Investments to pour into Malaysia, Boston Scientific plant in Penang to be ready by 2017

Fruitful partnership: Lee receiving a souvenir from Boston Scientific executive vice-president of operations Ed Mackey during the ground-breaking ceremony of the company’s facility in the Batu Kawan Industrial estate. It is expected to be operational in the fourth quarter of 2017.

BATU KAWAN: Malaysia is targeting to attract RM40bil worth of investments from the manufacturing and services sectors this year.

Malaysian Investment Development Authority (Mida) chief executive officer Datuk Azman Mahmud said that of the RM40bil, about RM800mil would be for the medical device segment.

“For the first quarter of the year, we have approved RM651mil investments for the medical sector, compared to RM194.7mil achieved in the same period of 2015.

“The approved medical device investments would create 1,610 job opportunities,” he said.

Azman said this after the ground-breaking ceremony of Boston Scientific new plant at the Batu Kawan Industrial Estate.

The RM40bil investments would come mainly from the United States and Europe, according to Azman.

“We are now negotiating for these investments,” he added.

Deputy Minister of International Trade and Industry (Miti) Datuk Lee Chee Leong represented Minister Datuk Seri Mustapa Mohamed at the event to officiate the groundbreaking ceremony.

Lee also read out Mustapa’s speech.

In the speech, Mustapa said in 2015, the exports of medical devices increased by 15% to RM15.5bil from 2014.

“According to the National Export Council (NEC), revenues from the export of medical devices are projected to grow to RM26bil by 2020.

“In this regard, industry players in Malaysia will be able to enhance their exports by capitalising on the liberalisation of markets such as Asean, facilitating access to the region’s 620 million strong market,” Mustapa said. Also present at the event was Penang Chief Minister Lim Guan Eng.

Boston Scientific’s new medical device manufacturing plant, which will involve investments running more than hundreds of millions of ringgit, is scheduled to be operational in the fourth quarter of 2017.

By David Tan The Star/ANN

Boston Scientific plant in Penang to be ready by 2017 

New plant: Artist’s impression of the new Boston Scientific plant at Batu Kawan Industrial Park.

GEORGE TOWN: Boston Scientific’s new medical device manufacturing plant in Batu Kawan Industrial Park, which will involve investments running more than hundreds of millions of ringgit, will be operational in the fourth quarter of 2017.

Boston Scientific vice-president (operations) Dave Mitchell told StarBiz the group would move production equipment into the facility in the second quarter of 2017.

“The plant will be operational in the fourth quarter of 2017, and we expect to ship our first “Made-in-Malaysia” product before the end of 2017,” Mitchell said in an e-mail.

The construction of the facility will begin in the first half of 2016 and scheduled for completion in the second half of 2017.

Mitchell said the site and facility were designed to accommodate at least 10 years of growth, including new products, additional volume and added capabilities, which might include research and development (R&D) or distribution.

“We anticipate having more than 400 employees at the Penang site within four years of operation, with room to grow significantly beyond that.

“Initially we will focus on building manufacturing capability and capacity in the Penang facility.

“We have the space and ability for additional capabilities at the site, including both R&D and distribution,” he said.

On the outlook of the global medical device market, Mitchell said that according to research firm Euromonitor, in 2016 the medical device industry was expected to record strong growth of almost 6% to reach US$315bil.

“Unlike the traditional markets such as Western Europe and the US, the Asia-Pacific medical device market is projected to to grow and gain a wider market in 2016,” he said.

Boston Scientific was founded in 1979 and is the worldwide developer, manufacturer and marketer of medical devices.

Its products and technologies are used to diagnose or treat a wide range of medical conditions, including heart, digestive, pulmonary, vascular, urological, pelvic health, and chronic pain conditions.

The group has 23,000 employess in 40 countries.

By David Tan The Star/ANN

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If it's too good to be true, something's wrong

DURING a recent shopping session with my family, I saw an interesting promotion for a television set at a big retail store.

The retail price for the said television set was RM4,999. A 22% discount was offered for cash purchasers which brought the price down to RM3,899.

While the price seemed attractive enough, I saw another sweetener for the deal, stating that the special price under its flexible payment plan was RM2,729.30, apparently a massive 45% discount from the retail price!

At first glance, the flexible payment plan was the best deal. As the deal seemed too good to be true, I decided to do some calculation to see the rationale behind it.

Under the flexible payment plan, the weekly installment was RM26.72 for a total of 5 years.

The price of the television set would end up to be RM6,947 instead of RM2,729 upon the last payment.

I was surprised with the huge difference between a cash purchase and the flexible payment plan. This incident has also highlighted some blind spots we have in our spending.

Many a time, there are instalment plans that offer seemingly low interest rates as their marketing strategy.

As consumers, we may end up spending more than we thought if the effective interest rate and other financial concerns are not taken into account.

Taking the television set as an example, the total amount paid for the instalment plan is 78% higher than the cash purchase.

The effective interest rate per year for the financing of 5 years is about 45%, which is way higher than our fixed deposit rate of only 4%.

Bear in mind the high amount that we pay is for a depreciating item. With more advanced technology introduced year after year, the television set we buy today would not have much value left.

Thus, what looks like an attractive deal initially does not ring true anymore after factoring in high effective interest rates and accelerated depreciation in values.

Looking at the high premium charged for the instalment plan, it would be better to go for a cash purchase if the situation permits.

Often, it is better to evaluate our needs before making the decision to purchase depreciating items.

I always encourage prudent spending especially in testing times when we are faced with uncertainty in the economic environment.

Imagine if we can channel the money spent on depreciating items to assets such as investments or properties for the same period of 5 years.

Our money would have grown and helped to improve our financial position, or at least to hedge against inflation.

Other than potential value appreciation, the interest we pay for a housing loan is lower compared to other loans such as personal, credit card and car loans.

The effective rate for a housing loan is as advertised, and the rate is calculated based on the reducing balance (only pay interest on the remaining loan balance).

On the other hand, for car loans and flexible payment plans like the one mentioned above, their interest rates are calculated based on the full loan amount throughout the term, which makes the actual interest rate higher than the advertised rate.

For instance, the interest rate for credit cards is calculated based on 1.5% per month, hence the effective rate per year is 18% (1.5% times 12 months).

On the other hand, for a RM100,000 car loan with a 2.5% interest rate and a 7-year loan tenure, the interest amount would be RM17,500, making the total amount for the car RM117,500.

As a result, the effective interest rate for this car loan is 4.7% instead of 2.5%.

On many occasions, we tend to be drawn in by the “attractiveness” of easy payment plans without weighing the hidden financial commitments.

Though it helps us to obtain an item immediately, we may overlook the true value of the item and the potential financial burden it brings.

Therefore, if a deal is too good to be true, most of the time, it is just too good to be true and worth a second thought.

By Alan Tong food for thought

Datuk Alan Tong was the world president of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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Malaysia's pragmatic patriot: friends with benefits

The South China Sea dispute. The global terrorism threat. Malaysia’s foreign policy is back in the world’s spotlight and it is exciting times for ISIS Malaysia’s Foreign Policy and Security Studies chief.

IN an article titled “Think tanks aren’t going extinct. But they have to evolve”, American scholar James Jay Carafano wrote that the capacity to do rigorous, credible research is “no longer sufficient” for think tanks to manoeuvre their ideas prominently into the policy debate. Instead, think tanks must learn to communicate “in ways that will allow their ideas to break through to decision-makers who are bombarded with information from all sides”.

In that regard, Elina Noor has proven to be a real asset to Malaysia’s premier think tank, the Institute of Strategic and Interna­tional Studies, or ISIS Malaysia. Her ability to articulate on complex and dynamic global affairs – such as major power relations, cyber warfare, terrorism and conflicts – in succinct yet jargon-free language has also made her a highly sought-after interviewee by the international media.

As a child, Elina wanted to be “everything”, from prime minister to fashion designer. Her parents, who ran a management consultancy firm, however, might have subconsciously put her on her career path by leaving the world news on television all the time when she was growing up.

“My parents would engage in lively debates about international affairs between themselves. As I grew older, I wanted to do law with an eye towards international law, specifically how war and conflict affect people.”

After graduating from Oxford University in the United Kingdom, she specialised in public international law at the London School of Economics and Political Science. This was followed by an internship at the Centre for Non-proliferation Studies at the Monterey Institute of International Studies in Washington DC, specialising in issues of weapons of mass destruction terrorism.

Essentially, she helped compile a database of terrorist groups with chemical or bioweapons capabilities by combing through secondary sources and obtaining intelligence from experts who had gone into the field.

Her days in the United States were cut short, however, by visa limitations. So, after nine months, she returned to Malaysia in 2001.

Her appetite whetted by her Washington experience, Elina joined ISIS Malaysia as a researcher.

Though formally positioned as a research organisation for nation-building initiatives, ISIS Malaysia was set up by former prime minister Tun Dr Mahathir Mohamad in 1983 to serve as a crucial sounding board for the government on foreign policy and security issues.

In addition to research, ISIS Malaysia engages actively in non-governmental meetings between states, known as Track Two diplomacy, and fosters closer regional integration and international cooperation through forums such as the Asia-Pacific Roundtable.

Now, having risen through the ranks, Elina heads a team of eight in the Foreign Policy and Security Studies division.

As a claimant state in the ongoing South China Sea dispute, chair of the Association of South-East Asian Nations in 2015, and currently a non-permanent member of the United Nations Security Council, Malaysia’s foreign policy direction has drawn renewed interest at home and abroad.

Invariably, Elina is asked questions on Malaysia’s relations with China. Her answer is perhaps best laid out in an article she wrote, titled “Friends with Benefits: Why Malaysia can and will maintain good ties with both the United States and China.”

On the topic, Elina had explained: “Malaysia should or will be subservient to an awakening dragon, but the cost-benefit calculus militates against provoking it. Equally, Malaysia’s location and posture make it a strategic partner for China in South-East Asia.

“It is the mark of a mature and solid friendship when overall relations are not held hostage to single-issue disagreements.”

Elina had added that such overlapping claims in the South China Sea, “should not, if managed well, stultify cooperation between Malaysia and China in other areas of the relationship. For a developing country with high-income and knowledge-economy ambitions like Malaysia, the show must go on”.

Or to put it simply, Malaysia wants to be everybody’s friend. That’s always been the country’s foreign policy from the start, she points out.

On the other hand, this pragmatic approach has also enabled the country to punch above its weight in places where even superpowers fear to tread.

Elina’s other portfolio, cyber warfare and security, is expected to come further into the spotlight with recent headlines claiming that the so-called Islamic State extremist group in Iraq and Syria intended to abduct top Malaysian leaders, including the PM.

“Malaysia up to this point has handled terrorism very well,” Elina says.

Many attempts have been foiled in the past, she adds, and the police have kept it low-key.

“If you follow the issues closely, you’ll notice the police only started publicising their efforts in the run-up to Pota (The Prevention of Terrorism Act 2015), an anti-terrorism law passed by the Malaysian government on April 7, 2015 enabling the Malaysian authorities to detain terror suspects without trial for a period of two years.”

Part of this publicising had to do with the political selling of Pota, but there was a more legitimate, pressing reason: People were taking security for granted in Malaysia.

“Malaysians treat security like it’s not a problem. We often criticise the police but the military and Special Branch in charge of counterterrorism really know what they’re doing. The police have been very vigilant and I think they do good work but haven’t been given enough credit.”

After 14 years, she still enjoys her job because of the intellectual robustness but admits some world-weariness has set in.

Nevertheless, Elina remains motivated by the knowledge that a lot of good Malaysians on both sides of the political divide are doing good work for the country.

Pointing to a faded wristband she has been wearing for “donkey’s years”, the inscription reads: “Malaysia tanahairku (Malaysia, my homeland)”.

“Call me cheesy,” she says, “but I’ve never thought of removing it. Love for country might, but does not always, equate to love for government. I’m a sentimental patriot.”

By Alexandra Wong, China Daily/Asia News Network