Government Facilitation for the Iron and Steel Industry

Transcription

1 Government Facilitation for the Iron and Steel Industry 1

2 Slides Outlines Introduction of MIDA Investment Performance Status of Ferroalloys Industry Investment Policies & Guidelines Free Trade Agreements

3 Introduction of MIDA

4 Who Are We? The principal Malaysian Government agency responsible for the promotion of investments and coordination of industrial development. 1st point of contact for investors who intend to set up projects in the manufacturing and services sectors in Malaysia Malaysian Investment Development Authority, Established in 1967 under Act of Parliament, 1965 Foreign Direct Investment Domestic Investment Manufacturing & Selected Services Functions of MIDA Manufacturing Licenses Tax Incentives Expatriate Posts Duty Exemption Principal Hub & selected services Assist companies in the implementation & operation of their projects Facilitate exchange & coordination among institutions engage in or connected with industrial development Advisory Services Planning for industrial development Recommend policies & strategies on industrial promotion and development Formulation of strategies, programmes and initiatives for international economic cooperation 4

5 Investment Performance

6 Phases of Industrial Development 2050 GDP CONTRIBUTION (%) SECTOR Agriculture Mining s Digital Economy, Industry 4.0 & E- Commerce Innovation, ETP & High Income Construction Manufacturing Services Malaysia has successfully transformed from a predominantly agriculture-based economy in the 1970s, to a more diversified economic structure. Source : Department of Statistic Malaysia, BNM 1970s 1980s 2000s 1990s Technology Intensive Resource-based & heavy industries Economic Corridors & Services 1960s Export Oriented & Labour Intensive Import Substitution 6

7 Total Approved Investment in 2017 US$22.9 bil. Projects Approved DDI US$13.7bil. 60% FDI US$9.2 bil. 40% FDI DDI 1,116 Employment opportunities 68,433 US$1 : RM4.00 Project Employment Investment (US$ Mil.) Manufacturing ,421 15,921.2 Services ,979 27,870.7 Primary

8 Approved Projects By Major Countries, 2017 (Manufacturing) USD 611 USD 964 USD 379 USD 508 USD 576 China, Switzerland, Singapore, the Netherlands and Germany were the main sources of FDI, contributing more than half of total foreign investments approved 8

9 Approved Projects By Industry, 2017 (Manufacturing) 9

10 Status of the Ferroalloys Industry

11 Iron & Steel Industry Snapshot Crude Steel Production : 2.76 million MT Exports: 1.06 million MT Imports : 9.13 million MT Implemented Projects: 2, Basic Metals, 1,779 Metal Fabrication Employment : 196,311 *Figure as at

12 Realised Projects For Basic Metals and Fabricated Metal Products NUMBER OF PROJECTS EMPLOYMENT CREATED 832 1, ,184 75,127 TOTAL INVESTMENT FOREIGN INVESTMENT USD 19.4 Bil USD 7.5 Bil USD 8.9 Bil USD 4.2 Bil Basic Metals Fabricated Metals 12

13 Projects Implemented for Ferroalloys Industry as at 2017 Samalaju, Sarawak Total Investment : USD 980 million Jobs created : 2,641 13

14 Ferroalloys Ecosystem (Ferrous) Raw Material Iron Making (Blast Furnace, BOF) UPSTREAM Steel Making (EAF / IF) Long Products Flat Products Companies In Production Pellets, Iron Ore, Ingots, Scrap, Ferro Alloy OM Materials SB Sakura Ferroalloys SB Pertama Ferroalloys SB Elkem Carbon Malaysia SB DRI, HBI / Pig Iron Alliance Steel (M) SB Eastern Steel SB (will resume production by Oct 2018) Established Metal Industries SB Ann Joo Integrated SB Molten Steel (In house used) Billets Blooms Slabs Malaysia Steel Works SB Amsteel Mill SB Antara Steel Mills SB Ann Joo Integrated SB King Hong Steel Southern Steel Berhad Malaysia Steel Works SB Southern Steel Bhd Amsteel Mills SB Leader Steel SB Unimekar Industries SB Antara Steel SB NIL Eastern Steel SB (will resume production by Oct 2018) 14

15 Investment Policies & Guidelines

16 Investment Policies Equity Ownership Foreigners are allowed to hold 100% equity owneship in the manufacturing and selected services sectors Repatriation of Income Freedom to repatriate capital, interest, dividends and profits. No restrictions Intellectual Property Protection Malaysia s IP laws are in conformance with international standards - Member of the World Intellectual Property Protection Organisation (WIPO) - Signatory of the Paris Convention and Berne Convention which govern IP rights - Signatory of the Agreement on Trade-Related Aspects of IP Rights (TRIPS) under the WTO Business Friendly Policies Investment Guarantee Agreements (IGAs) Malaysia has signed IGAs with more than 60 countries Employment of Expatriates Key posts (posts that are permanently filled by foreigners) Term posts (posts that are filled by foreigners for a period of 1-5 years) 16

17 Manufacturing Licence Application A company with shareholders funds of RM2.5 million and above or employing 75 or more full-time paid employees to obtain a Manufacturing Licence. "Shareholders' funds" as the aggregate amount of a company's paid-up capital, reserves, balance of share premium account and balance of profit and loss appropriation account "Full-time paid employees" as all persons normally working in the establishment for at least six hours a day and at least 20 days a month for 12 months during the year and who receive a salary. Additional criteria: Cost of investment per employee (CIPE) at least RM140,000: AND Malaysian manpower must at least 80% of total manpower: AND Value added at least 40% or managerial, technical & supervisory at least 25% Forms can be downloaded from: 17

18 Major Incentives Pioneer Status Income tax exemption of 70% or 100% for a period of 5 or 10 years Investment Tax Allowance 60% or 100% on qualifying capital expenditure for 5 years Reinvestment Allowance 60% on qualifying capital expenditure for 15 consecutive years Import Duty Exemption For raw materials / components and machinery and equipment 18

19 Targeted Subsectors/Activities List of promoted products/activities under the Promotion of Investment Act (PIA) 1986: Manufacture of Iron and Steel Blooms or slabs of steel Shapes or sections of steel of height more than 200 mm Plates, sheets, coils, hoops or strips of steel: - Hot rolled - Cold rolled/cold reduced Seamless steel pipes Ferromanganese, silicon manganese or ferrosilicon Electrolytic galvanized steel sheet in coil Manufacture of Non Ferrous Metal and their products Primary ingots, billets, or slabs of non-ferrous metals other than tin metals Bars, rods, shapes or sections of non-ferrous metals except EC copper rods Plates, sheets, coils, hoops or strips of non-ferrous metals Pipes or tubes of non-ferrous metals Aluminium composite panel 19

20 Free Trade Agreement

21 MALAYSIA IS CONNECTED TO THE WORLD THROUGH FTA s MALAYSIA IS THE STRATEGIC GATEWAY TO KEY MARKETS LEVERAGING ON FTAs Market size: 2.7 billion people Tariff reduction and elimination: 2016 Malaysia Malaysia has implemented 13 FTAs: ASEAN 1. ASEAN Free Trade Area (1992) 2. ASEAN-China (2004) 3. ASEAN-Korea (2006) 4. ASEAN-Japan (2008) 5. ASEAN-India (2009) 6. ASEAN-Australia-New Zealand (2009) BILATERAL 1. Japan (2005) 2. Pakistan (2007) 3. New Zealand (2009) 4. Chile (2010) 5. India (2011) 6. Australia (2012) 7. Turkey ( ) Malaysia is still negotiating Regional Comprehensive Economic Partnership (RCEP), Malaysia-EU, Malaysia-EFTA and ASEAN-Hong Kong. 21

22 Air Connectivity Singapore: 45 minutes (90x daily) Jakarta: 2 hours (32x daily) Bangkok: 2 hours (34x daily) Hanoi & Ho Chi Minh: 2 hours (18x daily) Manila: 2.5 hours (12x daily) Phnom Penh & Siem Reap: 2 hours (6x daily) Brunei: 2 hours (5x daily) ASEAN Economic Community and Single Market Yangon: 3.5 hours (3x daily) ASEAN:633 million market, 8.8% of world s population Implemented AFTA in th largest economy in the world combined GDP USD2.4 trillion 3 rd largest market in the world - population over 633 million people in 2015 and estimated to 717 million in Intra-ASEAN trade is 24% of total global trade of USD2.51 trillion in 2013 Total FDI inflows of USD122 billion in 2013 with intra-asean investments alone contributing 17% 97.3% of products traded in the region will be duty-free ASEAN Economic Community 2015, integrated market & production base freer flow of goods, services, investments, skilled labour and capital 22

23 Dominant position in Islamic Finance Development Indicator (ICD- Thomson Reuters) Best countries to invest (BAV Consulting and the Wharton School of the University of Pennsylvania. 2017) Global offshoring destination (A.T. Kearney Global Services Location Index 2016) Protecting investors (World Bank Doing Business 2017 Report) Most attractive investment destination (Baseline Profitability Index (BPI) 2015) RANKING Manufacturing Value Added (Bloomberg Innovation Index 2017) Most competitive economy in overall performance (IMD's World Competitiveness Yearbook 2017) 23

24 Why Malaysia? STRATEGIC LOCATION Home to Tropical Paradise We Embrace Multiculturalism An Unsurpassed Lifestyle Liberal Investment Policies Political and Economic Stability Pro-business Government Well Developed Infrastructure/ Connectivity Harmonious Industrial Relations Excellent Facilities - Convention and Conferences English speaking language Liberal Business Environment Young, Trainable and Educated Labour Force Banking System Quality of Life IP Protection Good Track Record 24

25 Contact us Be With Us On Mobile: Business Information Centre (BIC) Opening hours: Mon - Fri 8.30 a.m p.m. URL : URL : URL : URL : 25

26 Thank THANK YOU you MALAYSIA Your Your Profit Profit Centre in in Asia Asia Malaysia is a vibrant economy. Talk to MIDA and discover how Malaysia can be your Profit Centre in Asia For more information, please visit or to investmalaysia@mida.gov.my 26