SACC - Delegation - Kriesemer

SACC - Delegation
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By Patrick H. Kriesemer, MBA,
Member of Executive Board and
Chairman Malaysia and Brunei
Committee
E-mail: pkriesemer@kriesemer.com
SACC /JOURNAL2/2010
Swiss Economic Mission's Assessment
Malaysia Offers Best Investment
Opportunities for SMEs
A Swiss Economic Mission, led by excellently organized week through
Patrick H. Kriesemer, Chairman of the Malaysian business opportunities.
Malaysia Committee visited Malaysia
October from 23 to 28 October, 2010. The objective of the Mission was firstly to
inform and motivate Swiss SMEs to
This Mission was jointly organized by include Malaysia in their export market
the OSEC Business Network evaluation, mainly due to the economic
Switzerland, the Swiss Business Hub slowdown of the EU. Secondly, to show
ASEAN, the Swiss Embassy in Malaysia, these Swiss SMEs how other Swiss
the Malaysian Embassy in Switzerland, companies have established regional
MIDA Milano and Kuala Lumpur, the market and manufacturing hubs in
Swiss Malaysia Business Association Malaysia to enter China, India and the
(SMBA) in Malaysia, and the Swiss-Asian Middle East and thirdly, to present Swiss
Chamber of Commerce (SACC). SMEs how our chamber, together with
A special note of appreciation shall be
given to Mrs. Barbara Möckli-Schneider,
General Secretary, for her great support
in organizing the Mission.
MIDA and/or other Malaysian
government agencies can set up easily
their local company, regional office or
regional manufacturing plant. Based on
this the well-known Swiss Economic
“It is obvious, that such a mission journalist of the prestigious newspaper
motivates Swiss investors to think about “Weltwoche” joined the mission to
Malaysia as a micro cosmos of Asia: support the objectives set by the
Malaysia is truly Asia”, concludes one of Chamber and the Swiss Government.
the members of the delegation, adding,
“Therefore, Malaysia is a premium place
to invest and to leapfrog from Malaysia to
China, India and the Middle East.” The
delegation had an intensive but
Malaysia is a strong market-oriented
economy and government policies
providing businesses with the
opportunity for growth and profits have
Dr Pierre Heumann, Weltwoche with Alex Diem, Sansara and DKSH

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SACC /JOURNAL2/2010
made Malaysia a highly competitive and Lumpur and its suburbs, and adjoining
attractive manufacturing and export cities and towns in the State of Selangor.
base in the region. In addition, An alternative reference to this would be
Malaysia's rapid move from a country Kuala Lumpur Metropolitan Area or
dependent on agriculture and primary G r e a t e r K u a l a L u m p u r . I t i s
commodities in the 60s, towards an geographically delineated by Titiwangsa
export-driven economy, spurred on by Mountains to the north and east and the
high technology, knowledge-based and Strait of Malacca to the west. The
capital-intensive industries. population in this area is estimated to be
The Malaysian economy has performed
remarkably well over the years due to
the country's political stability, the
sound financial and economic policies
adopted by the Government, and the
efficient management of its natural
resources which include oil and gas.
Dr Pfister, CEO Ixmation with
Mr. Patrick Kriesemer
six million. Klang Valley is home to a
large number of migrants from other
states within Malaysia and foreign
workers largely from Indonesia, India
and Nepal.
Within this region, most of the Swiss
companies are based here, due to its
Even more impressive is the fact that the Saujana, Tim Bilfinger, Ian Hurst, new international airport, the harbour,
economic growth in Malaysia was General Manager of the Saujana Resort the infrastructure, access to a skilled
achieved within an environment of and Franz Zeller, Managing Director of workforce and its free trade zones. Very
relatively low inflation. Malaysia is the the Saujana Hotel and Resorts. The Club well-known Swiss companies such as
10th most competitive country in the at the Saujana, a member of the Leading Nestlé, Roche, DKSH, Haco, Huber and
world among countries with a Hotels of the World, has just been Suhner, Unisto, Omya, Hiestand,
population of more than 20 million opened and all delegates were very Zuellig etc., have their manufacturing
people, according to the 2010 World
Competitiveness Yearbook.
pleased with the service and the stylish plant and regional office in this area.
Another important factor to consider is
the strong local currency (Malaysia
Ringgit) which was by 1.1 percent
stronger than the Swiss Francs in 2010
(see table below)
Following were values of currencies
against the Swiss Francs in 2010:
1) Mongolia, Tigrit (+3.7%)
2) Japan, Yen (+3.6%)
3) Australian Dollar (+3%)
4) Malaysian Ringgit (+1.1%)
5) South African Rand (+0,8%)
6) Thailand Baht (+0,3%)
7) Singapore Dollar (+0,1%)
The Swiss delegation received a warm
welcome by the Manager of the Club at
The Club at the Saujana
designed rooms as well as the food, the
wine offerings and the professional
beauty treatments provided at the SPA
and Med Beauty Swiss.
The Mission visited Swiss, International
and Malaysian companies in Greater
Kuala Lumpur, Penang and Johor Bahru
(ISKANDAR) region. Since the Club at
the Saujana is located only five minutes
from the regional Subang Airport, the
delegation could visit all these regions
during their visit.
1. The Greater Kuala Lumpur
region / Klang Valley
Klang Valley (Malay: Lembah Klang) is
an area in Malaysia comprising Kuala
SACC - Delegation
Subang regional airport - the hub for Malaysian Airlines regional airlines
The delegation visited Omya, Unisto,
Haco and Proton/Lotus. Interesting is the
fact that Unisto and Haco are using
Ambassador Dr Urs Stemmler with
Dr Pierre Heumann at Unisto
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The Petronas Towers in Kuala Lumpur
Malaysia as a regional manufacturing
location, exporting their products to
ASEAN, China, Japan, India and the
Middle East.
2. Penang region
SACC /JOURNAL2/2010
This region is to be recommended if a language skills (Hokkien, Cantonese
Swiss company is looking forward to and Mandarin), access to multiple
manufacture mainly high tech, suppliers having experience in just-inelectronic
components and want to time manufacturing practice, excellent
Penang is the third-largest economy establish a service center (i.e. call center) infrastructure and a pragmatic free trade
amongst the states of Malaysia, after the for China. zone.
Greater Kuala Lumpur and the Johor Within this region the following well-
3. Johor Bahru Iskandar Region
region. Manufacturing is the most
important component of the Penang known Swiss SMEs and Swiss
economy, contributing 45.9 percent of
the State's GDP. The southern part of the
island is highly industrialised with high-
tech electronics plants (such as Dell,
Intel, AMD, Altera, Motorola, Agilent,
Hitachi, Osram, Plexus, Bosch and
multinational companies have
established their presence: Ixmation
(part of the Schmidheiny group of
companies), CPA, ESCATEC, Premec,
Stoppani, Bossard, Swatch, Swiss
Profile, Triumph International, etc.
The Malaysian Government wants
Iskandar to be to Singapore what
Shenzhen is today to Hong Kong, and
since 2006 it has secured $14.4 billion
in investment. The total investment over
20 years is projected to reach $109
Seagate) located within the Bayan Lepas
Free Industrial Zone - earning Penang
the nickname Silicon Island. In January
2005, Penang was formally accorded
the Multimedia Super Corridor Cyber
City status, the first outside of Cyberjaya
(Greater Kuala Lumpur area), with the
The Mission had the opportunity to visit
the newly established plant of Ixmation,
a higly innovative Swiss company and
Dell Computers, manufacturing
notebooks and servers for Asia, filling
two Boeing 747 Cargos on a daily basis.
billion. A marina, a golf course, houses
and government buildings have been
completed so far, and Senai Airport
expanded. The public transportation
project to build the MTR from Singapore
to Iskandar has started marking a key
milestone for this project: Linking
aim of becoming a high-technology The key benefits of the Penang region Orchard Road to Iskandar in just 20
industrial park that conducts cutting- can be summarized as following: Skilled minutes. The first Legoland theme park
edge research. engineers, staff with all Chinese in Asia (others are in California, the U.K.,
Denmark and Germany) is under
Religious ceremony at a buddhist temple in Penang
The Delegation at Ixmation
Iskandar from the Air

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SACC - Delegation
Overview of Iskandar/new borders for the Special Economic Zone
place for over thirty years which created
so many jobs, increased in aggregate
demand and spur sales of properties,
especially high-end and commercial
and all the benefits from the 'Singapore
catalyst' to the Johor economy. Now it
can be done by done in a strategic,
structured and intensified effort to woo
the Singaporeans into Johor. Like this,
Singapore can 'extend' her high value
industries with Johor. It is clear, if there is
any effort to develop similar programs
within Malaysia, which include Johor,
the Singaporeans will do it there. Many
people believe that a lot of these services
are ready to be outsourced to South
Johor, thus creating jobs all around Johor
Bahru. If that happens now, these jobs
are of high value operations for the
construction, as well as the first overseas
campus of the U.K.'s Newcastle
University. Both are expected to open in
2012.
high growth potential.
South Johor will be 'serving' the high
growth Singapore economy and Johor
will benefit from the “spill over effect”.
service industry they support, such as
project management, design and R&D,
investment banking and co-operate
advisory or consulting being the focus
point of the exercise for Singaporeans to
Because of its strategic location, South Johor is to 'serve' and 'facilitate' relocate their 'support' services and
accessibility to leading Asian cities, for the Singaporeans to concentrate on industry of their high value economy.
proximity to some of the world's most the high value industries and sectors Besides all this, jobs such as call centers,
rapidly growing and important over its territory. customer service or outsourced services
economies, and a range of attractive
fiscal incentives, Iskandar Malaysia is
poised to attract an exciting influx of
foreign and high-level corporate
investments as discerning investors look
to benefit from its many advantages and
Like this, investments will start to pour in
and South Johor is going to develop. It is
a fact that Johor has already ten of
thousands of Singaporean investments
and businesses incorporated all over the
such as printing of bills and statements
are going to be located, which will help
to develop the blue collared staff of the
region.
Having a large middle income and
professional workforce is a very
important ingredient for Singapore to
sustain their high value industries
growing at the pace that they planned.
Officially, Singapore reached its five
million-population mark recently.
Majority of them are the middle class
and income bracket workforce. Most of
the Singaporeans who migrate abroad
are persons in this category. The rising
cost of living slowly becoming
unbearable is usually the cause. Hence,
there is a strategic effort to make
Singapore a city-state where only
persons with high income live. It is
suspected that the Lees intend to make
Singapore like Lichtenstein,
Luxembourg or Monaco. The
middleclass and working class to
support these high value incomers
Hans Joller, CEO Askoma, explains the processes to Rolf Noll, OSEC
should be residing outside of Singapore.
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Iskandar Housing projects
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What is better than make South Johor the Malaysia provides a perfect opportunity
new habitat for the Singaporean middle for Singaporeans to 'invest' in
class. They live in Johor, shop all around properties. There are already plans for
JB at lower cost than Singapore, and Singaporeans to set up nursing and old
afford a high-end lifestyle with middle folks' homes within South Johor. Now
income Singapore earnings and not this must be seen as a great business
loosing their rights as Singaporeans. This opportunity.
makes sense, as Singapore HR
consulting groups are busy establishing
themselves all over JB, for this
'relocation program'.
It is obvious that the Singaporeans are
envious of the Malaysian oil and gas
success story, especially Petronas. Of
course, it is natural that they now want to
As such, Singaporean developers are carve part of the very lucrative pie of the
now making inroads into Malaysia, Malaysian economy. Since the support
specifically South Johor. Iskandar for the oil and gas service industry is
Patrick Kriesemer with the CEO of
Iskandar Development
The Delegation in Iskandar
SACC /JOURNAL2/2010
based in Singapore, mainly because of
the history of the shipping industry, ship
maintenance and building
infrastructure, they are seriously
eyeballing the most productive industry
in Malaysia.
The property play is very important to
the strategic interest of Singaporean
tourism. The recent announcement
about theme parks, such as Lego land in
Iskandar Malaysia, is an illustration that
more attractions are needed to
complement Singaporean ambitious
entertainment and tourism sector. With
the upcoming Marina Sands Casino and
Sentosa Genting Casino complexes and
Universal Studio, the ambitious RM 750
million investment, which 80 percent of
it came from Khazanah Holdings Bhd.
Lego land, expect between 1.8-2 million
visitors will pay RM 80.00/pax to throng
the 40 acre park.
As stated before, Iskandar is becoming
the new main development area for
Singapore and this offers a great chance
for local and western players to move
into that field as long as you are able to
adopt quick!
The delagation visited the Iskandar
Economic Development Agency,
Askoma and Sukano Sdn Bhd.

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SACC - Delegation
ignore the culture and its local rules. Sell
Swiss Made quality with an Asian face,
that's how it's done”. The Swiss Made
label can turn out to be the key to
success, especially for young SMEs,
because a lot of positive attributes are
associated with it; quality, precision and
reliability, to take a few examples.
General Secretary Barbara Moeckli-Schneider with Martin Schneider
happy and relaxed about the Mission
In summary, a Swiss SME shall evaluate
Malaysia in their expansion strategy by
having one of the most conducive
business environments in the region.
Malaysia is easily one of the best places
to invest in. Taking into account its
competitive wages, no natural
catastrophes, low inflation, high staff
retention rate, a well-educated and
multilingual workforce with excellent
Conclusion
Chinese or Indians, and I am convinced English language skills (based on the fact
that not playing by the prevailing rules that Malaysia was a British colony until
In Asia, Malaysia is one of the countries can cost you success.
August 31st 1957) along with world-
with a mental outlook most similar to
that of the West, due its history of being a
British colony. That makes doing
business with them a little bit easier.
Of course, the product or service you are
providing will be the decisive factor, but
even the best product can fail if you are
not playing the markets properly.
class infrastructure (Airport, Seaports,
Highways, Cities etc), it makes perfect
economic sense to invest in a country
that is as sound and stable as Malaysia. �
Culture and ethnicity is very important Kriesemer recommends involving
in Asia; you have to know about the experts with a strong local network and
differences, especially if you hire local who know how to prepare a successful
employees. There are certain positions market entry into Malaysia. “You have to
that are traditionally filled by the Malay, offer something unique but cannot
Mission accomplished...
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