Penang expects RM5b investments for 2021, eyes a busy second half of 2022

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Lee said once the effects of the Covid-19 pandemic have settled down and borders are open, even partially, the investment community will be busy. — Picture by Sayuti Zainudin
Lee said once the effects of the Covid-19 pandemic have settled down and borders are open, even partially, the investment community will be busy. — Picture by Sayuti Zainudin

GEORGE TOWN, June 18 — Penang is hoping to record total investments of RM5 billion for 2021 after its outstanding investment performances in the last two years, according to Invest Penang.

Invest Penang Executive Director Datuk Seri Lee Kah Choon said Penang recorded a total investment of RM14.1 billion in 2020 and a record high RM16.9 billion in 2019.

For the first quarter of this year, Penang has already recorded RM1.1 billion in approved manufacturing investments that were derived from 40 projects.

Citing figures from the Malaysian Investment Development Authority (Mida), Lee said 52 per cent of the investments came from domestic direct investments while the remaining 48 per cent were contributed by foreign direct investments.

“This year is a year of consolidation for the manufacturing industry and this is usually what happened after one to two years of investment growth,” he said, referring to high investments over the last two years.

The Special Investment Advisor to the Chief Minister of Penang said the state is confident that it can achieve the RM5 billion investment target this year as they are now in discussions with a few interested investors.

“We are hopeful that we will be able to clinch them this year,” he said.

He said the consolidation stage this year will likely extend up to the first half of 2022 before investment growth picks up in the second half of 2022.

“There are going to be a lot of pent-up demand due to the pandemic as there were slowdowns in the roll-out of new technologies in 5G and artificial intelligence,” he said.

He said once the effects of the Covid-19 pandemic have settled down and borders are open, even partially, the investment community will be busy.

Lee said Penang has garnered multiple strategic projects over the past two years and these investments are expected to create supply chain opportunities for homegrown companies and small-medium enterprises.

He said these investors could also potentially attract their existing supply chains to consider investing in Penang.

Penang is also playing a substantial role in driving the country’s exports where it recorded RM84.9 billion of exports in the first quarter of 2021 which is a 22 per cent increase year-on-year, he said.

“Penang is the top contributor of the country’s exports with a 30 per cent share,” he said.

He added that Penang also generated RM28.2 billion of trade surplus during the same period that represented 48 per cent of Malaysia’s total.

Lee said Penang is a global hub for the electrical and electronics (E&E) sector but its manufacturing sector is also evolving with E&E at its core.

“We are expanding our supply chain, we have products that are electronically based and evolving into medical devices, machinery and equipment, we are evolving in all sorts of directions instead of remaining in only the E&E,” he said.

He said this will allow the state to continue to expand its manufacturing sector and attract more investments into the state.

Therefore, he said the state, being the second smallest state in the country, has to seek solutions to ensure there is an adequate supply of industrial lands in high-tech industrial parks for investors.

“With the emerging trend of industrial automation and digitalization, Penang is expediting the review of land utilisation to maximize its productivity,” he said.

He said the state will also continue to propel its global business services (GBS) activities as it is an industry that is well-positioned with great potential.

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