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KUALA LUMPUR: After decades of focusing their operations on the electrical and electronics (E&E) sector, Japanese companies are now diversifying their huge investments into new areas to reaffirm their confidence in Malaysia as their top foreign investment destination.
Japanese Ambassador to Malaysia Hiroshi Oka said startups are starting to grow in new areas of the country by venturing into the healthcare, medical device manufacturing, digital technology and halal food industries.
“Japanese companies had started arriving in Malaysia in the 1970s and when trends accelerated with the start of the Look East Policy in the 1980s, world famous Japanese companies such as Toray, Hitachi, Sony and Panasonic rushed to operate in Malaysia.
“There are now about 1,500 Japanese companies in Malaysia and these companies have helped to industrialize Malaysia. Approximately 40% of Malaysia’s exports come from the E&E sector and this field has traditionally been exactly the focus area of Japanese direct investment.
“We have grown along with the industrialization of Malaysia,” he told Bernama.
While industries across the board suffered severe declines resulting in massive job cuts due to the Covid-19 pandemic, Japanese companies have managed to retain their employees, totaling 340,000 in the manufacturing sector alone, in the many months of the motion control command.
This is one of the most fantastic dimensions of Japanese investments in Malaysia, Oka said,
He said that last year Japan was the largest provider of foreign direct investment in Malaysia, accounting for about a third of the total flow of direct investment in Malaysia, “and this is the resounding endorsement by Japanese companies of the attractiveness of Malaysia and, interestingly, , Japanese investment areas have diversified significantly ”.
In the healthcare sector, last year Mitsui, one of Japan’s leading trading houses, acquired an additional 16% of Malaysia’s global hospital network, IHH.
A Japanese medical device manufacturing company, which has been producing highly sophisticated cardiovascular medical devices in Japan, has established its first new overseas plant in Malaysia to export its products to Japan.
“The company is also looking to export its high-quality medical devices to Asian markets in the future. So medical device manufacturing is one of the new emerging areas for Japanese investment in Malaysia, ”he added.
In digital technology, a start-up company was created in Malaysia this year to provide mobility data-based services to enhance awareness of driving safety while having fun, and to contribute to the distribution of traffic volume and the reduction of accidents.
Another established name, Hitachi, also provides solution services based on digital technology and is making Malaysia its regional hub for this service throughout the Asean region.
On the halal industry, said the ambassador more and more, Japanese food industries are attracted to Malaysia as the halal certificate provided by Malaysia is considered highly credible globally.
“They are making Malaysia a starting point from which to go out into the Middle Eastern and Islamic markets with their Malaysian halal certified food products,” said Oka.
Another new area for Japanese investment in Malaysia is the aviation industry.
“Within Asean, we are exploring cooperation with the Malaysian government to promote the participation of the Japanese private sector in the aviation industry in Malaysia due to its high potential.
“This is an example of the efforts that the Japanese government is making enthusiastically to further encourage Japanese companies to come to Malaysia to seek business collaboration with Malaysian companies through investment,” he said.
On the Covid-19 pandemic, he said it had not affected Malaysia’s attractiveness as a destination for Japanese companies.
“On the contrary, in light of Malaysia’s attractiveness as a destination for Japanese companies, we as the government are supporting Japanese companies to make more commitments to Malaysia,” he said.
