GEORGE TOWN (Jan 28): Four major investments with an initial combined funds of about RM5 billion in the manufacturing sector and a growing outsourcing and services industry are expected to cushion the impact of less-than-ideal external economic factors on the state this year.
 
Speaking to reporters at the Penang economic briefing for 2015, investPenang director Datuk Lee Kah Choon said the four multinational corporations (MNCs), in the midst of finalising approvals with the authorities, are expected to set base in the state by the end of this year.
 
“The investment horizon is very good for Penang because of these four investors which will also create about 2,000 jobs for engineers, clerical and ground staff.
 
“Two [of the MNCs] have already sourced for factories and are hiring workers,” he said.
 
He declined to name the investors, only saying they are listed companies from China, Europe and US and are electronics and electrical (E&E)-based MNCs.
 
He said though the world economy was slow due to low crude oil prices, which is impacting Malaysia and weakened the ringgit, Penang is somewhat ‘shielded’ from the external forces so far.
 
Between 2008 and 2013, Penang ranked the top capital investment receivers with an average of 13% in Malaysia, Lee said, adding that between January and September last year, a total of RM6 billion was recorded.
 
He expected the figure for capital investment in 2014 which was made up of RM2.7 billion from domestic investors and RM3.3 billion from foreign investors, to exceed the record of about RM4 billion in 2013.
 
He added that property investment in the Bayan Baru area in terms of office rentals and purchases could also contribute about RM700 million to the state's economy as a result the RM11.3 billion Business Processing Outsourcing (BPO) Hub in the next few years.
 
Lee said the investments particularly in the services sectors would expand on the back of a slowly shrinking manufacturing sector before the latter stabilises in the next few years.
 
“The manufacturing sector is very important to Penang but it will slow down. We believe it will stabilise in future. When we expand the services sector, a large portion of it is in support of manufacturing,” he said.
 
While the manufacturing sector accounted for 48% of the total output of RM55 billion in 2013, the services sector followed closely at 47%, he said.
 
The balance of economic activity showed a clear shift towards the services sector from 41% in 2005 to a predicted 48.6% (manufacturing 47.4%) of an estimated RM60.6 billion output this year, Lee added.
 
The state is also expecting more global shared-services such as Citigroup Transaction Services Malaysia, Wilmar International Ltd, Air Asia Berhad, First Solar Global Service and IHS Inc to locate here, he said.