Bernama.com (Malaysian National News Agency), 23 January, 2007

Malaysia Can Attract R&D Operations Of US Companies

NEW YORK, Jan 23 (Bernama) -- The trend of US companies moving their research and development (R&D) operations overseas augurs well for Malaysia, according to Phang Ah Tong, director of the New York office of the Malaysian Industrial Development Authority (MIDA).

"We have the ability to capture a substantial part of this business," said Phang who has just completed his posting of nearly six years and is returning for another assignment at MIDA headquarters in Kuala Lumpur.

"Malaysia's strong point is its IPR (intellectual property rights) protection which is conducive to attracting high technology and can put the country on the world map," he said.

MIDA's biggest challenge in the United States is to convince the small and medium-sized enterprises (SMEs), with limited resources, to come to Malaysia, Phang said.

"It's a question of providing them adequate information and, as it were, taking them by the hand," he said.

Due to the changing global economic situation conditioned by competition, MIDA's work has extended to manufacturing-related services (MRS) beyond traditional manufacturing.

The MRS include supporting services as well as R&D, "backward integration process and other allied tasks", Phang said.

"Marketing and distribution will constitute forward integration, providing foreign companies with assistance to enhance their operations, setting up hubs, etc," he said.

Malaysia, he added, is concentrating on enhancing the value-added component in the supply chain process.

Asked about competition from China and India and, to a lesser extent Vietnam, Phang said Malaysia needed to always remain competitive by increasing its productivity level.

"We can, of course, build on our existing strengths," he said.

Phang also sees opportunities opening up for Malaysia because of its "high level of productivity" combined with skilled human capital and a flexible competitive incentive package which are attractive factors for US corporations.

A "window of opportunity" also appeared in the much-debated Malaysia-US free trade agreement (FTA), with the third round of talks between the two sides having been completed, he said.

"If the FTA is finalized, it will create trade and investment opportunities in both directions," he added.

Phang, credited with establishing contacts with top-notch corporations, told Bernama shortly before his departure for Kuala Lumpur that his posting had been a "most rewarding and enriching experience".

"My greatest satisfaction came from deriving live-wire exposure to the US corporate culture which is very important in my kind of work," he said.

"I am happy when I find that a potential investor has visited Malaysia and comes back satisfied," Phang said.

"And I am lucky that I have very good professional colleagues at the head office, without whose support it would have been difficult for me to meet my goals," he said.

The MIDA director, popular among members of the local Malaysian community who rallied behind him in support during ministerial visits and other important events, identified US companies already operating in Malaysia as "our ambassadors" because they already know what the country can offer.

"We need to court businesspeople who have been to Malaysia and know its strengths but are still undecided about starting business in Malaysia," he said.

Phang's successor Wan Hashim Wan Jusoh, meanwhile, has already started work.

He had served before at the MIDA office in Los Angeles and he was director of the MIDA office in Boston before his transfer to New York.

"New York's greater international outlook and its deep ties with Asia should help us," he said.

Wan Hashim said MIDA has targeted certain US industries such as biotechnology, life sciences, medical devices, information and communications technology (ICT), and aerospace.

"In the biotech sector, many US companies want to set up testing facilities. But we have to ensure that Malaysia remains competitive. However, it is a myth to say that other countries such as China are still cheaper than Malaysia," he said.

"The cost of doing business in China has been steadily rising. But Malaysia's high productivity and the availability of human capital will definitely be pluses in our favour," he added.

-- BERNAMA