Govt has set a vision for Selangor to be the gateway to Asean via SIBS
By AFIQ AZIZ / Pic By MUHD AMIN NAHARUL
DESPITE all the success stories that have been charted by Selangor — the richest state in the country which makes up a huge part of the Klang Valley — investors and outsiders seem to be more familiar with all the glory that is Kuala Lumpur (KL).
State investment industry and trade, small and medium industries committee chairman Datuk Teng Chang Khim said KL, physically a small territory that might have some overlapping business domains with Selangor, has made it a little tricky for the state to market and promote all its capabilities as a great location for foreign investors.
“I have been travelling the world and people still call us KL,” Teng told The Malaysian Reserve in an interview recently.
With an area of 24,300ha, KL is 34 times smaller than Selangor, but the country’s capital city has been known and recognised for years around the globe as a business and leisure destination.
“Selangor has been the gateway to Asean, but it has not been properly profiled. We are home to the 12th busiest global container port in the world, have three airports servicing international and regional routes, and provide excellent ICT ecosystem and communication infrastructure.
“It is just a lack of package that the people do not have the impression that we are the gateway to Asean. However, I believe that through our efforts, we have managed to strengthen this with the creation of a very strong impression among the investors,” he said.
Investment Push — SIBS
Teng said in the past five years, many initiatives have been introduced by the state administration to push Selangor to the fore as a frontliner that is attractive to investors.
“We have even changed the Selangor State Investment Centre’s name to Invest Selangor, with the hope that we could create further interest in the state as well as uplift our image.
“We have to make sure that Selangor is seen and highlighted correctly. Everything must be about Selangor,” he added.
Still, the “glamourous perception” about KL is very hard to break and much more will have to be done to promote the “Selangor” brand.
For instance, the government has set a vision for Selangor to be the gateway to Asean via the Selangor International Business Summit (SIBS).
Teng said the state, via SIBS, is expected to improve investors’ perception on Selangor.
The international platform was set on a smaller scale back in 2015, offering major industry players from around the region to meet, explore and discover business opportunities and potential areas of collaboration.
“Our main achievement is being globally recognised as a regional business event, attended by over 60,000 visitors and recorded a negotiated transaction value of RM680.8 million since the summit’s inception in 2015.
“Back then, there was only one event, namely the Selangor International Expo. Now, the entire initiatives are grouped into a bigger business summit with multiple industries that are more focused with clear directions,” Teng said.
This year, the third series of SIBS is aimed at attracting up to 850 booths. It is envisioned to attract 30,000 domestic and foreign visitors, yielding some RM250 million in transaction value.
SIBS is also expected to create more interest with additional segments — research and development, and innovation.
In the first year, SIBS generated RM204.2 million in transaction value with 22,071 footfalls of visitors, hosting 691 booths.
In 2018, the event saw a total of 23,737 visitors and recorded a negotiated trade of RM194.6 million with 548 booths from over 33 countries.
“As for this round, the response has been very encouraging. We have secured more than 85% of booth take-up rate so far. Countries such as India, China, Taiwan, Japan, Indonesia, the Philippines and Vietnam are returning to SIBS this year with a bigger delegation,” Teng said.
SIBS 2019 is scheduled to be held from Oct 10 to 13 at the Malaysia International Trade and Exhibition Centre (MITEC).
Prime Minister Tun Dr Mahathir Mohamad is expected to deliver a keynote address at the Selangor Asean Business Conference in conjunction with the event.
Teng said this year, the state would incorporate all of the previous three main events, namely the Selangor International Expo, Selangor Asean Business Conference, and Selangor Smart City and Digital Economy Convention.
“We are giving further emphasis on creating value through smart collaboration and advancement in product research and innovation.
“It will also be a platform to gather and match the academia within the Selangor Education Cluster with interested industries,” he said. In the long run, Selangor will not be “recognised as KL” anymore.
Gateway to Asean
Teng said various developments and ongoing projects are taking shape in the state which would elevate Selangor’s position as the Asean gateway.
For instance, he said IKEA’s new regional distribution and supply chain centre is being developed in Pulau Indah and will be the world’s third-largest IKEA distribution centre. The RM908 million outlet is expected to be opened by September 2020.
“While the centre is still under construction, IKEA is expected to sign another agreement to expand its present warehouse,” Teng said, without revealing the details of the investment.
As it is, Toyota Motor Corp has also made Selangor its distribution centre for South-East Asia.
Volvo AB has made Shah Alam, Selangor, as a distribution centre for East Pacific outside China.
“Roland, the Japanese musical instrument manufacturing company, has shifted their headquarters from Tokyo to Port Klang. These are indicators that people are moving into Selangor,” Teng added.
Selangor also houses up to 62% of the total 230 aerospace companies in Malaysia at its three aerospace parks — Sepang, Subang and Serendah.
In Serendah, UMW Holdings Bhd delivered its first fan case to Rolls-Royce over two years ago when its RM750 million venture into high-value aerospace manufacturing was established.
The 12ha fan-case manufacturing plant is made for Rolls-Royce’s Trent 1000 engine, which powers Boeing Co’s 787 Dreamliner planes.
“In Sepang, Sepang Aircraft Engineering Sdn Bhd (SAE) is the only maintenance, repair and overhaul (MRO) centre owned fully by Airbus SE outside Europe,” Teng said.
He added that Selangor is still the best investment avenue for corporations compared to Singapore.
“People may argue that Singapore is still No 1, but it is a fact too that the cost of operating businesses in Singapore is very much higher compared to Malaysia.
“So, naturally, a lot of business that comes from this part of the world to South-East Asia should be through Selangor,” he added.
Selangor has also identified five core industry clusters as the catalysts of its economic development, namely transport equipment, food and beverage, electrical and electronics, machinery and equipment, and life sciences.
In order to promote these core industries effectively to its potential investors, Invest Selangor has collaborated with industry councils with the participation of relevant industries.
The collaboration includes Selangor Bio Council, Selangor Aerospace Council, Selangor Information Technology and E-Commerce Council (Sitec), and Halal International Selangor Council.
“This is to accelerate the industries’ growth and sustainability, as well as assist in identifying potential investors to the sectors.
“We have seen some progress in some areas such as the aerospace council, Sitec and halal industry, but slightly slower progress for biotechnology due to some limitations,” he said, adding that the state is planning to come up with a comprehensive action plan for the halal industry soon.
As it is, Selangor has been successful in attracting multinational companies to invest their regional operations in Selangor.
The year 2018 was a record-breaking period. Selangor reported its best performance in history with total investments valued at RM18.9 billion and 241 approved projects.
Of the total, RM10.8 billion was foreign direct investment, while RM8.1 billion was domestic direct investment.
The number is three times more than the RM5.6 billion investments recorded in 2017.
For the first quarter of this year, Selangor reported a total investment of RM1.5 billion with 75 approved manufacturing projects, the highest record among all the states in Malaysia within the same period.
Due to the various global economic uncertainties, Invest Selangor has set a conservative target of RM10 billion for this year.
Nevertheless, the state has experienced the most vibrant investments, especially in the manufacturing and services sectors throughout the years.
More than five million people are now proudly “sheltered” by Selangor, with 3.4 million workers making their living in the state.