Reinvestment is equally as important as new investment, says Chief Minister Chow Kon Yeow.
“The first quarter of 2019, Penang attracted RM8.5 billion of Foreign Direct Investment (FDI) in which the majority was reinvestment,” said Chow during a press conference held after the opening ceremony of AVX Manufacturing (M) Sdn Bhd today.
AVX Manufacturing, which has been operating in Penang since 1998, has opened a new plant at the Bayan Lepas (Free Industrial Zone).
This new manufacturing facility (250,000sq ft) with a RM600 million investment, is an addition to the existing 200,000sq ft factory.
With a total square footage of 450,000sq ft, the Penang site is now AVX’s largest multilayer ceramic capacitor manufacturing factory in the world.
“When we talk about investment, it includes new investment and reinvestment.
“In this case, it is a reinvestment whereby the company is expanding its operation by putting up a new facility,” Chow added.
According to Chow, reinvestment is important for the economy as it brings new job opportunities and contributes to the country’s export value.
“This is because reinvestment, in essence, brings about the same impact in terms of job and the value chain.
“I would like to urge the Federal Government to continue to grant tax incentives for reinvestment,” he said.
Chow also stated that the tax incentive matter affects potential investors to the state.
In addition, he said the country should not lose out to the neighbouring countries with regard to the tax incentives.
“We in Penang also sometimes face with this issue of the potential reinvestment not materialising due to the tax incentive issues
“We do not want to lose out to the neighbouring countries in terms of tax incentives but at least make them (investors) more comfortable with this destination for the investment choice.
“So, hopefully, the government will consider tax incentives for reinvestment too other than giving incentives for new investment,” Chow added.
The Chief Minister also affirmed that tax incentives play a pivotal role for the investors to evaluate the destination of their investment.
Chow said the state government was also committed to supporting high-quality investments that were related to disruptive technologies, such as the Internet of Things, 5G networks, Artificial Intelligence and so on.
“I am pleased to learn that AVX collaborates with local universities to offer employment opportunities for graduates and provides in house and overseas training to its employees on cutting edge manufacturing technologies and operating of the state-of-the-art equipment.
“I believe this initiative will strengthen the skill set of local technical talent and create a larger pool of trained professionals in Penang,” he said.
AVX Manufacturing (M) Sdn Bhd managing director Kumar Krishnamani, who was also present, said the company was in a discussion with MITI (International Trade and Industry Ministry) and MIDA (Malaysian Investment Development Authority) regarding the incentives for the investment (for the new plant).
Also present were the AVX Corporation chief executive officer John Sarvis and investPenang director Datuk Seri Lee Kah Choon, who is also the special investment adviser to the Chief Minister.
Story by Tanushalini Moroter
Pix by Siti Noor Nabilah Norazis
Video by Darwina Mohd Daud