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Malaysian state looking to seduce RI companies

Indonesian businesspeople may be tempted to invest in the halal-certified food industry in Selangor, as the Malaysian state offers Indonesian investors various incentives and world-renowned halal certification that they cannot find at home

Khoirul Amin (The Jakarta Post)
Jakarta
Fri, September 4, 2015

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Malaysian state looking to seduce RI companies

I

ndonesian businesspeople may be tempted to invest in the halal-certified food industry in Selangor, as the Malaysian state offers Indonesian investors various incentives and world-renowned halal certification that they cannot find at home.

The chairman of the Indonesian Chamber of Commerce and Industry'€™s (Kadin) Malaysia committee, Halim Kalla, said on Thursday that Indonesian businesspeople might be interested in producing halal-certified food in Selangor and marketing the products worldwide.

'€œOf the many sectors that our investors could enter in Selangor, I think halal food is the most attractive. Halal food is increasingly vogueish, and Malaysia is now the world'€™s leading hub for the halal industry,'€ Halim said after a two-hour meeting with 40 local investors and delegates from the state of Selangor.

Malaysia first issued halal certification letters for food products in 1974 and it is now a leading hub for the halal industry, which has an estimated global market value of US$2.3 trillion, according to data from the Malaysian government.

Indonesia'€™s halal food industry, meanwhile, is still at an early stage.

Halim told reporters that besides its globally reputed halal industry, Selangor also offered various facilities and incentives that could not be found in Indonesia.

Selangor has Southeast Asia'€™s second-largest port, Port Klang, which is well connected to other trading hubs.

The senior executive councilor of the Selangor state administration, Dato'€™ Teng Chang Khim, said that Selangor was a match for Singapore as a business hub.

'€œWe have a distribution system as good as that of Singapore, but at a more competitive price,'€ he said.

Dwelling time at the Port Klang averages at three days, with turnaround time for a very large ship within 24 hours, Khim went on.

Invest Selangor Bhd. CEO Hasan Azhari Idris, added that Selangor offered tax holidays ranging from five to 10 years, depending on the amount of investment and type of industry.

The state government also offered land ownership periods of up to 99 years with possible extension and possibility for whole ownership for oil refinery businesses, he said.

Halim said that what the Selangor state government offered to investors could be a model for the Indonesian government to copy to attract more investment to spur economic growth.

Selangor, which contributes 23.7 percent of Malaysia'€™s total gross domestic product (GDP), attracted a total of around 1.15 billion Malaysian ringgit ($271.2 million) in foreign direct investment in the first half of this year, with the largest investment coming from Japan, Singapore and the UK, according to data from Invest Selangor.

The state is currently targeting more investment from Southeast Asian trading partners, including Indonesia, Thailand and the Philippines.

It is mainly targeting investment in technology-intensive industries, with a focus on electronics, transportation, life sciences, food and machinery.

Halim said, however, that Kadin expected investors from Selangor also to invest in Indonesia in return.

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