Posts tagged government
Support programs are developing a strong industry but access to qualified staff remains an issue, says Geneflux Director and biotechnology entrepreneur Dr. Prashanth Bagali
by Jon Southurst
It’s been over four years since the Malaysian government formed the Malaysian Biotechnology Corporation (BiotechCorp), an agency tasked with turning Malaysia’s infant biotechnology sector into a global competitor. BiotechCorp is achieving this with a comprehensive array of programs providing everything from education to entrepreneurial support, investment, training and marketing. Large companies and niche players alike would get the kind of assistance they needed to expand internationally. Geneflux™ Biosciences is one company that took its concept global with a focus on local issues under BiotechCorp’s guidance. Dr. Prashanth Bagali, its Director and co-founder, spoke to us about his company’s experience and the challenge for Malaysia in the 21st century’s preeminent scientific sphere.
The term ‘biotechnology’ refers to the science of life itself. It includes research and techniques involving living organisms from microorganisms to plants and animals, to serve specific applications in improving human health and agriculture. At its cutting edge is genome mapping, cell fusion, gene detection, gene transfer and embryo manipulation. It’s a prestigious, high-value industry with rewards in intellectual property, international sales and reputation among the world’s scientists.
The national interest in biotechnology started as early as the 5th Malaysian plan (1986-1990) but was given due recognition and emphasis starting from the 8th Malaysian Plan (2001-2005). Before 2007, healthcare biotechnology in Malaysia was an embryo itself. The existing industry was driven by traders, equipment suppliers and reagent vendors, with less than 100 local patents filed of any international importance. That was around the time BiotechCorp was just beginning, and it was into this scene that entrepreneurs Dr. Bagali and partner Ir.Balagaru Naidu arrived to set up a business.
Geneflux Biosciences registered in 2007 with a focus on the research and development of Polymerase Chain Reaction (PCR) based testing kits, a faster way to detect and analyze small quantities (or volume) of DNA or RNA without the need for full cloning. Their kits would be available at affordable prices to developing countries in Asia and Africa, vital in combating diseases affecting those regions. (more…)
There has been a ‘wave’ of foreign direct investment (FDI) into Malaysia this year, totaling RM31.7 billion (US$10.6 billion) to the end of July 2011. More than half of this has flowed to the manufacturing sector and the top sources are Japan, Singapore, the Netherlands and Taiwan.
Malaysia’s Minister of International Trade and Industry, Mustapa Mohamed, announced the figures and said government initiatives such as the Economic Transformation Programme (ETP) had attracted international interest. Domestic investment had also improved, with RM4.3 billion ($1.44 billion) also going to manufacturing projects.
Business Times reports a breakdown of manufacturing investments shows RM6.5 billion ($2.2 billion) went to electronics and electrical products, RM2.4 billion ($804 million) to basic metal products, RM1.7 billion ($570 million) to chemicals and chemical products, and RM1.1 billion ($369 million) to food manufacturing.
Mustapa also said the figures reflect a shift towards high-value-added, more capital intensive (investment per employee) industries as Malaysia became less competitive at the lower-pay end against countries like China and Vietnam. He promised more new opportunities and growth areas as the ETP chases its 2020 goal of RM1.2 trillion ($40.23 billion), 92% of which the government wants to come from the private sector.
Total investment in Malaysian projects, including both foreign and domestic, was RM47.2 billion ($15.8 billion) in 2010.
source & article: Business Times
“A combination of low cost and high technology” is the in-a-nutshell reason The Economist gives for the beginnings of Penang’s success in the healthcare and electronics industries. Penang state and its neighboring region on the mainland now account for 21% of Malaysia’s GDP as a result of its technology focus, as well as a strong rule of law, intellectual property protection and ease of doing business.
The road to technology riches was paved in the 1970s when Penang became Malaysia’s first free-trade zone, but the article also credits Penang’s current government for freeing up the local economy further by removing economic privileges and combating corruption and waste. For its part, the federal government has also invested heavily in Penang with massive infrastructure upgrades such as a duplication of the bridge to the mainland and extensions to the main seaport and international airport.
Penang has historically enjoyed a strategic trading position thanks both to its physical location between China, India and Southeast Asia, and the well-connected multi-ethnic mix that reflects this. High-tech industries have created a skilled local workforce of technicians and engineers, the capital Georgetown is enjoying a revival, and foreign companies are moving in once again.
source & article: The Economist
Iskandar Malaysia-based technology park aims to lead Malaysia into an advanced future as it signs another new investment and production deal.
Johor’s Senai Hi-Tech Park (SHTP) would be a “key driver” for high value technology industries and Malaysia’s aim to transform itself into an advanced, innovative nation, says Prime Minister Najib Razak.
PM Najib spoke yesterday at a signing ceremony for SHTP and Solexel (M) Sdn Bhd, a subsidiary of California-based solar cell manufacturer Solexel Inc. A new memorandum of understanding between the two will see an aggregate investment of RM2.8 billion (US$944 million) over the next five years, and create 2,300 jobs.
Solexel will manufacture crystalline silicone solar cells at a new 100-acre facility in SHTP’s Industrial Zone Phase 1, and is capable of producing one gigawatt of cells per year. The company will also conduct R&D operations and help create a local supply chain for chemicals used in solar photovoltaic (PV) cell and semiconductor manufacturing.
Senai Hi-Tech Park will be 1,000 acres total at completion, and is Malaysia’s second dedicated high technology zone after Kulim Hi-Tech Park in the country’s northwest. Kulim’s success at attracting international investment was the impetus for creating the SHTP project last year and the project’s developers are negotiating major deals with foreign investors.
Both parks aim to spur the local high-value economy and create employment for Malaysians in more advanced industries. Calling itself a ‘third-generation technology park’, SHTP is located next to the redeveloped Senai International Airport in Johor state’s Iskandar Malaysia special economic region, across the water from Singapore.
Will Indonesia overtake Thailand as the automotive manufacturing center of Southeast Asia? Thanks to increased investment from overseas carmakers, government incentives and a growing domestic demand for vehicles, many think so.
Thailand has traditionally been the country of choice for international manufacturers. Despite its own large middle-class customer base and strong production figures (1.64 million vehicles in 2010) it faces new pressure from rising costs and a new government-set minimum $10 daily wage for workers. Companies produced a total 650,000 vehicles in Indonesia and sold 764,000, but forecasts predict both numbers could top a million by 2013.
The Jakarta Globe reports:
Indonesia is already expecting more than $1 billion in investment in the automotive sector starting this year. Nissan recently announced a $250 million expansion plan; Suzuki has announced an $800 million expansion; Chrysler a $100 million expansion; Daihatsu just carried out a $246 million expansion; and BMW a $12 million expansion. India’s Tata also expressed interest in building a production base in Indonesia.
Peugeot and General Motors have also announced plans to assemble vehicles in Indonesia. The government also intends to provide tax breaks for investments over Rp1 trillion (US$117 million), though no formal arrangement has been made yet.
Indonesia’s auto manufacturing base is in Bekasi and Karawang, near Jakarta and the government-set minimum wage of $8 may see Thailand-based companies chase lower costs. As always, Indonesia’s infrastructure inadequacies will be an issue and the country would need to address them before it could become a serious global export leader, an analyst said.
source & article: The Jakarta Globe
Indonesia is considering tax holidays for major foreign direct investors, targeting new and existing businesses in an attempt to bump the country’s FDI up to a total Rp240 trillion (US$28.2 billion) by the end of 2011.
Finance Minister Agus Martowardojo said details of the plan were still being discussed, but would probably feature 5-10 year tax breaks for investors in the base metals, telecommunications equipment, oil refinery, petrochemicals, machinery and renewable energy industries.
The new plan would also cover businesses which had been in operation less than a year. Projects such as a $6 billion joint venture by South Korea’s POSCO, a $4.5 billion petrochemical complex by Honam Petrochemical Corp (also of South Korea) and a $8-9 billion oil refinery from Kuwait Petroleum Corp were said to be waiting for an announcement on foreign investor tax breaks before going ahead.
Foreign direct investment (FDI) into Indonesia in Q2 is already up 21% on the same period last year, thanks mainly to the mining sector. The government is also mulling plans to give tax holidays to smaller investors employing 100-300 people, determined to take Indonesia’s economy into the global Top 10 by 2025 and making much-needed improvements to the country’s infrastructure.
Foreign white-collar workers looking for a share of Singapore’s prosperity may soon find the going a little tougher. Prime Minister Lee Hsien Loong used part of his National Day speech last week to promise concerned citizens that conditions for employment passes would become stricter, with higher salary and qualification requirements.
As sectors of Singapore’s economy soared in the past year, so did threats of inflation and housing prices, causing many locals to worry whether they’d be able to compete for even average-salaried office jobs to pay for it all. These concerns rattled Singapore’s ruling party, the long-serving People’s Action Party, which recorded a record low (though still relatively high) 60% share of the vote at the most recent elections.
In his speech, PM Lee cautioned Singaporeans against becoming xenophobic towards foreign workers and reminded them the country would remain open to immigration. The raised minimum monthly salaries for the three types of employment visa (Q, P1 and P2) represent a 12-14% increase and will now be: S$2,800 (US$2,318), S$4,000 (US$3,311) and S$8,000 (US$6,623) respectively.
source & article: Xinhua (via philstar.com)
Indonesia’s upstream gas industry regulator BPMigas has approved 10 major projects worth US$4.7 billion in investments over the next three years, claiming that in future, gas will dominate the energy industry rather than oil.
The Jakarta Globe reports all 10 projects would produce gas but one would produce both gas and oil, delivering a total of 1,750 million standard cubic feet per day (mmscfd) of gas and 20,000 barrels of oil per day (bpd). The two largest projects would be operated by the country’s biggest gas producer, France’s Total E&P Indonesie.
Indonesia has seen oil production fall in recent years as its wells have aged, though this has coincided with a boom in gas production which saw the country beat its target of 7,758 mmscfd by 15%. This year’s target of 7,769 mmscfd was reached in the first half of 2011 alone. Indonesia’s oil and gas industry contributed Rp240 trillion ($28.1 billion) in non-tax revenue in 2010.
Much of the gas produced will be gobbled up by domestic power plants and industry, which have been hungry for new finds to fuel Indonesia’s recent growth. State-controlled gas distributor Perusahaan Gas Negara currently has the price at $1.80 mmscfd, but BPMigas is negotiating to raise that to $5.50 in an attempt to boost state revenues.
source & article: The Jakarta Globe
Indonesia’s economy could probably cope with a sudden outflow of ‘hot money’ from its economy but should still be wary of risks presented by such bubbles, said the government.
Bambang Brodjonegoro, The Finance Ministry’s head of fiscal management, said his country should minimize hot money scenarios, or short term investors chasing quick profits on the country’s fast-rising economy. Channeling investments into long-term FDIs (foreign direct investors) and government bonds was preferable to achieve stability and growth.
Foreign investors have become fascinated with so-called ‘emerging’ economies in the past few years as growth opportunities in the developed West have dried up and countries like China, India and Indonesia have boomed. Indonesia’s premier market index, the Jakarta Composite Index (JCI) has risen 6% this year to 4,130.80 and its currency, the rupiah, has increased its value by 5.5% against the US Dollar, to Rp 8,491.
The government may well be getting its wish, as foreign sales of Indonesian government bonds have also risen 31% to Rp 248 trillion (US$29 billion) with 15 year bonds yielding an attractive 9%. The Finance Ministry said foreign investment could reach 40% of all bond holdings after the government sells a further Rp 40 trillion by the end of this year.
Indonesia has suffered in the recent past from rapid foreign capital flight, once during the Asian Crisis of the late 1990s and less severely after the 2008 global financial crisis, which still devalued the rupiah. With the effects of both crises still looming large in memory, fears of hot money and moves to curb short term investments are common across the region.
source & article: The Jakarta Globe
Malaysia’s government wants all sports development funding to come from private sources by 2020, saying it’s (yet) another reason the country should move from a planned to a market-based economy.
Financial sports events and development nationwide is becoming more expensive, and sports organizations need to move away from sponsorship to a corporate model with “dynamic return on investment,” said Sports Minister Ahmad Shabery Cheek at the Sports Business Conference.
Sports funding is also part of Malaysia’s grand Economic Transformation Programme (ETP) and 2011-12 has been designated Sports Industry Year (SIY) to encourage more economically sustainable, privately funded sports initiatives. Sports activities contributed about RM30.2 million to Malaysia’s GDP in 2009.
source & article: Business Times