SPEECH BY CHIEF MINISTER OF PENANG
AT PENANG SME CONNEXTION 2018
27 November 2018, 12.30pm – 2pm
Olive Tree Hotel, Bayan Baru, Penang
Good afternoon. It gives me a great pleasure to join all of you at the Penang SME Connextion 2018 organised by investPenang. This is the 5th edition of the Penang SME Seminar, which investPenang has refreshed and reinvigorated this year using the term ‘Connextion’, reflecting the trajectory for Penang small and medium enterprises to embrace the digital transformation and Industry 4.0 revolution. As the Chairman of investPenang, I am also encouraging more connections to be made among the SMEs, between the SMEs and government and supporting agencies. I am pleased that the event today has provided a meaningful platform for that.
Robust investment performance driven by domestic and foreign investment.
In 2017, Penang was the second top recipient of total manufacturing investment among states valued at RM10.8 billon. Penang showed robust investment performance with total investment growing by 151% year-on-year compared to 2016. Domestic investment driven by our local large companies and SMEs, also grew by 92% year-on-year to reach RM2.3 billion in 2017.
Penang is also the top recipient among states, with approved manufacturing investment FDI in 2017 valued at RM8.5 billion, a growth of 209%, year-on-year. BBC in their feature video also named Penang, as the next Silicon Valley of Asia and highlighted the experiences of our local entrepreneurs, who ventured into tech-related industries to support the multinational corporations. Penang is now home to more than 300 MNCs and more than 3,000 supporting SMEs.
The State continues to recognize our SMEs as significant contributors to the growth of our twin engines of growth - the manufacturing and services sectors. The SME Corp 2017/2018 Annual Report stated that Malaysian SMEs showed a robust growth of 7.2% in 2017, and Penang’s 66,921 SMEs represented 7.4% of total SME establishments in Malaysia.
The State’s support for SMEs and key growth areas
The State Government has a three-prong strategy to nurture the SMEs in Penang. The establishment of SMART Centre serve as a one-stop centre to facilitate SMEs to expand their business. Secondly, the State Government has set-up a 4-storeys 160,000 sq. ft. building in Bayan Lepas Industrial Park to nurture the SME to move up the value chain and reduce the cost of SME doing business by providing the option to rent at subsidized rental rates. Thirdly, a 150 acres SME Villages are developed by PDC in Batu Kawan Industrial Park to better serve the needs of SMEs to get closer to the MNCs. Lately in March 2018, the State has also initiated USD1 million Penang i4.0 Seed Fund to nurture and accelerate the growth of technopreneur start-ups in Penang.
Penang’s industries growth continues to be anchored by the growing E&E industry, besides our emerging success in the medical devices, LED, avionics, food and halal sectors. Penang is also attracting more global business services (GBS) investments providing knowledge-based, high value opportunities in Penang. We encourage the SMEs to continue to partake in these sectors and take the opportunity especially with the localization of business activities from the MNCs.
We heard of Industry 4.0 in just several years and in the past 2 years, we have seen fast momentum moving worldwide and it gives a huge impact on the global industrial and manufacturing including the SMEs. In the National Budget 2019, in order to drive the Industry 4.0 transformation agenda forward, the Federal Government has allocated RM 210 million to support the transition and migration to Industry 4.0 in the next 3 years, RM2 billion to incentivize SMEs to invest in automation and modernization and RM3 billion fund with subsidy incentive of 2% for adoption of smart technology.
This morning, the seminar has also provided various discussion sessions with agencies and companies namely MIDA, MDeC, MATRADE, MIDF, SME Corp, Robert Bosch and Inari. I would like to urge the acceleration of the allocation to support the growth of local enterprises especially in high value-added industries. The incentives and support by these agencies are important as means to achieve the desired goal.
Digital Transformation Acceleration Program (DTAP) - a new joint initiative between MDeC & MIDA to provide support and incentives in the form of Matching Grant (1:1), targeted to Malaysian companies and focused on manufacturing and logistics.
With all these assistance in place, I encourage the businesses present today to place innovation, creativity, the bigger goal of making your enterprises a successful business model and continue to create more footprints of “Powered in Penang” companies in Penang.
We are confident that Penang will remain a thriving growth hub for
many years to come and this is in line with the Penang2030 aspirations aimed at making Penang a model for the nation and the world. Themed “A Family-focused Green and Smart State to Inspire the Nation”, the policy package is the state’s four-prong vision to increase liveability to enhance quality of life, upgrade the economy, empower the people to strengthen civic participation and invest in the built environment.
I would like to thank the speakers from various agencies and companies today for supporting this event, which also marks the continued commitment to facilitate the growth of our SMEs. I hope all the companies here today will go back with better knowledge on market access and opportunities, enhancing competitiveness as well as enhancing access to funding.