MNCs keen on principal hub scheme

KUALA LUMPUR: Malaysian Investment Development Authority (Mida) has disclosed that about 20 multinational companies (MNCs) are in the pipeline to join the country’s principal hub (PH) scheme by the end of this year.
“There are some small and big fish from the electrical and electronics (E&E), oil and gas, healthcare and services sectors,” International Trade and Industry Minister Datuk Seri Mustapa Mohamed said after announcing the establishment of a PH in Johor by JCY International Bhd last Friday.
Asked on the potential investments of the 20 companies, he said it is too early to come out with the figures.
Mustapa said from its introduction in May 2015 until now, Mida has approved 12 PH projects in the aerospace, E&E, food & beverage, engineering and resource-based industries with investments worth RM7.31 billion.
“These projects will generate about 728 high-value jobs and will be located at various areas in Malaysia, including Kuala Lumpur, Johor and Negri Sembilan,” he added.
Meanwhile, JCY chairman Dr Rozali Mohamed Ali said the group sees the PH initiative as an important part of its springboard to the future, as it will enable to consolidate its resources across various entities within the group as well as the hard disk drive (HDD) industry.
He said the group will be investing about RM50 million to set up the PH that will function as its global procurement centre, which will control the supply chain functions that were previously undertaken by its entities in Singapore, British Virgin Islands, the Mauritius, Thailand and China.
With the new project, JCY will create 82 more jobs with almost 80% to be filled by local workers, half of whom will offered a monthly salary of more than RM5,000. Its local operations currently employ 1,400 Malaysians.
JCY is one of the largest HDD manufacturers in the world, with sales bringing close to RM2 billion of foreign exchange into Malaysia annually, and has a RM1.4 billion market capitalisation. The group holds at least 25% of the global market share currently.
The PH scheme fully supports local and foreign MNCs in their offshore trading as it eliminates previous restrictions associated with international procurement centres, and regional distribution centre schemes, such as drop shipment limits, brand distribution requirements and the requirement of serving a related local manufacturing facility in Malaysia.
JCY is the first listed Malaysian company to join the scheme.