By Clara Chooi
KUALA LUMPUR, July 19 — Recent natural disasters in Malaysia’s regional neighbours have perpetuated an industrial boom in Penang as global manufacturers flee to the Pearl of the Orient to park their businesses in a bid to spread risk, the Asian Wall Street Journal (WSJ) reported today.
The international paper wrote that global tech firms, eyeing Penang not only for its strong logistics infrastructure but also its geographic location outside the the “Pacific Ring of Fire”, now find the island an attractive alternative investment destination.
This investment climb, it said, has helped Penang rediscover its industrial dynamism from the 1970s and placed the Pakatan Rakyat-ruled (PR) state onto the global investment map.
“Longer term, many multinational companies are preparing better for natural disasters and supply-chain disruptions, and they now see Penang and Malaysia as an attractive location,” the paper quoted Globetronics Technology Bhd managing director Heng Huck Lee as saying.
The article noted that the only possible risk to investing in Penang was the prospect of political turbulence as the ruling Barisan Nasional (BN) is facing stiffer competition from PR in the coming polls.
This, it added, ultimately meant that PR-ruled states like Penang could face policy conflicts with the federal capital.
“But those tensions are relatively minor compared with those of some of Malaysia’s neighbours,” WSJ wrote, pointing to Malaysia’s geographic location.
“The country sits safely away from the so-called Pacific Ring of Fire, mostly unaffected by the earthquakes and volcanoes that can afflict countries such as Japan and Indonesia.
“Malaysia also is less likely to fall victim to the kind of flooding that left Thailand’s economy flailing last year,” it said.
WSJ reported that the earthquake in Japan and floods in Thailand last year had left companies in both nations flailing.
The hardware industry was hit especially hard from Thailand’s flooding, it said, even forcing renowned electronics firms like disk-drive maker Western Digital and electronics companies Sony Corp, SNE and Toshiba Corp to temporary shut down their plants.
At one point, global prices for disk drives even doubled, WSJ reported, before Western Digital and other manufacturers began bumping up their productions in Malaysia.
“Now the California company is expanding across Malaysia in a five-year, US$1.2 billion (RM3.8 billion) effort to whittle down its dependence on Thailand.
“A new Malaysian plant is expected to open this year,” the paper wrote.
Others, including chip-maker Intel Corp, audio firm Bose Corp and electronics-equipment makers National Instruments Corp and Agilent Technologies, have also begun expanding their operations here.
With investments pouring in, Penang Chief Minister Lim Guan Eng is banking on another “bumper year” in 2012 after having pushed for the construction of more industrial parks to accommodate the investment boost.
“We had fallen off the radar screen, so we went back to the drawing board. It just takes a little time to shake off the rust,” Lim was quoted as saying.
