategic plan and implementation framework to catalyze Green Growth and propel Malaysia towards sustainable development and high income nation by 2020, and to position Malaysia as a Green Technology hub by 2030.

Source: Malaysian Green Technology Corporation(MGTC) 9 Renewable Energy(RE) Energy Efficiency (EE)

EnergyCost • Power generation in Malaysia Industry EE Project is largely dependent from Saving fossil fuel (gas, LNG and coal) which is the main Co-generation 57.3 % Glove contributor to GHGs with emission heat recovery

• Malaysia is well endowed Power motor 12.0 % Chemical with abundant renewable savers energy sources from various High efficient 10.3 % sources such as: Plastic ✓ Biogas chiller ✓ Biomass 57.0 % ✓ Hydro Variable speed Ceramic compressor ✓ Solar Photovoltaic ✓ Geothermal Duty cycle 20.0 % Glass management product system (DCMS)

12 Approved Green Technology Projects (2001-2017)

Renewable Energy Note: Including projects for FiT, own consumption and selling to thirdparty RE Projects Basedon No. Projects Approved Investment Implemented Sources (RM Million) (as at Dec2017)

Solar 349 3,878.5 295 Biogas 76 1,040.2 57 Biomass 127 4,858.0 85 Mini Hydro 25 1,898.3 9 Geothermal 1 506.3 0 Total 578 12,181.3 446

Energy Efficiency & Conservation Activities No. of Projects Approved Investment Implemented (RM Million) (as at Dec 2017) Energy Service Company 23 492.5 14 (ESCO) Energy Conservationfor 117 2,835.6 98 Own Consumption

Total 140 3,328.1 112 18 Promoted Green Projects & Services

• Renewable Energy (RE) ▪ Green Building

▪ Green Data Centre • Energy Efficiency (EE) ▪ Green Township • Integrated Waste Management Activity ▪ Electric Vehicles (EV)

20 Waste Management & Waste to Energy(WtE)

Improving waste management and biomass to energy methods to contain methane emissions for better quality of life

13 Solid Waste in Malaysia Year 2005 2012 2016 Total Waste Generated 19,000 33,000 38,200 (Tonne/Day) Waste Disposed in Landill (Tonne/Day) 18,050 30,129 35,335 Disposal Percentage 95% 91.3% 92.5%

Assumption Factors: • Rapid population growth, increase 4% per year • Waste generation rate average from 0.8kg-1.12kg/capita/day • Increasing recycling rate from 5.0% in 2005 to 17.5% in 2016

Solid Waste Composition • Food Waste is still a significantly major component of generated waste (45%) and contains high organic compound • Due to insufficient separation at source, more than 30% potentially recyclable materials such as plastic, paper, aluminum, glass are still directly disposed in landfills • Diapers have become a major component (12.1%)

14 Source: SWCorp Malaysia Waste to Energy(WtE)

Biogas from palm oil mill effluent (POME) as a resource for energy & wealth generation

15 Waste to Energy(WtE)

Palm Biomass Source Production • OPF (from pruning activity) 48.5 million tonnes • OPF (from replanting activity) 3.96 million tonnes • OPT (based on 5% replanting rate) 38.48 million trunks / 19.37 million tonnes • EFB (from palm oil mills operating at total 7.9 million tonnes capacity of 94.92 million tonnes of FFB) • Mesocarp fibres 8.1 million tonnes • Palm kernel shells 5.5 million tonnes • POME generated from per tonne of FFB is 65.20 million tonnes about 16 67%. SolarPhotovoltaic

Available solar schemes in Malaysia: • Net Energy Metering (NEM) • Large Scale Solar (LSS)

17 Embracing Industry 4.0

37 Eleventh Malaysia Plan (2016-2020) 11TH

3 2 CATALYTIC + HIGH GROWTH SUBSECTORS SECTORS

Electrical and Chemicals Electronics Medical Aerospace devices Machinery and Equipment

Three (3) catalytic subsectors namely Chemical, E&E and M&E industries; and two (2) subsectors of high potential growth namely Aerospace and Medical Devices have been identified in the 11th MP to drive the growth of the manufacturing sector.

38 Launching of Industry 4.0 Policy Framework

Enhance Global Competitiveness

Strengthen growth and productivity of manufacturing industry

Create new generation jobs and reduce dependency on foreign labours

Sustaining high levels of Foreign and Domestic Investments

39 Targeted Technology Drivers

Industry 4.0 Key Technologies Outcome

Attract stakeholders Create the right ecosystem Transform industry capabilities • Adoption of industry • Industry 4.0 Readiness • Labour productivity 4.0 Assessment • Cost efficiency • SME inclusion • Technology Providers • Share of high-skilled jobs • Preferred Talent supply & skill levels • Technology & innovation manufacturing • Collaboration platforms capabilities location • Digital infrastructure • Local technology • Funding support development • Tax Incentives

41 Collaborators in Industry Proof-of-Concept projects, R&D Grant projects, talent programs:

Manufacturing Anchors

RMK11:Technology (Thrust 6) Providers- Strategy& SystemsB2: Integrator Enhancing productivity through automation

Research Expertise & Knowledge

Source: Collaboration Research in Engineering, Science Technology (CREST) 42 Investment Policies & Incentives

43 Business Friendly Investment Policies

Equity Ownership Repatriation of Income Employment of Expatriates Foreigners are allowed to Freedom to repatriate • Key posts (posts that are hold 100% equity capital, interest, permanently filled by ownership in the dividends and profits. foreigners) manufacturing and No restrictions • Term posts (posts that are selected services sectors filled by foreigners for a period of 1-5 years)

Intellectual Property Protection Malaysia’s IP laws are in conformance Investment Guarantee Agreements (IGAs) with international standards Malaysia has signed IGAs with more than 60 - Member of the World Intellectual Property countries Protection Organisation (WIPO) - Signatory of the Paris Convention and Berne Convention which govern IP rights - Signatory of the Agreement on Trade-Related Aspects of IP Rights (TRIPS) under the WTO 44 Setting Up a Representative Office/ Regional Office in Malaysia Activities Allowed Eligibility Criteria Gathering and analysis of USD75,300 (RM300,000) information operational expenditure per annum feasibility studies on investment and business opportunities in Malaysia and the region; financed by funds emanating from sources outside Malaysia. 33 SPANISH Planning or coordination of COMPANIES HAVE business activities;

Expatriate Posts BEEN APPROVED Identifying sources of raw materials, Expatriates will be RE/RO STATUS considered for managerial Representative Office/ and technical posts. Regional Office Undertake research & product development;

Act as a coordination centre for the Not allowed to be engaged in any trading corporation's affiliates, subsidiaries (including import and export), business or and agents in the region any form of commercial activity. 45 Major Tax Incentives

Pioneer Investment Reinvestment Import Duty Status Tax Allowance Allowance Exemption Income tax 60% on qualifying For raw exemption 60% or 100% on capital materials / ranging from 70% qualifying expenditure for components or 100% for a capital 15 consecutive and machinery period of 5 or 10 expenditure for years and equipment years 5 years

Less Developed Area 100% income tax exemption for up to 15 years

46 PRINCIPAL HUB Incentive Scheme A locally incorporated company Key Functions Uses Malaysia as a base for conducting its regional or / and global business and operations to manage, control and support its key Management of Strategic Business Trading functions. risk Activities

ELIGIBILITY CRITERIA :- Management & Finance Decision Making • Local incorporation under the Human Resource Companies Act 1965 • Paid-up capital : > RM2.5 Million

47 Regional/Global Operations

Global Operations Hubs, Regional Distribution Centers / Global Business Services Principal Hubs, International Procurement Centers (MSC & Medini) Regional Headquarters

839 100 104,667 US$14.3 bil Projects Countries Employment Investments Market Access

14 Free Trade MARKET Agreements 2.7 Billion Population

TURKEY JAPAN PAKISTAN CHINA KOREA

INDIA

AUSTRALIA CHILE ASEAN

• 3rd largest market in the world with 622 million people (behind only China and India) NEW ZEALAND • Already zero tariffs for 99% of products • Attracts 11% of global FDI 49 The practice of finding another ASEAN country to complement current operations has led ASEAN-based investors to deepen their engagements with the region. ASEAN : 7th Largest economy (4th by 2050)

Intel has leveraged on the complementations in the region

Nestle Procurement Hub for Asia in Malaysia

IKEA Regional Distribution and Supply Chain Centre for ASEAN in Malaysia

Honeywell has made Malaysia its ASEAN

Regional HQ 50 MALAYSIA IS CONNECTED TO THE WORLD THROUGH FTA’s

7 Regional FTAs 7 Bilateral FTAs

MJEPA 1993 AFTA 2006

MPCEPA 2005 ACFTA 2008

2010 MNZFTA 2007 AKFTA

2012 MCFTA 2008 AJCEP

2011 MICECA 2010 AIFTA

2013 MAFTA 2010 AANZFTA

MTFTA 2017 AHKFTA 2015 51 *Signed on 12 November 2017, target entry into force in 2019 Most attractive emerging Most competitive country in the 1st 22nd world World Competitivve Report by market in ASIA (Bloomberg 2018) Management Development, Switzerland

Global offshoring destination Ease of Doing Business withinASEAN (A.T. Kearney Global Services 2nd 3rd Location Index™ 2017) World Bank

Doing Business Report 2019 Most attractive emerging market in the World (Bloomberg 15th World Bank 5th 2018)

STRATEGIC English speaking Pro-business LOCATION Harmonious Government Industrial Relations Home to Tropical Paradise We Embrace Multiculturalism An Unsurpassed Lifestyle Liberal Business Well Developed 52 Environment Infrastructure/ Connectivity Contact us Be With Us On Mobile: The First Point of Contact for Investors

Opening hours: Mon - Fri 8.30 a.m. - 5.00 p.m.

Business Information Centre (BIC) 2nd Floor of the MIDA Sentral Investors are also invited to visit MIDA’s Business Information Centre (BIC)

MIDA Sentral URL : https://www.facebook.com/OfficialMIDA No. 5 Jalan Stesen Sentral 5 KL Sentral 50470 Kuala Lumpur URL : https://twitter.com/OfficialMIDA Tel: 603 – 2267 3633 Fax: 603 – 2274 7970 Email: [email protected] www.mida.gov.my

53 GRACIASMalaysia as a gateway to ASEAN

MIDA PARIS Malaysian Investment Development Authority (MIDA)

Ms. Noorhazlina Mohd Noor, Director MIDA Paris 42 Avenue Kleber 75116 Paris, France

Tel : (331) 4727 6696 / 3689 Fax : (331) 4755 6375 E-mail : [email protected] [email protected] Website: www.mida.gov.my

Mr. Kamel BENLOUKIL Investment Officer, MIDA Paris

Tel : (331) 4727 6696 / 3689 Fax : (331) 4755 6375 E-mail : [email protected] Website: www.mida.gov.my Malaysia As A Hub For ASEAN FAST GROWING ECONOMIC REGION

7th Largest economy th (4 by 2050) Population: 642 million (2017) Youth: 50%

GDP: US$ 2.77 trillion (2017) GDP Growth: 3.5% (2017) Per capita: US$ 4,307(2017)

Total FDI: US$137 billion (2017) Intra ASEAN: US$27 billion (19.9%)

Total Goods Exports: US$ 1.3 trillion ASEAN Dialogue Partners: Intra ASEAN US$590 billion • Australia • Korea • Canada • New Zealand Tourist Arrivals: 125 million (2017) • China • EU Intra ASEAN: 46 million • India • Russia • Japan • USA

55