Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : SEBERANG PERAI, PENANG
Tarikh/Date : 21/12/93
Tajuk/Title : THE OFFICIAL OPENING OF OTIS
MANUFACTURING SDN BHD
I would like to take this opportunity to congratulate
Otis Manufacturing Company Sdn. Bhd. for setting up this
plant in Malaysia. Malaysia is especially proud of Otis'
confidence in this country, as Otis is one of the world's
largest manufacturers of elevators and escalators. I hope
its choice of Penang as the site for its factory is not due
to Penang being 'more Chinese' as reported by the Economist
sometime in May this year. The foreign press as we know
have always been 'naughty' when reporting about Malaysia's
success story. I am sure Malaysia was chosen mainly because
of its political stability. All the states in Malaysia have
played hosts to successful manufacturing enterprises.
2. 'Elevator, escalator and parts thereof' is a promoted
product that is granted tax incentives under the Promotion
of Investments Act 1986. The production of elevators and
escalators involves advanced technology and the fact that
there are approximately only seven major producers in the
world speaks for itself.
3. The rapid pace with which technology has advanced in
this industry has dramatically changed the shape of the
world. No longer were the imaginations of architects and
builders stopped at the third floor of buildings; now with
escalators and elevators, they can design multi-storied
shopping complexes and skyscrapers of almost unlimited
heights. The urban landscape need no longer be flat and
sprawling. Now city skylines can break the monotony of the
horizon. Innovative, safe, fast and reliable ways have been
found to move people up and down and along interminable
corridors. Walking and climbing need no longer be tiring.
Product innovations include double-decker elevators,
glass-enclosed observation elevators and the people mover
systems. Such product innovations have changed man's living
and working environment. Of course, innovations have not
stopped at external structures, the inside workings of these
people movers have changed and improved as well.
4. Building construction in East and South East Asia is
booming. By locating in Malaysia, Otis can take advantage
not only of Malaysia's rapid growth but that of the region
as well. Under the Sixth Malaysia Plan, US$ 10 billion has
been allocated to finance infrastructure development alone.
Construction initiated by the private sector is even bigger.
Very many elevators, escalators and walkalators are going to
be needed.
5. To ensure investments are profitable, the Government
reviews and analyses policy measures on an on-going basis.
This is also to ensure that a coherent process of
industrialisation would have the desired spin-offs in the
economy as a whole.
6. Malaysia has enjoyed seven consecutive years of
sustained rapid growth. Next year is also expected to be
another boom year. Real gross domestic product is expected
to touch 8.2 percent, which will be higher than the
estimated eight percent this year. Macro-economic measures
taken by the Government to sustain growth and prevent
inflation in the last two years have borne results beyond
expectations. The fundamentals are now firmly emplaced to
help the economy continue its path of sustained expansion in
the future, with the manufacturing sector playing the lead
role in the transformation of the economy.
7. The manufacturing sector continued to be the
dominant source of growth in the economy in 1993. Its
contribution to real GDP is expected to increase further
this year. Due to the strong external demand and good
growth in the domestic market, value added in the
manufacturing sector is expected to expand at a faster rate
of 11.6 percent in 1993 compared to 10.5 percent in 1992.
8. In particular the export-oriented industries registered
a creditable growth of 15.9 percent in the first seven
months of 1993. Despite a population of only 19 million, we
are the 16th biggest trading nation in the world. Overall,
exports to the U.S rose by 34 percent last year. Malaysia's
exports to the U.S. amounted to US$8.18 billion.
9. In terms of projects with U.S. investments approved in
the manufacturing sector, in 1992, 41 projects with a
proposed capital investment of US$1.28 billion (RM 3.30
billion) were approved. These projects accounted for 18.5
percent of the proposed total foreign investment in all
projects approved in 1992. For the first ten months of this
year, 22 projects with American interests were approved with
a proposed capital investment of US$ 652 million (RM 1.68
million). These projects accounted for 27.7 percent of the
proposed total foreign investment of RM6.07 billion in all
the projects approved during the same period, making the
United States the largest foreign investor in Malaysia in
1993 to-date, followed by Japan (RM 1.5 billion), Taiwan (RM
836 million) and the U.K. (RM 467 million). It is also
interesting to note that interest in investments is not just
shown by new projects alone. This is because of the 22
projects granted approval, eight were approvals for
expansion of their existing capacities or for
diversification of their existing products. This fact
testifies to the growing confidence of U.S. investors in
Malaysia's investment climate.
10. It is a truism that a climate of uncertainty is never
good for any business. But for Malaysia her greatest assets
are both her political stability and consistency of
Government policies, factors which are most valued by the
business community. It is still clear that the
concentration of interest among investors continues to be in
the Asia Pacific region. Asia's growth which is largely
driven by the major economies of the Pacific basin is
estimated at 8.75 percent this year and 7.1 percent in 1994.
The world economy at large is expected to grow at 2.2
percent in 1993 and 3.2 percent in 1994.
11. As more countries join the ranks of trading nations,
Malaysia's ability to maintain and expand her markets amidst
greater competition worldwide will hinge upon her
competitiveness. Malaysia's excellent performance should
not lull us into complacency but should make Malaysians
strive to be ever more competitive in the future. We are
aware that certain inherent weaknesses such as productivity
levels and technical skills must be addressed.
12. Certainly, when companies such as Otis undertake here
in Malaysia activities that go beyond mere fabrication, then
it indicates their willingness to integrate as much as
possible into the Malaysian industrial community. This will
increase the added value of their operations in Malaysia.
13. This is a reflection and indication of the long-term
perspective of their investments in Malaysia. They regard
Malaysia not merely as an operations location to profit
from, but also as a permanent base from which to expand and
diversify.
14. The challenge of investment promotion will inevitably
become more difficult. Not only has Malaysia to compete
with the other Less Developed Countries and the Newly
Industrialised Countries but also with the developed
countries which are taking strong measures to retain
investors in their countries. Our focus must therefore be
on higher value added, capital intensive and
technologically sophisticated industries, all of which would
help to strengthen the industrial linkages and to ensure
that Malaysia develop even greater export capabilities.
15. Malaysia is hopeful that more American investors will
come forward and form alliances with Malaysian investors.
The environment is now more conducive as the corporate tax
has been reduced from 34 percent to 32 percent, effective
from year of assessment 1994. It will be further reduced to
30 percent effective from year of assessment 1995. Our
company income tax rate will be comparable to that of
neighbouring countries. The 1994 Budget recently announced
carry several new incentives pertaining to high-tech and R &
D operations that should encourage more inflows of foreign
direct investments. At the same time this should enable
existing operations to expand and new manufacturing
enterprises to locate their projects in the eastern corridor
of Peninsular Malaysia and in Sarawak and Sabah.
16. I now have much pleasure to officiate the opening of
the Otis Manufacturing Company Sdn Bhd.
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