iP Slide 20130709

PENANG, MALAYSIA A destination of choice for investment,

great place to work, live and play…

iP Slide 2013

Introducing Penang

Penang Value Proposition

Our Value Offer

Contents

Penang : “Centre to ASEAN”

At the heart of East Asia and less than 2 hrs from

Singapore

Situated between 2 large economic masses

represented by Bangkok to the north and Kuala

Lumpur/Singapore to the southeast

A trade hub with geostrategic nexus

Midway between the growing economy of China

and India

Centrally located in the Indonesia- Malaysia-

Thailand Growth Triangle (IMT-GT)

Penang is at the Centre

• 2nd smallest state in Malaysia 1031 km²

• 2nd most urbanized state pop : 1.6m

• 4 decades of industrialization

• >781,500 workers supporting Penang’s economy

• >259,700 (34%) from manufacturing

Source: DOS

Penang At a Glance…

Penang’s transformation

• “Prince of Wales Island” • Natural harbor &

anchorage for trading ships

• Straits Settlements – Crown Colony George Town

• Post-independences Federation of

Malaya

• Free Port status revoked in1969

• Establishment of Malaysia’s 1st FIZ in

Bayan Lepas in 1972

• Started with 31 factories (1970s) to

>280 factories (1990s) with 60k

workers

• GDP RM5.16b (2012)

• Contributes 8.9% of Malaysia’s GDP &

16% of country’s output for

manufacturing

• Major economic structure:

Manufacturing 50% & Services 47%

• Unemployment rate 15.7% (1960s) &

4.9% (1990s)

• GDP: RM790m (1970) to RM7.8b

(1990s)

• Major economic structure:

Manufacturing 13% (1970s) to 43%

(1990s).

• 40 years of industrialization

• Recognized as the 8th most liveable

cities in Asia (ECA International)

• Diversifying into linked services & value

added industries

•George Town as a World Heritage Site

(UNESCO)

1700s –1800s 1900s Today

Source : Penang Institute, PDC, 10th Malaysia Plan

- Trading

- Agriculture

- Low cost

- Labor intensive operation

• SSO / BPO • Design &

development • LED – solid state,

chip, display/ design

• Integrated solar industry

• Computing & mobile electronics

- Precision tooling - Local contract

manufacturing - Semiconductor-

automation - Assembly & test - Consumer

electronics - Development of local supporting industries

Pre-industrialisation

Setting up MNCs

- Hard disk

drive - Test system

development - Supply chain

management - R&D

application - Vertical

integration - EMS

Highly automated manufacturing

Beginning of mechanization

Moving-up value chain

60’s 70’s 80’s 10’s 90’s

• LED-packing,

testing • Wireless / RFID • Medical devices • Biotechnology • Optoelectronics • Solar suport • Local SME migrating

to system design & development

• Aerospace / avionics

Diversification beyond semiconductor

00’s

Industrial transformation

iP Slide 2013

2009 2010

2011 2012

2013 (Q1)

Taiwan Singapore Denmark US China

US Germany Switzerland Taiwan Japan

Japan US Netherlands Canada Singapore

Netherlands Switzerland British Virgin Island Singapore US

Investment Performance Track Records

Germany Taiwan Singapore Japan France

Top 5 Investment by country, 2008- Q1,2013

Taiwan - >68

USA - >45

Germany - >11

Japan - >86

Others (Netherlands/ Sweden / Swiss, Norway, India etc) - >51

Singapore - >27

> 300 international presence in

Penang

Penang Investment Updates

Boon Siew Honda Sdn Bhd (BS Honda) RM200 million new plant at the Batu Kawan Industrial Park –started operation in Feb 2013

IHS Inc. a US-based leading source of information & insight in critical areas in energy & power, oil & gas, and defence – set up APAC CoE – Sept 29, 2011 - Initial payroll: US$8 million will be raised to US$50 million by 2015

VAT - world renowned company supplying vacuum valves, signed S&P with PDC for a site at Batu Kawan – Feb 8, 2012, starting production Apr2013.

Phison Electronics Corp opened design centre for flash memory chips in Penang – Mar 15, 2012

Bose Corp - US-based audio equipment maker setting-up manufacturing facility in Penang – operating from May 2013

Malaysian Automotive Lighting (MAL) - PDC’s first build and lease business agreement with MAL, a world leader in automotive lighting. MAL’s investment in Penang will increase by an additional RM 117 million for the next 4 years. Starting operation in Apr 2013

Tourism/ hospitality projects

• Komtar bouvelard & tower sky lounge- by Only World Group

• ESCAPE Park @Teluk Bahang- adventure park by Sim Leisure Gp

• Penang Waterfront Convention Centre- Suntech Int & IJM Land

Penang Buzz

Top 10 dynamic industrial cluster locations in the world to have

demonstrated a successful manufacturing experience among

developing economies (UNIDO Industrial Development Report

2009)

Top 31 Business Processing Outsourcing (BPO) locations of the

future (KPMG’s “Exploring Global Frontiers” Report 2009)

Voted the eighth most livable cities in Asia, on par with Seoul,

Korea and above Kuala Lumpur and Bangkok by ECA

International 2012

Georgetown – UNESCO World Heritage Site in 2008

Top in Green initiatives in Malaysia

CAT Governance praised for anti-corruption efforts (Transparency

International, AG Report 2010)

Penang Revenue 2011 – RM192.19 Million (recorded a surge of 4%

compared to previous year), AG Report 2012

Top Ten Best Street Food Cities 2012 (VirtualTourist.com )

Top 8 islands in the world ‘You must see before you die' (by

Yahoo! Travel, Feb 2011)

An industrial base state, heritage city and

campus for IP creators

iP Slide 2013

iP Slide 2013

Introducing Penang

Penang Value Proposition

Our Value Offer

Contents

• Strategic location in the heart of Asia Pacific region

and time zone - able to conduct business round the

clock in Asia, Europe and Americas.

• Linguistic ability - multiracial & multilingual population

- can serve numerous groups in Asia as well as the US,

UK and Australia.

• Unique combination of history, architecture, nature,

food and culture - a natural destination for tourists.

• Well integrated in the global manufacturing supply

chain – great opportunities for trade business

• Malaysia: Members of various Intellectual Property (IP)

group eg WIPO etc – strong commitment to IP

protection

Penang : Key Gateway for the rest of the

world

• “Silicon Valley of the East” with 40 years

of experience in manufacturing

• Penang pioneered Malaysia’s 1st FIZ to

promote and facilitate the

development of export-oriented

electronic manufacturing

• Approximately 34% of Penang’s

workforce employed in industrial sector

• > 300 MNCs established here

• Competent local supply chain

• Diversified beyond E&E to LED, medical

device, biotech, PV/ solar, aerospace &

avionics.

• Core areas of microelectronics design:

Integrated Circuit (IC) & Design, MEMS

Sensor, Microelectronic System Design,

and Test & Measurement.

Your investment destination for next-generation technology

Penang Diversification of ‘E&E center’

iP Slide 2013

Penang as ‘BPO Hub’

Penang a future BPO star: KPMG “Large labour pools, proximity to the major client bases and multiple language skills…”

Penang as a future BPO star • Strong talents support with 20,500

professionals employed in IT-BPO

• Low attrition rate

• Multilingual, multi-ethnic and highly

trainable workforce

• Well diversified talented workforce

• Qualified and trained professionals in

finance, IT

• Strong large based MNCs – hub for shared

services outsourcing (SSO)

• Offers 10 Bill of Guarantees for MSC Status

(financial & non financial incentives)

• Some of the big players in Penang:

Penang as ‘SSO hub’Penang focus and initiative for the global SSO industry

The 1st State in Malaysia to be awarded the MSC Malaysia

Cybercity status in 2005 with area of 2,283 ac.

Rental rates : RM 1.70-3.80 per s.f. /month

99.9% service availability for telecommunications &

electricity

Malaysia ranked 3rd in SSO for 8th consecutive years; rated

the highest in “business environment” category (A. T.

Kearney).

Malaysia among the top five of 3 verticals of Banking,

Financial Services & Insurance (BFSI), Oil & Gas (O&G) and

Transportation and Logistics (Frost & Sullivan).

Penang focuses on IT, back-office (HR, finance &

accounting) and engineering services (KPMG)

Information technology Creative multimedia Shared services &

outsourcing (SSO) iP Slide 2013

Penang on Property ...

Source: The Star (26th Jan 2013)

Developers plan RM9.733bil gross development value (GDV) of properties on Penang island in 2013:

• IJM (RM5.4 billion)

• Ideal Property (RM2.0 billion)

• SP Setia (RM945 million)

• Ivory (RM520 million)

• E&O (RM500 million)

• Mah Sing (RM248 million)

• Sunway (RM120 million)

• Heritage Tourism

• Medical Tourism

• Convention centres / M.I.C.E.

• Education

Investment Opportunities in Services

Penang as ‘famous tourist destinations’

Penang has it all in tourism

Escape theme park

Refreshing

beaches @ Batu

Ferringhi

Enjoyable rides @

Penang Hill

Boutique hotel

Breathtaking view @

Straits Quay

Food heaven

Penang as ‘famous tourist destinations’

• Tourism industry is expected to grow to 36 million tourist arrivals and RM168 billion in tourist receipts by 2020 (Ministry of Tourism, Malaysia).

• The hotel industry is expected to see a four percent growth in occupancy rate to 70 percent in 2013. Recently opened hotels include Hard Rock Hotel, Eastin Hotel and new wing of the E&O Hotel. Upcoming hotels: Four Points by Sheraton, The Nomad, Penang Royale Bintang, The Light and Rice Miller. (Malaysian Association of Hotels Penang Chapter)

Penang as ‘famous tourist destinations’

• On 7th July, 2007, George Town’s rich living

heritage, culture & history - officially

recognised as a UNESCO World Heritage Site

by World Heritage Committee in Quebec

City, Canada.

• George Town was acknowledged as having

developed over 500 years of trading and

cultural exchanges between East and West in

the Straits of Malacca.

• Featuring residential and commercial

buildings, George Town represents the British

era from the end of the 18th century.

• Opportunities in hospitalities / boutiques

hotels, F&B, etc.

Penang as a UNESCO World Heritage Site

“... A unique architectural and cultural townscape without

parallel anywhere in East and Southeast Asia.” – UNESCO

Penang as ‘medical tourism hub’

Penang a leading medical tourism hub of Malaysia.

• Competitive cost with high quality medical

services and facilities

• Penang recorded RM314m in revenue from

medical tourism (2012) and accounted for 55%

of Malaysia medical tourism revenue

• Malaysian hospital fees are 25% below the U.S. (Malaysia Healthcare Travel Council)

• 7 hospitals committed to medical tourism, offers highly-trained medical professionals and

cutting-edge facilities with affordable package.

Meetings, Incentives, Conferences, and Exhibitions (MICE)

Subterranean Penang International Convention and Exhibition Centre (sPICE)

• “Penang People’s Park” that includes: Convention and Exhibition Centre, Sports Arena & Aquatic Centre

Penang Waterfront Convention Centre

• A 10,000 sq. meters multi-purpose hall convertible to a 9,000-seat arena.

• Managed by Suntec.

Universiti Sains Malaysia – Accelerated Programme For Excellence (APEX) university

Top 50 by 2020

Focus on R & D

Create 100,000 PhD graduates in next 15 yrs

> 40 institutions of higher learning in Penang

Skills training institution such as Penang Skills Development Centre (PSDC), Japan-Malaysia Technical Institute, etc

9 international schools with different curriculum

Penang as an “Education Hub”

The Penang International Airport recorded

the 3rd highest growth (3.23%) in 2012

among airports in Malaysia after KL and KK

– from 4.6mil in 2011 to 4.78mil passengers

1) Singapore (66X/week) 2) Medan (60X/week) 3) Acheh (4X/week)

4) Surabaya (3X/week) 5) Jakarta (7X/week) 6) Bangkok (14X/week) 7) Phuket (4X/week) 8) Hong Kong (14X/week) 9) Taipei (4X/week)

10) Guangzhou (7X/week) 11) Koh Samui (3X/week)

International routes:

Airline Schedules in Penang

1) Kuala Lumpur (229X/week) 2) Langkawi (14X/week) 3) Johor (14X/week) 4) Kota Kinabalu (7X/week) 5) Kuching (7X/week)

6) Kota Bharu (7X/week) 7) Kuantan (3X/week)

Domestic routes:

Penang connectivity

Penang 2nd Bridge • Construction ahead of schedule. • Expected to be opened to traffic by Oct 2013.

Penang International Airport • Phase 1 comprises upgrading and expansion of the

existing passenger terminal, security fencing, and aircraft parking apron

• Phase 2 includes a business-class hotel • Terminal capacity to be increased from 3.5 MPPA to 5.0

MPPA

Expansion of North Butterworth Container Terminal • Handling capacity will be increased to 1.8 mil TEUs

(current capacity = 1.0 mil TEUs)

Electrified Double Tracking Project • Current phase - North to Central Malaysia • Expected completion Q4- 2014

Major Infrastructure Improvement

Other Key State Projects in Penang

Education Hub • Campus for higher learning institutions

• Balik Pulau- attracted Asian Women's Leadership University (AWLU) run by Smith College, the premier women college in the US.

Penang Paradigm-

State development blueprint: Infrastructure • Plan to reduce traffic congestion, improve public transport

and connectivity. Proposed new by- pass, flyovers and tunnel.

• Land use aligned with transport planning, Self contained live, work, play townships.

Distance from Batu Kawan to:

Pg. Science Park 6 km

Butterworth 19 km

Airport < 30 km (2nd Bridge)

Batu Kawan island – next growth centre

NEW TOWNSHIP COMPONENTS ACREAGE (ACRES)

Residential 1,093.46

Commercial / Corporate Office 641.30

Mixed Development 547.02

Government Institution 194.99

Industry 1,183.80

Technology Park 83.56

University & College 167.62

Cyber Center 77.58

State Stadium 150.00

Mosque/Schools 14.95

Cemeteries and other Religious 80.53

Town Parks 46.54

International Golf & Resort 729.68

Road Reserves/Mangrove Swamps 864.97

Private Land

(Future Mixed Development)

391.00

ANSB Land

(Mixed Development)

450.00

TOTAL

6,717.00 acres

(2,729.23 ha)

iP Slide 2013

Introducing Penang

Penang Value Proposition

Our Value Offer

Contents

Penang offering the right balance

for everyone to invest, work, live and play”

Our value - offerings

Penang…

Tranquil Island Resort in a Vibrant City

with

the right PEOPLE, favorable COST and conducive

BUSINESS ENVIRONMENT

The Choice is obvious

Choose Penang

Key Highlights

iP Slide 2013

Thank you!

Invest-in-Penang Berhad PSDC Building, 1, Jalan Sultan Azlan Shah, Bayan Lepas, 11900 Penang, Malaysia

Tel: 604-646 8833 Fax: 604-646 8811

Talk To Us!

www.investpenang.gov.my

PENANG,

MALAYSIA