ASIA NEWS NETWORK
WE KNOW ASIA BETTER
Investing in Greater Kuala Lumpur
Publication Date : 20-08-2012
InvestKL Malaysia, a special agency set up to attract more multinational companies to invest in the Greater Kuala Lumpur, is committed to change the investment landscape of our capital.
Although it has just celebrated its first anniversary about a month ago, it is staffed by an experienced team to carve out its footprint on the global map. InvestKL CEO Zainal Amanshah shares with StarBizWeek his vision and passion in the making of the Greater Kuala Lumpur.
What are the findings of your recent road show to promote Greater Kuala Lumpur?
We recently went for a road show in the US and Europe and there were some interesting findings as a result of engaging with the multinational corporations (MNCs) and the big tax and advisory consultants.
When an MNC makes a decision to invest, it usually engages one of these big consultancy firms.
For example, MNCs who are very familiar with Malaysia and Kuala Lumpur, would engage the consultants to structure their tax optimisation.
Those who are unfamiliar with Malaysia would engage these consultants to know more about the country's profile such as political stability and infrastructure.
What is more interesting is that the majority of these MNCs and consultants who advise the MNCs have never been to Kuala Lumpur.
There is a big gap as people know Singapore and Hong Kong. Malaysia and Kuala Lumpur collectively is a hidden gem as people are unaware that we have a lot to offer in terms of business and liveability propositions.
So what is InvestKL going to do about this?
We need to do more direct engagements, especially with the tax and advisory consultants.
They are very important because they advise the MNCs.
We must engage and reach out to them, and explain about the Economic Transformation Programme, what are the opportunities here, how we are liberalising, and structural policy reforms all these are news to them as they think that Malaysia is very much a manufacturing hub and engages mostly in just back office activities.
Which sectors is InvestKL strategising to attract to Greater Kuala Lumpur?
We are promoting six sectors; financial services, business services, oil and gas, healthcare, electronic and electrical (E&E), and wholesale & retail.
We are targeting and reaching out to the top MNCs in each sector. If they are already here, there is still a lot of upside for growth.
We also want to attract high services businesses. Even if it is an E&E investment, there should be service and hi-tech elements to it.
In addition to what we have on our plate today, to attract MNCs to invest in regional headquarter operations, we also have a new focus which is to have MNCs set up what we call “control tower” activities here.
This would entail bringing their decision makers here or making Kuala Lumpur a regional location for their decision making, centres of excellence, training, research and development, and treasury management.
It is sad that when I talk to some MNC CEOs, their companies could be generating a few hundred million worth of businesses here but the billings and transactions are done somewhere else. It should be done here.
If the MNCs are in the food business, they can do their halal certification here.
We also want to attract more innovation based type activities here. We have been doing this in small ways, but our neighbouring countries are more aggressive.
Can you imagine the people that would be needed for these kinds of activities and the amount of high-skilled jobs that we will generate?
What does Greater KL has to offer to these MNCs?
Strong business and liveability propositions. We have ample business and investment opportunities under the ETP, structural policy reforms which are investor friendly, multi-language talent, and low inflation. In addition, we offer highly competitive cost of doing business and living.
We are very affordable. Most MNCs like the cost factor of Malaysia as money goes a long way here compared with Europe and some other parts of the world.
Our government is also very generous when it comes to incentives as reflected in the GIFT programmes for oil and gas trading companies, which was launched by Malaysia Petroleum Resources Corp. As a result, we now have more oil traders based in Kuala Lumpur.
So, we must package these business offerings with the liveability aspects of Greater KL such as world-class infrastructure, excellent services and facilities, friendly locals and an abundance of natural attractions.
We recognise that the liveability aspect needs to be further improved, for example better maintenance and security. These is work in progress. We are also improving public transport by building the MRT and establishing a number of business hubs. The transformation of KL will take some time but at least we are in the right direction. We should recognise that KL is a good place to work and live.
In terms of hubs, we have the Tun Razak Exchange which is offering many attractions and incentives. We also have KLCC where many expatriates work and they live within the same area. These hubs are unknown to investors and we must tell them how they can benefit from these business centres.
Does Malaysia have the talent to support the creation of high-skilled jobs?
We are doing a couple of things. We are working with Talent Corp to bring Malaysian talent who are living and working abroad back home. We are talent sourcing and developing programmes for talent development.
Let's say that a MNC has employed some Malaysians abroad, we can bring them back. Or if the MNCs need to bring some of their senior management team members here, they also can do that.
Secondly, we are working also working with Talent Corp and the local universities to source for local talent. What we have today is a talent pool of multi-lingual, multi-cultural and hardworking people.
But the big question is do we have internationally competitive talents who can do modern jobs?
The modern job professional would need to be a decision maker, innovative and have good management skills.
Having said that, the availability of creative talent is not only a challenge in Malaysia but is a global phenomenon.
What is InvestKL investment's target?
We target to attract about 100 MNcs by 2020 and that translates to about 10 MNCs per year.
Last year was a short year for us; we are fortunate that we are able to reel in six MNCs investment as Pemandu has done some groundwork for us.
This year, we have to start from scratch by looking into our database and re-articulating the propositions for Greater KL where the average deal-cycle is about 12 months.
For the 100 MNCs targeted by 2020, the gross national income (GNI) is expected to be around 40 billion ringgit (US$12.7 billion).
As we are moving away from manufacturing-based investments into services-based investments, the capital expenditure value might not be that big but it will create a lot of high skilled and highly paid job opportunities.
This year, we have interesting projects or investments where we are potentially going to get the control tower type of operations to be based here in Kuala Lumpur.
These MNCs (all the companies that InvestKL talked to are in the Fortune 500 and Forbes Global 2000 list) are from the US, selected European countries and Asian countries, namely Japan, Korea and China.
What are challenges that you face in attracting these MNCs?
Speed. We have to move faster because MNCs want to see some predictability. So, if they are interested and come to a point where they have submitted applications for tax incentives or other matters, we must get back to them fast. This is an area that we need to improve.
The bottomline is about the ease of doing business here.
Next, we will also have to continuously work on the softer aspects of doing business such as our infrastructure, security and entertainment.
How do you balance between moving away from manufacturing and delving into more service-centric investment?
If we have an investment to set up a manufacturing facility in the Greater KL, and we see that there is a fit, we will do it as Selangor has a lot of land to offer. In addition, we will also pitch the idea to the MNC to not just only set up their manufacturing facilities here but also to create their management centre here as well.
All this while you were in the private sector and now you have crossed over to the public sector. How has that been working out for you?
I was in private sector since late 1980s. My last stint was with Redtone for 11 and half years. In Redtone, almost 50 per cent of our clients were MNCs. Today, I deal solely with MNCs so this is quite a natural progression for me.
Both roles challenge me to work hard to achieve my target. Redtone was a challenger in the telco industry. Greater KL is a challenger too as the target is to be among the top 20 cities in terms of economic activities and liveability.
Being in InvestKL, I am proud that we are contributing to the ETP and we are highly driven by this.
I am also amazed at the amount of talent that we actually have in the Government to leverage on.
I am really enjoying what I am doing and sometimes, I am not even aware of how fast time flies. I just realised that July 11 was InvestKL's first anniversary!
What do wish to say to our fellow Malaysians in working together to make Greater KL a success?
Let's work together and be objective even when critical. Let's be more positive and promote the good things about Kuala Lumpur. Be ready to take on the 2020 challenge. We have an abundance of talent in Malaysia and all we need to work on is our will to succeed.