OVR Photo Shoot (18/04/12)

Mida's Touch for Penang Industries

IN 1969, the Penang Development Corporation (PDC) was established to drive economic growth, urban renewal and development of new townships. The main policies of the early 1970s centred around the establishment and development of free trade zones (FTZs) – the first of which was operationalised in 1972 in Bayan Lepas on the southern side of Penang island. The pioneer investors also played a major part in nurturing the skilled workforce they needed.

In 1989, the PSDC (Penang Skills Development Centre), the first industry-led skills training centre, was set up within the free industrial zones. The PSDC’s tripartite model brings together the best of industry, academia, and government, both state and Federal. This unique model pools resources and management expertise and allows the PSDC to provide invaluable advice and guidance on the latest industrial technological progress, along with up-to-date training and educational programs.

Since 1990, under the leadership of former Chief Minister Tan Sri Dr Koh Tsu Koon, the PSDC increased its floor space from 5,000sq ft in 1990 to 300,000sq ft by 2008 on the basis of Federal funding, donations and generated revenues. The Malaysian Investment Development Authority’s (Mida) efforts in the early years, in collaboration with the state government, specifically the PDC, brought globally renowned corporations to Penang’s shores and changed the state’s industrial landscape.

It took quite a convincing by Mida officials to get the corporate giants of the world to give Penang a serious look. These giants have transformed the largely agrarian landscape to a hub for making the most sophisticated products. Among the pioneering MNCs that took the risk of converting the paddy fields in Bayan Lepas into high-tech industrial enclaves were industry leaders such as Intel, National Semiconductor, HP, Clarion, AMD, Bosch and Litronix. The presence of these MNCs has also stimulated the development of local supporting industries such as Pentamaster, Globetronics and Vitrox.

With the rise of local vendors in areas such as equipment making, metal stamping, plastics injection moulding and precision engineering, more foreign companies are attracted to Penang to tap into the supply chain and ecosystem. Industrial development has not only contributed to the socio–economic growth of the island but has also led to the development of industrial areas in Kulim and Sungai Petani. The emergence and excellent performance of the local SMI Cluster in Penang and neighbouring industrial areas in Sungai Petani, Kulim and Kamunting constitute a major attraction for new and existing investors to come to Penang and its vicinity. Also, Bayan Lepas was designated the first MSC Cyber City outside Cyberjaya in 2005, reflecting Penang’s stellar performance as a technological hub.

Mida continues to aggressively promote investments into Penang, both from new and existing, domestic as well as foreign investors. However, in line with the aspiration of the Economic Transformation Programme, the targeted activities have now shifted from manufacturing and assembly activities to more integrated investments, high knowledge, value-added and high technology industries, including the services sector. This focus is now showing results. More and more companies in Penang are undertaking global corporate functions and shared services such as R&D centres, operational headquarters, supply chain, distribution and fulfillment centers and treasury management.

Many of the big names that came to Penang over the last 40 years are still around. But their operations in recent times are totally different from their original investments. This development benefits the local workforce and local companies. The establishment of global R&D functions with new product introduction (NPI) functions within the industries in Penang has paved the way for the transfer of technology from parent companies to the local workforce. The companies, especially the MNCs, also continue to play a major role in nurturing and developing local capabilities by establishing smart partnerships with universities and other institutions of higher learning.

These companies also have assisted the higher learning institutions to develop curricula that address the industries’ skills requirements. As more responsibilities of R&D and NPI are given to the locally incorporated MNCs, Mida has encouraged these companies to create opportunities for local vendors via technical collaboration programs.

In the electronics sector, complementing the technology companies, local electronic manufacturing service (EMS) providers are also involved in the design, development and manufacture of industrial electronic products. These local companies have the potential to grow into major global players. The combination of the Federal and state governments’ investments in a robust ecosystem, especially in the E&E sector, over more than four decades and the strategic foresight of the likes of Andy Grove, the co-founder of Intel Corporation, and the promotional efforts of agencies such as Mida have enabled Penang to become a major node in the global supply chain.

The solid ecosystem will enable Penang to sustain the momentum of attracting investments, both domestic and foreign. With the launch of the Northern Corridor Economic Region blueprint, further impetus is provided for investments into the state as the blueprint anticipates greater synergistic relationship between Penang and its neighbouring states within the corridor and the rest of the nation. All these are a result of continued support from the Federal Government and Mida. Moving forward, Mida will continue to work with the Penang Government to ensure that the state continues to be one of the preferred manufacturing hubs in the country.

By DATUK SERI MUSTAPA MOHAMED International Trade and Industry Ministry (Miti)

Star Online

Penang trumps KL as most liveable city for second time

GEORGE TOWN: Penang has, for the first time, trumped Kuala Lumpur for two consecutive years as the country's most liveable city, Penang Chief Minister Lim Guan Eng said.

Quoting the annual ECA Location Ratings research, Lim said Penang had maintained its position as Asia's eighth most liveable city, while Kuala Lumpur had dropped from ninth to 10th.

"If we only beat them once, people may say it's a fluke. But we have repeated the feat this year.

"It's not a fluke, it's a fact," Lim told a press conference in Komtar here Monday.

Star Online

By ANDREA FILMER

Culturing Pearl of the Orient

LAST year, Malaysia's approved investments continued on a sharp recovery trend with total approved investments in the manufacturing sector recording a value of RM56.1bil compared with RM47.2bil in 2010.Penang, Selangor, Sarawak and Johor topped the table with RM9.1bil, RM8.7bil, RM8.5bil and RM6.6bil, respectively. Penang has consistently been among the top investment destinations over the last four decades.The island state is a manifestation of the success of Malaysia's evolution from a primary-based to a highly industrialised economy.

The success of the transition of the Malaysian economy is due, in no small measure, to the development and industrial plans introduced by the Federal Government since Independence, especially after 1970.A major thrust of these plans was to promote the growth of private investments, both local and foreign.These plans combined with a politically stable environment, effective policy and implementation framework, commitment to the development of infrastructure, and the provision of education and skills training, were crucial in making Malaysia a competitive investment destination.

The Free Trade Zone Act 1971, which was a result of the collaborative efforts of then prime minister Tun Abdul Razak and Penang Chief Minister Tun Dr Lim Chong Eu, and the Promotion of Investments Act 1986 were among the key policy instruments that provided a conducive framework to attract investments.In 1965, the responsibility of promoting investments was assigned to the Federal Industrial Development Authority (Fida), forerunner of the now Malaysian Investment Development Authority (Mida).

With clear directions embodied in various economic and industrial master plans, Fida, and then Mida, was able to generate investment growth at exponential rates.Compared to RM4bil in the 1980s, approved investments for Penang increased five times to RM20bil in the 1990s, and doubled again to RM40bil between 2000 and 2008.Between 1980 and 2011, there were 3,240 projects with a total investment of RM86.9bil approved for Penang, generating 421,299 direct employment opportunities.

Mida's main responsibilities are to promote Malaysia as an attractive and competitive investment destination, to provide information on the opportunities for investments in Malaysia, target and entice potential investors, facilitate companies which are looking for joint venture partners, handhold and assist investors in obtaining all necessary approvals for projects until they are operational.These include direct consultation and cooperation with relevant authorities at both the Federal and state levels in matters such as securing infrastructure facilities, including land, factory sites, electricity and water supplies, telecommunication, expediting approvals relating to building plans, certificates of fitness and business licenses.

Mida also supports existing companies in planning expansion, diversification and re-investments.The setting up of Mida has been instrumental in making Malaysia a premier investment destination in the region.Penang has been a major beneficiary of the nation's aggressive drive to secure investments.The Government's continued efforts in providing adequate and quality infrastructure have enhanced the investment attractiveness of Penang.

Since the 1970s, the Government has been expanding and upgrading Penang's infrastructure.The Penang Airport at Bayan Lepas was developed into an international airport by 1977, further expanded in 2000 and is now again undergoing major expansion.The Penang Bridge was completed in 1985. Certainly, Penang would not be what it is today without the bridge.Phase One of the North Butter-worth Container Terminal (NBCT) was completed in the early 1990s and has been further expanded since.The North-South Highway was completed in 1994, the Butterworth-Kulim Highway opened for traffic in 1996 and Penang is connected to the east coast of peninsular Malaysia via the East-West Highway, which was opened in 1982.

Perhaps the most critical investment made by the Government that continues to make Penang attractive is the setting up of Universiti Sains Malaysia (USM) in 1969 as the second university in the country.This led to the successful nurturing of a highly skilled and knowledgeable workforce.The educated, English-speaking and trainable workforce in Penang was a key attraction to foreign direct investments (FDI) in the early days of the state's industrialization.Today, thanks to USM and the growing number of training institutions in Penang, the state's workforce not only manages local operations but also runs and oversees the operations of many of the MNCs' offshore plants.

Additionally, some MNCs' design engineers are Penangites, who have produced a large number of quality patents.The state government responded to efforts at the Federal level with its own set of policies and strategies.Under the leadership of Chong Eu, the Penang Government introduced a master plan for the development of the state.

The Star Online

By Datuk Seri Mustapa Mohamed International Trade and Industry Ministry (Miti)

NCER gets RM9.9bil private sector investments

PUTRAJAYA: The Northern Corridor Economic Region (NCER) received some RM9.9bil in private sector investments last year, up 62.8% from RM6.08bil committed in 2010. The figure surpassed its target of RM6.67bil, achieved on the back of new investments from the agriculture, manufacturing, tourism and logistics sectors. Multinational corporations contributed the bulk of the investment at RM8.92bil, while local investments totalled RM877.7mil. The balance came from the Government in the form of facilitation funds. Since January 2010, investments in the NCER are estimated to have created 26,267 jobs and business opportunities

.

The NCER, one of five economic zones created by the Government to spur development and private investment in various parts of the country, is managed by the Northern Corridor Implementation Authority (NCIA). NCIA chief executive Datuk Redza Rafiq said at a briefing that the Government had also reduced its facilitation funding to 1.15%, or RM114.2mil, of private investments last year, from 8.99%, or RM546.6mil, in 2010.

Asked if the NCER could post another record year for investments this year, Redza said he was unable to reveal any targets as the region's first phase of development is ending in 2012. “We need to work out a new set of key performance indicators, and this would be decided after the next council meeting. We should be able to say more by July,” he said. The NCER's second phase will be for five years beginning 2013, coinciding with the 11th Malaysia Plan.

On whether the NCER could adopt a catalytic approach similar to Iskandar Malaysia in Johor, which is a multi-billion ringgit development involving major infrastructural changes, Redza explained that the two regions were different, in that Iskandar Malaysia was more of a greenfield while the NCER was a brownfield. “Our job is to leverage on existing opportunities, so the method differs from something that is greenfield in nature,” he said.

By JOHN LOH
johnloh@thestar.com.my

Real Estate Green Living Tips

Reducing the amount of materials and energy required to build or maintain a home can help to substantially reduce your carbon footprint. At the same time, a green approach to home ownership ensures greater peace of mind, physical comfort, and preservation of a sustainable investment over the lifetime of the home.

Save money while living a more responsible green lifestyle - whether buying a condo, remodeling a home, planning new construction, or just wanting to take simple environmentally conscious steps forward. Here are some of the many interesting paths to a greener home:

• Passive heating and cooling techniques can be also employed by almost any homeowner to capture or deflect solar heat with a reflective roof, intensive insulation, or just strategically placed old-fashioned ceiling fans. An open floor plan with good cross-ventilation, in fact, can actually reduce energy bills significantly by making a home easier to cool - so green options do not necessarily have to be radically futuristic.

• Homeowners can also choose more environmentally safe and beneficial products such as "on-demand" water heaters, energy efficient light bulbs, low-VOC paints, and flooring or counter top products made from renewable materials like bamboo, cork, and recycled plastic or glass.

• Conventional house paints contain toxic Volatile Organic Compounds (VOC). But low or zero VOC paints and finishes perform just as well and they are more pleasant to use because they do not have the strong odors associated with high VOC paints.

• Bamboo is harder and more durable than many varieties of hardwood, yet it also happens to be the fastest growing plant on the planet. As one of the most rapidly renewable sources of potential building materials on Earth, it is also beautiful to look at and gives off a warmth and glow that will enhance any ambiance at a highly competitive price.

Based on the article by Jeffrey A. Hammerberg