GEARING for STRATEGIC GROWTH Annual Report 2017 CONTENTS
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ANNUAL REPORT 2016 GEARING FOR STRATEGIC GROWTH Annual Report 2017 CONTENTS 01pg 4-7 02 pg 8-11 03 pg 12-15 07 pg 32-47 08 pg 48-53 09 pg 54-79 STAYING AHEAD GEARING FOR FOCUSED INITIATIVES MOVING FORWARD ELEVATING MALAYSIA FINANCIAL MIDA is at the forefront in STRATEGIC GROWTH Dato’ Azman Mahmud, Chief The expansion and diversification MIDA continues to give its all in STATEMENTS courting sustainable, high quality Tan Sri Amirsham A. Aziz, Chairman Executive Officer of MIDA emphasises projects secured in 2016 paved the race towards securing new MIDA’s audited financial investments to fortify the nation’s of MIDA, evaluates Malaysia’s the need for a focused approach in the way for potential future investments and re-investments statements for the year ending economic growth momentum resilient economy and the driving strategic investment initiatives development in Malaysia’s 31 December 2016 opportunities for strategic growth that are capital, knowledge and manufacturing sector innovation intensive in line with the Government’s vision to become a high-income nation by 2020 04 pg 16-21 05 pg 22-23 06 pg 24-31 10 pg 80-97 11pg 98-100 THE AUTHORITY MAKING A MARK GOING FOR APPENDICES CONTACTING MIDA MIDA’s functions, Board of MIDA is Malaysia’s principal THE GOLD Throughout 2016, MIDA actively Addresses of MIDA Headquarters, Directors, Management Team investment promotion agency, The services sector remained the promoted the national investment State and Overseas Offices and Organisation in 2016 working in service of the nation’s anchor of the nation’s economic agenda, at home and abroad economic development agenda growth in 2016 4 ANNUAL REPORT 2016: GEARING FOR STRATEGIC GROWTH 5 Introduction MIDA has held the esteemed role of Malaysia’s lead investment agency for five decades. In the stiff global race for investment dollars, the agency continues to carve the nation’s economic and social development via focused efforts to boost efficiency, productivity and competitiveness, all the while transforming the nation through various phases of industrial development. mid the current phase of global uncertainty, 25th place and was the only South East Asian country Malaysia retained its standing as a key to make an appearance besides Singapore. A competitive nation. The World Economic Forum’s annual Global Competitiveness Report Located in the heart of ASEAN, Malaysia is a regional for 2016/2017 ranked the country 25th out of 138 economic powerhouse capable of offering MNCs and countries. Despite slipping seven notches from the investors unique access to a steady stream of talent, 18th position in 2015, Malaysia retained its foothold a modern business ecosystem, world-class infrastructure STAYING AHEAD as the highest ranking among fellow developing Asian and connectivity, and competitive cost advantages and MIDA is at the forefront in courting sustainable, high quality countries; a sure signal of the country’s progress in incentive packages. In the World Bank’s Commission ramping up its efficiency and competitiveness through on Growth and Development Growth Report, Malaysia investments to fortify the nation’s economic growth momentum the Government Transformation Programme (GTP) and was one of 13 countries identified to have recorded an the Economic Transformation Programme (ETP). average growth of more than seven per cent per year for 25 years or more. The nation’s national per capita The World Bank’s Ease of Doing Business report 2017 income grew 25-fold from US$402 (1970) to US$10,796 placed Malaysia in 23rd place out of 190 economies, (2014) and is charging ahead to surpass the targeted ahead of France, Switzerland, and Japan. The country’s US$15,000 threshold of a high-income economy by standing slid a mere notch from its former rank of 2020, in line with the Government’s aspiration of 22nd in 2016 and Malaysia rode in second position in achieving advanced economic status. ASEAN behind Singapore. Notable improvements were recorded in three areas; protecting minority investors, getting credit (owing to the start of credit bureaus Unlocking the Potential providing consumers with credit scores) and paying taxes which has been made easier since the introduction of Productivity of the online systems for filing and paying GST. Every effort channelled into building the nation’s economy thus far must continue along the national Malaysia also shone bright in UNCTAD’s Global agenda. MIDA’s concerted efforts must be geared Investment Prospects Assessment survey of top towards attracting high-quality, high-technology, prospective host economies and most attractive global and innovation-driven projects that will enhance FDI locations for the 2016-2018 period, coming in the investment ecosystem and drive momentous, 10th place, ahead of Hong Kong and Singapore. sustainable, and inclusive growth. As the Government The country’s ongoing efforts to diversify its industry introduces prudent fiscal management to enhance the – moving from labour intensive to high-value, nation’s fiscal flexibility, such projects will not only churn high-technology activities – are also paying off. In out innovative and creative products, and services but Bloomberg’s Innovation Index 2016, which celebrates will also unlock the nation’s potential for productivity. the 50 most innovative economies, Malaysia featured in Building Investors’ Trust in Shaping the Nation www.mida.gov.my 6 STAYING AHEAD ANNUAL REPORT 2016: GEARING FOR STRATEGIC GROWTH 7 Introduction The assiduous efforts of MIDA officers in courting winning projects to grace the nation’s shores are recounted in this Annual Report. Earmarked as a reference point for other Investment Promotion Agencies (IPAs) within and outside Malaysia, the agency works closely with other IPAs and Regional Corridors (RCs) to facilitate potential investors’ requests. MIDA also traversed the globe, participating in trade and investment missions across Singapore, Thailand, New Zealand, India and Sri Lanka, China, Iran, and Germany. These initiatives, alongside the other outreach programmes undertaken by MIDA, will pave the way in entrenching direct engagement with the private sector and relevant stakeholders. Activities within the ASEAN in search of key hubs continue to rise. As more MNCs come forth to adopt Malaysia’s Principal Hub (PH) model and its attractive incentives, Malaysia is set to become a regional and global operations base for multinational companies. The growth of approved investments in global establishments increased by an astounding 72 per cent in 2016, creating 1,982 high-value jobs. This attests to the fact that MIDA is pushing all the right buttons, despite facing stiff competition offered by neighbouring countries within ASEAN. The quest for quality investment projects does not end at foreign sources; domestic investments continue to spearhead private investments and play the leading role in ensuring Malaysia’s long-term growth. To this end, MIDA remains committed to promoting domestic investments by championing the development of supply chains between local companies, including SMEs, with MNCs and large corporations via intensified 27 September 2016 - MIDA officials at a dialogue session with "German Business Leaders" in Berlin, Germany programmes, aimed at facilitating strategic linkages between both sides. efficient markets. “Located in the heart of ASEAN, Malaysia is a regional economic powerhouse Riding the growth momentum in pursuit of quality The days ahead will be packed with numerous investments via local and foreign sources will attain macroeconomic challenges which may impact global capable of offering MNCs and investors unique access to a steady stream success only if companies remain focused on increasing FDI activity such as volatile exchange rates, lower productivity across the entire value chain by upgrading commodity prices, and debt concerns in emerging of talent, a modern business ecosystem, world-class infrastructure and their workforce, harnessing new technologies, and markets. However, with an established, continuous and connectivity, and competitive cost advantages and incentive packages.“ investing in innovation. By doing so, corporations can targeted approach to improve the resilience of the galvanise the overall ecosystem, thereby strengthening Malaysian economy, MIDA aims to stay ahead of the Malaysia’s long-term economic agenda. The upscaling investment gateways’ amazing race. of business practices and investment in innovation is fast becoming as important as infrastructure, skills and Building Investors’ Trust in Shaping the Nation www.mida.gov.my 8 ANNUAL REPORT 2016: GEARING FOR STRATEGIC GROWTH 9 Chairman’s Statement TAN SRI AMIRSHAM A. AZIZ Chairman, MIDA MIDA celebrates 50 years of taking root as the strategic partner to businesses, investors and stakeholders in Malaysia and globally in the year 2017. Looking back, the birth of MIDA in 1967 can be traced to the government’s response to the World GEARING FOR Bank's suggestion in their report entitled, 'Economic Aspects of Malaysia' in 1963, for an investment agency to be set-up to develop the nation’s industries. Zipping STRATEGIC GROWTH through times of export-driven and heavy industries in the 80s to promoting high- Tan Sri Amirsham A. Aziz, Chairman of MIDA, evaluates Malaysia’s resilient technology, capital-intensive industries and quality investments in the current economy and the opportunities for strategic growth millennium era, MIDA’s steadfast promotion and facilitation of investments over the past five decades