Tag Archives: economy

Manufacturing in Malaysia: Bahru Stainless Starts Production

Malaysia’s economic develop plans have been progressing well the last few years. Balancing the development of an economy is a tricky business and many countries slip up along the way. Good plans and policies are needed. And then good execution. Good execution requires 1) attracting investors, 2) infrastructure, 3) skilled employees, 4) the ability to get plan implemented, 5) managing the environment, 6) urban planning…

Malaysia has several key areas targeted for development, including: education, energy, health care, computer technology, finance and banking. One area of focus in the Iskandar area in Johor (southern Malaysia). Penang and Kuala Lumpor are also growing well.

Bahru Stainless (a joint venture between Acerinox Group [67% stake] a Spanish company, Nisshin Steel [30% stake] a Japanese company, and Metal One) has started production. This is exactly the type of thing that is going to determine how well Iskandar, and Malaysia do going forward.

Photo of employees inside Bahru Stainless

Employees of Bahru Stainless, Johor, Malaysia

On the 12th December the first coil in the annealing and pickling line was successfully processed, which completes Phase I of the project. The current production capacity amounts to 240,000 Mt (megatonne) a year, out of which 182,000 Mt will be cold rolled. USD 370 million has been invested so far. This event is the culmination of a long process started in 2007, with feasibility studies.

The construction of Phase II is proceeding at a good pace. This phase, which start up is scheduled for the first quarter 2013, will increase the production capacity to 400,000 Mt/year. Likewise, it will allow Bahru Stainless to produce special steel grades and thin thicknesses, which are products with more added value. The investment of the second phase is estimated in USD 310 million, including a cold rolling mill, a cold annealing and pickling line, auxiliary lines, a laboratory, and an electric substation, which in the future will also feed the electric furnaces when they will be in operation.

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Johor Bahru Customs, Immigration, and Quarantine Complex (CIQ)

photo CIQ building in Johor Bahru

Johor Bahru CIQ

The Johor Bahru Customs, Immigration, and Quarantine Complex (CIQ) is a very large complex at the causeway to Singapore that accommodates Malaysian customs check for cars, trucks, buses and the JB Sentral train station. The CIQ was opened in 2008. The complex is know as CIQ – if you tell a taxi for example they will know where you mean to go if you say CIQ.

photo of Johor Bahru CIQ

Looking up to Johor Bahru CIQ from the street (all photos by John Hunter)

Queues are often reasonable but at rush hour (especially leaving Singapore on Friday’s and near public holidays) can be long. In several ways taking the bus is quite appealing (costs of bringing a car into Singapore plus tolls and there are significant restrictions on taxis that make that option difficult) but the walking from the entrance to the custom lines is quite a distance so that will add 5 minutes to your time. And waiting for a bus once you clear customs can add another 5 – 10 minutes. [update – given all the long delays and complaints from people they reopened walking over the causway as an option. A newspaper story in 2016 claimed 300,000 people walk across each day, that surprises me and I am not 100% sure the number is accurate]

The 2nd link (to the West) has shorter queues currently (these are the only 2 links between Singapore and Johor Bahru now). That is one of the reasons many people have been buying out near the 2nd link. Also that is a focus area for the Iskandar economic development initiative and the available of housing estates with integrated security and new bungalows is another attraction.

JB Sentral, which opened in 2010, is located in the same area and includes the train station and a large bus terminal.

Singapore and Malaysia have been taking recently about extending the MRT (light rail) from Singapore into Johor Bahru before the end of this decade and the likely location of the first stop is JB Sentral. This MRT (and extending 5 to 7 more stops in Johor Bahru will be a welcome improvement to mass transit and continue to build the economic ties between the two cities. Currently you have to take the long walk through Malaysian customs, then walk to the bus, take it over the causeway, walk through Singapore customs, catch the bus again and then got to the MRT (which for some reason isn’t the closer Woodlands MRT but the Kranji MRT). So just getting on the MRT in JB and clearing customs and getting right back on will be a big improvement. Of course they will have to add quite a few more customs staff to prevent long queues.

Related: Taking the Bus from Johor Bahru to SingaporeResidence Pass for Talented ExpatsPenang Condo Market

PayPal Opens Regional Support Center in Malaysia

PayPal announced it will open a new regional customer support center in Malaysia. The site opens with 200 employees and they may hire up to 300 more employees over the next 3 years. PayPal’s new facility will offer service and support for customers across Southeast Asia as well as provide operational support for PayPal’s global payment service.

Based in Kuala Lumpur, PayPal’s new customer support center is currently hiring for a wide range of positions including customer service, merchant support and other operational support roles. PayPal is now accepting resumes from experienced applicants (I had added a link to apply but their job site is so lame I removed it – hopefully Paypal isn’t as backward as their job site makes it appear, or those jobs might not last long).

“PayPal is experiencing phenomenal growth in the Asia Pacific region and this new support center demonstrates our commitment to offering a safe, secure online payment platform to millions of customers across the region, especially in Southeast Asia,” said John McCabe, senior vice president of global customer service and operations, PayPal. “We chose Malaysia because of its highly-skilled, globally competitive and multilingual workforce, in addition to a world-class business environment and technology infrastructure.”

“We believe their decision to put up a major regional facility here is a strong endorsement of Malaysia as a vibrant hub for the high-technology industry. As an MSC Malaysia-status company, PayPal is an important and strategic partner to us, as we move towards realising our nation’s goal of becoming an innovative digital economy,” said Datuk Ghazali, CEO of Multimedia Development Corporation (MDeC).

Kuala Lumpur joins the other customer support locations for Paypal: Shanghai, China; Chandler, Arizona, USA; Omaha, Nebraska, USA; Dublin, Ireland; Berlin, Germany.

Adding jobs such as these in the key growth areas of technology and financial services is important for Malaysia’s economic plan. Attracting these companies to locate here is important. And keeping them here and having them add jobs will be a big factor in the future of the Malaysian economy.

It is also important to build the economy in multiple areas, targeting: Johor, Penang, Sarawak and Kuala Lumpor makes sense to me. And given the success in Kuala Lumpor already, I would really try and focus on adding jobs elsewhere whenever possible. Still, gains in Kuala Lumpor are a very positive sign. And targeting several industries is also wise, good targets for Malaysia: internet technology, finance (especially in the areas of back office support for Singapore and Islamic finance), energy, manufacturing, health care and education. Advancing the progress on the residence pass for talented expats would be a big help for Malaysia’s economic future.

Related: Penang’s Economic GainsThe Investment Potential for Iskandar is Attracting Interest from Great BritainPenang Condo Market

Penang’s Economic Gains

There is an interesting article in Bloomberg on the Penang’s recent economic success:

Penang’s progress highlights the challenges facing the rest of Malaysia and the National Front government as China, Indonesia and Vietnam offer investors bigger workforces while Singapore lures talent with lower taxes and easier immigration. Lim, 50, the country’s only ethnic-Chinese state leader, embodies the contrast between Penang’s business transparency and the four-decade old policies of the ruling party that favor Malays, which the World Bank says undermine competitiveness.

I am sure that is a politically contentious issue. The very good sign, I think, is the ability of Penang to experiment. For countries to succeed in this very competitive environment they need to experiment and can’t be afraid to disappoint some people. I see Malaysia doing many good things, including recognizing the brain drain and the need to build a partnership with Singapore.

In the first seven months of 2011, Penang won 3.6 billion ringgit ($1.2 billion) of approved foreign manufacturing investment, ahead of the 3.4 billion ringgit that went to Selangor, the state that surrounds the capital Kuala Lumpur, a government report showed last month.

Under Najib’s Economic Transformation Program, his government is promoting about 65.8 billion ringgit of private- sector-led projects for southern Johor state, compared with at least 375 million ringgit for Penang, according to data compiled by Bloomberg. The comparison excludes projects covering multiple states or those without a clear single location, which amounted to 34.3 billion ringgit nationwide.

With my admittedly limited knowledge of Malaysia investing in Johor, to build a dynamic relationship with Singapore, is very wise. It seems to me investing in creating strong economic center’s in KL, Penang, Johor and Sarawak makes a great deal of sense. It is always wise to spread development around – at the same time concentrating it (somewhat contradictory, I know).

And the long term economic plans seem very wise: investing in building a high tech workforce, building around natural resources, targeting some key industries (health care, manufacturing…). I would also strongly push to maintain and upgrade the use of the English language. Granted, that is useful for me personally, but economically it is a powerful tool to grow Malaysia over the long term.

Building economies into mid-wage and mid-to-high-wage economies is very difficult. You need to constantly be looking out decades while still making people’s lives better today. And moving the society along with the economic development. Economies are made up of people, forgetting that is dangerous. But they also are in competition with many other countries that are doing what they can to grow and compete with your country. The balance is not easy, but it is much easier when the economy is growing and the gains cResidence Pass for Talented Expatsan be distributed to show people what has already been gained and dream about the potential.

Related: Penang Condo MarketResidence Pass for Talented ExpatsStrong Singapore Dollar

Residence Pass for Talented Expats

I wrote about the Malaysian Residence Pass for Skilled Professionals previously. I found some up to date links to the official site, with some updated information (do see my original post, as the post shares information I don’t see on the official site now – that information may not be official but it does provide some good ideas on what was being thought of when the program was originally announced).

One part of the plan for long term economic growth is to focus on workers with highly valued talents globally: technology, engineering (oil production, construction, manufacturing…), higher education, health care… From the official TalentCorp site (this is the organization the government is putting in charge of implementation of the efforts to attract and grow talent):

a nation’s economic growth would hinge on its ability to attract, nurture and retain top talent. Malaysia has thus far achieved some success in steering its economy to current levels. Going forward, talent is expected to play a key role in supporting Malaysia achieve its objectives of propelling the economy to a high-income status.

Major cities around the world have thrived because of talent and their ability to capitalize on the best and brightest minds around. Malaysian professionals from abroad and top foreign talent complement the Malaysian talent pool, providing variety and diversity in terms of expertise and experience. Our local pool must be enhanced with the best skills and talents that can be tapped globally.

We welcome talent to Malaysia, which offers a host of opportunities for talent to develop and enhance their skills and experience in key sectors of the economy. The Malaysian Government has rolled out various initiatives and programs to engage top foreign talent in the long term.

As I mentioned the Residence Pass (which offers a long term visa without being tied to 1 employer – for skilled professionals) program was signed in April of 2011 to attract and keep top talent in Malaysia. Since my original post the program is officially providing the new passes. However, at this time, it is limited to those expats already with a current visa and having been in Malaysia on such a visa for the last 3 years.

Obviously this is a very small percentage of the talent available globally. So the program will obviously need to expand to be more useful. But I don’t see any details on when that will happen. I have asked but have not received a response yet. Please share information you have that others would find interesting.

As I said before, I think this effort to attract, retain and encourage the development of internationally valuable talent is a very wise move by Malaysia. I have written about the importance of science and engineering to economic development on the Curious Cat Science and Engineering Blog for years: How to Build a World Class Technology Economy (2006)The Economic Benefits of Engineering Excellence (2007)Keeping Out Technology Workers is not a Good Economic Strategy (2009)Science and Engineering in Global Economics (2006)Asia: Rising Stars of Science and Engineering (2007).

Related: Penang Condo MarketStrong Singapore DollarSingapore Ranks Highly as an Expat Destination

Malaysian Residence Pass for Skilled Professionals

The Residence Pass program officially launched on April 1st. I still can’t find much information on it. If I am reading things right, Talent Corporation Malaysia Bhd has been tapped by the government to lead this effort.

The Residence Pass was a new immigration instrument which offers 5 to 10 years of residence and work in Malaysia. Unlike other employment passes it is not tied to a specific employers so it allows workers to move between jobs much more easily. For the initial phase of implementation, Residence Pass applicants must hold a valid Employment Pass. The Residence Pass is targeted at world-class talents and thus, to secure approval, applicants must demonstrate a high level of professional achievements, supported by possession of relevant qualifications and work experience, especially in key economic sectors, as identified under the Economic Transformation Programme.

Currently, only those with current employment passes are eligible to apply (but eventually it will be opened to others). To requirements/materials needed to apply for the RP Talent pass are:

  • Academic Qualification: Bachelors / Masters / PHD degree in any discipline from a recognized Institute of Higher Learning, Diploma or a Professional / Competency Certificate from a recognized Professional Institute.
  • Total years of working experience: MINIMUM total of 5 years working experience.
  • Salary: MINIMUM gross annual salary of RM144,000 (approximately US$50,000)
  • Industry/Sector: Applicant from all industries and sectors are welcomed to apply.
  • Local Sponsor: Applicant must have a local sponsor i.e Malaysia Citizen, 21 years old and above.
  • Recommendation: Any recommendation from regulatory bodies will be an added advantage.
  • Years of experience working in Malaysia: MINIMUM total of 3 years working experience in Malaysia and it must be continuous.
  • Income Tax File No: Applicant must have an Income Tax File Number in Malaysia and have paid income tax for a MINIMUM of 2 years.
  • My understanding (though I could definitely be wrong) is that the last two will be removed at a later date, I believe, allowing those who have not worked in Malaysia to apply. I believe the idea is to retain and attract new talent, therefore the last two requirements don’t seem to make sense. My guess is they are just using it, initially, as a way to control applications.

    The Residence Pass Talent Application Form is required only for manual submission of applications. Required documents include: copy of passport, updated resume, and a copy of educational certificates. It seems to cost 2,000+MYR to apply (about $700).
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