Thursday 6 December 2012

Tharman: Iskandar a 'nice complementary space' for businesses

By Teo Cheng Wee, The Straits Times, 5 Dec 2012

JOHOR BARU - A "nice complementary space" is developing between Singapore and Johor for businesses, as more companies in Singapore look to the Iskandar Malaysia development corridor as a place to base their operations, said Singapore's Deputy Prime Minister Tharman Shanmugaratnam.

"There'll over time also be increasing pressures on our small and medium-sized businesses, because of the shortage of labour in Singapore as well as of land... Malaysia is a logical hop away, easy in terms of operational flexibility and logistics," he said.

Mr Tharman, who is also Finance Minister, was speaking to reporters yesterday on the sidelines of the eighth World Islamic Economic Forum (WIEF), held in Johor Baru for the first time.

Iskandar Malaysia, the southern Johor state's investment corridor, has drawn RM95 billion (S$38 billion) worth of investments since its launch in November 2006. Singaporean interest and participation rose after 2010, when the two countries settled a 20-year dispute over railway land. Mr Tharman made his comments at an event where Singaporean billionaire Peter Lim announced his decision to build a race circuit in Johor.

Mr Lim, a motoring enthusiast, had been courted to invest in Singapore's stalled Changi Motorsports Hub, but said yesterday that he was inhibited by the high costs in the Republic.

Mr Tharman said these are "ultimately business decisions".

"The job of the Government is to ensure that with limited land, limited labour, limitation of resources generally, you have a level playing field and you have fair pricing," he said.

"Some businesses, based on their business models, will find it very worthwhile to grow in Singapore... but (others may) rather make use of opportunities in Malaysia and elsewhere, where you have labour available at a lower salary and more availability of land. That's how Singapore itself grew."

WIEF was started in Malaysia in 2005, but has been hosted by other countries as well.

Mr Tharman yesterday called on Malaysian Prime Minister Najib Razak, who was also attending the WIEF.

At a separate press conference, Datuk Seri Najib said "Singapore can continue as the hub for commercial and financial development, whereas southern Johor can be an area of high-quality living" for Singaporeans.

"This will be a win-win situation. Johor will benefit from the influx of people, talent and capital," he said.

During their meeting, Mr Tharman and Mr Najib affirmed the excellent state of bilateral ties and noted the good progress on several joint initiatives, including cooperation in the Iskandar Malaysia Joint Ministerial Committee, and joint ventures by Temasek Holdings and Khazanah Nasional in Singapore and Iskandar Malaysia.

They also agreed on the need for both governments to continue working together to improve connectivity and maintain an attractive investment climate.

Mr Tharman had separate meetings with Comoros President Ikililou Dhoinine, Islamic Development Bank president Ahmad Mohamed Ali and WIEF foundation chairman and former Malaysian deputy prime minister Musa Hitam. He returned to Singapore last night after attending a gala dinner hosted by Mr Najib and his wife.

S'pore firms have over 300 factory projects in Iskandar
Republic already single largest foreign investor in Iskandar, having put in $2b
By Teo Cheng Wee, The Straits Times, 7 Dec 2012

NUSAJAYA (Johor): Singapore companies have set up more than 300 manufacturing projects in Iskandar Malaysia since 2006, according to the latest statistics from the Malaysian Investment Development Authority.

The figure, which was provided in response to queries from The Straits Times, underscores the importance of Singapore to the economic corridor in southern Johor, said Iskandar Regional Development Authority chief executive Ismail Ibrahim.

The Republic is already the largest single foreign investor in Iskandar, having ploughed in more than RM5 billion (S$2 billion) since its inception in 2006. Total foreign investment in the development region rose from RM22 billion in 2008 to RM37 billion in September this year.

"We see Singapore and Iskandar as a single economic hub," Datuk Ismail told reporters yesterday. "Much of the investment has been from small and medium-sized companies. But as ties continue to improve between the two countries, we expect bigger projects to come on board."

This week, Singapore billionaire Peter Lim announced that he was building a racing circuit in Iskandar. He had been wooed to invest in Singapore's stalled Changi Motorsports Hub, but he said he was put off by the high costs.

The same day, Deputy Prime Minister Tharman Shanmugaratnam acknowledged that more Singapore companies will face increasing pressure to move out of the island because of labour and land costs - and that Malaysia would be a logical destination.

One Singapore firm that has expanded its operations to Iskandar is steelworks company Yongnam. In 2008, it opened a steel fabrication plant in Iskandar's Southern Industrial and Logistics Clusters (SILC), to complement its operations in Singapore.

Yongnam picked Iskandar because it was near Singapore and the company's clients could visit the factory easily. Another advantage was Iskandar's proximity to Johor's ports - Yongnam exports almost all of its goods from Iskandar.

Operating costs are at least 30 per cent lower in Iskandar than in Singapore, with the greatest savings coming from labour, said Mr Yusufirashim Sadir Mohammed, the administration and human resource manager of Yongnam's Iskandar plant.

The more labour-intensive projects, he said, are carried out at the Iskandar facility. "But our company will continue to keep our Singapore operations, because we have our headquarters there," he said. "You can't have a body without a head."

Singapore companies currently occupy about 20 per cent of the land in the 405ha SILC. Malaysian companies take up more than 70 per cent.

"Such projects show that foreign investors believe in the stability of our country and the opportunity for growth," Johor Menteri Besar Abdul Ghani Othman said yesterday.

He was delivering a speech on behalf of Prime Minister Najib Razak at the official opening of the Puteri Harbour Family Theme Park in Nusajaya.

The park boasts the first Sanrio Hello Kitty Town outside Japan. Since the park opened its doors to the public in October, it has attracted more than 50,000 visitors.


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