Key-note address by Lim Guan Eng, Chief Minister of Penang, at the official opening of FMM Penang Island office at D'Piazza, Penang on Monday, 13^th February 2012: 

Key-note address at the official opening of FMM Penang Island office 

It gives me great pleasure to be with you on the official opening of FMM Penang Island Office this morning. FMM and the FMM Institute have been in the forefront of engaging the Government on policy and implementation issues affecting the manufacturing sector in particular, and the industrial environment of our country in general. Your track record of constructive engagement with the Government to address the needs of industry through consultation is indeed commendable.

The setting of the FMM Penang Island Office is indeed a significant step to reflect your Penang identity. I look forward to your commitment to support the State Government and other related agencies to help make Penang the "location of choice" for investments.

The state government hopes by 2020 to equalise the tourism and manufacturing sectors which made up 39% and 52% respectively of the state's GDP in 2010. The rationale is that a more balanced economic structure for the state will reduce its vulnerability to the fluctuations of the global business cycles.

In our drive to realize the state government's vision, we have the following achievements on our scorecard. Among them are:

1. Penang ranks among the top in investments approved in 2010.

2. Penang International Airport is undergoing a RM250 million expansion to increase its passenger capacity to five million people.

3. Penang state government's competency, accountability and transparency governance for anti-corruption efforts received commendation of Transparency International in 2010, and earned the distinction of being the best financially managed state in the country for three consecutive years by the Auditor-General.

4. Penang has been voted by Yahoo Travel as one of the top eight islands in the world to see before one dies, and the state's green initiative including the ban on plastic bags daily.

5. In a global economy filled with debt crisis, Penang recorded the remarkable achievement of reducing our debts by 95% from RM630 million on 8 March 2008 to RM30 million at the end of 2011.

6. Penang is also the safest state in Malaysia with the highest reduction of 27% in crime index in the country among all states in 2010 and topped the country again for the first six months of this year with crime reduction of 26%.

   Indeed, Penang state government is committed to leverage on Penang's available human talent, supply chain, logistics and communications, strong intellectual property protection, non-corrupt governance, creativity and innovation in science and technology and liveable city environment to create the congenial industrial environment for future development of Penang.

Toward this end, Penang is pushing for high-value manufacturing in electronics, LEDs, medical devices, photovoltaic/solar, aerospace and avionics industries. Penang is also promoting and encouraging existing companies to move up the value chain to include research, design and development activities in software, hardware and firmware in their Penang operations.

The share of manufacturing sector in Malaysia grew from 24.6% of GDP in 1990 to 30.9% in 2000, and then fell to 27.4 by 2011. Malaysia must not neglect its manufacturing sector as this sector is a key foundation for a vibrant economy. One of the key reasons is that manufacturing sector creates demand for the growth of high-productivity services sub sector such as finance, telecommunications and transport. Secondly, some knowledge-intensive services which are spin-offs from the manufacturing production. Finally, manufacturing sector generates export surpluses which can finance imports.

In additional to manufacturing and related services, Penang state government wants to develop and promote Penang as the hub for shared services and outsourcing, particularly for business process outsourcing (BPO), information process outsourcing (IPO), and knowledge process outsourcing (KPO). In this connection, I welcome FMM member companies and their global business network to set up their regional headquarters here in Penang. Remember, Penang wants to create a sense of belonging, a sense of togetherness and a sense of ownership. To be an international and intelligent city Penang must not only be a global citizen but make you feel at home a place for everyone to live, learn, work, rest and play in a clean, green, safe and comfortable environment.

Now, it is my pleasure to officially open the FMM Penang Island Office. Thank you.

*Lim Guan Eng, Penang Chief Minister