Y.B. LIM GUAN ENG
MINISTER OF FINANCE FOR MALAYSIA
Shareholders’ Agreement Signing Ceremony between
JAPAN OVERSEAS INFRASTRUCTURE INVESTMENT
Tuesday 11 June 2019
Putrajaya Marriott Hotel, IOI Resort City
His Excellency Dr Makio Miyagawa
Ambassador from Japan to Malaysia
Mr Noriyoshi Torigoe,
Managing Executive Officer, JOIN
Mr Kenji Mizushima
President of Yusen Logistics Group
Mr Lee Check Poh
Executive Chairman, TASCO Berhad
Ladies and Gentleman.
Good morning and Salam Harapan!
1. I am honoured to be invited as the guest of honour on this momentous occasion for the signing of the shareholders’ agreement between Japan Overseas Infrastructure Investment Corporation (JOIN) and TASCO Berhad.
2. Earlier this year, Malaysia successfully raised a Samurai bond worth JPY200 billion or approximately RM7.3 billion. It was raised with the support of the Japanese government via a guarantee from the Japan Bank for International Cooperation (JBIC), with the full cost of only 20.63% per year. The bond was over-subscribed by more than 1.6 times by various Japanese financial institutions, reflecting confidence in the Malaysian economy and Prime Minister YAB Tun Dr Mahathir Mohamad, and has significantly raised the profile of Malaysia as an investment destination among Japanese corporations.
3. The support provided by the Japanese government and the success of the Samurai bonds highlight the close ties between Japan and Malaysia, especially between Tun Dr Mahathir with Japanese leaders.
MALAYSIA AS SAFE HAVEN
4. During our engagement sessions with investors in Tokyo, I presented the case for them to invest in Malaysia, especially amid an uncertain world where China and the United States are engaged in a trade war. Japan needs to take up any opportunity arising from a changing world. Now, several months down the road, the trade war is escalating and it is disrupting the global supply chain.
5. In the short term, the reorientation of the supply chain has benefited Malaysia through trade diversion, business relocation and investment diversion. This can be seen in the approved foreign direct investment (FDI) statistics. Approved FDI for all Malaysian sectors for 2018 rose 48% to RM80.5 billion from RM54.4 billion.
6. The latest approved FDI statistics for 1Q2019 continue to show encouraging results as it rose 73.4% to RM29.3 billion from RM16.9 billion in the same quarter a year ago. In particular, approved FDI for manufacturing rose 127% to RM20.2 billion in the first quarter of 2019, from RM8.9 billion during the corresponding period in 2018.
7. With these figures, it is no surprise that Nomura in its recent report identified Malaysia as the 4th largest beneficiary of trade diversion from the China-US trade war after Vietnam, Taiwan and Chile.
8. These prove the role of Malaysia as a safe haven in the global supply chain. Malaysia is able to play this role effectively due to its warm relations with all parties, as well as due to its strategic location, great infrastructure, its multilingual society with a young educated workforce, strong rule of law with effective protection for intellectual property, and stable political environment supported by a competent, accountable and transparent government.
9. And it is not just foreigners who are confident of the state of the Malaysian economy. Nielsen last month revealed that its Consumer Confidence Index for Malaysia rose 11 points to 115 points in the first quarter 2019 from 104 points a year ago. This makes Malaysian consumers as the 6th most confident among 64 countries surveyed by Nielsen.
10. Today, I am happy to witness a celebration of economic partnership between two entities from different countries. This stands in stark contrast to the trade tensions happening at the global stage. There is room for cooperation, with Malaysia and Japan showing the way.
11. Japan Overseas Infrastructure Investment Corp for Transport & Urban Development (JOIN) is investing RM125 million for a 30% stake in TASC)-Yusen Gold Cold Sdn Bhd, a cold chain logistics arm of TASCO Bhd. JOIN’s investment in Malaysia is a statement of confidence and trust in the Malaysian government and the policies in place to promote trade and develop greater infrastructure development.
12. JOIN is 87.9% owned by the Japanese Ministry of Finance. It is a government-private fund specialising overseas infrastructure investment. Meanwhile, TASCO Bhd is a total logistics solutions provider listed on Bursa Malaysia.
13. By taking up the 30% stake in TASCO-Yusen Gold Cold Sdn Bhd, JOIN has committed to cooperate through knowledge sharing and technology transfer for the benefit of Malaysian cold chain logistics industry. With its global network and direct links to largest Japanese corporations, JOIN can be the bridge to connect Malaysian companies to other parts of the world. This will not only provide access to greater logistics connectivity, but also provide a platform for Malaysian companies to gain an international reach, and further benefit from the trade diversion and the changing global supply chain landscape.
14. It is my sincere hope that this investment from JOIN will pave the way for more Japanese corporations to follow in its footsteps and invest in Malaysia. Malaysia will welcome any investment from abroad, especially from Japan, that will raise the skills and wages of Malaysian workers, while improving the competitiveness of the Malaysian economy through application of new technology.
15. Before I end, please allow me to congratulate JOIN and TASCO for forming this new partnership. I am sure the collaboration will be profitable for all sides.