Penang sees a 73% drop in investments

 

22 March 2013

TROUBLING: Critics question Penang govt's ability to attract investors to the state

GEORGE TOWN: A DIP of  73 per cent  in investment flow into Penang has the state Barisan Nasional  questioning the state government's abilities to drive and continue growing the manufacturing and services sectors.

Both sectors, state BN committee member Ong Thean Lye said, were the main sources of revenue for the state and had in previous years placed Penang at the top in the country's investment ranking.

However, there were now growing concerns that investments were on the decline with Penang only getting RM2.47 billion in investments last year compared with RM9.11 billion in 2011 and RM12.24 billion in 2010.

"That is a 73 per cent drop, putting Penang in the sixth spot in the country in terms of investments.

"Employment opportunities in the two sectors dropped to 10,359 jobs last year from 14,293 in 2011 and 21,618 in 2010," he said here yesterday.

Ong said the huge investments in 2010 and 2011 were mainly because of reinvestments and expansions by foreign companies here.

"If we compare 2010's foreign investments of RM10.45 billion with last year's RM1.13 billion of foreign investments , we see a drop of about 90 per cent.

"There was a reinvestment of just RM350 million last year by foreign investors compared with RM8.95 billion in 2010 and RM4.37 billion in 2011."

BN's Batu Uban coordinator Goh Kheng Sneah, who is also state Gerakan secretary, said foreign direct investments for Penang had never in previous years caused Penang's ranking to fall to sixth place.

The state was always ranked in the top five when it came to investments, he said.

"Chief Minister Lim Guan Eng is irresponsible. He does not really understand the industry.

"He has to explain what the state intends to do to attract higher investments.

"Foreign direct investment is down, some projects are not moving and some companies have decided not to invest here."

He declined to name the companies or elaborate further.

When pressed for an example, Goh mentioned "BlackBerry" and said Lim should be the one making the explanations as he was the person leading the administration.

Canadian manufacturer of the BlackBerry smartphone, Research in Motion (RIM) had, since July 2011, outsourced the production of several models from the BlackBerry portfolio to a Penang-based electronics manufacturing services (EMS) provider for global distribution.

In August last year, the EMS company confirmed that it was exiting the business of manufacturing BlackBerry phones in Penang.

Goh also questioned the Penang government's propensity of sending investment delegations to countries like China, Korea, Taiwan, Hong Kong and Australia when the state's bigger investors hailed from the United States, Japan, Germany and Holland.

Citing figures obtained from the Malaysian Industrial Development Authority (Mida), he said Taiwan invested about RM102.9 million in 2010, RM148.5 million in 2011 and only RM34.36 million last year.

Korean investments stood at RM1.8 million in 2010 while China brought a total of RM8.8 million in investments to Penang between 2010 and last year.

Friday March 22, 2013 STAR

Penang sees a 73% drop in investments

GEORGE TOWN: Penang fell to sixth position with a drop of 73% in total investments last year compared to 2011, state Barisan Nasional committee member Ong Thean Lye said.

Quoting information from Mida, he said that Penang suffered “a drastic drop” in total investments from RM9.11bil in 2011 to only RM2.47bil last year.

The state came in first in 2010, with investments that amounted to RM12.24bil.

“While Malaysia suffered a 27% drop in total investments from RM56bil in 2011 to RM41bil last year, total investments in Penang dropped by 73%,” Ong told a press conference here yesterday.

He added that not only did the total investments drop, the number of jobs had also declined.

“The employment opportunity dropped from 21,618 in 2010 to 14,293 a year later, then to 10,359 last year.

“The decline in investments and job opportunities are a big concern, and we do not see any industrial blueprint from the state government,” Ong said.

Batu Uban Barisan coordinator Goh Kheng Sneah said trade and investment delegations from the state concentrated on Taiwan, South Korea and China when the major foreign investors in Penang were from the United States.

“(South) Korea only invested RM1.82mil in 2010 and did not invest in 2011 and 2012.

“Taiwan's investment dropped from RM148.4mil in 2011 to RM34.3mil last year.

“China only invested RM4.93mil last year,” Goh added.

State government representatives were not available for comment on the drop in investments.