Bright FDI prospects for Malaysia

By Rupa Damodaran

Malaysia expects to attract at least three more big investments from foreign companies involved in the solar energy industry this year.

The three foreign direct investments (FDIs), averaging RM1 billion each, are expected to come from the US, Japan and Europe.

"We're also trying to woo potential investors from Japan, the US and Nordic countries," Malaysian Industrial Development Authority director general Datuk Jalilah Baba said in an interview.

Malaysia has identified renewable energy as a new driver for economic growth. Solar energy is essentially the conversion of sunlight into electricity.

So far, Malaysia has managed to attract a few large firms like solar panel makers First Solar, Q-Cells and Sunpower.
The emergence of major solar companies in Malaysia such as First Solar, Q-Cells and Sunpower, has spurred the growth of the solar value chain, opening up new opportunities for both local and foreign investors in developing the solar cluster.

These companies, which have their respective factories located in Kulim Hi-Tech, Malacca and Selangor, have also been a magnet to others to follow their tracks to Malaysia.

Last week, China-based EQ Solar Technology International Sdn Bhd announced plans to invest US$500 million (RM1.7 billion) to produce module, cell and wafer at the Senai Hi-Tech Park in Johor.

A subsidiary of Hangzhou Energy Solar Co Ltd, EQ Solar is the first China-based solar module manufacturing company to invest in Malaysia.

Others include the US-based Twin Creeks Technologies Inc's proposed plans in Perak and Japan's Tokuyama in Sarawak, which processes silica for the solar industry.

Jalilah expects all the states in the country, with the exception of Perlis and Kelantan, to have companies involved in the industry by 2012.

The two states need to improve their infrastructure to attract solar energy investors, she said.

Pahang and Selangor have raw materials like silica and glass while Terengganu could supply specialised plastic material.

Jalilah said after introducing the high-end wafer fabrication industry, it would only be natural for Malaysia to advance into similar high-end industries like the solar industry.

This is because the semiconductor industry and the solar energy industry share the same raw material, which is silicon, among others.

Malaysia, she stressed, can take the lead of being the solar hub in the Asean region. However, what is crucial is how much Tenaga Nasional Bhd would pay for solar power that's connected to the national grid.


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