< Previous18 MAY 2021 S I T E S EL E C T I O N INVES TMENT PROFILE: MALAYSIA Ready to Reach the Next Level? Malaysia Is Too. Swift and sure in its response to the global pandemic and downturn, the Malaysian government is just as swiftly rolling out a familiar welcome mat to global corporate investors. In an April 2021 speech, Y.B. Dato’ Seri Mohamed Azmin Ali, Malaysia’s Senior Minister and Minister of International Trade and Industry, said the country’s investment promotion efforts have successfully kept Malaysia on investors’ radar, noting that the country “is currently undertaking concerted efforts to review our existing policies and restructure our investment strategy to ensure that implementation of high-impact projects can be expedited.” Site Selection has tracked plenty of recent high-impact projects in Malaysia from companies such as GE Engine Services, SK Holdings, GKN Aerospace, Plexus Manufacturing, Longi Green Energy Technology, medical device company Smith & Nephew, Nestle, Dexcom, UCT, LEM, Music Tribe and Leuze Electronics, among others. But the country is always seeking that next level, based on National Investment Aspirations that will guide it toward status as a regional investment hub. Helping the country get there will be Arham Abdul Rahman, who in April 2021 became the new CEO of the Malaysian Investment Development Authority (MIDA). He recently responded to questions from Site Selection as Malaysia and the rest of the world emerge from the pandemic into a new era of FDI and economic development. What are the top questions or concerns global corporate leaders have when they are considering investments in Malaysia? MIDA CEO Arham Abdul Rahman: Generally global corporate leaders and MNCs look for cost-competitive, secure and stable locations to consider for facility investment. Today, over 5,000 companies from more than 50 countries have made Malaysia their location for manufacturing and related services operations. Malaysia also serves as the gateway to ASEAN, one of the fastest-growing economic regions in the world with market of over 620 million people. Malaysia is also a member of the Regional Comprehensive Economic Partnership (RCEP), which presently encompasses 30% of the world’s population and around 30% of global trade. Malaysia boasts a robust legal system, including intellectual property protection, and a well-developed financial sector. The country’s telecommunications and internet capabilities are by ADAM BRUNS adam.bruns@siteselection.com Arham Abdul Rahman, CEO of MIDA S I T E S E L E C T I O N MAY 2021 19 among Asia’s most sophisticated. Seven international airports connect Malaysia to regional and global commercial hubs, while its seven seaports facilitate the rapid movement of goods. A modern highway system spans most of Peninsular Malaysia, and over business parks are scattered across the country. e DHL Global Connectedness Index ranks Malaysia No. in Southeast Asia and No. globally for trade connectivity. Malaysia’s young, educated workforce makes it one of the most competitive in Asia o ering high-skilled talent. e nation boasts over , students enrolled in roughly colleges and universities. Vocational and technical schools, polytechnics and industrial training institutions prepare young people for employment in various industrial trades. One of the most compelling factors is the multi-diversi ed cultures in Malaysia. And most of our citizens are English-speaking, which helps in ease of doing business in the region. e IMF has projected the Malaysian economy will grow by . % this year. Where are you already seeing this resurgence? MIDA CEO Arham Abdul Rahman: MIDA will continue to be at the forefront to entice more quality investments in the areas of technology and innovation to position Malaysia as an alternative supply chain hub in Asia. Malaysia is always adopting a selective ecosystem and targeted approach to attract foreign investment, including from the United States. Malaysia places emphasis on high-technology and high value-added industries which cover, among others, advanced electronics, machinery & equipment and chemicals, as well as new growth areas in medical devices and aerospace in the manufacturing sector. For the services sector, Malaysia continues to target global service centers, principal hub, healthcare, education, logistics, green technology and R&D. Penang has been seen as the hub for electrical and electronics and medical devices due to its strong supporting ecosystem anchored by major U.S. companies such as Intel, Jabil, Boston Scienti c and Dexcom. e Malaysian East Coast is an ideal location for chemicals and petroleum, while Johor is more prominent for services-based activities. MIDA, which represents the federal government, works closely with the state promotion agencies to attract targeted investments in a coordinated investment promotion approach that includes trade and investment missions, targeted one- to-one meetings, webinars and many more activities. Once investors choose the location, MIDA will continue to facilitate and handhold the project to ON SOUTHEAST ASIA’S DOORSTEP Jabil, Inc.: For more than a quarter-century, global electronics company Jabil Inc. has maintained operations in Penang, including a Global Business Center (GBC) in Penang’s GBS@Mayang. The GBC started in 1995 in Bayan Lepas Industrial Park with just 200 employees, and by the time of the move had grown to 950. One of the largest shared services centers in Penang, the site has the capacity to accommodate an additional 1,100 people. Malaysia’s high-tech manufacturing environment is also attractive to Jabil, which several years ago began expanding at the Batu Kawan Industrial Park in Penang, producing products across the industrial, medical and aerospace sectors and aiming to employ as many as 2,500 people. That very park is where California-based Lam Research Corp. with MIDA in February announced a new advanced technology production facility that will employ approximately 350 and serve as an Asia hub for Lam’s manufacturing operations. A roof-topping ceremony was held in Penang in March for Lam Manufacturing Malaysia, a new high-tech facility for the global supplier of wafer fabrication equipment and services to the semiconductor industry. Image courtesy of Lam Research After vetting numerous potential locations, we determined this site in Malaysia is a great t for our future manufacturing needs.” — Quentin Blackford, COO, Dexcom, June 2020, on the company’s fi rst non-U.S. manufacturing facility for continuous glucose monitoring systems coming to Penang’s Batu Kawan Industrial Park After vetting numerous potential locations, After vetting numerous potential locations, we determined this site in After vetting numerous potential locations, 20 MAY 2021 S I T E S EL E C T I O N ensure smooth implementation. MIDA is not only focusing on new foreign investment but at the same time driving existing companies to reinvest in high value-added products and undertake high-value activities or services. What does the recent signing of the Regional Comprehensive Economic Partnership agreement mean for Malaysia’s economy? MIDA CEO Arham Abdul Rahman: With the aim to establish a modern, comprehensive, high-quality and mutually bene cial economic partnership, RCEP is expected to strengthen the regional value chain and contribute to global economic growth and development. With the recent pandemic experienced globally, RCEP is poised as one of the country’s economic recovery tools in ghting against COVID- . Malaysia sees plenty of opportunities and bene ts that come along with the agreement: Greater market access: e implementation of this agreement will ensure the continuous opening of markets as well as uninterrupted supply chain. Service providers, including e-commerce companies and SMEs, will be able to enjoy greater market access in terms of cross-border supply and establishing a commercial presence in the RCEP markets. Tari elimination: Companies based in Malaysia are expected to bene t from tari elimination and reduction of merchandise goods. e single consolidated tari and rules will facilitate export and import of goods among RCEP countries and strengthen trade ows. Increased transparency: RCEP also pledges that the negative list approach adopted for both trades in services and investments will provide transparency on rules, laws and regulations concerning investments into the country. Global experts have praised Malaysia’s well- coordinated response to the pandemic. How have you been able to navigate this public health crisis while at the same time supporting corporate growth and FDI? MIDA CEO Arham Abdul Rahman: Despite the international border closures and strict standard operating procedures in place worldwide to contain the spread of COVID- , MIDA continues to be responsive in undertaking innovative and aggressive promotion activities to entice FDI. Malaysia recorded total approved investments of US$ . billion last year in the whole economy, of which FDI accounted for $ . billion ( . %) whereas DDI [domestic direct investment] accounted for $ . billion ( . %). It is important to note that, amid pandemic, FDI accounted for % ($ . billion) of total approved investments in the manufacturing sector. Despite the challenging times, FDI increased by . % compared to . e total investments approved are for , projects which are expected to create , jobs. is includes several projects from the U.S., particularly in machinery and medical devices industries such as Lam Research and Dexcom. e U.S. ranked fourth in terms of major sources of FDI last year behind China, Singapore and Netherlands, with investment of $ million in the manufacturing sector. Project Acceleration and Coordination Unit (PACU): Last year, MIDA introduced the Project With global challenges caused by the pandemic, Malaysia is open for business and remains conducive for foreign investors.” — H.E. Dato’ Azmil Zabidi, Ambassador of Malaysia to the United States With global challenges caused With global challenges caused by the pandemic, With global challenges caused Malaysia’s Green Technology Master Plan aims to help the sector achieve $43B in revenue and create more than 200,000 green jobs by 2030 across the energy, transportation, manufacturing, building, waste and water sectors. S I T E S E L E C T I O N MAY 2021 21 Acceleration and Coordination Unit (PACU) to expedite and facilitate the implementation of approved projects. PACU provides advisory services to start-ups and conglomerates through its one-stop center concept, whereby investors are encouraged to discuss the challenges faced during operations and seek much-needed clari cation and advice on government guidelines and procedures. e-TRANS: MIDA, through its e-TRANS system, has launched and enhanced several online modules — namely faster approval for applications for e-manufacturing licenses, e-incentives, and import duty and/or sales tax exemptions — to expedite the execution of projects. Stimulus package: e government also undertook major initiatives last year to bolster investment and cushion the impact of the pandemic through its four economic stimulus packages which involve allocation of US$ billion to expedite the recovery. is includes a relocation incentive to promote foreign investment with an attractive % tax rate for a period up to years in the manufacturing and services sectors. One Stop Center (OSC): Another game- changing initiative by MIDA was the setting up of a One Stop Centre (OSC) to ease the movement of business travelers by expediting the approval of their entry into Malaysia to carry out their business activities. On March , , the Business Travellers Center (BTC) was o cially launched to welcome more investors into Malaysia. Located at KLIA, the BTC is now open for short-term foreign business travelers planning to carry out their business tasks in the country. e launching of the BTC marks a major milestone of the government’s unwavering mission to revive the economy and to pave the way for economic rebound in . Complete information on OSC is now available at safetravel.mida.gov.my. Corporate investors are attracted to stability and consistency. How has Malaysia been able to create a dependable business environment even when there is a change in political leadership? MIDA CEO Arham Abdul Rahman: Malaysia has always adopted a consistent investment policy in attracting foreign direct investment [FDI] to the country and ensuring a vibrant and dynamic economy. Malaysia will continue to provide a business-friendly ecosystem and ne-tune policies to ensure sustainability of businesses in Malaysia. MIDA has assumed the critical and pivotal roles in contributing signi cantly to Malaysia’s rapid industrial development in the last ve decades, particularly in the manufacturing and services sectors, by promoting investments, both FDI and domestic direct investment [DDI]. MIDA’s strategies have gone through various transformations, in line with the changing dynamics of the global and domestic economic landscapes. MIDA has put a strong emphasis on attracting Industry . adoption, digital economy, e-commerce, AI and robotics. It is a major step to restart the economy and also bring Malaysia to the next level. This Investment Profile was produced under the auspices of the Malaysian Investment Development Authority (MIDA). For more information about investing in your profit center in Asia, visit mida.gov.my. ALREADY FLYING HIGH Aiming to become Southeast Asia’s top aerospace nation by 2030, Malaysia today boasts 27,500 jobs and 230 employers across the MRO, aero-manufacturing and engineering/design services sectors, with companies taking advantage of infrastructure such as KLIA Aeropolis, Subang Aerotech Park, Senai Aerospace Park, Serendah High Value Manufacturing Park and Kulim Hi-Tech Park. the manufacturing and services sectors.the manufacturing and services sectors. MIDA will continue to be at the forefront to entice more quality investments from the U.S. and to position Malaysia as an alternative supply chain hub for U.S. companies in Asia.” — Nelson Samuel, Director, MIDA New York22 MAY 2021 S I T E S EL E C T I O N Québectricity: Two electric mobility projects pick Québec. In mid-March, California-based Lion Electric, a maker of all-electric trucks and buses, announced it would construct a battery manufacturing plant and innovation center in Québec in Saint-Jérôme. The Canadian and provincial governments pledged combined support of nearly C$100 million toward the $185 million plant. Two weeks later, electric off-road vehicle developer Taiga Motors pledged to invest part of $185 million in recently announced funding in a new mass-production assembly facility in Shawinigan, Québec, where it will accelerate production of electric snowmobiles and personal watercraft, as well as Taiga’s side-by- side vehicles. The new facility will supplement a ramp-up in production capacity at Taiga’s R&D site in Montréal. The projects will rise against a backdrop of electrification strategies from various levels of government and powerful players such as Hydro-Québec. Lion already has a vehicle assembly location in Saint-Jérôme (part of the Montréal metro area) and another in Sacramento, California. Its new factory is planned to begin operations in early 2023 and will produce battery packs and modules made from lithium-ion cells. Construction is projected to break ground over the next few months “at a location to be confirmed in the near future,” the company said. Over the last decade, Lion has established itself as a leader in the all-electric school bus industry, having delivered over 300 all-electric school buses in North America with over 6 million miles driven since 2016. Among its customers is Amazon, for which it’s delivering hundreds of all-electric trucks by 2025. In February, Lion added to its roster of customers with an order for 10 all-electric school buses from the Los Angeles Unified School District (LAUSD). But its growth in Québec is just as pivotal. “With the construction of the plant, Lion predicts to see a considerable reduction in the cost of its vehicle manufacturing while ensuring control and optimization of a key component of its vehicle supply chain,” the company said in its announcement. “With a planned yearly production capacity of 5 gigawatt-hours in battery storage, Lion will be able to electrify approximately 14,000 medium and heavy-duty vehicles annually.” The move will also make the company the first Canadian manufacturer of medium- and heavy-duty vehicles to equip itself with its own automated battery pack manufacturing capability. In November, Lion entered into a business by ADAM BRUNS adam.bruns@siteselection.com QUEBEC A new battery pack plant and innovation center in Saint‑Jérôme is pivotal to the growth plans of all‑electric bus and truck company Lion Electric. Photo courtesy of Lion Electric24 MAY 2021 S I T E S EL E C T I O N combination agreement and plan of reorganization pursuant to which a wholly-owned subsidiary of Lion will merge with Northern Genesis Acquisition Corp., a publicly traded special purpose acquisition company (SPAC) focused on a commitment to sustainability. “Thanks to the financing provided by the federal and provincial governments, we will now be able to manufacture in Canada what we previously imported,” said Lion Electric CEO and Founder Marc Bédard. “Lion, Quebec and Canada will gain from this, both on the economic and environmental fronts, to the great benefit of generations to come.” In a CNBC interview in January, Bédard said a factory would be opened in the U.S. in the next two years. Green Growth in Shawinigan Later in March, Taiga Motors announced its intent to build its facility in Shawinigan, scheduled for completion in 2022. The facility is expected to increase Taiga’s production capacity to 80,000 units by 2025. “This facility, a part of the $185 million in recently announced funding, will bolster Taiga into becoming a globally leading OEM for powersports vehicles,” said Samuel Bruneau, CEO of Taiga. “We have seen strong customer demand limited by product availability. This new facility shows Taiga’s continued commitment to be trailbreakers and offer electric vehicles capable of diving mass-market adoption without compromise.” Taiga’s initial production acceleration is underway in Taiga’s current Montréal Research & Development facility, which is expected to ramp up production capacity to 2,000 vehicles per year by the end of 2021. The second phase of increasing Taiga’s production capacity includes the building of the Shawinigan facility, beginning at a 200,000 sq. ft. capacity and later increasing to 340,000 sq. ft. In a similar fashion to Lion’s business timeline, Taiga intends to begin construction in the second quarter of 2021, following its listing on the Toronto Stock Exchange in connection with its proposed merger with Canaccord Genuity Growth II Corp. Taiga said the site was chosen because Québec is already a world-leading electric technology hub and the site secures positioning in a primary location for innovation in the EV space. “As a location for a mass- production facility, Shawinigan provides multiple advantages with strong logistical infrastructure and a talent pool for future growth,” the company stated. “As Shawinigan is an established technology hub, it will accelerate Taiga’s vision for a vertically integrated local supply chain.” “It’s always a pleasure to receive advocates and entrepreneurs who wish to establish themselves in Shawinigan,” said Michel Angers, mayor of Shawinigan, “especially when it’s a start-up that has developed in our entrepreneurial ecosystem and is part of one of our four pillars of economic diversification — energy efficiency and green technologies.” Proactive Utility Shawinigan happens to be the home of the energy technologies lab of HydroQuébec. The utility is proactive in the electric mobility, battery and renewable energy space, including the December announcement of a new subsidiary, EVLO Energy Storage Inc., that will design, sell and operate energy storage systems. “Energy storage will play a crucial role in the energy transition,” declared Hydro-Québec President and CEO Sophie Brochu. “We firmly believe that the know-how Québec has acquired with regard to batteries will help develop solar and wind power. Our products will also have useful applications in existing power grids, such as in managing consumption peaks.” The utility will play a key role in the Québec government’s new Plan for a Green Economy, intended to lower the province’s greenhouse gas (GHG) emissions. “Québec’s GHG emissions are already lower than those of other regions in North America, and the Plan for a Green Economy will help us make further improvements in this area,” said Brochu in November. The utility even takes a stake in companies staking Lion Electric’s new battery manufacturing plant and innovation center at a still-to-be-named location in Quebec is projected to produce one battery module every 11 seconds and a full battery pack every five minutes. Photo courtesy of Hydro-Québec S I T E S E L E C T I O N MAY 2021 25 their futures on the energy transition. By the end of 2020, Hydro-Québec invested over C$25 million to pursue the growth of Dana TM4, a JV between Dana Incorporated and Hydro-Québec that designs and manufactures low- and high-voltage electric motors, generators, power electronics, and control systems suitable for the automotive, commercial, off-highway, marine, rail, motorsports, and RV markets. The company’s growth includes a new plant in India, another in Ohio and an acquisition in the UK. As of last fall, the partnership had generated a number of economic benefits for Québec, including 100 new high-quality jobs in Boucherville, primarily in engineering and R&D for vehicle electrification, and the 2019 acquisition of Laval-based Nordresa, which plans to expand there in coming years. “Electric mobility is an irreversible trend that is accelerating worldwide,” said Simon Racicot- Daignault, senior director of subsidiaries and commercial innovation at Hydro-Québec. “Our enhanced presence in this market through our various investments positions us advantageously for the future.” EV PUSH BACKED BY RESEARCH INFRASTRUCTURE HydroQuébec b acks The Electric Circuit charging network, and its energy technologies lab is located in Shawinigan, the same community where Taiga Motors is investing in a new mass-production assembly facility for electric recreational vehicles. The utility’s research institute in Varennes includes the Center of Excellence in Transportation Electrification and Energy Storage. The Electric Circuit, the largest public charging network in Québec, consists of more than 2,900 public charging stations in every region of the province. Photo courtesy of Hydro-Québec26 MAY 2021 S I T E S EL E C T I O N W ORLD REPOR T S Coming Soon: World’s Longest Suspension Bridge With opening set for March 2022, the 1915 Çanakkale Bridge spanning Turkey’s Dardanelles Strait will surpass the Akashi Kaikyō Bridge in Japan to become the longest suspension bridge in the world. Connecting European Turkey to Asian Turkey, the bridge will feature a main span that exceeds 1.2 miles (2 km.) and will reduce a 30-minute ferry ride to a spin taking less than fi ve minutes. Launched in 2017, the project is being led by the Danish engineering fi rm COWI. The span’s impending completion is expected to bolster transportation links to neighboring European countries and to further facilitate tourism. by GARY DAUGHTERS gary.daughters@siteselection.com Source: Getty Images Free Trade and Agriculture in Africa The African Continental Free Trade Area (AfCFTA) agreement, which entered into force January 1, is expected to boost intra-continental agriculture trade, according to a report issued April 12 by the Oxford Business Group. The trade pact is to result in the elimination of tari s for 90% of products originating from signature countries by 2021 and will increase further to 97% by 2030. “While the tari reductions are likely to have a positive impact on agricultural trade,” the reports states, “non-tari measures — in addition to relatively high administrative and logistical costs — continue to pose serious obstacles to trade on the continent.” Source: Oxford Business Group “What we see is a multi-speed recovery [from COVID-19], increasingly powered by two engines — the U.S. and China. Prospects are diverging dangerously not only within nations but also across countries and regions.” — Kristalina Georgieva, Managing Director, International Monetary Fund S I T E S E L E C T I O N MAY 2021 27 Hyundai Turns to China for Fuel Cell Facility Hyundai Motor Group on March 2 announced groundbreaking for HTWO Guangzhou, the Group’s fi rst fuel cell system facility outside of Korea. The investment, Hyundai said in a statement, “advances the Group’s global hydrogen leadership and supports its push into China’s rapidly developing hydrogen industry.” Upon expected completion in the second half of 2022, the facility is to initially produce 6,500 fuel cell systems per year. To be built on a 2.2-million-sq.-ft. (207,000-sq.-m.) site in the Guangzhou Development District, the operation also is to include an innovation center. Source: Hyundai “Amidst a global collapse in FDI, China’s outbound investment fell 45% to $29 billion in 2020, contributing to the downward trend seen since 2017.” — Atlantic Council, April 17 Busiest Airports Passenger tra c at the World’s 10 busiest airports decreased by 46% during 2020. China now hosts seven of the Top 10, according to Airports Council International. World’s Top 10 Busiest Airports* (TOTAL PASSENGER TRAFFIC)Next >