Mary posted on March 10, 2011 21:31
Kuala Lumpur, 8 March 2011 – The Prime Minister of Malaysia, Dato’ Sri Najib Tun Razak, today said that the RM83 billion investment target for 2011 is likely to be achieved.
According to Najib, the investment from Entry Point Projects of the Economic Transformation Programme (ETP) is expected to generate about RM76 billion in 2011.
In addition, an annual exercise to determine the investment commitment of both local and foreign companies, over and above those from the Entry Point Projects, took place for the first time in the fourth quarter of 2010. 30 per cent of 5,835 companies surveyed indicated that they are committed to invest a total of about RM50.6 billion this year. This initiative is under the auspices of the Joint Investment Committee co-chaired by the Ministry of International Trade and Industry, and PEMANDU.
“Consolidated, the upside of our total potential investment is RM127 billion. This high level of investment commitment indicates that Malaysia offers a conducive investment ecosystem that encourages the private sector to invest,” said Najib.
He cautioned that while these potential investments are planned for 2011, not all of them may be realised. However, given the high upside of the planned investment, he is confident that the RM83 billion investment target for 2011 is within reach.
Najib said this before announcing nine new projects and recapping 14 others from eight National Key Economic Areas at the fourth ETP progress update. Combined, these 23 projects produce RM14.75 billion in investment, RM20.1 billion in GNI and 88,354 in incremental jobs.
The nine new projects are as follows:
Tourism NKEA
Globalports Sdn Bhd, Bina Puri Properties Sdn Bhd and Marina Sanctuary Resort Sdn Bhd will work together as a Consortium to spearhead the development of the new 110 Acres Marina Island Pangkor 2nd International Resort & Entertainment Island.This RM600 million investment will support the Straits Riviera initiative to develop a nascent cruise line industry in Malaysia. It is expected to have a GNI impact of RM9 billion by 2020.
Healthcare NKEA
General Electric Malaysia, in conjunction with local partners including REDtone International, is investing in a teleradiology hub. By linking public and private sector radiologists in Malaysia on a teleradiology grid, this hub will serve to redistribute reporting workload in Malaysia and build capacity which will generate GNI by in-sourcing teleradiology services from overseas. This project is expected to have a GNI contribution of RM540 million and create 1,585 jobs by 2020.
Agriculture NKEA
The Agriculture NKEA’s initiative is to scale up and strengthen production of paddy farming in the Muda Area. Hence, the Muda Agriculture Development Authority (MADA) will invest RM99.6 million this year to intensify irrigation in the region as well as incentivise smallholders to lease their land or agree to be managed on a profit-sharing basis by larger operators. Farmer income is expected to increase between 30 to 50 per cent by 2020, with a GNI contribution of RM1 billion.
In addition, the Malaysian Agricultural Research and Development Institute (MARDI) has developed two specialty fragrant rice varieties, which share many characteristics with foreign fragrant rice. A total investment of RM26.6 million is expected from the public-private partnership between MARDI and Infoculture Sdn Bhd to introduce fragrant rice cultivation in non-granary areas and market them as specialty fragrant and organic rice respectively. This initiative will have a GNI impact of RM133 million by 2020.
Palm Oil and Rubber NKEA
The Emery Oleochemicals Group will invest RM416.2 million in three sub-projects to produce bio-lubricants and green polymer additives as well as surfactants for home and personal wellness products. It will contribute RM155 million in GNI in 2020, and create 86 new positions. Emery Oleochemicals is a 50:50 joint venture between Sime Darby Plantation and PTT Chemical International, a wholly-owned subsidiary and international investment arm of PTT Chemicals PCL of Thailand.
Electronics and Electrical NKEA
Through a collaboration with the Northern Corridor Implementation Authority (NCIA), QAV Technologies Sdn Bhd will invest RM12 million to develop a light emitting diode and solid state lighting certification centre. This facility, which is the first outside the USA, will be able to perform certified testing per American National Standards Institute (ANSI) certification, will verify the compliance of Malaysian products to global standards. It is expected to attract customers from Malaysia, other parts of Asia, the US and Europe, and produce a GNI impact of RM510 million by 2020.
Oil, Gas and Energy NKEA
RG Gas and Chemicals Sdn Bhd is set to invest RM1 billion over three years in an integrated oil and gas hub on Pulau Daat, Labuan. This hub will provide land-based logistics and support services, and is expected to have a GNI impact of RM360 million for the first phase of its operations.
On the energy efficiency front, Faber Group Bhd will spearhead the pilot trial for the Energy Performance Management System (EPMS) and has commenced energy audits at five public hospitals to ensure efficient use of energy. This project is estimated to result in RM18 million of savings by 2020.
On renewable energy, Cypark Resources Bhd is investing RM94.29 million renewable energy park on a 26-hectare remediated landfill site in Pajam, Nilai. Comprising a 2 MW biogas plant and an 8 MW solar power facility, the renewable energy park is expected to generate RM12.16 million in GNI in 2020.
The success of this pilot project could catalyse similar projects in 31 other landfill sites in Peninsular Malaysia. Local authorities where the landfills are situated will be able to capitalise this new source of income and are required to do so on open tender basis.
The 14 projects unveiled since the third ETP update are as follows:
Tourism NKEA
AirAsia X will invest RM1.86 billion to purchase three A330-200 aircrafts that will support services to 10 priority cities. Total GNI contribution will be approximately RM560 million per annum.
Palm Oil and Rubber NKEA
RM297 million has been allocated to accelerate the replanting of oil palms, replacing mature low-yielding oil palms with new high-yielding trees, among smallholders. Led by the Malaysian Palm Oil Board (MPOB), this move will significantly increase output in the future and ensure Malaysia continues to be a global leader in palm oil production. This exercise supplements similar initiatives by the large plantations.
Correspondingly, the Malaysian Palm Oil Board (MPOB) has hired 70 additional Tunjuk Ajar dan Nasihat (TUNAS) officers, with an additional 30 officers expected to report for duty in April. These officers will work to cluster independent smallholders into cooperatives and ensure best practices to increase yield while lowering production costs. In 2010, four cooperatives were formed, covering an area of 17,076 hectares. MPOB targets to form 11 cooperatives covering 107,312 hectares of land this year.
Furthermore, palm oil mills will be ranked based on oil extraction rate (OER) performance and source of supply, and a maximum of five mills within a 50 km radius will be grouped into clusters. This programme aims to increase the OER to 23 percent by 2020, up from the 20.5 per cent currently.
Palm oil mill effluent waste is treated before discharge and a valuable by-product from this process is the production of methane gas that can be captured to generate electricity. In this respect, Felda Global Bhd will invest RM100 million this year in 10 biogas facilities at its mills to generate electricity for Felda’s use and supply to the national grid under the Very Small Renewable Energy Programme (VSREP). It will have a GNI impact of RM182 million in 2011, creating 260 jobs in the process. An additional RM347 million will invested in 39 facilities to be completed by 2015, adding a further 1,014 jobs.
The Malaysian Rubber Board has entered into agreements with Felda Rubber Industries Sdn Bhd and Mardec Bhd on technology transfer and commercialisation of two new generation latex-grade specialty rubber, namely Ekoprena and Pureprena. The investment of RM140 million will supply to eco-friendly green tyre manufacturing, and is expected to create 2,000 jobs and a GNI impact of RM1.3 billion by 2020.
Electronics and Electrical NKEA
Philips Lumileds Lighting is setting up a new LED manufacturing facility in Bayan Lepas, Penang. This facility, which will be the first in Malaysia to be designed with 100 per cent LED lighting, will also include a research and development centre and a design centre to help Malaysia grow its competency in advanced manufacturing and position the company for growth in LED lighting. It will provide incremental employment opportunities for 300 skilled workers by 2020.
Communications Content and Infrastructure NKEA
Telekom Malaysia will invest RM418.5 million to lay a state-of-the-art cable system linking Malaysia with Japan and Hong Kong, as well as connecting seamlessly with other trans-Pacific cable systems. This project is in collaboration with NTT Communications Corporation.
Telekom Malaysia will also collaborate with PT XL Axiata Tbk and PT Mora Telematika to deploy an upgradable, future-proof cable system connecting Melaka-Batam and Melaka-Dumai. An investment of RM22.8 million will ensure that there is sufficient cable capacity to cater to the region’s fast-growing data needs.
The Mayor of Kuala Lumpur has recently announced that business operators are required to offer wireless internet facilities as a condition of license renewal. The proliferation of WiFi will improve business for these operators while helping Greater Kuala Lumpur achieve its connectivity targets.
Wholesale and Retail NKEA
Retail chain stores namely Mydin, Carrefour and Tesco, will collaborate with the Ministry of Domestic Trade, Cooperatives and Consumerism, and invest RM5.43 billion over the next 10 years in the Transformasi Kedai Runcit (TUKAR) project. The objective of this project is to modernise the traditional retail shop to increase their level of competitiveness. A pilot project has indicated an improvement of up to 30 per cent in sales. This Entry Point Project under the Wholesale and Retail NKEA is expected to generate a GNI contribution of approximately RM5.56 billion by 2020.
Oil, Gas and Energy NKEA
Under the marginal field development initiative, Petronas has awarded a risk service contract for its Berantai field to Petrofac Energy Developments Sdn Bhd, Kencana Energy Sdn Bhd and Sapura Energy Ventures Sdn Bhd. The partners expect to invest around RM2.56 billion in the development and hope to produce the first gas by December 2011.
Muhibbah Engineering (M) Bhd, in a consortium with Perunding Ranhill Worley Sdn Bhd, have been awarded a RM1.07 billion contract by Petronas Gas Bhd to construct a liquefied natural gas (LNG) import terminal off the coast of Malacca.
Petronas' strategy to intensify exploration activities in Malaysia has begun to bear results. Petronas has made significant discoveries after commencing drilling works at NC3 and Spaoh-1 wells in Blocks SK316 and SK306 respectively, offshore Sarawak. Based on preliminary evaluation, these discoveries hold an estimated 100 million stock tank barrels of oil-in-place and 2.8 trillion standard cubic feet of gas-in-place.
“These projects are proof points that the ETP remains in high gear. More importantly, it now has a visible catalytic effect on the economy as seen from the committed investment as well as expected rise in real income. The ETP roadmap has put us on the right path but the journey has just begun. We must remain focused and continue this discipline of action to ensure this momentum is not easily reversed even in the face of global economic uncertainties,” said Najib.