FRANKFURT: The Malaysian Investment Development Authority's (Mida) new director in Frankfurt, sees opportunities for attracting investments from Europe, despite the challenges posed by the economic downturn.
S.Siva, who took office just six weeks ago, said he had come with realistic expectations about the investment climate in Germany as well as the Benelux countries of Belgium, the Netherlands and Luxembourg, which come under his jurisdiction.
"Although some parts of Europe are facing economic uncertainties, Germany and the Benelux countries are doing well.
"In fact, companies in Germany and the Benelux region are looking for investment opportunities in Asia, including Malaysia, in a variety of sectors," he told Bernama.
Siva is familiar with Germany's corporate sector, having served once before in the country as the MIDA director from March 2006 to July 2009.
Prior to his second posting in Germany, he worked as an expert on strategic planning at the Mida headquarters in Kuala Lumpur.
Within the first six weeks of his arrival in Frankfurt, he handled two major projects in coordination with the industry-specific division heads at Mida headquarters.
The first was on the oil and gas industry, and the other related
the building materials sector.
"I visited the companies in these sectors here and pointed out the investment opportunities available to them in Malaysia," he said.
"The strategy is to concentrate on attracting quality investments, while looking at the production value chain and identifying areas of specific interest for potential investors.
"We are selective in targeting companies as we realise that Malaysia is no longer a cheap manufacturing site.
"Our strength is in quality and value-added attributes which we emphasise to potential investors. Since we are also trying to reduce unskilled foreign labour, our priority is to ensure that projects we target in manufacturing are not contingent on this.
"Some of the priority industries we pursue include advanced electronics, aerospace, machinery, specialty chemicals, clean technology and services," he added.
Driven by the compulsion to cut costs as it is a high-cost economy which is increasingly hurting the country's small and medium-sized companies, Germany is looking at Asia to overcome the problem.
Malaysia's well-developed infrastructure, its accessibility to the Asean markets, and a reservoir of well-trained labour make the country an attractive investment site.
According to Siva, German companies could initially set up a representative office in Malaysia, and then increase their presence by going into manufacturing or a full-fledged services operation.
"Malaysia's central location also give the country an unique advantage of being a regional hub. German automobile company BMW has set up a regional distribution centre in Johor.
"Other German companies are watching BMW's move and could follow its example," he said.
Malaysia's attractiveness as an investment site has also been enhanced with the liberalisation of 44 industry sub-sectors.
"More sub-sectors are expected to be opened up in the future. Of special interest to the German industry will be sectors such as pharmaceuticals and medical devices. This also applies to the Benelux countries," Siva said.
He also believes that Malaysia should capitalise on Germany's current interest in Asia.
He pointed out that the UNCTAD World Investment Report 2013 had praised Mida's approach to attract hi-tech, value-added and knowledge-intensive Investments.
The report ranked Malaysia at number 11 amongst the world's 20 top economies with a high profitability for foreign direct investment opportunities.
Germany's cumulative investments in Malaysia from 2007 to June 2013 stood at RM13.358 billion.
In 2012, German investments amounted to RM693.342 million, while in the first six months of 2013, it was at RM156.390 million.
Germany is amongst the top 10 investing countries in Malaysia.-- Bernama