KOTA KINABALU: No Sabah companies have applied for the RM1 billion Domestic Investment Strategic Fund (DISF) launched by Prime Minister Datuk Seri Najib Tun Razak in July 2012.
Malaysian Investment Development Authority (MIDA) Services Department executive director Dato’ Mathialakan Chelliah said a total of RM391.3 million was approved under DISF to 71 local companies in Malaysia as of December last year.
“There is no awareness among companies in Sabah that this facility is available,” he said in a press conference during a seminar on services sector themed ‘Government Initiatives to Propel the Services Sector’ here yesterday.
The seminar, organized by MIDA in collaboration with the Ministry of Industrial Development Sabah, was graced by Deputy Chief Minister cum Industrial Development Minister Datuk Raymond Tan Shu Kiah.
Mathialakan said the RM1 billion DISF under the 10th Malaysian Plan was intended to accelerate the participation of Malaysian-owned companies in the global supply chain of high value-added, high technology, knowledge intensive and innovation based industries.
“The fund would be granted on a negotiable basis based on the request of the companies and the merits of each case with the objective to enhance technological capabilities of domestic investors.”
Companies with Malaysian equity ownership of at least 60 per cent are eligible for DISF.
The priority sectors for DISF are aerospace, machinery and equipment, pharmaceuticals, advanced electronics, medical devices, renewable energy and services including design, research and development, testing, quality and standard certification, technical and skills training, engineering services and logistics service providers. Other industries will be considered on a case by case basis.
Mathialakan said the DISF was a matching grant, for example, a company who invested RM100,000 to upgrade or modernize its facilities would be reimbursed 50 per cent of its expenditure by the government upon showing proof of the investment.
On the other hand, Mathialakan said the government gave 10 years of tax free period as special incentive for foreign companies that turn waste to value, like producing biomass pellets as our country has yet to have the capacity to do so.
Earlier in his speech, Mathialakan said the services sector was targeted to contribute 61 per cent of the country’s gross domestic product (GDP) by 2015 under 10th Malaysia Plan.
“Last year, the services sector contributed 54.6 per cent of the country’s GDP and recorded a growth rate of 6.4 per cent.”
For the period January to September last year, a total of 22 projects were approved in Sabah with investments of RM3.6 billion and the projects are expected to create 1,665 employment opportunities in the state, Mathialakan said.
“The manufacturing sector is still a major contributor with RM3.2 billion investments in industries like petroleum products, food manufacturing, chemical products and non-metallic mineral products.
“The services sector contributed a total RM600 million worth of investment under the hotel and energy generation industries.”
On the national level, Mathialakan said Malaysia had successfully attracted a significant level of investments in the first nine months of 2013.
From January to September 2013, approved investments in the country reached RM136.9 billion, an increase of 26 per cent from the corresponding period in 2012.
The services sector continued its lead with approved investments amounting to RM83.4 billion or 60.9 per cent, followed by the manufacturing sector at RM35.1 billion (25.6 per cent) and primary sector at RM18.4 billion or 13.5 per cent.
He noted that the services sector continued to maintain its strong performance during the first nine months last year.
“A total of 3,316 services projects were approved, creating 68,436 employment opportunities; the largest potential employer of all three sectors being manufacturing, services and primary sectors.”
Domestic investments outshone with investments totaling RM71 billion or 85.1 per cent of approved investments, he said, while foreign investments in the services sector surged from RM7.2 billion in the first nine months of 2012 to RM12.5 billion in the same period in 2013.
Mathialakan added that approved investments in the services sector were most significant in the real estate segment, with investments valued at RM37.2 billion, followed by global operations hubs at RM8.8 billion, transport RM6.9 billion, utilities RM6.2 billion and hotel and tourism RM6 billion.