MALAYSIA EMERGES AS PRODUCTION HUB FOR JAPANESE HIGH-END ELECTRONICS PRODUCTS

From Yong Soo Heong

TOKYO, March 28 (Bernama) -- Malaysia has emerged as a major production hub
for Japanese electrical and electronics companies in medium to high-end products
and appliances despite competition from other countries to attract Japanese
manufacturing investment, says Yasuo Hayashi, Chairman & Chief Executive Officer
of the Japan External Trade Organisation (Jetro).

"This is due to the capable workforce, attractive investment environment and
stable government in Malaysia," he said in a recent interview. The interview was
conducted before the March 11 earthquake that hit north-eastern Japan.

Malaysia, Hayashi said, can be described as "having graduated from its
developing stage" and its capability in undertaking more sophisticated tasks was
a nice fit for Japanese companies wishing to expand into other countries.

Major Japanese companies that have expanded their operations in Malaysia
include Sony, Panasonic and Sharp, to name a few.

For example, Sony has moved its Blu-ray disc players manufacturing
operations to Malaysia from Hungary this year as part of efforts to improve
its business and manufacturing efficiency.

Hayashi said while some Japanese companies may have diversified into other
neighbouring countries like China and Vietnam, many still considered Malaysia to
be an attractive investment location.

Another area which Japanese companies would like to expand their presence in
Malaysia was in the manufacture of equipment and provision of services dealing
in industrial wastes, he said.

This will be done via the Japan-Malaysia Cooperation Initiative for
Environment and Energy which was agreed upon when Malaysian Prime Minister Najib
Tun Razak visited Japan last May.

It is expected that more than 20 new programmes will be carried out, under
the initiative, where Japan will provide crucial technological and building
assistance to Malaysia in areas of environmental protection and help create a
recycling system for the disposal and recycling of electronic goods in Malaysia.

Malaysia's Ambassador to Japan Shaharuddin Md Som told Bernama in an
interview that he would be facilitating this endeavour since Japanese companies
have a long history and good experience in recycling industrial wastes.

On another note, Hayashi said Japanese companies, especially
small-and-medium scale enterprises that were strong in parts and components,
would have to branch out to other countries to take advantage of their growth.

Taking China as an example, he said many American and European automobile
companies had already started investments there to take advantage of the
economic boom and increasing demand for vehicles.

"This is where Japanese parts and components companies can come in supply to
foreign manufacturers as well as local Chinese manufacturers in China.

"They need not supply only to Japanese automobile companies as that would
only be one portion of the potential market, Hayashi said.

He said similar opportunities also existed in Asean and India, which has an
estimated middle-class population of about 500 million people.

"Japan would have to reach out to these markets as well, which in the
long-term, would also help the Japanese economy back home when they repatriate
their profits for further R&D to be undertaken to enable them to stay on top of
the competition," said Hayashi, who was Managing Director of Mitsui & Co,
Europe, before assuming his present position in Jetro in April 2007.

On Jetro's part, he said its researchers in 73 overseas locations in 56
countries and 36 offices nationwide would provide up-to-date information and
analysis on business trends and opportunities to Japanese companies, an
endeavour which the organisation has been doing since 1958 after it was
established by the government.