“We’ll continue to ramp up our efforts in positioning local companies as the primary driver of economic growth.”

DATUK SERI MUSTAPA MOHAMED, International Trade and Industry Minister

INVESTMENTS in the manufacturing, services and primary sectors for the first three quarters fell by 26.5 per cent to RM113.5 billion, compared with a year ago.

The services sector recorded a 37.6 per cent drop while the manufacturing sector saw a 15.5 per cent decline in the first nine months of the year.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said while the high base effect due to the Pengerang and Rapid projects in Johor was a factor behind the decline, the lower approved investments could also be attributed to cooling measures in the property market.

Global investment flows also softened during the year.

“Notwithstanding the increasing level of competition, especially with the lower cost of production offered by neighbouring countries such as Vietnam and Thailand, our manufacturing sector continues to attract substantial levels of investment.”

A total of 464 manufacturing projects worth RM35 billion were approved between January and September, which could potentially create over 32,700 jobs.

Most of these investments were in petroleum products and petrochemicals (RM12.4 billion), electrical and electronics (E&E) (RM8.8 billion), chemicals and chemical products (RM2.7 billion), non-metallic minerals (RM2.5 billion) as well as scientific & measuring equipment (RM2.0 billion).

For the first nine months, investments involved 3,886 projects in manufacturing, services and primary sectors and were expected to create 91,500 jobs.

Domestic investments accounted for nearly 60 per cent of total approved investments for the sector.

Among domestic companies that continue to embark on new or expansion and diversification projects during the period are Petronas Floating LNG, Salutica Allied Solutions, Inari Technology, Sime Darby Biodiesel, Omni Oil Technologies, Saiyakaya and Kibaru Innovation.

The bulk of foreign direct investments was led by Switzerland, the Netherlands, Singapore, Hong Kong and Germany.

Mustapa said 70.4 per cent of foreign investments recorded in the manufacturing sector were expansion or diversification projects by existing investors, such as TF-AMD Micro-Electronics, Longi, Osram, and ASE Electronics Malaysia.

“These expansions should be welcomed as our focus now is on attracting quality investments. They send a strong signal of the continued confidence placed by foreign investors in Malaysia’s economic potential.”

He also noted the prevalent cautious sentiment among international investors due to global economic uncertainty.

“We’ll continue to ramp up our efforts in positioning local companies as the primary driver of our economic growth. “

Local companies contributed 73.5 per cent of the approved investments in the first nine months — in line with the government’s target of securing 73 per cent in domestic direct investment and 23 per cent in foreign direct investment by 2020.

Six principal hub projects valued at RM1.5 billion were approved in the third quarter after the completion of the policy review for this scheme in July.

“We expect more investments to be approved under this scheme,” said Mustapa.

On future investments, he said the Malaysian Investment Development Authority had 252 projects in the pipeline for the manufacturing and services sectors, with total proposed investment of RM10.5 billion.

The majority of these investments are in the machinery and metal products, chemicals, global establishment as well as green technology industries.

Some of these investments were expected to be approved in the next six months, he added.