THE STAR, TUESDAY 1 DECEMBER 2015

special

INVEST MALAYSIA

Vision for a vibrant future

2 invest malaysiaTHE STAR, TUESDAY 1 DECEMBER 2015

Total: RM113.5bil

ServicesRM61.7bil(54.4%)

ManufacturingRM49.5bil

(43.6%)

PrimaryRM2.3bil

(2%)

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

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).

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 high-income 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

ensure sustainable fiscal positionsThen 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 multi-year 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.

Regional advancementTHE 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 three-pillar ideal that seeks to deepen regional integration.

The pillars are the Asean Political and Security Community, Asean Economic Community and Asean Socio-Cultural 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.

Focus on growthAzman 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 knowledge-intensive 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

On track with clear goals

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.

3THE STAR, TUESDAY 1 DECEMBER 2015

ECER: YOUR EASTERN INVESTMENT GATEWAY

ADVERTORIAL

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 non-engineering 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.

The 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

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

reasons to invest in ECER10

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

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.

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.

Competitive wage rates.

ECERDC, together with MIDA and MITI to facilitate incentives application for approval.

4 invest malaysiaTHE STAR, TUESDAY 1 DECEMBER 2015

Port grows to meet demandKUANTAN 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 competitive-minded environment have driven Kuantan Port to more competent day-to-day operations.

Looking to the futureKuantan 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

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

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 alwaysKuantan Port adheres to

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

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.

Attracting more investment

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.

n For more information, visit www.kuantanport.com.my

Many investment dollars are going into upgrading and modernising Kuantan Ports infrastructure.

Datuk Ir Khasbullah A. Kadir

Diversifying actions> FROM PAGE 2In 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

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 billion-ringgit 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

The subsectors for manufacturing and services sectors targeted by Malaysian Investment Development Authority for the near future.

Manufacturing Services

Focus on 3+2 catalyticsubsectors: Chemicals Electrical and electronics Machinery and equipment

High growth potentialindustries: Medical devices Aerospace

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

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.

Kuantan Port aims to accommodate bigger ships in the hope of becoming a regional transhipment hub.

5THE STAR, TUESDAY 1 DECEMBER 2015

6 invest malaysiaTHE STAR, TUESDAY 1 DECEMBER 2015

GambangKuantan

Pekan

KertihPahang

KelantanTerengganu

Gua Musang

Bukit Bunga

Jeli

Rantau Panjang

Tumpat Kota Baru

BachokTok Bali

Besut

Kuala Lipis

Kuala Berang

Kuala Terengganu

Dungun

BandarMuadzam

Shah

Bandar Tun Abdul Razak

Pulau Tioman

Mersing

Rompin

Endau

Raub

Bentong

Mersing

Node 3 : KTCC - Kenyir - Dungun Triangle

Node 2 : Cross-border development

Node 1 : ECER Special Economic Zone (ECER SEZ)

Node 4 :Mersing -Rompin KDA

Node 7 :DARA - Jengka KDA

Node 6 :Bentong - Raub KDA

Node 5 :Gua Musang - Kuala Lipis KDA

1. Approved allocation(government investment)

2. Implementation of projects and programmes 3. Achievements

9thMalaysiaPlan

67projects All projectscompleted

RM1.4bil

10thMalaysiaPlan

Total RM6bil

46projects

26 projectscompleted

20 projectsat variousstages

RM4.6bil92,313

jobs

Publicinvestment

RM6bil

Privateinvestment

RM84bil

Ratio of public investmentto private investment

1:14

ECER exceeds targets this yearTHE 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 investmentsIn 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

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

petrochemicals (RM5.2bil).

The right balanceAlthough 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

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

ECER: Public and private investments (2007-November 2015).

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

continue to attract investors with their strategic and competitive advantages. These include: l Malaysia-China Kuantan Industrial Parkl Pekan Automotive Parkl Kertih Biopolymer Parkl Kuantan Integrated Bioparkl Gambang Halal Industries Parkl 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

Manufacturing 8.46bilBioeconomy 1.73bilServices 826bilOil and gas 509milAgriculture 420milTourism 253milConstruction 212milEducation 96milLogistics 10mil

67.6%

13.8%

6.6%%

4.1%

3.4%2% 1.7%

0.8%

0.1% Sector

Total 12.5bil

Investment(RM)

THE STAR, TUESDAY 1 DECEMBER 2015

invest malaysia 7

Human capital an assetTHE 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.

Exodus of talentAccording 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 foreign-educated 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

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 rightMore 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

Making strides

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

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.

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.

8 invest malaysiaTHE STAR, TUESDAY 1 DECEMBER 2015

Malaysia as global halal hubMALAYSIA 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 halal-related 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 parksHalal 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

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

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 horizonTo 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 Halmas-designated halal parks is one of the key components in realising the vision of Malaysia being a global halal hub, says Jamil.

The Halmas advantageTHE 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 yearsl 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 yearsl 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 servicesl A workforce consisting of

a sizable number of knowledge workers and subject matter experts in the halal industryl At least two halal

compliance officers who are constantly involved in the processing of halal food, products and servicesl Companies involved in

the slaughtering of animals must be in possession of the halal Malaysia and halal Slaughterman Certificationl Provide technology

transfer and/or contribute towards the development of the Halal industryl Dedicated location and

formulation of a separate legal entityl Premises located within

the designated Halmas-accredited halal parks

Datuk Seri Jamal says the halal parks will improve the economic performance of participating companies.

The growing halal industry is supported by biotechnology research in scientific and halal laboratories and consecutive

development of imperative findings.

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.

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