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RENEWABLE ENERGY SYMPOSIUM SPEECH BY YBHG. DATO' N. RAJENDRAN DEPUTY CHIEF EXECUTIVE OFFICER MIDA
Tuesday 29/11/2016
Renewable Energy Symposium
Speech by
YBhg. Dato’ N. Rajendran
Deputy Chief Executive Officer MIDA
29 November 2016 (Tuesday), 8.30am, Renaissance Hotel, KL
Acknowledgements
H.E. Holger Michael
Ambassador of the Federal Republic of Germany
Mr Daniel Bernbeck
Executive Director of Malaysian-German Chamber of Commerce and Industry
Distinguished Guests
Ladies and Gentleman,
A very good morning. I would like to thank the Malaysian-German Chamber of Commerce and Industry (MGCC) for having me at the Renewable Energy Symposium today. This event provides an excellent opportunity for both Malaysian and German companies to explore smart partnerships and technological collaborations that would benefit both our countries.
Harnessing economic growth for sustainable and inclusive development is very important and a primary driver of such growth would be investments. In support of Malaysia’s aspiration to be a developed nation, the nation places emphasis on striking a balance between greening the economy and being pro-business. I believe this symposium will be beneficial for all of us in our efforts to achieve long term growth.
Ladies and Gentlemen,
The economic ties between Malaysia and Germany continue to remain strong and stable. Germany was Malaysia’s 12th largest trading partner globally, with total bilateral trade of RM43.03 billion in 2015. Among the European Union, Germany is our largest investor. As at August 2016, we have approved a total of 562 manufacturing projects with German participation. These investments, which totalled RM41.02 billion, have created more than 66,430 employment opportunities.
Germany’s investments in our manufacturing sector are strong in electrical and electronics, petroleum products including petrochemicals, chemicals and, scientific and measuring equipment. The sustained inflows of quality German investments into Malaysia, some incorporating the latest technology and high value added activities, are a reflection of Malaysia’s continued competitiveness for global businesses.
Malaysia is proud to host notable German companies such as Infineon, Osram, SGL Carbon, Continental, BASF, Elektrisola, B. Braun, Robert Bosch, Siemens, X-Fab, Jowat, Schmidt + Clemens, SEW Eurodrive and Mühlbauer to name a few which have chosen to establish their base in Malaysia.
The presence of German investors is also evident in the services sector in Malaysia. Among some renowned companies that have set up their global operations hub or regional establishments in Malaysia include B.Braun, Arvato, BMW, Lufthansa and Eppendorf.
German companies not only continue to invest in Malaysia, but more importantly, invest in quality projects, incorporating the latest technology and in high value added activities. Such investments are also in line with the Government’s promotional efforts to attract investments into these areas.
The sustained inflows of German investments into Malaysia are a reflection of the country’s continued competitiveness for businesses. The very fact that these companies continue to invest in Malaysia, even during such challenging times to the global economy, is noteworthy.
Ladies and Gentlemen,
The outlook for Malaysia’s economy remains favourable. Since 2009, Gross National Income has increased by nearly 50 percent, and 1.8 million jobs have been created. The OECD forecasts that Malaysia will sustain healthy growth -- far higher than the global average – over the next four years. The International Monetary Fund (IMF) team that visited Malaysia earlier this year commended us for making significant progress in strengthening the foundations for substantial economic growth and maintaining macroeconomic and financial stability.
In the 3rd Quarter of this year, our Gross Domestic Product (GDP) rose 4.3% year on year, surpassing the median estimate from economists of 4%. Being strategically located and economically resilient, as well as having strong global trade and investment ties, Malaysia has much to offer. We have an abundant supply of resources, a creative and talented workforce and a proven track record of an open and outward-looking business environment.
With our strong economic fundamentals, Malaysia continues to attract foreign direct investments. In 2015, we have approved a total of RM36.14 billion of foreign investments in the manufacturing, services and primary sectors. I am pleased to share that for the first half of this year, our approved foreign investments have already reached 78% of the total foreign investments approved for the whole of last year. We expect the figures to increase even more towards the end of 2016.
Ladies and Gentlemen,
Rapid technological advancements have seen various disruptions to existing industry structures as well as create new pathways for growth. Given the speed of change today, clearly there is a need for global companies to position themselves well. There is therefore much scope for German investments to expand in Malaysia, particularly to capitalize on the innovative capability of German businesses.
I am aware that Germany currently spends 2.6% of its GDP on R&D, higher than the EU average, and going forward, this spending is expected to increase. Just as Germany’s Industry 4.0 initiative is aimed at elevating the country’s position as one of the leading nations in high value and emerging technologies, Malaysia is also moving towards becoming an innovation economy – driven by knowledge and technology. Malaysia has been developing its capabilities to adapt quickly and embrace smart technologies and processes.
Our country is not only home to many of the world’s largest and most successful multi-national corporations, but it has also incubated home-grown stars such as Globetronics, Inari, Unisem and Vitrox. These domestic players have moved up the value chain by intensifying their R&D activities, and also through technology diffusion between them and their global partners. The upcoming breed of local players is more than capable of meeting the stringent demands of original equipment manufacturers (OEMs) and the international markets.
While Germany’s large multinational companies are already well established in Malaysia, there are still more business opportunities available for Germany’s midsized manufacturers or also known collectively as Mittelstand. I understand that some 1,300 world market leaders from the German Mittlestand have successfully found niches for their products.
Studies show that no other country has as many mid-sized global market leaders as Germany. Malaysia`s small and medium enterprises can surely learn much from these mid-sized global market leaders – especially in terms of their entrepreneurial spirit, competitive strategies, and adaptation of innovation to become world leaders in advanced technology.
Ladies and Gentlemen,
Germany has always been a strategic partner for Malaysia, and our engagement with Germany has been good. The principal economic accords between the two countries include the agreement on Investment Promotion and Protection (1960), the Air Transport Agreement (1968), the Double Taxation Agreement (2010) and, at regional level, the Cooperation Agreement between the European Community and ASEAN (1980).
Just two months ago, our Prime Minister led a delegation to Germany to promote bilateral ties, and was given a red-carpet welcome by the German Chancellor Dr Angela Merkel. It was fruitful exchange of ideas, views and plans between Germany and Malaysia both politically and economically. Taking into consideration all the valuable meetings and exchanges with German business leaders, a further strengthening of German-Malaysian business ties can be expected.
Malaysia and the European Commission have also had preliminary discussions to take stock on the possibility of restarting the Malaysia-EU Free Trade Agreement (MEUFTA) negotiations by the end of 2016. The MEUFTA will deepen cooperation between EU Member States and Malaysia and provide economic benefits for both sides. We look forward to Germany’s continued support for the relaunch of the negotiations.
Malaysia has been a strong supporter of Malaysia-German platforms for partnership-based dialogues such as today’s event. Realising the significance and potential of Malaysian-German business ties as early as four decades ago, MIDA set up its first overseas office in Dusseldorf, Germany in 1972 to facilitate German investments to Malaysian. Nine years later, in 1981, the Malaysian-German Industrial Cooperation Programme (MGICP) was introduced in Malaysia. Under this programme, a German investment advisor was stationed at MIDA to promote German investments into the country.
Currently MIDA has two offices in Germany, namely Frankfurt and Munich. We continue to engage actively with the business community seeking to make Malaysia their preferred investment destination.
I would like to also take this opportunity to highlight that Kuala Lumpur will be hosting the upcoming 16th Asia-Pacific Conference of German Business (APK) in 2018. It will be our second time hosting APK since the 8th round in 2000. This will open more doors for the German business community to capitalise on investment opportunities within the country and beyond.
Ladies and Gentlemen,
We are certainly looking forward to more investments in new growth areas, particularly in the energy sector. We welcome more opportunities for Malaysian companies to work with German technology providers and experts. This will contribute to the development of local industries towards a sustainable ecosystem in the country.
I trust that everyone will leave this Symposium inspired and armed with fresh ideas to prepare for the challenges and expectations in ensuring your long term business growth.
Thank you.
SOURCE: Malaysian Investment Development Authority (MIDA)
FOR MORE INFORMATION, PLEASE CONTACT:
Name : Khairul Amir Alais
Information and Communications Division
Malaysian Investment Development Authority
Tel: 03-2267 3505
Fax: 03-2274 8470
Email : khairulamir@mida.gov.my
Website: www.mida.gov.my
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