29 August 2017

Joint Training Program on Economic

Corridor Development for

Competitive and Inclusive Asia

Close the urban-rural skills gap

NCER Is One Of The

Five Economic Corridors Established In

Malaysia

Stemming from RMK-9, 5 Regional Corridors were

established across Malaysia between 2006 – 2008 to

address uneven development across the nation

Northern Corridor Economic Region

2 3

Why Corridors?

1

Boost economic potential Address uneven development

and regional imbalances 2

Population 2015

6.5 mil1

Total employment

(at 2015)

2.8 mil

1

GDP as at 2015 (at

2010 constant price)

RM 169 bil

1

Total investment into

NCER (at 2016)

RM 79.9 bil

1

Jobs created (at 2016)

103,597 jobs1

Capitalising The Unique Strengths Of

NCER

3

2Key To The

Nation’s Food

Security Agenda

• Modern Agriculture

• Usage of Technology

3Top Tourists

Destinations

• Langkawi

• Pulau Pinang

• Belum Rainforest

1Strategically

Located

• IMT-GT & ASEAN

• Good infrastructure

and connectivity

4Strong

Manufacturing

Ecosystem

• Strong Cluster and

ecosystem

• Existing Talent & Skill

Targets Set For All

Corridor Authorities by

2020Realised Investment

RM236 bil1 Job Creation

470,0002

RMK-11 Has Positioned Corridors

Strategically To Enhance Inclusiveness

4

11th Malaysia Plan

Focus Area C

Strategy C2

Focus Area D

Encouraging more private investment in rural

areas

Accelerating regional growth for better

geographic balance

Chapter 3: Enhancing inclusiveness towards an equitable society

Corridor Authorities continue to play significant role to ensure investments are

realised and attract investment in rural / less developed areas

Blueprint 2.0’s Targets

For NCER by 2025 Realised Investment

RM146.5 bil1 Job Creation

161,1972

3rd Wave:Concentration and

Specialisation

Blueprint 2.0 (80 Projects)

2nd Wave : Capacity Development

(RM79.9b investment,

103,597 job creation)

1st Wave: Catalytic

Infrastructure Development

(RM17.25b)5

NCER Is One Of The

Five Economic Corridors Established In

Malaysia

6

Legend:

Airport

Bridge

Railway

1

Upgrading of Penang

International Airport

RM250 mil2 Penang Second Bridge

RM4.5 bil

3 Electrified Double Track

Project

RM12.5 bil

RM17.25 bilInvestment By Federal Government

2009 2016

RM79.9 bil Total Cumulative Investment

103,597 Total Cumulative Jobs Creation

Private Investment

Jobs Creation

1st Wave: Catalytic Infrastructure Development

2nd Wave: Capacity Development

NCER Is One Of The

Five Economic Corridors Established In

Malaysia

2nd Wave: Capacity Development

Economic Impact up to 2014

7

“Setakat 2016, Wilayah Ekonomi Koridor

Utara (NCER) mencatatkan tarikan

pelaburan paling tinggi sejumlah RM6.6

billion”…

1st Wave: Catalytic Infrastructure Development

NCER Is One Of The

Five Economic Corridors Established In

Malaysia

8

Economic Impact (Up To 2014)

87,59395,159

101,464106,268100,584

127,720135,972

143,776151,000

159,924

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

NCER GDP 2005 - 2009 and 2010 - 2014 At Constant Prices (In RM 'mil)

1,8101,927

2,1112,315

3,023

3,797

2002 2004 2007 2009 2012 2014

Median Monthly Household Income Of NCER (In RM)

NCER experienced higher annual GDP growth

rate of 5.8% compared to Malaysia’s 5.4% duringthe period of 2010 – 2014 (Dept of Statistics)

Median household income in NCER has grown by

10% (CAGR) from 2009 – 2014 compared to 3%from 2002 to 2007 (Dept of Statistics)

1 2

2nd Wave: Capacity Development

1st Wave: Catalytic Infrastructure Development

NCER Is One Of The

Five Economic Corridors Established In

Malaysia

NCER Has Attracted World Class

Foreign And Local Companies

99

1.47.48

17.3929.67

40.34

59.1471.62

79.92

2009 2010 2011 2012 2013 2014 2015 2016

Cumulative Private Investments 2009 - 2016

2,608

56,619

15,4753,818

Cumulative Private Investments By Sector (In RM mil)

Agriculture Manufacturing Tourism Logistics

1,050

1,777

3,751

11,532

13,350

0 5,000 10,000 15,000

China

Taiwan

Japan

Germany

USA

Top 5 Origin Of Investments By Country (In RM mil)

Share Of Private Investments

Local Participation Foreign Participation

45%

55%

RM 44.1 bilRM 35.8 bil

Local Investments Foreign Investments

10

Blueprint 2.0 To Propel Further Growth

Of NCER

3rd Wave: Concentration and Specialisation

Growth Nodes

7 Projects

Transcending Borders

28 Projects

Localised High Impact

45 Projects

80 Projects Identified In Blueprint 2.0

The Northern Corridor Economic Region

Development Blueprint (2016 -2025)

(Blueprint 2.0)

Blueprint 2.0 (BP2.0) was developed in consultation

with 409 stakeholders from the federal and state

governments, the private sector as well as from

learning institutions. BP2.0 is driven by the purpose of

Growth with Social Equity.

Key features of BP2.0:

Provides specific direction to transform NCER

Comprises revised targets and indicators

Enhances NCIA’s strategic direction, roadmap and

implementation plans

The NCER Blueprint 2.0 Was

Developed & Introduced Early This

Year

11

GROWTH WITH SOCIAL

EQUITY

To identify commercially-viable opportunities and

implement strategic initiatives to:

Spur economic growth to address inter and

intra-regional imbalances and increase

inclusivity

Achieve balanced growth in all sectors,

Manufacturing, Agriculture & Bio-industries

and Services

Enhance talent to meet the growing needs of

the region

Increase private-sector investments and private

finance initiatives

To be a world-class economic region by 2025

Mission

Vision

Blueprint 2.0 (BP2.0) was developed in consultation

with 409 stakeholders from the federal and state

governments, the private sector as well as from

learning institutions. BP2.0 is driven by the purpose of

Growth with Social Equity.

Key features of BP2.0:

Provides specific direction to transform NCER

Comprises revised targets and indicators

Enhances NCIA’s strategic direction, roadmap and

implementation plans

The NCER Blueprint 2.0 Was

Developed & Introduced Early This

Year

12

GROWTH WITH SOCIAL

EQUITY

Enhancing inclusiveness towards

an equitable society

Strengthening infrastructure to

support connectivity and growth

Addressing investors’ needs

Re-engineering growth and

productivity in priority sectors

Fostering talent development for an

advanced region

NCER Is Leveraging On The Strengths

Of Its Key Sectors

13

Pulau Pinang

Perlis

Kedah

Perak

NCER is a brownfield area that leverages on the strengths of its economic activities

NCER is strategically

located at the centre of

South East Asia

NCER Targets In Blueprint 2.0

14

2020

2025

2015

Note: Investment and job creation targets are NCIA targets as per the corridors’ expected outcomes

RM225

billion

RM300

billion

GDP

RM169

billion

RM

8,265

RM

12,964

Average household

income

RM

4,815

RM

3,852

RM

6,043

Average B40

income

RM

1,926

RM

109.5

billion

RM

146.5

billion

Cumulative

Investment

RM

71.6

billion

129,197

jobs

161,197

jobs

91,221

jobs

Cumulative

jobs created

7 Growth Node Projects

Perlis Inland Port

(PIP)

Pulau Pinang

Perlis

Chuping Valley

Industrial Area

(CVIA)

Pembangunan

Batu Kawan

Kedah Science &

Technology Park

(KSTP)

Kedah Rubber

City (KRC)

Kedah

Perak

15

Greater Kamunting

Conurbation (GKC)

Manjung-

Aman Jaya

Maritime City

12,674

Jumlah

pekerjaan

RM2.58b

PNK setahun

pada tahun

2025

14,471

Peluang

pekerjaan

RM14.7b

Jumlah KDNK

dalam 15 tahun

23,244

Peluang

pekerjaan

RM57.4b

Impak Ekonomi

Sehingga 2030

90,263

peluang

pekerjaan

RM12.96B

KDNK sehingga

tahun 2030

35,310 peluang

pekerjaan

RM22.5B

KDNK sehingga

tahun 2030

4,056

Jumlah

pekerjaan

RM0.94b

PNK setahun

pada tahun

2025

Examples Of Project Initiated By NCIA In

Perlis

Perlis Strategic Development

Plan 2012 - 2030

1

Perlis Strategic

Development Plan

2012 - 2030

3

Border Economic

Transformation Programme

2

Logistics & Trade

Facilitation

Masterplan

4

Chuping Valley

Development Plan

Typically Projects Are Initiated From The

Strategic Plans

Chuping Valley

Industrial Area (CVIA)1

Perlis Inland Port (PIP)2

Upgrading Of Padang

Besar Inland Container

Terminal3

4 Perlis Superfruits Cluster

5 MySuria Programme

Typically Projects Are Initiated From

Strategic Plans

Project Estimated Timeline

Project Facts

Chuping Valley Industrial Area (CVIA)

17

Brief Overview

Land Size

2,500 acres

Focus Clusters

District

Padang Besar

1 2

• Integrated Business Centre (IBC)

Mar 2017 – Sep 2017

• Phase 1 - CVIA

2016 – 2020

• Phase 2 - CVIA

2021 - 2025

1

2

Cluster 1:

Green

Industries

Cluster 2:

Halal

Industries

Cluster 3:

Renewable

Energy Generation

CVIA study was completed in 2015Potential Economic Impacts3

GNI Contribution

Per Year (By 2025)

Job Creation(By year 2025)

RM2.58 bil 12,674 jobs

Advantages• Rail connectivity to main ports in

Malaysia (Penang Port, Port

Klang)

• Located next to the upcoming

Perlis Inland Port

Lembah Chuping,Perlis

+

A Structured Game Plan To Attract

Investors

18

• NCER Development Blueprint 2.0 has identified key industrysegments we should focus on when we engage with potentialinvestors.

• We have been able to narrow down on:

- areas to focus on

- rationale behind a participation

- and how these entities will operate

Investor nurturingLead nurturing

Pre investment

InvestmentPost

investment

The investor attraction funnelInvestors:

• Will take action when they are

ready, not when we are ready

• Will not only look for geographic,

demographic and cost of doing

business information – also on

opportunities and risks

• Will try to find customers, suppliers

and distributors:

• Will not just look at incentives, but

also how a community are aligned

• Will look for paths which can

provide soft landing for their

investments

The Quality Of Our Handholding Will

Be A Key Differentiator

19

Common Agenda

Shared Measurement

Mutually Reinforcing

Activities

Continuous

Communication

Backbone Support

Shared vision

Shared results & accountability

Delivery of co-ordinated plan of action

via differentiated approaches

Consistent & open communication

Escalation feature, with ability to

convene participating organisations

Collective Impact

Quality of

handholding

will strengthen

our position as

a competitive &

differentiated

investment

destination.

Pre investment

InvestmentPost

investment

• A key differentiator will be our ability to respond to client

needs efficiently, effectively and ahead of competitors. We

need to act as a partner to existing and prospective client

companies in the implementation of their strategic

objectives.

• This spans the entire investment process, from initial

awareness of our value proposition, through the full

decision-making process, to the start of the investors’

operations and beyond.

1 2 3

Preparing An Investment Soft Landing

Programme

20

Investors look for ways to maximise certainty and minimise risk in

considering new locations.

Game changer

Delivering the next generation of incentives

Tax incentives

Other forms of

facilitation

Support

facilities

Knowledge-

based support

Fiscal incentives: the base plus customised

structure via MoF

Other tools via NCIA or collaborative partners

as per RMK-11 positioning & NBOS Game Plan

Physical infrastructure used as “carrot” to

attract investors

Involvement of IPTs in providing the right kind

of inputs to the private sector

Community

supportInvolvement the local community via symbiotic

relationship with the private sector

NCER Incentive Packages

Broad based incentives for companies carrying out

promoted activities or products in the key sectors

To encourage and attract companies to establish or

expand its business / operations into NCER in the

key sectors

To promote and encourage the growth of human

capital and talent in NCER

• Tax incentives for knowledge workers

• Financial assistance and subsidies to promote relocation to NCER

• Incentives for companies (including grants) to train and relocate employees to

NCER

Incentives to attract individuals/talent into NCER

Broad Based Incentives1 Special Incentives For CVIA & KSTP2

KSTP CVIA

As part of Blueprint 2.0 focus areas, NCIA has submitted the NCER Incentive Packages in Mar

2017 to MOF and is currently pending approval

Improvements In Logistics &

Connectivity To Boost

NCER’s Economic Growth

22

Legend:

Airport

Bridge

Railway

7

Upgrading of Penang

International Airport

6 Penang Second Bridge

3 Electrified Double

Track Project

Rapid Kamunting8

Rapid Manjung

Perlis Inland Port2

Upgrading Of Pdg Besar Terminal1

Penang Sentral5

Rapid Sg. Petani4

9

• Note: Northern Integrated Transportation

And Logistics Hub

1 To ensure seamless

connectivity & mobility

of people and goods

2 Ultimately, this will

boost the economic

growth of NCER as a

whole

Infra connectivity has the power to

integrate economies by deepening

trade, investment and business

links. It can expand and strengthen

regional production networks and

supply chains of goods and

services. It improves inclusivity,

productivity and competitiveness;

and stimulates economic activity,

trade and investment.

NCIA As A Strategic Partner In IMTGT

23

Koridor Utara has an advantageous

position in SEA with close proximity

to China and India

… and can be a true logistics corridor in IMTGT

What do we need?

1. Double Tracking

2. Fast Intercity Train

Service

3. Reliable Commuter

Train Service

4. Integrated

Transport Terminal

5. Inland Container

Terminal

Legend:

Container

Terminal

International

Airport

Domestic

Airport

Seaport

Integrated

Terminal

Penang Port

Padang

Besar / PIP

Lumut

24

Trade & Customs Facilitation

• Streamlined custom policies and

processes to facilitate trade

Transport & Logistics Effectiveness

• Assessible and connected logistics

location

Supply of Logistics Human Resource

• Steady supply of talent with Logistics

experience

Multi-modal transport structure

• Effective multi mode transportation

network

Koridor Utara has an advantageous

position in SEA with close proximity

to China and IndiaWhat do we need?

1

2

3

4

… and can be a true logistics corridor in IMTGT

NCIA As A Strategic Partner In IMTGT

Capitalising On Regional Trade

Networks

25

Grow international trade

and export activities.

Increase cross-border private

sector engagements.

• Build comprehensive regional service provider network that offers

effective support services for international trade.

• Enable selected industries to ride on Koridor Utara’s logistics

capabilities and network.

• Form strategic relationships with international business networks,

existing foreign companies.

• Leverage on the activity base and facilities of Padang Besar, Bukit

Kayu Hitam, Durian Burung and Pengkalan Hulu.

• Implement the BETP study.

Action plans

The agriculture sector remains an important sector in NCER,

contributing around 11% of the region’s Gross Domestic

Product (GDP).

In 2016, the agricultural sector accounted for 8.1% of the

national Gross Development Product (GDP), a decline from11.9% recorded in 2011.

Malaysia also continued to widen its trade deficit on

agriculture products to RM16.59 billion in 2016 from RM 11billion in 2011,

Agriculture Sector

Food Security

Malaysia’s population growing at 1.8% per annum and is

expected to reach 35 million by 2025.

Can we cope with the

increase pressure on food demands?

13.3 millions

are obese

5.6 million

are overweight

6.1 millions

have hypertension

3.5 million

have diabetes

9.6 millions

have > cholesterol

(Uni. Victoria, Australia)

National Health and Morbidity Survey (NHMS), 2015

GDP loss to Malaysia from NCD

is expected to be about US$

22.5 billion by 2025

70% - 80% of NCD was due to

improper diet resulting in

ailments such a diabetes and

obesity.

Recent statistics already show

that 60% of premature deaths

(below 60 years) in Malaysia

were caused by NCD

Nutritional Safety

The strategy refers to intensifying the use of productivityenhancing technologies by the farmers.

Commercialising The Agriculture

Sector

Farm Output

Farm Surpluses Market Participation

Farmers Income

Less number of labour

As a pre-requisite to implementing this strategy, the local

agriculture sector:

must increase its productivity to achieve lower per

unit costs of production

adopts the market-driven farming program.

These pre-requisite requirements however pose another

huge challenge to commercialising the local agriculture

sector.

Commercialising The Agriculture

Sector

There is also deficient of interest towards

the agriculture sector among the young andeducated workforce

60% of the workforce in this sector are

already over 60 years old while only 15%below 40 years old.

Challenges In Commercialising The

Agriculture Sector

64%

26%

7%3%

Paddy Yield: 2011 (Prior program)

<4 4 - 6 6 - 8 8 - 10

Nota :

64% of the farmers’ yield were below 4 MT/ha with monthly gross

income of RM465.00

Nota :

43% of the farmers produced average paddy yield of between 6 to 10

MT/ha with monthly gross income of between RM2,167.00 to

RM4,000.00 i.e. higher than the average income of B40

RM465.00 RM897.00 –

RM1,763.00

RM1,763.00 –

RM2,462.00

RM2,462.00 –

RM3,327.00

17%

40%

33%

10%

Paddy Yield: 2016 (Post Program)

<4 4 - 6 6 - 8 8 - 10

RM667.00 RM1,167.00 –

RM2,167.00

RM2,167.00 –

RM3,000.00

RM3,000.00 –

RM4,000.00

Introduction of Modern Farm

Management Concept

Shared Value In Commercialising

The Agriculture Sector

Shared value concept is a principle of integrating business

efforts with social and environmental values. It is a point of

connection between the activities and needs of a company

and the activities and needs of the society.

The Government will act as a catalyst for creating shared

value partnerships through which there is also the changing

role of business and government in solving the social

problems.

The introduction of the right kind of regulatory framework

can encourage companies to pursue shared value.

One example of a successful shared value project in the

Northern Corridor is the collaborative partnership between

NCIA, Nestle Paddy Club and Pertubuhan Peladang

Kebangsaan (PPK) C2-Kerpan on rice farming for baby

cereal products.

Shared Value In Commercialising

The Agriculture Sector

Agriculture 4.0

Knowledge-based farm production

system such as precision agriculture

(PA) could replace the current labour

intensive system with lowproductivity.

The IoT in agriculture market is

expected to grow at a cumulative

average growth rate (CAGR) of over

16% in terms of market value

through 2016 to 2022, to reach$20 billion

THANK YOU

36