European firms eye Sarawak expansion, but long-term certainty matters

EuroCham Malaysia's CEO, Kati Ferry, highlighted the attraction of Sarawak for European companies in energy, data centres, and semiconductors. Ferry emphasized the importance of predictable regulations, skilled workers, and a reliable energy supply for long-term investments. Sarawak's commitment to energy and green industrialisation, aligned with the EU's sustainability goals, made it an appealing destination for European firms.

While initial setup and operating costs are crucial, long-term partnerships depend on the business's long-term profitability. Ferry noted that European companies invest with a vision of 10 to 30 years, seeking stability in regulations and a strong supply chain. Malaysia's advantages, such as a robust manufacturing base, strengths in semiconductors, and economic ties with various regions, were bolstered by its neutral stance towards regional and global markets.

The New Industrial Master Plan and ongoing negotiations for a European Union-Malaysia Free Trade Agreement were viewed positively by investors. Sectors like semiconductors, advanced manufacturing, digital technology, cybersecurity, healthcare, and medical devices were drawing interest. However, Ferry cautioned that attracting higher-value investments required more than tax incentives, highlighting the need for skilled engineers, software developers, and reliable energy supplies.

She called for closer collaboration between industry, universities, and the government to provide practical skills for advanced manufacturing and high-value industries. Ferry cited the Penang Skills Development Centre as a successful example of industry-academia-government cooperation, which had trained over 180,000 workers over three decades.