A PLACE TO INVEST

Malaysia 2017 | ECONOMY | VIP INTERVIEW

TBY talks to Dato' Hasan Azhari HJ. Idris, Chief Executive Officer of Invest Selangor Berhad, on the strengths of the region, the development of talent, and e-commerce.

What are the key strengths of Selangor State?

Selangor is centrally and strategically located in Malaysia. We have world-class infrastructure, good road networks, and strong port and airport connectivity. Our seaport is the 12th largest in the world and the second biggest in Southeast Asia, after Singapore. We have 17 major highways in our state, enhancing mobility among our population. Our second biggest asset is the talent pool; we provide the most skillful labor force in Malaysia.

What are your focus areas in manufacturing?

We focus on five main clusters: life sciences, electrical and electronics, transport equipment—which covers automotive and aerospace—food and beverage, and machinery and equipment. Apart from these main clusters, we place special emphasis on four other areas: biotech, aerospace, the halal industry, and e-commerce. For these four, we set up special councils, of which three are already in place. In 2015, we inaugurated the Selangor Information Technology and E-Commerce Council (SITEC), focusing on IT and e-commerce development. We also set up the Selangor Bio Council to move the biotech sector forward as well as the Selangor Aerospace Council to ensure that all aerospace-related projects proceed as planned. We are now in the middle of setting up the Halal Selangor Council.

How do you take control over talent development?

We work with universities and try to connect them with the industry. We look at various models on how we can bring them closer and bridge the gap between the demands of the industry and the skills and knowledge of graduates. We formed Talent Initiative Programs that can function as a platform for industry and academia. We also have a training center, the Selangor Human Resource Development, aimed at the development at vocational training. Here, we venture into another program that will enable students to further their academic career at the university level after their vocational training. We tailor these programs to the four focus areas for growth that we have outlined.

Can you tell us more about the biotech industry?

We have few focuses under life sciences, and these include pharmaceuticals and biotech. For biotech, we will develop a special dedicated area called Selangor Bio Bay. We plan to launch it by the end of 2016 or early 2017. We have almost 1,000 acres, close to Westport, allocated to this project. Centrally, we will develop the biotech center, with a number of related facilities around that. We will invite other companies to operate here as well as residential and commercial real estate developers. As we are still in the research phase, we visit Australia, Korea, and San Francisco, and Boston in the US to get input.

What are your efforts to attract more investment in the halal industry?

We are the first state to develop a halal park, which we called the Selangor Halal Hub and it is located in Pulau Indah. It was set up in 2003 and has attracted a number of investors in the food industry, among others: F&N Dairies, Mewah Dairies, Kawan Food Manufacturing, Sydney Cake House and Ramly Food Industries. We planned to enhance the Halal Park by adding the Halalan Toyyiban ecosystem through another initiative, Halal International Selangor (HIS). HIS is set to become a single community, a global market platform for the Global Halal Toyyiban Trade and Industry. The initial program is to facilitate the Human Capital Development program via the introduction of Halal Technical Competent Person (HTCP), a competency-based education and training program. This program is envisaged to facilitate and accommodate the halal industry with competent halal human resources required by global halal industry. All halal certified companies can appoint one of their staff to be this HTCP to ensure that all the company's processes are halal compliant. It is similar to the manufacturing industry that requires HSE and QA officers. We design complete modules and intend to market this abroad as well. We have spoken to some potential partners and are happy to hear that these standards will be recognized domestically and in the international market. We will not limit ourselves only to food and beverage; the Halal industry is much larger than that. Furthermore, we are progressing on the planning of other halal ecosystems, such as e-commerce platforms and distribution chain.

Regarding e-commerce, what are your efforts here?

Since 2015, we have had several e-commerce initiatives. One of the most fruitful ones was a program for training SMEs to develop their own apps and to become online sellers with their products. Initially, we targeted having 220 merchants online by the end of 2016, and were happy to have 187 companies that had successfully opened a web store up to date. Within 13 months, the Selangor Information Technology and E-Commerce Council (SITEC) had organized about 30 E-Commerce classes and startup sharing sessions with an average attendance of around 100 people per class. SITEC also successfully organized several international conferences focusing on e-commerce, including a trade mission to Taiwan to touch base with 1,000 merchants there during a visit to five major cities. We also have the Selangor Digital Creative Center, where we provide co-working space for these SMEs, a center that functions as a startup incubator.

How do you interact with Chinese investors in Selangor?

Chinese investors are attracted to the large infrastructural development projects across the country, and most of these are carried out by the federal government. We do not target companies and investors, but instead focus on those that bring new technologies and are active in innovative manufacturing.

What are your ambitions for Selangor state?

We have annual KPIs for foreign investment that we attract in the manufacturing sector. In 2015, our target was MYR8 billion and we managed to get MYR7.96 billion. In 2016, we target MYR6 billion, slight lower due to the uncertainty in global economics. This is FDI and DDI combined. Looking at the momentum and the trend for the first quarter, we are optimistic we can achieve this. Great examples of this momentum are the partnership between Rolls Royce and UMW and the fact that Airbus also chose a local engineering company to become a global supplier are good indicators for us. We have also seen a few large Japanese companies that announced expansion of the projects, mostly in the field of electronics and automotive industries. With these investments, we feel comfortable we can reach our targets.