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SIGNING CEREMONY FOR PROPOSED JOINT-VENTURE BETWEEN POWERCHINA GROUP, PARAGON PINNACLE SDN BHD,
&
ECOWORLD DEVELOPMENT GROUP BHD MINISTER OF FINANCE FOR MALAYSIA


Speech by

YB Lim Guan Eng

Minister of Finance Malaysia

3PM, 14 June 2019

BBCC, KUALA LUMPUR

 

Yang Berbahagia Tan Sri Liew Kee Sin
Chairman of Eco World Development Group Berhad

Yang Berhormat Tuan Tan Kok Wai
Special Envoy of Malaysia to The People’s Republic of China

Mr Xia Jin
Chairman of PowerChina Real Estate Group Limited

Yang Berhormat Tuan Fong Kui Lun
Member of Parliament for Bukit Bintang

Mr Li Jing
Director of Guandong Economic & Trade Office in Southern Asia

Ladies and Gentleman.

Selamat Petang danSalam Harapan,

INTRODUCTION

1. Terlebih dahulu saya ingin mengucapkan Selamat Menyambut Hari Raya Aidilfitri kepada semua hadirin yang hadir sekalian. Hari ini adalah satu permulaan untuk perjanjian rakan kongsi di antara dua pihak iaitu Ecoworld, salah sebuah syarikat terkenal dalam sektor hartanah di Malaysia dan juga PowerChina, sebuah syarikat gergasi yang terdiri daripada Fortune Global 500 yang akan memberikan satu penyelesaian kejuruteraan dan pembinaan.

DEVELOPMENT OF ECO BUSINESS PARK V, PHASE 2

2. The signing of a joint venture and shareholders agreement today will result in the development of Eco Business Park V(EBP V), Phase 2 in Puncak Alam, Selangor.The JV will be 60% owned by PowerChina and 40% by Paragon Pinnacle Sdn Bhd. Paragon Pinnacle Sdn Bhd itself is 60% owned by EcoWorld, with remainder 40% held by the Employees Provident Fund (EPF).

3. This project is part of the larger EBP V development that has an estimated gross development value (GDV)of RM3.7 billion covering 518 acres. For Phase 2 itself, the GDV is estimated at RM850 million, and it covers 117 acres. Phase 2 development will comprise of medium to large individual industrial lots for light to medium industries. These include warehousing, logistics, spaces for assembly, fabricating, finishing, manufacturing, packaging, repairing and processing of materials.

4. The development of Eco Business Park V, Phase 2 is to be completed within 5 years. It is expected to create more than15,000 job opportunities within the northwest Klang Valley local community. It would also hasten the growth of Puncak Alam and put the area on the map.

ECOWORLD-POWERCHINA PARTNERSHIP

5. The people behind EcoWorld are seasoned players when it comes to Business Parks, having won a FIABCI World Prix d’Excellence Gold award for Eco Business Park 1 in Iskandar Malaysia.Together with an experienced partner that is PowerChina, we expect the industrial park to offer the market the best facilities.

6. The participation of PowerChina will connect and open doors for potential industrialists from China seeking to set up business and operations in Malaysia.This partnership between both companiesis an example of the China’s One Belt and One Road Initiative that brings Malaysia and China closer together economically.

7. The opening of doors to Chinese manufacturers is particularly important point at a time when the global supply chain is undergoing significant reorientation due to the China-US trade war. Malaysia has been benefiting from business relocation,as well as trade and investment diversions caused by the trade war.

8. This can be seen with the 73.4% rise in first quarter 2019 approved foreign direct investment (FDI) for all sectors from RM16.9 billion a year ago to RM29.3 billion. This was driven by approved FDI in manufacturing, which increased drastically by 127% to RM20.2 billion in the first quarter 2019 compared to RM8.9 billion last year.

9. The sources of approved FDI for manufacturing in the first quarter tells us investors are eager to use Malaysia as a safe haven from the prevailing trade conflict. Indeed, out of the RM20.2 billion approved FDI into manufacturing, RM11.5 billion came from the United States and RM4.4 billion from China. These two countries form the bulk of total approved FDI.

10. The strong approved FDI performance is a persistent trend as the 73.4% rise in overall approved FDI in the first quarter of 2019 came after approved FDI for the whole of 2018 rose by 48% to RM80.5 billion from RM54.4 billion.

11. While Malaysia has been benefiting from the trade dispute, we do hope the trade war would be settled amicably. Any trade war would hurt global growth, and eventually there will be no winners, only losers.

MALAYSIA’S COMPETITIVENES SALLOWS IT TO BENEFIT FROM THE TRADE WAR

12. Malaysia is the preferred safe haven because of our competitiveness in the global supply chain. In the World Bank 2019 Doing Business Report, Malaysia is ranked 15thin the world out of 190 countries as the easiest place to do business. In 2018, Malaysia was placed 24th in the world.

HIGH DOMESTIC CONFIDENCE IN THE ECONOMY

13. While this is something to be proud of, the Government will simplify business as well as government processes further to reduce the cost of doing business and directly improve the competitiveness of the Malaysian economy.The Prime Minister himself has called for cuts in regulatory provision and investment application red tape to expedite government approval processes.

14. The rising FDI is a sign that foreign investors are confident in the Malaysian economy,with a competent government in charge. And confidence isn’t just amongst the investing community.

15. Nielsen’s Consumer Confidence Index shows that Malaysian consumers were the sixth most confident among 64 countries surveyed in the first quarter of 2019. The index for Malaysia rose 11 points to 115 points in the first quarter 2019 from 104 points a year ago. This indicates that Malaysian consumers are confident of their economic prospects for the next 12 months.

16. Such confidence can be based not just on the encouraging approved FDI figures,but also on persistent signs of growth from multiple data sources. Unemployment rate for instance is low at 3.4% while inflation is low and stable at 0.2%for the month of April.

17.  Industrial production for April in particular grew at a solid rate of 4.0%. This was above the market expectations of 2.5%,based on a survey by Bloomberg. This is the second month in a row when actual industrial production grew faster than market consensus.

CONCLUSION

18. I hope this investment proves yet again that Malaysia welcomes quality investment from China, be it from PowerChina, Huawei or other top Chinese companies. China is of course Malaysia’s largest trading partner in the world, followed by Singapore.In 2018, total Malaysia-China goods trade was valued at RM313.8 billion and this was a 8.1% increase from RM290.4 billion in 2017. At RM313.8 billion worth of total goods traded, Malaysia-China trade comprised 16.7% of Malaysia’s total trade last year and this is a relationship that Malaysia cherishes.

19. Let me end here by wishing you congratulations on your partnership. Let us grow together by learning together so that we can enjoy the fruits of our partnership together.

Thank You.

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