Published November 4, 2008

US investments double to RM6.3b in M'sia

By PAULINE NG
IN KUALA LUMPUR

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AMERICAN investments in Malaysia's manufacturing sector have more than doubled this year to RM6.3 billion (S$2.6 billion) from RM3 billion last year, the latest being a RM280 million investment from Nasdaq-listed National Instruments (NI).

The developer and manufacturer of software and hardware products used by engineers and scientists to test, control and embed design applications plans to establish an integrated manufacturing, research & development and operations facility in Malaysia - its third globally. The facility is expected to provide some 1,500 job.

NI's maiden investment in the country comes on the heels of investments this year by other US firms such as Sunpower, First Solar, Honeywell Aerospace and Spirit Aerosystems, and is eagerly welcomed for the higher value added they bring as well as quality of employment.

NI expects to begin production in 2010 at its Penang facility. About 90 per cent of its future output are for export, chief financial officer and senior vice-president of manufacturing & IT operations Alex Davern told media yesterday.

In time, its Penang operations are expected to contribute close to 40 per cent of NI's revenue growth, and when fully operational by 2015, should rake in US$600 million to US$700 million, Mr Davern said. For its fiscal year to end December 2007, NI posted revenues of US$740.4 million.

The company already has two integrated facilities in the US and Europe, and NI president, chief executive and co-founder James Truchard said Malaysia makes 'an ideal location' for its third, given the new facility's proximity to Asian markets would make it easier for the company to respond faster to customer demands.

NI is currently in discussions with state officials to obtain a 17-acre greenfield site in Bayan Lepas near the airport.

Penang had emerged top of the list after an 'extensive multi-year search' - incidentally it was the first site NI had researched - the state's availability of high end R&D talent for advanced manufacturing, competitive advantage and large English speaking workforce ultimately sealing the deal. 'We think there will be a good cultural fit,' Mr Davern remarked.

NI's announcement of its planned investment in Penang follows another over the weekend by the state government of a US$100 million commitment by a South Korean conglomerate DK ENC to build the state's most expensive golf course in Batu Kawan. The course is to be completed by 2013 and is expected to boost state tourism.

International Trade Minister Muhyiddin Yassin who was at the press conference said as at end August, approvals for investments in the manufacturing sector amounted to nearly RM50 billion. Foreign investments accounted for nearly three quarters of the total approved.