Penang attracted a resilient RM1.5billion of approved manufacturing investment in Jul-Sep 2020, with a remarkable 73% of the total amount contributed by DDI. Meanwhile, Penang’s cumulative manufacturing inflows in Jan-Sep 2020 stood at RM10.6 billion, of which 83% of the amount was contributed by FDI, making Penang the second highest contributor in approved manufacturing FDI during the period.
Penang, November 19, 2020 – Penang’s performance in the approved manufacturing investment has well proven the State’s ability to endure hardships. Against the backdrop of having numerous restrictions in place due to the pandemic, Penang managed to garner RM1.5 billion of approved manufacturing investment in Jul-Sep 2020 (3Q20).
According to data from the Malaysian Investment Development Authority (MIDA), Penang notched up 47 projects in 3Q20, which, together with projects approved in the first half of 2020, are expected to generate 9,137 new employment opportunities in the State. In 3Q20, domestic direct investments (DDI) accounted for RM1.1billion or 73% of Penang’s manufacturing investment inflows, while the remaining 27% or RM401.9million came from foreign direct investments (FDI).
3Q20’s inflows brought the total approved manufacturing investments for the first nine months of 2020 (9M20) to RM10.6 billion (year-on-year: -20%). Notably, 83% of Penang’s 9M20 approved manufacturing investment was contributed by FDI, making Penang the second highest FDI contributor to Malaysia and representing 22% of the country’s total. Encouragingly, DDI in Penang spiked 42% year-on-year and reached RM1.8billion in 9M20 with eminent projects from Federal Oats Mills, Iconic Medicare, Straits Orthopaedics and Vitrox Technologies.
Penang’s total approved manufacturing investments were dominated by its key promoted industries, comprised of Machinery & Equipment, Scientific & Measuring Equipment (which includes medical devices) and Electronics & Electrical industries. The joint amount constituted 88% of Penang’s total approved manufacturing investments in 9M20. Markedly, Penang contributed 60% of Malaysia’s collective investments from these three industries.
The Chief Minister of Penang, Right Honorable Mr. Chow Kon Yeow expressed his satisfaction at the State’s investment performance. “As I have stressed previously, investment inflows would be moderated in the second half of 2020, in light of the challenges arising from the COVID-19 pandemic. Having said that, I am pleased to see that Penang’s approved manufacturing investment managed to surpass the RM10billion mark in the first nine months of 2020, capturing 63% of 2019’s full year amount and way above 2018’s full year performance of RM5.8billion. I am glad that Penang’s captivating and strong aspects in its ecosystem, continue to render the State as a preferred investment destination for both domestic and foreign investors. Notably, Penang’s approved manufacturing investment for the third quarter of 2020 was primarily contributed by DDI, signifying that our robust industrial ecosystem offered a competent platform for the local players to participate and thrive.”
“I wish to convey the State’s appreciation to the investors who have put their trust in Penang. In addition, I would like to thank state agencies, InvestPenang and Penang Development Corporation (PDC) for their tremendous tenacity and hardwork in engaging investors and facilitating project implementations under this new norm. Penang would not be able to achieve its position today had it not been for the concerted effort from all,” Chow adds.
Looking ahead, repercussions of the pandemic still persist. Given the third wave we are currently experiencing, coupled with the implementation of Conditional MCO, Penang’s investment performance for 2020 beyond doubt, will not be able to match 2019’s all-time-high of RM16.9 billion. However, with strong synergy between the State government and federal agencies, especially MIDA, and the recent investment incentives announced in the Budget 2021*, Penang can ride out these uncertain times.
The Penang state government will continue to strive our very best to ensure that Penang remains the “Silicon Valley of the East”. We look forward to a vibrant 2021, where businesses or investment decisions are no longer impeded by the effects of this pandemic.
Note: * At the time of writing, Budget 2021 has yet to be passed by the Parliament
InvestPenang is the Penang State Government’s principal agency for promotion of investment. Its objectives are to develop and sustain Penang’s economy by enhancing and continuously injecting business activities in the State through foreign and local investments, including the spawning of viable new growth centres. To support the realization of its objectives, InvestPenang also runs initiatives like SMART Centre (to assist SMEs), Penang CAT Centre (to assist talents) and @CAT Penang (to assist start-ups).
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Yeoh Bit Kun/ Ooi Phei Wen