Speechs in the year
Tempat/Venue 	: 	SHAH ALAM, SELANGOR 
Tarikh/Date 	: 	22/02/91 

 Distinguished Guests;
Ladies and Gentlemen.
    It gives me much pleasure to be here today to officiate
the  opening  of  Canon  Incorporation's first manufacturing
plant in Malaysia, Canon Opto (Malaysia)  Sendirian  Berhad.
I  am  also  happy  to  note  that in less than a year after
starting production here in Shah Alam,  Canon  launched  its
second  facility  in  Malaysia,  Canon Electronic (Malaysia)
Sendirian Berhad, at the Prai  Industrial  Estate  in  Pulau
Pinang.    This  positive  step  by  Canon demonstrates very
clearly the attractiveness of Malaysia  as  a  manufacturing
base for such precision products.
2.   Another  proud record for Malaysia is that this factory
has expanded into the production  of  lens  shutter  cameras
from  the polishing of optical lenses and prisms a year ago.
I am also told that this plant has managed to earn the  sta-
tus  of being Canon's second plant outside Japan to manufac-
ture lens shutter cameras, after the one in Taiwan.
3.   The successes by Canon in Malaysia, I believe,  is  not
an  isolated case.  In fact, success stories of foreign com-
panies in Malaysia seem to be the norm since Malaysia  over-
came the recession.
4.   While  these success stories abound, we also see a par-
allel escalation of Japanese interest in Malaysia.  From  44
project  applications  with  Japanese participation in 1986,
the number of applications received last year  increased  to
229  or  more than five times the 1986 total.  Even more im-
pressive was the proposed Japanese capital investment  which
shot  up from $285 million ringgit in 1986 to $6,738 million
ringgit in 1990, more than 23 times the 1986 volume.
5.   While all these numbers and  figures  are  encouraging,
more attention should now be directed at the quality of man-
ufacturing projects that are being set up by Japanese inves-
tors  in  Malaysia.    A  growing  area of concern among the
business communities in the Asia Pacific Region,  especially
among  the  ASEAN countries, is that of technology transfer.
Technology is much needed to spur our  economies  towards  a
higher   level  of  industrialisation  and  to  develop  our
workforce into one that can handle the changing  demands  of
industry.    We believe that Japan can provide that technol-
6.   It is our hope that the Japanese multinationals in this
region will pass on some of their technologies to local com-
panies.  There should not be too much concern over  any  ad-
verse  effect of doing this for the Japanese companies since
it is a fact that  Japanese  technologies  are  not  static.
They  advance  very rapidly and as a result the technologies
transferred to Malaysia will not be in a position  to  chal-
lenge the latest in Japanese technologies.
7.   The  benefits  for  the Japanese companies are in being
able to source components and have the vendors  network  lo-
cally  which will reduce costs.  Japanese companies can work
together with Malaysian manufacturers  to  develop  products
which can meet the stringent requirements of export markets.
This  co-operation can even be further extended into the im-
provement of product price and delivery time.  Although  ef-
forts  to  work  together with Malaysian companies have been
going on for some time, they are  however  not  on  a  large
scale.   However there have been cases where Japanese compa-
nies have sent their own engineers to Malaysian  manufactur-
ers   to  help  them  improve  production  capabilities  and
quality.  This is encouraging.
8.   Malaysian companies, on the other hand, have been  said
to  be  reluctant to invest in additional machinery and even
to shy away from taking investment risks.   Local  companies
should  take  advantage  of  proposals  for  co-operation by
Japanese companies.   Such proposals  for  co-operation  can
also  come  in  the  form of joint-ventures between Japanese
components and  parts  suppliers  and  Malaysian  companies,
where   the   risks   are  shared  and  technology  transfer
progresses in a more organised fashion.
9.   I have been told that a Japanese company producing  au-
dio   products  in  Malaysia  have  steadily  increased  its
Malaysian content from 18% when it started in late  1988  to
52%  by  late last year.   This company has also developed a
total of  113  suppliers  in  this  region,  about  half  in
Malaysia  and  the  rest in Singapore.  About 60% of the 113
companies are Japanese-affiliated, indicating that the  con-
cept  of technology transfer through joint-venture is feasi-
10.  Besides developing local suppliers, other ways in which
Japanese  companies  can  integrate  themselves   into   the
Malaysian  business  network  is  to  continually attempt to
source raw materials and intermediate inputs  such  as  sub-
assemblies locally and to set up more integrated projects in
11.  The  rapid  growth and economic dynamism of this region
is undeniable.  South-East Asia is also an integral part  of
the  East  Asian  Region  which has a population of nearly 2
billion people or 37% of the world's population,  represent-
ing  a huge potential market.  Japanese business enterprises
in this region will be a growing presence, and  a  long-term
one and this presence will only thrive in a politically sta-
ble and economically sound environment.
Ladies and Gentlemen,
12.  Malaysia  provides this environment.  The Government of
Malaysia has been consistently successful in ensuring  poli-
tical   stability,   sound   economic   policies   and  good
infrastructure, including an  educated  and  trainable  work
force.    But the development and training of this workforce
must be undertaken  largely  by  the  companies  themselves.
They  should  spare  no effort to inculcate good work ethics
and a culture that places a high value  on  company  loyalty
and   productivity.    Where  Malaysian  workers  have  been
inculcated with good ethics they have proven to be good  and
highly  productive workers.   It is hoped that their produc-
tivity will be fairly rewarded.  It is the Government's hope
that Malaysians will gradually earn  better  income  without
hurting  the profitability of the companies.  The Government
will work to ensure that investors in  Malaysia  will  never
regret their decision.  I feel that Canon has no regrets.
Ladies and gentlemen,
13.  With  these words I now have much pleasure in declaring
open this Canon Opto (Malaysia) Sdn Bhd.