Tag Archives: jobs

Manufacturing in Malaysia: Bahru Stainless Starts Production

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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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PayPal Opens Regional Support Center in Malaysia

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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: Penangโ€™s Economic Gains – The Investment Potential for Iskandar is Attracting Interest from Great Britain – Penang Condo Market

Residence Pass for Talented Expats

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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 Market – Strong Singapore Dollar – Singapore Ranks Highly as an Expat Destination

Malaysian Residence Pass for Skilled Professionals

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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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    Penang Condo Market

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    See Topic: Penang Condos 2011 forum discussion of this topic for background information.

    In general property prices can only support what local jobs support. So is Penang adding lots of jobs that can support costly condos? I don’t know, but am skeptical.

    Penang may be a bit of an exception (as a “retirement local”). For retirement locations if you have a future stream of retirees then you can support higher prices than local jobs (this is riskier to rely on as a investor). Retirement locals that are cheaper than where those worked are coming from can seem cheap so those working elsewhere are willing to “overpay.” This could be the situation for Penang.

    MM2H buyers don’t seem that can actually affect the market. Speculators are likely a big player. The smart public policy action in this case is to raise down-payment requirements and increase transaction taxes. This won’t stop a bubble from forming but will reduce the size of the bubble and limit the damage when it pops.

    I wonder if a significant portion of demand (in addition to direct speculation) is Malaysians working in KL, Singapore, USA… buying a condo today that they don’t plan on living in for years. This can be a form of speculation but is a much more solid foundation for sustaining prices. If you have a high working income, purchasing a condo in Penang could be relatively cheap. If you are buying one, to rent for 10 years and then move back into you are unlikely to be harmed greatly when prices drop. Now some people will do this and see their first condo doubled in value and then buy two more, over-leverage themselves and have a great ride up the bubble and then get clobbered when the bubble bursts.

    For the Penang area to sustain a long term boom, Penang needs to develop a sustainable long term pool of buyers. the safest way to do this is with lots of high paying jobs. That can be supplemented with some retirees (Malaysians and MM2Hers). To do either of these the government and developers must pursue strategies that attract these populations. There are other minor factors – you can have people making a lot of money buy a condo for their family or parents… But the only reliable way to sustain increasing property values is adding jobs and creating a pleasant living experience.

    In looking around Penang me sense is that rental prices are very good (for renters). The available condos for rent seem to be quite high also. My guess is this is a sign of the large percentage of speculators/investors compared to those buying condos to live in themselves. This is a dangerous sign – when the market has more capacity than people (normally due to building more housing than the job market supports). My familiarity with the market is extremely limited however, my perception could be way off.

    On the plus side the prices on a regional and global basis are reasonable. Therefor, those accustom to international prices can buy and feel they have a bargain. And this situation can support rising prices (especially if those buyers plan on retiring there – if they need to have a job there then it doesn’t matter how cheap the prices are if the jobs don’t exist). Buying with the hope that Penang is moving toward a prosperous future is reasonable. That is a bet that the island will add jobs and improve infrastructure to support a livable community that attracts people from all over Malaysia, and beyond. There is a great example of how to do this in nearby Singapore. If Penang take cues from many of Singapore’s wish moves investors could certainly be rewarded in the long term.

    One significant risk to investors is the carry cost of their investment if the overcapacity (if there actually is overcapacity) continues over a long period. That will suppress rental rates. As new condos are added it also can reduce the attractiveness of your condo to renters (or future buyers).

    Related: Home Values and Rental Rates – 10 million More Renters In the Next 5 Years (in the USA) – Apartment-vacancy Rate is 7.8%, a 23-year High (in USA, Nov 2009) – Retiring Overseas is an Appealing Option for Some Retirees