KUALA LUMPUR: MALAYSIA is an attractive investment destination for multinational companies (MNCs) because of its cost of running businesses, local talent and diversity, said General Electric (GE) general manager of Asia Pacific Global Operations, Yuichiro Yamaguchi.
GE opened its first dedicated tooling centre in Port Klang, Selangor, last Friday to serve more than 300 cross-fleet power generation assets in more than 10 countries across Asia Pacific, offering customers improved and faster services.
“Malaysia is located at the heart of the region, thus making it an ideal gateway to Asean’s population base.
“The infrastructure that is readily available, such as high-speed broadband networks, international air and sea ports as well as the road networks among growth centres, add to the appeal.
“Malaysia also has business-friendly policies that encourage investments into the country, such as robust local talent and diversity as well as low cost of running business,” said Yamaguchi in an interview with NST Business.
Yamaguchi said the new facility featured more than 500 different toolkits that would be used to dismantle, assemble, test, diagnose and increase the productivity of more than 300 installed gas and steam turbines and generators across the region.
“It also further expands GE’s network of power tooling locations, which include facilities in the United States, Europe, Middle East, India and China,” he said.
The centre would be staffed by local engineers and technician, he added.
Universiti Utara Malaysia director of Asian Research Institute of Banking and Finance Dr Irwan Shah Zainal Abidin said GE’s investment would boost Malaysia’s digital economy agenda with the introduction of the first Digital Free Zone in the world, which was expected to materialise this year as stipulated in the 2017 Budget.
“A better market area and urban systems in the digital economy would be established as a result of the setting up of GE’s tooling centre in Malaysia,” he said.
“It will also benefit Malaysia in uplifting growth in a sustainable way and creating jobs for both skilled and unskilled workers on a long-term basis.
“Since it is the first GE centralised tooling centre in Asia Pacific, it will become an enabler in making business activities more efficient in the region via greater integration.
“Some form of positive externalities are expected to occur in Malaysia. These are, among others, the effects of economics of scale, economies of scope, economic agglomeration and network effects,” he said.
Irwan said GE chose Malaysia over other countries in the Asia Pacific due to the resilience of its economy with clear planning and its direction in the short, medium and long terms.
LBB International chief executive officer Dr Marco Tieman said GE now could have access to two world-class ports after locating its tooling centre at the Port Klang Free Zone.
“Westport and North Port together are bigger than Tanjung Pelepas Port. Other than lower total supply chain costs, they have cheaper and better available labour than Johor,” he said.
Meanwhile, experts said Malaysia would stand to benefit from GE’s foreign direct investment in bolstering the country’s digital economy.